By Carley Ellis

As a human living in 2023, you’re likely to be doing a lot of “stuff”.   Balancing work, kids, partners, pets, housework, exercise, hobbies, parents – the list can be long.  There are only 24 hours in a day, but we’re often trying to multi-task and cram more in.

Add a bit more pressure in the form of rising living costs and weather like a Scottish spring, and our brains seem to be spending time to help us survive, not thrive.  How’s that working for you?!

Ex-Coca-Cola CEO, Bryan Dyson describes us all as juggling five balls – work, family, health, friends, and spirit.

Some are made of rubber, and will bounce, but most are made of glass.  They may not shatter completely but will certainly be left with a dent, scuff or mark if we lose hold of them.  Sometimes, we have to put one of the balls down to preserve our ability to properly handle the remaining balls (which hopefully explains my empty social calendar).

I’ve observed that even the best jugglers drop a ball from time to time, and they mostly bounce back.  However, as it relates to insurances which support your health and wealth, it’s important to remember that the rebound needs to be fast – otherwise the ball might be lost forever.

“Lapse” is industry jargon for when a policy cancels due to non-payment of premium. 

Often this occurs when a credit card expires, or you’re in the process of changing banks and forget to update the account details.  While one missed payment isn’t too much to worry about, just like that ignored tooth ache, the longer you wait the more painful things may get.

If you miss an insurance premium payment, most insurers will attempt a double deduction when the next payment is due.  This will continue accumulating until they hit three months’ worth of deductions, which is when your policy will be put into pre-lapse.  You now have ten days to make a manual payment to clear some – preferably all – of the arrears or make a payment arrangement to do so.

What happens next is where most people get caught out – and we have seen some shocking stories.  The insurance policy is now void, and there will be no payment to you or your family if anything happens, which can be a bit of a scary surprise.

To get the cover back you will need to reapply, which can be tricky if new health conditions have arisen since you initially took out the policy.  These will likely now be excluded or may prevent you from being able to obtain the same insurance that you just lost.

While it’s in their best interests to do so, there’s no legal obligation for the insurer to ensure that you are aware that your policy is about to lapse.  So, it’s important to have two sets of eyes on the family’s finances, doubling the chances of picking up on missed premium payments.

If you find yourself in a position where cashflow is tight and the “insurance” ball is at risk of dropping – get in contact with your adviser ASAP.  We can offer some great options or alternatives to explore while retaining your cover – let us take that worry out of your hands.