How to Keep Your Insurance Policy

Most insurance policies have 30-day grace periods-that is, if your payment is due on the tenth of the month and you don't pay unitl the ninth of of the following month, you won't lose your coverage. A few companies won't terminate your policy as long as you pay your premium within 60 days of when it's due. If you don't pay within 60 days, your policy will surely be
cancelled.

Difficulty: Moderately Challenging

Instructions

Things You'll Need:

• Telephone
• This Article

1. If you want to keep your insurance coverage, contact your insurance agent. You can reduce the amount of coverage or increase your deductible, thereby reducing your premiums. This can usually be done easily for auto, medical, dental, renter's, life and disability insurance. It will be harder for home owner's insurance, because you'll probably have to get authorization from your mortgage lender, who won't your house to be under-insured.

2. If you have a life insurance policy with a cash value-an amount of money building up that you'll receive if you cancel the policy before it pays out-you usually can apply the money that represents the cash toward your premiums. The company will treat the use of cash value as a loan. Your policy's cash value won't decrease, but you are required to pay the money. Or, you can simply ask that the cash reserves be used to pay the premiums. This will reduce your cash value, but you won't have to repay anything.

3. Perhaps the best way to keep life insurance coverage while reducing the payments is to convert a whole or universal policy into a term policy. You may lose a little existing cash value as a conversion fee, but it may be worthwhile if you get a policy that costs far less to maintain.

Tips & Warnings

• I was in a situation last year when I was laid off from my teaching job last year in Detroit. I used cash from one of my policies until unemployment kicked and I found a new job. This really helped my family weather the storm.
• Be careful, always read the fine print. Pick the policy that is right for your family.

Resources

• www.whatdoidonow.biz

[kaytay]

on 1/9/2009 5 stars and a "recommend."