Have you ever taken a look at your finances and wished you could simply stop paying some of your monthly bills? Imagine the cash that could be put back into your pocket!
Rarely used subscription services and gym memberships are low-hanging fruit when it comes to cutting unnecessary bills. But one area that you should not eliminate is your insurance premiums! Let’s explore what happens if you stop paying your insurance premiums and how it could impact your financial security and future.
What happens if I stop paying my insurance premiums?
When you own an insurance policy, such as Medicare Supplement insurance, long-term care insurance policy, or supplemental health insurance policy, you pay a regular premium to keep the policy active.
Premiums should be paid by the stated due date, but most insurers understand that misplaced and forgotten bills can happen. If your insurer doesn’t receive your premium in time, your policy will probably enter its grace period, which keeps your policy active and gives you extra time to make a late payment. You may receive a reminder that lets you know when your grace period will end. Your insurance agent is there to help if you have any questions during this time!
If your grace period ends and your insurer still hasn’t received your premium, your policy will lapse and your coverage will be canceled. Here are a couple reasons why you shouldn’t let this happen:
- Your financial protection ends. Life is unpredictable, and you never know when a life-altering diagnosis or loss of life will occur. If you wind up in the hospital days after letting your Medicare Supplement insurance policy lapse, you could miss out on hundreds or thousands of dollars in benefits. And if you pass away without owning life insurance, your family could be faced with funeral costs, final expenses and debts without a death benefit to help.Bottom line: The worst tends to happen when we least expect it, so it’s good to always be prepared.
- Your premiums will probably go up. When it comes to many types of insurance, premiums tend to increase with age. So, if you cancel your policy, but then decide a few months later you want coverage again, you may be disappointed to discover that your premiums are now higher. You could also develop a pre-existing condition could exclude you from getting coverage or raise your premiums significantly.Bottom line: Locking in premiums when you’re younger and healthier—and keeping your coverage—is the best way to save on your policy in the long run!
Maybe an upgrade or change in coverage is what you need?
Are you thinking about letting your policy lapse because it no longer meets your needs? Before canceling your policy, talk to your insurance agent. A policy upgrade or change may be possible to help you get the coverage and benefits that you want. If a new and different policy is best for you, your agent can help you develop a plan that helps you avoid coverage gaps.
Let us know how we can help.
If you’re thinking about canceling your policy or letting it lapse, we encourage you to first talk to your agent. He or she may be able to help you find a solution that better meets your needs. Also reach out to your agent if your policy has recently lapsed as a reinstatement of coverage may be possible