What happens if I don’t pay my term life insurance premium?

A lapse in your coverage is what happens when you don’t pay your term life insurance premium. Reinstatement is an option offered by most insurance companies if you forget to pay your term insurance premiums. Learn more about what happens when you don't pay your term life insurance premium in our article and learn how to get affordable term life insurance.

Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

Full Bio →

Written by

Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

Full Bio →

Reviewed by Benji Carr
Former Licensed Life Insurance Agent

UPDATED: Mar 30, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right life insurance coverage choices.

Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We are not affiliated with any one life insurance company and cannot guarantee quotes from any single company.

Our life insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different life insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.

Term life insurance is a unilateral agreement between you and the life insurance company, which means the obligation rests only on one party, the life insurance company. Term life insurance quotes are also easy to find.

But what happens if I don’t pay my term life insurance premium? The policy will just lapse and you will not be covered.

We often have customers ask if letting a term life insurance policy lapse this will hurt their credit. The answer is no. What happens if you stop paying life insurance premiums on term life insurance?

As this is a unilateral agreement, there is no obligation to pay the premiums. Unlike a bank loan or credit card, missed payments are not reported to consumer reporting agencies or credit bureaus by the life insurance company.

Now you know your term life insurance policy will lapse if you do not pay your premium. What if you accidentally miss the payment date or can’t make the premium payment on time for some reason? No need to panic. You have options.

Before jumping into the details of what happens if you don’t pay your term life insurance premium, use our FREE online tool for instant term life insurance quotes in your area.

Not yet ready to buy term life insurance? Read on to learn more.

What Happens If You Miss A Payment: Behold the Life Insurance Grace Period

All term life insurance policies allow some grace period for making your premium payment. How long is the grace period for an individual life insurance policy? The most common length is 30 days.

Your policy will not lapse as long as the life insurance company receives your payment within the grace period. Keep in mind each company has its guidelines, and you should refer to your policy to verify the grace period and specific rules.

One important point to note — you are still covered during the grace period. If you die, the company will still pay the death benefit.

According to Life Happens, it usually takes life insurance companies between 30 and 60 days to get the life insurance check to your beneficiaries.

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

Reinstatement: Can an expired policy be reinstated?

If you do happen to go past the grace period without paying your premium, the policy will lapse. So, what then? If you decide you still want the coverage, you can apply for reinstatement.

Again, each company has its guidelines for reinstatement. Most term life insurance companies will allow you to apply for reinstatement up to five years from the end of the grace period.

Generally, reinstatement depends on the company as well as the type of term life insurance you purchase.

Here’s what is usually required:

  • Reinstatement Application – All companies will ask for you to complete this. It is similar to the original application you completed when you first applied for the policy.
  • Health Statement – Most companies will ask questions regarding your current health status. They want to see if anything has changed since your original application.
  • New Paramedical Exam – This varies widely by the life insurance company. Most do not require this if your reinstatement application is received within 90 days of the end of the grace period. Others will give you up to a full year before they will require a new exam.

However, if you have had a change in health status or provide answers on the health statement that suggest health changes, the life insurance company will most likely require you to complete a new paramed exam, regardless of the time passed since the end of the grace period.

These exams are quite detailed, and knowing what to expect from your paramedical exam helps tremendously.

If you are approved for a reinstatement, you will be required to pay the premiums due from the end of the grace period.

And that can be a significant amount if it has been several months or even years since your policy lapsed. For that reason, applying for a new policy altogether may be a better choice.

Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

Reconsider the Necessity of Life Insurance & Cancel Your Policy Entirely

You may ultimately decide you do not want your term life insurance policy anymore. Maybe you bought a less expensive policy recently and just want to cancel your old one.

Perhaps you simply no longer need the coverage. Regardless, you have a couple of options for terminating the policy:

  • Stop Paying – You can simply stop paying the premiums and the policy will lapse, as we have already discussed. However, if you pay your premiums annually or even semi-annually, you may be leaving some money on the table. Which leads us to the second termination option.
  • Formally Cancel – Call the life insurance company and tell them you want to cancel the policy. Give them a specific date and ask them to refund any “unused” premiums you have already paid. Most companies will oblige and give you back a prorated share of the premiums. So, if you are three months into an annual payment of $1,200, you would be able to recover $900 in unused premiums.

Check out the following video for another quick tip on cancelling your term life insurance policy.

Unlike cancelling a whole (permanent) life insurance policy, cancelling a term life insurance policy is easy.

As outlined above, there usually are not strings attached to the policy when cancelling, and most of the time you can even get a refund for what was not used in the coverage.

You may also make it to the end of your term life insurance policy and wonder, “What happens when my term life insurance policy ends?” Sometimes, the policy will just become void.

Other times, the insurance company will offer benefits and/or discounts for outliving your policy. This depends on the insurance company as well as your specific term life insurance policy.

If you are considering picking up a term life insurance policy for whatever reason, it is important to compare a few insurance companies and their rates.

As with any life insurance policy, term life insurance rates will increase the older you are and the more health risk you present.

Below are a few sample rates from the top three life insurance companies for insurance holders at different stages of life.

Top 3 Life Insurance Companies Based on Stage of Life with Sample Annual Rates

General Age of InsuredCompany A & Sample Annual RatesCompany B & Sample Annual RatesCompany C & Sample Annual Rates
20sMassachusetts Mutual Life Insurance Co.: $177.25State Farm Mutual Automobile Insurance: $195.50Pacific Life: $199.92
30sMassachusetts Mutual Life Insurance Co.: $201.00Pacific Life: $215.12State Farm Mutual Automobile Insurance: $222.25
40sMassachusetts Mutual Life Insurance Co.: $321.50State Farm Mutual Automobile Insurance: $339.75Pacific Life: $364.25
50sState Farm Mutual Automobile Insurance: $604.50Massachusetts Mutual Life Insurance Co.: $646.00Pacific Life: $719.04
60sMassachusetts Mutual Life Insurance Co.: $1317.25State Farm Mutual Automobile Insurance: $1469.25Pacific Life: $1604.12
Get Your Rates Quote Now

Compare RatesStart Now →

Comparing rates from the top three companies for you will help you narrow down your options and choose the best life insurance policy for your needs.

The Bottom Line: What happens if I don’t pay my term life insurance premium?

Thankfully, term life insurance policies are unilateral, otherwise falling behind on premium payments could have negative repercussions on you financially.

Unlike what happens if you stop paying whole life insurance premiums, there are not as many, if any, complications if you don’t pay your term life insurance premium.

The most important thing you can do if you find yourself falling behind on term life insurance premium payments or if you are unsure about continuing your coverage, is to contact your insurance agent or your life insurance company.

Discuss with them your options so you can make an informed decision that will ensure your loved ones remain protected.

Still need to make a decision about purchasing a term life insurance policy? Try our FREE online tool to get instant term life insurance quotes from insurers in your area.

Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

QuickQuote is a BBB Accredited Business. BBB