If you miss a premium payment, you typically have a 30- or 31-day grace period during which you can pay the premium. After that, the policy will lapse. You may be able to reinstate with evidence of insurability depending on your policy’s provisions. If your policy has sufficient cash value, the company can, with your authorization, draw from a permanent policy’s cash surrender value to keep that policy in force. This does not apply to term insurance because there is no cash value to draw from. In some flexible premium policies, premiums may be reduced or skipped as long as sufficient cash values remain in the policy. However, this will result in lower cash values.
Provisions or riders that provide additional benefits can often be added to a policy. One such rider is a waiver of premium for disability. With this rider, if you become totally disabled for a specified period of time, you do not have to pay premiums for the duration of the disability.
“Accidental death benefit”, provides for an additional benefit in case of death as a result of an accident. This rider, if available, would require additional premium. Availability and specifics varies by carrier and state. “Accelerated benefits”, also known as “living benefits.” This rider allows you, under certain circumstances, to receive the proceeds of your life insurance policy before you die. Such circumstances include terminal or catastrophic illness, the need for long-term care or confinement to a nursing home. This rider, if available, may require additional premium. Availability and specifics varies by carrier and state. “Child rider”, provides insurance for all your children, usually from $1,000 to $20,000 of death benefit. This rider, if available, would require additional premium. Availability and specifics varies by carrier and state.
If you decide to purchase the policy, find out when the insurance becomes effective. This could be different from the date the company issues the policy.