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

If your life insurance premiums are becoming too high, you have options.


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You never know when you’ll need to make a life insurance claim, so it’s important to maintain active cover whenever possible. Unfortunately, circumstances change, new expenses arise and it’s not always possible to keep up with premium payments.

Three readily available options to consider 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.

Which insurers offer premium freezes?

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

BrandsPremium freezeWhat age is this available?
  • Yes
AMP Elevate
  • Yes
Not stated
  • Yes
Not stated
  • Yes
  • Yes
Not stated
TAL Accelerated Protection
  • Yes
Zurich Wealth Protection
  • Yes
Not stated
  • Yes
12 months pause
  • Yes
Not stated
  • Yes
Not stated
TAL Lifetime Protection
  • Yes
Not stated

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 on May 2017. 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.

Compare life insurance with an adviser or direct

Enter your details and one of our partner brokers will call you. They will discuss your quote, options and available products.

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An adviser can help you find cover from trusted life insurance brands.

  • Get competitive quotes from multiple brands
  • Lower rate of declined claims (according to ASIC)
  • Save time and effort

Lender Logos

Compare quotes from these brands

Name Product Maximum Cover Maximum Entry Age Minimum Cover Terminal Illness Benefit
Real Family Life Cover
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™ .
Medibank Life Insurance
Medibank health members save 10% every year. T&Cs apply.
NobleOak Life Insurance
First month free for NobleOak Life Insurance. T&Cs apply.
ahm Life Insurance
ahm Health members can save 10% off premiums.
Guardian Life Insurance
Zurich Ezicover Life Insurance
Get your first month free. T&Cs apply.

Compare up to 4 providers

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2 Responses

  1. 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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