Can I Add a No Lapse Guarantee?
A No Lapse Guarantee is an agreement from a life insurance company that is intended to protect you from cancellation. Life insurance lapsing, especially after several years of payment, would be catastrophic. Certain situations can cause life insurance cancellation regardless of how much we try to prevent it from happening.
How can we ensure life insurance will not be canceled—- especially when the cash value is low?
Introducing the No Lapse Guarantee for Universal Life Insurance
With the No Lapse Guarantee, no matter how much the policy is worth, it will not be canceled as long as the minimum premiums are paid.. Even if the cash value falls below zero, the no lapse guarantee rider ensures your life insurance policy will still be in effect.
This type of rider is often found in guaranteed universal life insurance contracts. Your policy’s cash value could drop over time if, for instance, you’re using the cash value to pay premiums. Whole life insurance policies will typically not allow you to pay premiums using cash value.
What’s the catch with this rider?
This is very important: you must stay current on your premiums to be able to use this policy. Even missing one premium can cause the cancellation of your plan. As long as premiums are paid on time, this guarantee protects your insurance from cancellation no matter what.
If you think about it, all this makes sense. What incentivization does a carrier have to continue to do business with you if your policy isn’t worth anything? If you’re paying into your policy, but it isn’t worth anything, your company could be losing out under certain circumstances. This is why it’s so critical to make sure to keep paying premiums on time—- the payment of premium keeps you in the green with the company, while the no-lapse guarantee protects your interest by not allowing your policy to be canceled. As long as you pay your premiums, you remain protected.
No Lapse Guarantee Life Insurance
Note that as with any policy, any change in amount or coverage may change the premium. “Catch up” amounts may allow a policyholder to satisfy payments if needed to put you back into good standing with your carrier for the long term.
Let’s take a look at your specific situation and discuss how we can help you work with a plan that builds the right cash value over time. We know Life, we know no lapse and other guarantees that protect you as a consumer, and we’re glad to give you the details!