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13 HOW TO MAKE YOUR LIFE INSURANCE WORK FOR YOU Typically, Canadians choose to pay their life insurance premiums on a monthly basis, usually through automatic bank withdrawals. There are other options available: annual, semi-annual and quarterly payments. You can limit the number of years you pay premiums and telescope them into a shorter time-frame. Your premiums will be somewhat higher over those years, but afterward, your policy is free and clear. For example, you may wish to have a permanent life policy fully paid-up at age 65 so no premiums would be payable after retirement. (This differs from the premium offset concept, discussed on page 15, which is not guaranteed.) Premiums: When and how to pay them There is a 30-day grace period after the due date to pay a premium. If the premium is not paid by the end of this grace period, the policy lapses (terminates). If death occurs during this period, the death benefit is paid, but any outstanding premium is deducted from that payment. Cash values in a policy can provide protection against lapsing (see "Special Built-in Safeguards" in next column). Reinstatement of a lapsed policy can usually take place within two years on payment of overdue premiums, plus interest, and submission of satisfactory medical evidence. What If I Have To Stop Paying Premiums? A number of options, called riders, can be added to your policy to tailor it to your personal needs. For example: Accidental death and dismemberment: Guarantees an additional payment to your beneficiary, often doubling the amount of your policy, should you die from an accident. May also provide payment to you on loss of limbs or eyesight as a result of an accident. Disability waiver of premium: Pays your premiums and keeps your policy in force should you become totally disabled (usually takes effect once you have been disabled for a specified period of time [e.g., six or nine months].). Guaranteed insurability: Enables you to purchase additional insurance at specified times in the future without a medical or other evidence of insurability. Riders: added protection