What happens if I can't pay my premium?

Many people are concerned that the time and money they invest in a life insurance policy would be wasted if they were unable to meet their premium payments. They would have nothing to show for their money and they wouldn't have the protection they wanted either. However, this needn't be a worry.

Of course if you continually miss payments with no just reason then your policy will lapse. But most companies will offer you something called waiver of premium (sometimes known as premium protection). With this, if you're unable to pay your premiums after suffering a long term illness or disability the insurance company effectively waives the need for you to continue to pay the premiums.

There is usually a waiting period before a claim can be made, referred to as the 'deferred period', which is often about six months.

The underwriting - the decision on how much to charge you for your premium - is usually stricter on this than life cover and they are likely to investigate your occupation as well as your health. But usually any additional cost for waiver of premium is relatively small.

Next: How can I protect the value of my policy againist inflation

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