In the current era of high inflation, what happens if you can’t pay your life insurance bill? Will the policy become void?

Having life insurance is important because without it, your loved ones will likely struggle financially after you pass away. But it’s also a monthly expense you’ll need to cover, so keep earning the money to pay it off.

Many people have trouble paying their bills these days, thanks to inflation, but not paying for your life insurance can have a host of negative consequences, depending on the type of policy you have and the details of your policy.

If you don’t pay your monthly phone bill, your carrier will stop providing service. Similarly, if you stop paying your premiums, your insurance company will cancel your insurance. But just because you have financial problems doesn’t mean you will lose your insurance.

First, life insurance companies usually give policyholders 30 days to pay their premiums, so if your next payment is due on March 30 and you miss it, but somehow manage to pay it by the end of April, your insurance should not lapse.

What’s more, if you contact your life insurance company and tell them you’re having financial difficulties, they may agree to extend your grace period or work with you in another way.

At the same time, some life insurance policies also have a “waiver of premiums” clause, which allows you to stop paying if you become disabled without losing coverage. If your policy has this rider, you may be covered if your disability impedes your earning ability and you can no longer pay your premiums.

If you have a whole life policy and have had it for several years, it may have accumulated cash value. If you are unable to pay your premiums, you can use this money to pay for it. In other words, if you have whole life insurance and you can no longer afford the premiums, you can choose to cash in the policy. This will give you some financial help, but the problem is that you will no longer have life insurance.

Generally speaking, term life insurance is cheaper than whole life insurance, so choosing the former is a good way to keep your premiums down. Also, don’t overbuy insurance. If you only make $60,000 a year, you might want a life insurance policy that’s 10 to 20 times your salary, rather than a $2.5 million policy that would make your premiums very high.

Finally, remember to shop around when buying insurance, which can also help you lock in the lowest premium.

Do you only want to buy term life insurance for a few dozen dollars a month?