Is it sensible to let your life insurance lapse?
PNB MetLife 22-11-2016 04:30:16 PM
Paying a premium is a regular expense which can be a burden in times of economic hardship. At such times, terminating an existing life insurance may appear like an appealing option. However, is it really wise to let your life insurance lapse?Read More
Expense Now – Asset Later
While working, financial obligations are immanent. These obligations make us focus on minimising our expenses constantly. However, putting off a life insurance policy just to avoid a premium payment can be a big mistake.
Life insurance is an investment for the future. Not considering what your dependants might face without your income, can lead them into serious financial situations. Having a life insurance cover can be invaluable in these situations.
Keep up with Premiums
There can be many reasons for discontinuing a policy – from unaffordable premiums to changed circumstances. However, a lapsed policy is a lost financial opportunity. Planning your expenses with the help of a premium calculator can help you better plan your finances. Setting up an online premium payment that manages your insurance premium can also help you keep track of your policies effortlessly.
A lapsed policy also means the amount invested into premiums will go down the drain. In the case of a money back or endowment policy, it is prudent to understand the terms and conditions as some policies have a 3-year lock-in clause and discontinuation before that period will mean giving up on previously paid premiums. Once a policy lapsed, there is no way of reviving it.
In conclusion, plan your finances such that your insurance premiums are always accounted for. Even if a financial crisis does arise, opt for a loan or other options to meet it rather than lapsing your insurance policy.