In the unfortunate event that your life insurance policy lapses, it may not be possible to receive money back if the policy has exhausted its cash surrender value or if you have missed premium payments. To make matters worse, if you no longer have an active life insurance policy contract or a lapse in coverage, this means that a death benefit no longer exists for the individual or individuals insured.
However, the good news is that you do have some options and even have a grace period to make some adjustments to your life insurance policy. Keep reading to learn more about your options.
Take Action Before the Lapse
Most people are unaware that it’s possible to divide, or even sell off, your life insurance policy. Before you lose the money you’ve invested for death benefits, consider this option to secure your financial future. When struggling to make premium payments or when you’re interested in gaining cash value to use for expenses, medical bills or even leisure activities, professionals from LifeGuide can help you make this option a reality.
The process is quite simple, actually. Essentially, a finance or investment firm purchases the portion of your life insurance policy from you, the company pays the remaining premiums on the policy, and is then able to collect the death benefits when the insured individual has passed away.
Take Advantage of the Grace Period
If you want to maintain your life insurance policy, yet it has already lapsed, know that you may still have viable options. Most life insurance companies offer a grace period; however, if the grace period has already passed, you may have the option to reinstate your life insurance policy for a short time after the policy lapse.
State laws require that a life insurance policy must first go through a grace period of at least 30 days once a payment has not been received. If your policy does lapse, depending upon the rules of your life insurance company, you may be able to reinstate the policy. Keep in mind that to reinstate the policy, you may be required to pay more than just a one-month premium. Additional underwriting fees, premium costs or deposits may also be required, which will ramp up your ultimate out-of-pocket cost to reinstate the policy.
It’s crucial to reach out to qualified professionals who are experienced in guiding you through the process of either selling a portion of your life insurance policy or reinstating a policy. That’s where LifeGuide comes in.
Find the Support You Need with LifeGuide
LifeGuide™ offers financial information and guidance to seniors, access to a highly experienced referral network of planning professionals, and a safe and secure process for retirees to plan for the future. We offer innovative solutions including selling your life insurance policy if no longer needed. Contact us today to learn more about how we can assist you with your life insurance questions and concerns.