Is There A Penalty For Defaulting On Insurance Payments?

Discussion in Home & Property Insurance started by remnant • Oct 29, 2016.

  1. remnant

    remnantActive Member

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    Due to financial constraints, there are times when one is unable to service their insurance payments in time. In other instances, there is the possibility of defaulting on the same. I wonder whether one can negotiate an arrangement to pay twice in case of a default. Is there a penalty attached to this?
     
  2. Happyflowerlady

    HappyflowerladyWell-Known Member

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    This is proabably going to depend on the type of insurance you are talking about, @remnant@remnant . If it is something like health or car insurance, they will usually expire if they are over 30 days late. Most of the time, you can re-instate them if you do it soon enough, but there is likely to be a re-instatement fee if you do this.
    If you are talking about life insurance, then it depends on what type of policy that you have. If it is a term policy, then it will expire just like the car insurance does. However, if you have the kind of life insurance policy that builds up policy value, then that can pay the premium for you.
    This is basically like a loan against the policy, and is called APL, or automatic premium loan. Once you do that , it decreases the value of the policy by that amount, unless you pay the APL back again when you get the money.
     
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