What Happens To Old Life Insurance Policies?
10968 POINTSview profileTim WilhoitOwner, Your Friend 4 Life, Brentwood TNOld life insurance policies with paid up premium live until their insured or owner dies, then they pay out a death benefit to the beneficiary. If an old policy if allowed to lapse for non payment, one of two things happen. A term policy is lapsed and cancelled immediately because as term suggests it was "rented" until payment is complete. On a cash value plan such as whole life or universal life, the cash value pays the premiums until they are exhausted and it too will lapse and cancel.Answered on June 6, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is an excellent question! One of two things will happen. If the policy was paid up long ago, and has remained in effect, then it acts like any other policy, and when the insured passes, it pays out. Unfortunately, what happens most often is that Parents had a policy on the child, the parent that paid the bills passes, the policy doesn't get paid, goes into grace period, and then lapses, and cancels. All those years of payments go up in smoke. Please ensure that your loved ones have a copy, or access to, your finances, sand their payment schedules, so that this doesn't happen to you. I have had to have the conversation about unpaid policies far too often, and each time it breaks my heart to see the child realize there is no insurance. Thanks for asking!Answered on June 7, 2014flag this answer
Did you find these answers helpful?
Yes
No
Go!
Add Your Answer To This Question
You must be logged in to add your answer.
.JPG){kind=avatar}
