What happens if I can’t make a life insurance payment?

Adjusting or freezing your premium are among the options to consider if you find yourself unable to keep up with your life insurance payments.

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Keeping up with your premium payments it's crucial to prevent your policy from lapsing. Unfortunately, circumstances do change, new expenses arise and it’s not always possible to keep up with premiums.

But there are a number of options to consider regarding your life insurance policy. Three of these include:

What is a premium freeze?

A premium freeze is only available with stepped premium life insurance policies, where the cost rises with age. Applying for a premium freeze is generally as easy as filling out a form and sending it to your insurer.

Things to consider

  • Not all policies will include this option. If you’re interested, check whether your current policy includes it or if it’s available with new policies.
  • Limited window to activate option. If your premiums have recently gone up, you may have a limited window in which to activate a premium freeze. Typically a premium freeze must be activated within 30 days of policy renewal.

How does a premium freeze work?

When frozen, your premiums will stop rising with age, for a set period of time. Typically it can last until you choose to cancel it, or make a claim or adjust your level of cover in some other way. You will still have to pay premiums but the price won’t increase with time, as long as it’s active.

What’s the downside?

  • The main catch is that your cover won’t increase either, and you may become underinsured.
  • Policies are often indexed for inflation, but typically won’t be for as long as your premiums are frozen.
  • You might lose benefits like guaranteed future insurability depending on the policy terms and conditions.

Can I ‘unfreeze’ my policy later?

Yes. You can generally unfreeze your policy whenever you are ready, but certain conditions might unfreeze it sooner, depending on your policy. It may unfreeze when you make a claim, reach the next policy renewal date, change your sum insured or otherwise adjust your cover.

Should I freeze my premiums?

It might be the right option if your premiums are becoming unaffordable. However, there are downsides, so it’s a good idea to consider the other alternatives first.

What happens if I simply stop paying?

If your premiums go unpaid for too long, you will lose your cover. If they continue to go unpaid, your policy will be cancelled all together.[/fin_accordion]

Should I just cancel my policy and look for one later on?

A common mistake is to cancel your life insurance policy when the cost gets too high. If you do this, it will probably cost more to sign up again later, because you'll be older and might not be as healthy as you were before.

The good news is that you don't need to do this. Everyone's financial situation will change from time to time, and insurers have several options to make sure you don't need to cancel your cover.

Which insurers may offer premium freezes?

Here are some of the brands on Finder that offer premium freezes.

BrandWhat age is this available?More info
NobleOak Income Protection (Pre-existing conditions)


Request a premium freeze at any time. This means your future premiums will be fixed at the amount you were paying on the date you notified the provider.

Read the review

AIA Life Insurance Logo



Read the review

AMP Life insurance logo

AMP Elevate

Request a premium freeze or policy cancellation at any time. This takes effect from the next extension date of the plan.

Read the review

Asteron Life Insurance Logo


If you're paying premiums on a stepped basis, you can request a premium freeze on your life, TDP or trauma cover at any time. This excludes policy fees and government charges.

Read the review

MLC life insurance logo



Read the review

OnePath Life Insurance Logo


Not specified

Read the review

Picture not described



Read the review

Note that premium freeze options will reduce your sum insured amount and might not be available in super policies. Data taken from brand product disclosure statements, June 2021. Benefits, conditions and amounts are subject to change at anytime.

How do I temporarily suspend my cover?

Functionally, suspending your cover is a lot like temporarily cancelling your policy, with the advantage of not actually needing to cancel it. Not all life insurance policies will include a suspended cover benefit, and where they do it may be variously known as a premium holiday, premium pause or other variation.

Key conditions to consider

  • Suspended cover works differently between insurers and policies. Some may require you to provide evidence of financial hardship while others might let anyone suspend cover without condition.
  • Length of suspension. Some insurers might let you suspend cover for a full year, while others will limit you to only a few months.
  • Terms and conditions will apply. For example, you might be limited to only one premium suspension over the policy lifespan, and it might be restricted to no more than three months. Make sure you are familiar with all conditions before committing to this option.

How does suspended cover work?

Unlike a premium freeze which merely stops premiums from increasing, this option means you stop paying premiums entirely. The downsides are also more severe. You will typically lose all your cover, and cannot make claims for anything that occurs while your cover is suspended.

Should I suspend my cover?

This will depend on your personal circumstances. Some examples where suspending cover might be a sensible cost-saving measure include:

  • If you’re between jobs
  • If you’re on long-term leave
  • When you’re otherwise not earning your typical income

Note: You may be left without any cover if you suspend your premiums. This step should not be undertaken lightly, and it’s a good idea to consider the alternatives first.

Other ways to reduce costs

Life insurance policies are often more complex and multifaceted than others. This can make it more difficult to navigate, but also means there are many ways to reduce costs.

  • Share a policy. You can get a “bulk discount” with joint life insurance policies.

For more details on ways to lower your premiums, and other options to consider, try going over our guide to reducing life insurance premiums.

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Compare quotes from these brands

Name Product Maximum Cover Maximum Entry Age Fully Underwritten? Terminal Illness Benefit Optional Extras
NobleOak Life Insurance
TPD cover, Trauma cover
Get your one month free when you buy NobleOak Life Insurance policy. Offer ends 30 September 2021. T&C's apply.
Zurich Ezicover Life Insurance
No optional
Get your first month free and a 10% discount by taking out a second life insurance policy (discount applies to the second policy). Customers who suffer a serious side effect from an approved COVID vaccination may be eligible for a $50,000 one-off payment. T&C’s apply.
Real Family Life Cover
TPD cover, Trauma cover
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™ .
Insuranceline Life Cover
Trauma cover
Get a $100 bonus gift after 2 months. Offer ends 30 September 2021. Plus get 12 months cover for the price of 11 if you pay for life insurance annually. T&Cs apply.
Medibank Life Insurance
TPD cover, Trauma cover
Medibank health members save 10% on premiums every year. T&Cs apply.

Compare up to 4 providers

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2 Responses

    Default Gravatar
    SharmaneJanuary 7, 2019

    I am between jobs and would like to know if it is possible to not pay my premium this month and then resume the following month, but still be covered.

      Avatarfinder Customer Care
      MauriceJanuary 7, 2019Staff

      Hi Sharmane,

      Thanks for your question. Life insurance policies usually allow you to pause premiums during financial hardship. Your case sounds a little different – so you may need to get in touch with your insurer to find out what your options are.

      I hope this helps,


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