Life Insurance Payment Grace Period Defined

You have options if you do not make a life insurance premium payment on time.
Profile photo of Barbara Marquand
Written by Barbara Marquand
Senior Writer
Profile photo of Tony Steuer
Reviewed by Tony Steuer
Life insurance expert
Profile photo of Lisa Green
Edited by Lisa Green
Assigning Editor
Fact Checked

Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Anyone can forget to pay a bill. But it's important to send the missed payment quickly — especially if it’s a life insurance premium.

The good news is that you have a cushion. Life insurance companies generally offer a payment “grace period" of around 30 or 31 days. Your coverage continues as long as you pay the amount owed within the grace period. If you die during the grace period without paying the bill, your beneficiary will receive the life insurance death benefit, minus the money you owe.

You'll run into trouble if the grace period passes and you still haven’t paid your life insurance premium. Then the policy can “lapse,” meaning the coverage ends, and you might have to apply for a new policy with higher rates.

Consequences of missing the grace period

If you don't make your payment within the grace period and your policy lapses, the insurer will typically accept the premium for an additional 30 to 60 days, depending on the company, and restore the coverage.

To revive a lapsed policy after that time, you can apply to have it reinstated. You’ll have to pay any past-due premiums, and you may be charged interest on the missed payments, along with penalties such as late fees. Still, it's generally cheaper than buying a new policy based on your current age and health.

You can usually apply for reinstatement within three to five years of your policy lapse, but it's better to move quickly. If your lapse is longer than a couple of months, you’ll often have to prove you’re not too risky to insure by answering health questions or even taking another life insurance medical exam.

If you die before reinstating or replacing your lapsed policy, your life insurance beneficiary won't receive a payout.

Stay organized to make on-time payments

Even if you don’t receive a premium notice, you’re responsible for making payments on time. To avoid missing your premium payment (and a potential policy lapse):

  • Create reminders for life insurance bill due dates.

  • If you mail a check, allow enough time for the check to be delivered. The premium typically is considered paid on the date the insurance company receives the payment, not the date it’s mailed.

  • Pay online, if the insurance company allows it, to ensure your payment is not delayed in the mail.

  • Set up automatic payments from your bank account. Remember to change your details if you switch banks, and make sure you have enough money in the account when the payment is due.

  • Designate a second person, such as an accountant or trusted relative, to receive late-payment notices by filling out a form provided by your insurance company. If you miss a payment, a late notice will be sent to you and the person you’ve designated, who can then remind you to pay the bill.

A late payment on a life insurance policy isn’t cause for panic if you catch it in time. But it's best to develop safeguards so you don’t have to scramble.

Find the right life insurance plan for you
Make sure you and your loved ones are covered - compare customized life insurance quotes from our partners.
Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.