What happens if you stop paying whole life insurance premiums?
Answered by 4 licensed agents
If you stop paying whole life insurance premiums, the policy may lapse if there’s not enough cash value to cover the payments. If sufficient cash value has built up, it may be used to keep the policy in force, depending on the policy’s provisions.
If you miss a payment, you'll usually have about 30 days to get caught up before the policy is canceled. If your policy has enough cash value, it may be able to cover the premium and keep the policy in force.
What happens depends on how long you've owned the policy, how much cash value it has built up, and the options included in the contract. Unlike term life insurance, a whole life policy doesn't necessarily lapse immediately if you stop paying premiums.
When you stop paying whole life policy premiums the carrier will attempt to contact you and resolve the issue. If you don't respond within a given time, your policy lapses and consequently will be cancelled. If you let it go, you still have the accumulated cash value. Some insureds choose to pay the missing premium by automatic withdrawing from the cash value. In this case, the policy keeps going until cash value exhausts.
