What happens to a life insurance policy if premiums are not paid?

When premiums for a life insurance policy are not paid, the policy may lapse. This means that the coverage provided by the policy is terminated, and the insured individual will no longer have the financial protection that the policy offered. Typically, life insurance policies have a grace period after the missed payment, during which the policyholder can make the payment without losing coverage. However, if the premiums remain unpaid beyond this grace period, the insurer will stop the coverage, and the policy will lapse.

This outcome underscores the importance of adhering to premium payment schedules, as failure to do so can leave individuals and their dependents without necessary financial support, especially during times of need. It can be particularly important to communicate with the insurance company if there are difficulties in making payments, as some policies may have provisions for reinstatement if certain conditions are met.