The Insurance Company will contact you, but if you don’t
take action your policy will be cancelled.
The first thing that will happen if you miss a premium payment
is the Insurance company will get in touch to find out if it was some
kind of oversight or a mistake at the bank. They will also let you know
that if you don’t pay the premiums within a set time, the policy
will be cancelled.
It is important to realise that if a Life Insurance policy
is cancelled it can’t be restarted. It would be a case of reapplying
for cover, which would be bound to be more expensive, as you will be older
than when you took out the policy.
You must also be aware that if your insurance is a condition
of your mortgage, then failing to make premium payments could put your
mortgage at risk. Therefore, you should always contact your mortgage lender
before considering cancelling a policy or ending the premium payments.
If you don’t, you could find yourself in a serious situation regarding
your mortgage.
Remember that Life Insurance Policies do not have an investment
value. If you cancel a policy there is no requirement for you to make
further payments. But you will no longer have any life cover.
If you add Waiver of Premium cover to your Life Insurance,
this will pay your premiums if you are ill or unemployed. However, you
must tell the Insurance Company if this happens and provide the evidence
they require. They will then arrange to credit your policy with the premiums.