Why Keeping Track of Your Premiums Matters During the Holidays 
Life insurance policies are a crucial financial safety net, ensuring that loved ones receive the support they need in the event of a policyholder’s death. For these policies to be effective, premiums must be paid consistently and on time. However, December is a month that sees a surge in financial obligations due to the holidays. Between the cost of gifts, travel, and other seasonal expenses, many people inadvertently miss premium payments. The timing of these lapses is often crucial, as missed payments can lead to serious ramifications, especially if the policyholder passes away soon after.
It’s essential to understand that life insurance companies typically offer a grace period for missed payments. This is a period during which coverage remains active even though the premium has not been paid. But if the policyholder dies after this grace period has expired, the insurance company may refuse to honor the policy, leaving beneficiaries without the financial support they were counting on.
How the Grace Period Works and What Happens After It Ends
Most life insurance policies include a grace period of at least 30 days. This means that if you miss a premium payment, the policy will continue to provide coverage for 30 more days, giving the policyholder time to make the payment without losing coverage. However, if the payment is not received by the end of this grace period, the policy will lapse, and the coverage will be terminated.
Reinstating a Lapsed Policy: Is It Possible?
If a life insurance policy lapses due to missed premiums, it may still be possible to reinstate the policy. The process and eligibility for reinstatement depend on the policy’s terms, but generally, most insurers will allow a policyholder to reinstate a lapsed policy within a certain period, typically 1 to 3 years. The reinstatement process usually requires the policyholder to submit a reinstatement application, prove insurability, and pay back the premiums that were missed during the grace period. In New York, insurance companies are bound by strict state regulations when it comes to policy reinstatement. If you miss a payment and your policy lapses, you should contact your insurance provider as soon as possible to discuss reinstating the policy. Keep in mind that the insurer may require proof of insurability, which could mean undergoing a medical examination and paying back premiums, plus any interest or penalties associated with the missed payments.What Happens if Your Policy Cannot Be Reinstated?
In some cases, life insurance policies cannot be reinstated. This can occur if the reinstatement period has expired or if the insurer deems the policyholder to be uninsurable. If your policy lapses and cannot be reinstated, the insurer will likely consider the coverage terminated, which means no death benefit will be paid out. If your policy lapses and you are unable to reinstate it, there may be other options available, such as converting your policy to a term life insurance policy (if your policy has a conversion clause). However, if these options are not available, the only recourse for beneficiaries might be to explore other legal avenues, such as disputing the insurer’s decision or seeking compensation through legal channels.
We contacted Trief, Olk & Dror to help us with a life insurance issue and Shelly Friedland was the attorney assigned to our case. Before Shelly took our case she explained to us that the likelihood of our success without going to court was possible but not likely. Unfortunately we did not get the outcome we had hoped for but it was our decision to not move forward and have our case litigated. Shelly is very knowledgeable and was very straight-forward in her assessment of our case as we moved forward. She was very patient and thorough in answering our questions. She always responded in a timely manner and listened to our concerns. We would certainly recommend Shelly and would use her firm again in the future.”
- John Ramig
If there is any possibility of winning your life insurance case – this is the place to do it for you. They are efficient, honest and will achieve the best possible outcome.
Shelly Friedland worked on my case where a life insurance policy had lapsed and was even a few days beyond the grace period. Farmers had rejected my claim twice and was unwilling to take a second look. Shelly was able to get them to pay the entire claim without going to court, and the full amount was deposited in my account within a couple months. Highest recommendation.”
- Kathleen Brown
Trief, Olk & Dror is a superior law firm. Their attorneys and other legal professionals have a brilliant understanding of the law and the litigation process. They diligently perform their work in an efficient, strategic and cost-effective manner to ensure the best possible outcomes for their clients.
- Christopher Hughes
Preventing Policy Lapses During the Holiday Season
While it’s easy to get caught up in holiday spending, it’s essential to remember that keeping up with life insurance premiums should remain a priority. There are a few steps that policyholders can take to avoid lapsing their policies during the holiday season:- Set Up Automatic Payments: One of the easiest ways to ensure that premiums are paid on time is to set up automatic payments. This eliminates the possibility of forgetting a payment, especially during the busy holiday season.
- Create Reminders: If automatic payments aren’t an option, set up calendar reminders to alert you a week before the premium is due. This gives you time to make the payment without rushing at the last minute.
- Review Your Policy: Before the holiday season kicks off, take some time to review your life insurance policy and ensure that everything is in order. Check the payment due dates and make sure that your beneficiaries are up to date.
- Consider Payment Flexibility: Some insurance policies offer flexible payment options, such as quarterly or annual premium payments. If you know you’ll struggle with monthly payments during the holidays, consider switching to a payment plan that works better for your budget.
Settlements & Verdicts
Steps to Take If Your Policy Lapses
If you miss a premium payment and your life insurance policy lapses, there are steps you can take to recover coverage, depending on the terms of your policy:- Contact Your Insurer Immediately: The first step is to reach out to your insurance company. In many cases, insurers can offer a reinstatement option within a specific timeframe, so it’s important to act quickly.
- Submit a Reinstatement Application: If the policy allows for reinstatement, you’ll likely need to complete an application and provide proof of insurability. This could include a health examination or answering medical questions.
- Pay Back Missed Premiums: If reinstatement is approved, be prepared to pay the back premiums and any applicable fees or interest.
- Consult an Attorney: If your insurer refuses to reinstate your policy, or if the death benefit is denied after a lapse, it may be time to consult with an attorney. A skilled lawyer specializing in life insurance disputes can help you understand your rights and explore legal avenues for recovering the death benefit.
Why You Should Seek Legal Assistance After a Life Insurance Lapse
Dealing with the denial of a life insurance claim after a missed premium or policy lapse can be overwhelming, especially during the holidays when emotions are running high. If you find yourself in this situation, seeking legal assistance is a smart step to take. An attorney specializing in life insurance disputes can help you:- Review your policy and determine whether the insurer’s denial was justified.
- Negotiate with the insurance company to have the claim reconsidered.
- Represent you in court if the case proceeds to litigation.