Find out what kind of life insurance you have and ask if there are alternative ways to keep the policy in force.
Term life insurance lasts for a specific number of years, and does not build cash value. A term policy cancels for nonpayment if you do not pay the premium. Most term policies have a grace period, which often lasts 30 days after the due date. The policy may be eligible for reinstatement if you want to maintain coverage. A reinstatement application, health statement, medical exam, and payment of outstanding back premiums may be necessary.
Permanent life insurance has more possibilities. These policies build cash value. A policy in force for many years may be worth a significant amount. Ask about borrowing against the cash value to pay the premium. Keep in mind, however, that cash value loans must be repaid. The policy's death benefit will be reduced until the borrowed amount is paid back with interest.
Some permanent policies earn dividends based on investments. Dividends accumulate on top of cash value. Find out if you can use dividends to keep the policy in force. This may allow you to avoid a cash value loan.
Or, the permanent life insurance policy may have a nonforfeiture clause allowing you to reduce the policy's face amount or convert coverage to a term policy. Proceed cautiously as altering policy terms could leave loved ones without adequate protection.
A permanent life insurance policy will eventually cancel if the premium is not paid. Look into reinstatement when your financial situation improves. The insurer may be willing to reinstate your policy if you apply within five years of cancellation, if your health situation has not changed, and you repay the outstanding premium with interest.