When their annual family life insurance premium came due recently the Johnsons did not have the funds available. Their credit cards were topped out from some unexpected house maintenance issues, a trip and, along with all of the other day to day expenses of running a household; there was just not enough money in the bank. Their budget was on overload. The life insurance premium statement and reminder notice was filed in their "to be paid" folder, untouched and unpaid for several weeks until they received the final "lapsed" notice.
Fortunately for the Johnsons there was no claim required under their now lapsed life insurance policy or this story would have had a much sadder ending. There would have been no life insurance to look after their family responsibilities.
Unfortunately, however, the Johnsons needed insurance and soon found out getting their life insurance back on track when it has lapsed is no easy matter. New applications, new medicals (and a hope that their good health continued to even qualify) were required and now at much higher premiums reflecting their current ages. Years of previous insurance payments now gone and a new policy required. A costly and potentially financially catastrophic circumstance indeed.
Imagine similar circumstances if they had left the country on an extended vacation and their home, automobile, or any insurance policy expired while gone and they suffered a major loss such as a fire? For the sake of a few extra precautions, the risk of financial loss could be catastrophic.
With most of our household budgets strained and on overload these days it can become difficult trying to prioritize which expenses come first. Late with a credit card bill? You're charged more on the next one. Late with your cable TV, cell phone or most other monthly expenses? You might have an interruption of service or incur additional service charges. Late with your home, automobile, life, business or any insurance premium? You may find your policy lapsing and the financial consequences severe.
To avoid the chance of an accidental cancellation or expired policy always make sure your premiums are paid by their due date. If you are unable to do so, it is always important that this be communicated to your broker or insurer to review any options available.
The Insurance Advisors @ Guthrie Insurance Brokers Ltd
Toronto- (416) 487-5200 – 1-888-310-SAVE (7283)
E & O E