The economy is bad and you don’t have as much money coming in due to loss of job, reduced work hours, or for any other reason. If this is happening to you then you may wonder why you should pay your life insurance premium if the money could be used elsewhere. However, if you don’t pay your life insurance premiums you could be putting your family in a very tough situation.

Your policy terms and conditions will determine what happens if you don’t make a premium payment and all policies are different. However, you should know if you have term life then your coverage will lapse if you don’ t make the payments. This is certainly not a good position to be in because without the life insurance policy how will your family survive and pay the bills in the event of your death. If you have a permanent life insurance policy then you can pay premiums with the cash value of the policy in some circumstances. The policy and cash value available will determine if this is possible, but if it is then the cash value could be reduced significantly in time, the death benefit could be reduced, and/or the policy could eventually lapse.

There are some policies that offer flexible premiums. If you don’t have a policy like this then you should consider getting one. They allow you to skip premiums in some circumstances or to pay less than the premium. Before doing this, though, you should talk with your agent to ensure all is on the up and up.

The biggest reason you should continue paying your premiums is that if you don’t you could very well lose your coverage. This would put your family at risk should something happen to you. It’s important to have this money because it would allow your family to pay for the funeral, any debts you might have had, and to simply survive while they adjust to the new lifestyle.

If you are thinking about skipping payments on your life insurance policy think about why you got the life insurance to begin with. Was it because you wanted to protect your family in the event you died prematurely? If so, simply because the economy is down won’t change that fact. Do your best to work out a way to afford your life and your insurance policy until things get better. This includes getting a second job to afford your premium payments.

Posted in Home Budget

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