Key takeaway
Canadian life insurance policies include a grace period — usually 30 days — after a missed premium during which coverage remains in force. If the premium is not paid by the end of the grace period, the policy lapses and coverage ends unless you reinstate under the contract's reinstatement provisions.
What is the grace period?
The grace period is the time after a premium due date during which you can pay the overdue premium without losing coverage. In Canada, 30 days is standard for most individual life policies, though some contracts may specify 31 days or another period.
During the grace period, the policy remains in force. If you die within the grace period, the insurer typically deducts the overdue premium from the death benefit and pays the rest to your beneficiaries. If you do not pay by the end of the grace period, the policy lapses.
What happens when a policy lapses?
When the grace period expires without payment, the policy lapses. Coverage ends. Your beneficiaries would not receive a death benefit if you died after the lapse. Term policies have no cash value, so there is nothing to recover.
Permanent policies may have cash value. Depending on the contract, the insurer may use the cash value to pay premiums (automatic premium loan) or may allow a period during which you can reinstate by paying overdue premiums plus interest, subject to evidence of insurability in some cases.
Reinstatement options
Many policies allow reinstatement within a set period after lapse (e.g., three or five years). You typically must pay all overdue premiums plus interest and possibly satisfy underwriting again. Reinstatement is not guaranteed — the insurer can require evidence of insurability and may decline.
Reinstating is usually more expensive and less certain than simply paying during the grace period. Setting up automatic payments or payment reminders reduces the risk of lapse.
How to avoid an accidental lapse
Use pre-authorized debit or automatic withdrawal so premiums are paid on time. Keep your contact and payment information up to date with the insurer so that reminder notices reach you.
If you know you will miss a payment, contact the insurer before the end of the grace period. Some may offer a one-time extension or payment plan; others will confirm the exact date after which the policy will lapse so you can decide whether to pay or let it go intentionally.
Frequently asked questions
How long is the grace period for life insurance in Canada?
Typically 30 days after the premium due date. Check your policy document for the exact period, as it can vary by insurer and product.
If I die during the grace period, will the policy pay out?
Usually yes. The death benefit is typically paid minus any overdue premium. The policy is still in force during the grace period.
Can I get my policy back after it has lapsed?
Many policies allow reinstatement within a limited time (e.g., three to five years), subject to paying back premiums plus interest and possibly proving insurability again. Terms vary by contract.