What happens when you miss your life insurance renewal notice? Learn how a secondary addressee can help ensure your life insurance policy never lapses.
Life insurance is a valuable part of everyone’s financial planning strategy. However, staying on top of your coverage, renewal dates, and everything in between can be complicated – especially if you’re in the process of moving (or have recently moved). With so many things to keep track of, it may only be a matter of time before your policy lapses without you even knowing. A secondary addressee on your life insurance policy can help prevent such a situation from occurring.
The best part about a secondary addressee is that they act as a safety net for important insurance notices, like bills and notices of a potential lapse in coverage.
What is a secondary addressee?
A secondary addressee is a second person that can be listed on your life insurance policy to receive bills and notices regarding your policy. Some examples in which a secondary addressee may receive information include bill notices, cancellation, or lapse in policy notices. However, there are some state specific regulations regarding secondary addressees, which is why it’s important to contact a licensed insurance agent to discover if you may experience any unique regulations in your attempt to include a secondary addressee in your life insurance policy.
What is a lapse in coverage?
When you commit to a life insurance policy, you agree to pay either an annual or monthly premium. Doing this keeps the policy active. A lapse in coverage occurs when you stop paying premiums on your life insurance policy, causing you to lose your insurance coverage.
Thankfully, a lapse in coverage doesn’t happen overnight. There are notices sent out to inform the policyholder of a potential lapse in coverage, and normally a grace period of around 30 days before coverage lapses. Lapses in coverage commonly occur when an address or banking information has changed, making it easy to miss a payment.
How can a secondary addressee help prevent a lapse in life insurance coverage?
In the event you’ve missed a premium payment and have no way of knowing, your policy will lapse. Adding a secondary addressee to your life insurance policy can help save you the headache of reinstating your policy if you miss your premiums and your policy lapses.
Adding a secondary addressee to a life insurance policy is in most cases an easy thing to do. Generally speaking, all you need to do is reach out to your insurance provider and inquire about adding a secondary addressee to your policy. Your insurance provider will be able to inform you of any state specifics regarding a secondary addressee, and add them in with any regulations in mind.
The best part about a secondary addressee is that they act as a safety net for important insurance notices, like bills and notices of a potential lapse in coverage. While they can’t necessarily stop a lapse from happening, they can help the policyholder make sure they have the information they need to maintain their coverage, creating added security in some of life’s hardest moments.
State specific regulation or not, adding a secondary addressee to your insurance policy should be considered. Speak with a licensed insurance professional to learn more about adding a secondary addressee, and what a secondary addressee has access to regarding your policy in your state.