What can happen to a life insurance policy if the premiums are not paid?

When premiums are not paid on a life insurance policy, the most likely outcome is that the policy may lapse or be terminated. This occurs because life insurance policies are contracts that require regular premium payments to remain in force. If the premiums are not paid according to the terms of the policy, the insurer can no longer provide coverage, leading to the policy's expiration.

Lapsing means that the insurance coverage is no longer active; the insured will not receive any benefits from the policy, and the coverage ceases. In many cases, insurers offer a grace period during which the policyholder can make overdue payments without losing coverage, but if the premiums are still unpaid after this period, the policy will lapse.

While transferring a policy to another beneficiary or converting the policy to a whole life insurance policy might seem relevant, they do not occur as consequences of non-payment of premiums. Additionally, premiums do not decrease indefinitely; rather, they are generally fixed as stipulated in the policy upon issuance unless modified under specific conditions. Therefore, failing to pay premiums leads directly to the lapse or termination of the policy.