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What To Do If You Can’t Afford Your Life Insurance Premium

By on March 12, 2014 in Insurance, Life Insurance

What To Do If You Can't Afford Your Life Insurance PremiumWhether through loss of a job, lower commissions due to business slowing down, or unexpected higher expenses your budget can easily be compromised to where there isn’t enough money left at the end of each month. If you find yourself in a financial bind you will need to reduce your expenses somehow, and one of the first places you might look would be your life insurance premiums.

Before you outright cancel your life insurance policy, check out some of these tips you can use if you can’t afford your life insurance premiums.

What To Do When You Can’t Afford Your Life Insurance Premiums

Here are four different things you can try if you simply can’t afford to pay your life insurance premium right now.

Use the Grace Period

Your life insurance policy likely has a 30 day grace period built into the policy. This is to help you get your payment in in case the invoice is lost in the mail, your check is lost in the mail, or you simply forget. After 30 days the policy is usually canceled (or put on hold pending a new medical examination).

If you can’t pay your life insurance bill right now, use the grace period but make your get your payment in before the grace period expires.

Ask for a Longer Grace Period

Whenever you find yourself in financial hardship you can try reaching out to the companies you owe money to in order to seek some assistance. You can always call your life insurance company and ask for an extended grace period, but you can’t ask for the world either. You may be able to get an extra 30 days time (so two months or 60 days total) in order to get your payment in.

Get a New Life Insurance Quote for a Smaller Policy Coverage

If you won’t be able to pay your policy at all because you simply can’t afford the coverage, your life insurance will expire.

Do not continue on without any life insurance at all if you can prevent it.

Letting your old policy expire is unfortunate, but make sure you get a life insurance quote for a smaller policy you can afford. Going without life insurance at all is a huge risk for your family that can result in disaster if you end up dying unexpectedly. For example, if you can’t afford the $500,000 life insurance policy you have had for 3 years you can let that policy lapse and buy a $100,000 policy in its place. You can drop your annual life insurance premium costs dramatically while still providing some protection for your family. (Just remember to purchase the higher amount you actually need in the future when you can afford it again.)<

If you can’t afford to drop down to a smaller policy, you can look at getting life insurance through your employer. Your premium would be paid with each paycheck and give you the option of spreading the cost out throughout the year. Make sure you get another policy that isn’t tied to your employment as soon as you can to reduce the risk of becoming uninsured if you find yourself unemployed.

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