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

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.

1. Premium freeze

A premium freeze lets you stop your premiums from increasing as you age. It's only available with stepped premium life insurance policies because the cost rises with age.

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 – however, your level of cover will drop.

• 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.

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FAQs about life insurance premium freezes

• 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 altogether.

• 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.

Brand	What age is this available?	More info
NobleOak	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. amount.	Read the review
AIA	35	Read the review
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	If you're paying premiums on a stepped basis, you can request a premium freeze on your life, TPD or trauma cover at any time. This excludes policy fees and government charges.	Read the review
MLC	30	Read the review
OnePath	Not specified	Read the review
Clearview	30	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.}

2. Temporarily suspend your cover

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

• 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.

• 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

3. Other ways to reduce your life insurance premiums

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.

• Reduce your sum insured. If you've used the premium freeze option, you may want to consider reducing your cover before cancelling your policy altogether. For example, if your current benefit amount is $1 million, you might be able to save by reducing it.
• Remove CPI increases. Every year you hold life insurance cover, it will automatically increase to keep up with inflation. One more way to reduce the cost of your premiums is to request to your insurer to remove the increase. You can usually do this in writing or over the phone.
• Share a policy. You can often pay less overall or get a “bulk discount” with joint life insurance policies.
• Shop around. It’s important to be aware of the downsides of switching life insurance policies, but it may still be worth considering. Whatever life insurance policy you have, it’s still only one option among many. Compare it side by side with other policies to see if you’re getting value for money.

Compare life insurance

Name	Product	Maximum Cover	Maximum Entry Age	Terminal Illness Benefit	Claims Acceptance Rate	Average Claim Time	Sum Insured
NobleOak Life Insurance Finder Award		$25,000,000	74	$25,000,000	96.90%	1.1 months	$24,483 million	Our verdict: Finder Life Insurance Award winner for the last 5 years in a row. Good value for money, simple application process and a high claims acceptance rate. ⭐ Current offer: Get one month free for a limited time - apply by 21 December 2023. Offer T&Cs on insurer website apply.	Get Quote View details	Compare	loading Fetching your data...
TAL Accelerated Protection Life Insurance Finder AwardBonus		No set limit	73	Not stated	Data not available	1 months	$249,285 million	Our verdict: One of Australia's leading life insurers. Automatically includes child critical illness cover. Plus, it comes with a level premium option (e.g. costs remain similar as you get older). ⭐ Current offer: Get up to 15% off your TAL Life, Trauma or TPD insurance policy for life - if you have a Body Mass Index (BMI) between 19 and 28 at the time of your application. Offer T&Cs on insurer website apply.	Get Quote View details	Compare	loading Fetching your data...
Medibank Life Insurance		$2,500,000	70	$2,500,000	Data not available	Data not available	Data not available	Our verdict: Medibank offers a higher payout limit ($2.5 million) than 15 other providers. Get a 10% discount if you're already a Medibank Health Insurance member.	Get Quote View details	Compare	loading Fetching your data...
ahm Life Insurance		$1,500,000	55	$1,500,000	Data not available	Data not available	Data not available	Our verdict: ahm offers a simple application process. You can be approved online or over the phone. There are no medical or blood tests required.	Get Quote View details	Compare	loading Fetching your data...
HCF Life Protect Insurance		$1,500,000	65	$1,500,000	Data not available	Data not available	Data not available	Our verdict: Similar cover to other insurers ($1.5 million). A good discount for HCF members of 10% and an easy initial quote process. ⭐ Current offer: Eligible HCF Members receive 10% premium discount and HCF Thank You rewards.	View details	Compare	loading Fetching your data...
RAC Life Insurance Bonus		$25,000,000	74	$25,000,000	96.90%	1.1 months	$24,483 million	Our verdict: RAC’s maximum death cover limit of $25 million is one of the highest limits you’ll find, including $5 million in TPD insurance. You can get an online quote, but you’ll need to call RAC to get trauma cover. Benefit from added peace of mind with fully underwritten insurance.	Get Quote View details	Compare	loading Fetching your data...
Real Family Life Cover Bonus		$1,000,000	64	$1,000,000	88.90%	2.4 months	$53,238 million	Our verdict: The application is simple; it can be done with 1 phone call and there are no medical exams. But households with larger debts may need more than a $1 million payout. ⭐ Current offer: Get back 10% of the premiums you’ve paid after 1 year.	Get Quote View details	Compare	loading Fetching your data...

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