The need for life insurance is now more than ever before. Letting your life insurance policy lapse is dangerous in today's poor economy, especially if you have a family to support financially
Wheeling, IL (Vocus) October 26, 2010
Many consumers are dropping their life insurance coverage due to the economic downturn. In fact, life insurance ownership is at a 50 year low, according to LIMRA. Why are consumers dropping one of the most important components of a family’s financial plan? Unlike home and auto insurance, life insurance is not a required form of coverage. For that reason, many consumers have stopped paying their premiums; letting their life insurance policies lapse. To help consumers stabilize their financial portfolios, AccuQuote, a leader in providing term life insurance quotes to people across the United States, explains how to avoid letting their life insurance policies lapse.
A lapse occurs when an individual’s life insurance policy goes unpaid for a certain amount of time; typically 30 days after the premium is due. When this happens, the policy is no longer active, which means that if the insured died, the beneficiaries would not be eligible to receive the death benefit.
“The need for life insurance is now more than ever before. Letting your life insurance policy lapse is dangerous in today’s poor economy, especially if you have a family to support financially,” says Byron Udell, founder and CEO of AccuQuote. “Some people don’t even realize that their policy has lapsed, or is on the verge of lapsing. This can happen as the result of misplacing the billing notices, simply forgetting to make a payment or not notifying the insurance company of a new address.”
AccuQuote offers tips to help consumers avoid an inadvertent life insurance lapse:
- Reduce the premium – “If your premium payment is unaffordable, call your agent right away,” says Udell. “Often times there are things they can do to lower the cost, including lowering the coverage amount or term length. After all, something is always better than nothing.”
- Set a reminder – “f you find that you’re simply forgetting to make your payments on time, set up a few reminders on your calendar, or perhaps on your cell phone or PDA,” says Udell.
- Enroll in automatic payments – “We find that fewer lapses occur when customers enroll in an automatic debit program, similar to what many people do with their mortgage or car payments,” says Udell. “Rather than having to write a manual check when the bill is due, it’s deducted automatically from your bank account. You can stop this at any time, but until you do, you can rest assured that your bills will be paid on time.”
“If your policy is in a lapsed status, whether by accident or not, depending on how much time has passed since the lapse, and whether or not you’re still in the same health as you were when you bought it, you may be able to reinstate it,” says Udell. “The best thing to do is to call your life insurance agent as soon as you are aware of the lapse and ask your agent what the carrier’s guidelines are for reinstatement.
Reinstatement is not always available. If it is, the carrier always requires the insured to pay back all of their missed premiums. And in many cases, the carrier requires the insured to prove that they are still in good health. As a result, it may make more sense to just obtain a new policy.
For more information on how to avoid lapsing life insurance coverage, call AccuQuote at 888-314-4455.
AccuQuote helps consumers find the best values in term life insurance by combining instant online life insurance quotes with the personal service of unbiased life insurance professionals who answer questions, identify important issues and make meaningful recommendations. The company offers consumers an extensive selection of life insurance products, including term life, whole life, universal life, accidental death, long-term care, disability and selected annuities. AccuQuote.com has many handy insurance tools, including a term life insurance calculator to help consumers determine their life insurance needs, a glossary of industry terminology, a collection of articles and press releases that cover many life insurance topics and a blog that provides opportunities for discussion on life insurance and personal finance. For additional information or to get free quotes for low cost life insurance, please call AccuQuote at 1-888-314-4455.