Is it Okay to Pay Late in Sun Life?

Sun Life is one of the largest and most trusted insurance providers in the Philippines and worldwide. As a policyholder, it’s important to understand your responsibilities, including paying your premiums on time. This article will provide an in-depth look at late payments with Sun Life and the potential impacts.

Overview of Sun Life

• Sun Life is a leading international financial services organization that provides insurance, wealth management, and asset management solutions to individual and corporate clients.

• Founded in 1865, Sun Life has operations in over 25 countries and serves over 30 million customers globally.

• In the Philippines, Sun Life offers a wide range of insurance products including life, health, education, retirement, estate planning, wealth transfer, and more.

• For investments, Sun Life manages mutual funds under the Sun Life Prosperity Funds brand.

• Sun Life is known for its strong financial strength, customer focus, and overall trustworthiness as an insurance provider.

Premium Payment Basics

• The premium is the amount you pay for your insurance coverage based on the plan selected. It must be paid on time to keep your policy active.

• Premiums can be paid annually, semi-annually, quarterly or monthly. The mode you choose determines the payment schedules.

• All policies have a grace period – usually 31 days from the due date – to pay before the policy lapses.

• For Sun Life Philippines, premiums can be paid via:

  • Online channels (mobile app, website, e-wallets)

  • Banks and payment centers

  • Sun Life’s client service centers and advisors

• If paying overseas, wire transfers or international remittance centers may be used.

Impacts of Late Payments

• Paying late is not advisable because of the significant impacts to your insurance coverage.

• If you miss a payment, your policy will lapse after the grace period. This means your insurance coverage ends.

• In case of lapse, any insurance claims during the lapsed period will not be honored. You lose that financial protection.

• For life insurance, if the insured person passes away while lapsed, only the guaranteed cash value (if any) will be paid out, not the full death benefit.

• To revive a lapsed policy, you must pay all missed premiums and a reinstatement fee. Evidence of insurability may be required too.

• Every lapse can impact your future insurability and cause rating or exclusions when reinstating coverage.

• Too many lapses can also get your policy canceled altogether. Most contracts allow only 1-2 reinstatements.

What Happens If I Pay Late But Within the Grace Period?

• Paying late but within the grace period keeps your policy active and maintains your insurance coverage.

• However, there can still be some impacts:

• For a VUL or investment-linked policy, late payment means premiums are invested late. This causes a potential loss of fund earnings.

• It can reflect poorly on your payment history and insurability profile with Sun Life.

• If late payments happen frequently, you may need to submit evidence of insurability again or get rated for higher premiums.

• Overall it’s still much better to pay late than let your policy lapse entirely. But you lose some advantages by cutting it close to the grace period.

Options If Unable to Pay Premiums

If you are having genuine difficulties paying your premiums, Sun Life has some options to consider:

• Policy Loan – Borrow against the cash value of your permanent life insurance policy.

• Automatic Premium Loan (APL) – Allows premiums to be automatically paid via policy loan if cash value is available.

• Change of Plan – Convert to a more affordable insurance plan.

• Reduced Paid-up – Use available cash value to purchase a reduced amount of paid-up insurance.

• Extended Term – Use cash value to purchase term insurance equal to original coverage but for shorter period.

• Dividend Options – Use dividends from participating plans to pay premiums.

Discuss these with your Sun Life advisor to understand the tradeoffs. Temporary assistance may be available while you improve your financial capability.

Best Practices for Paying Premiums

To avoid issues with late payments, here are some tips:

• Choose a premium mode (annual, semi-annual etc.) that aligns with your income cycle.

• Set payment reminders for yourself before the due date.

• Enroll in auto-debit arrangements so you don’t have to remember to pay manually.

• Maintain sufficient balance in your account a few days before the premium deduction date.

• Pay a few days early if paying manually to avoid delays. Weekends and holidays can cause processing delays.

• Inform Sun Life immediately if you foresee difficulties in paying on time. Don’t wait until lapse.

• If overseas, factor in additional processing time for international payments.

• If paying online, have backup payment channels in case of technical issues.

• Keep contact information updated so you receive renewal notices and reminders.

What If My Policy Has Lapsed Already?

If your Sun Life policy has already lapsed, don’t worry – there are still options:

• Reinstatement – This allows policies lapsed for less than 5 years to be restored by paying missed premiums and fees. Quicker reinstatement is better.

• Policy Conversion – Convert your lapsed policy to a fully paid up plan or a reduced paid up plan based on available cash value.

• New Policy – Apply for a new policy suited to your current needs and financial capability. Prior health conditions may be rated.

• Policy Continuation – Some policies have continuation provisions that provide temporary coverage after lapse.

Discuss reinstatement or alternate options with your Sun Life advisor immediately. The longer the lapse, the fewer choices you may have. Act quickly to get back insured.

Key Takeaways

• Paying late is strongly discouraged as it can jeopardize your insurance coverage.

• Premiums must be paid before the grace period ends to avoid policy lapse.

• Lapsed policies mean loss of insurance benefits until reinstated, which has additional costs.

• Too many lapses can cause cancellation of non-forfeiture options and make renewal difficult.

• Communicate with Sun Life promptly if you anticipate payment delays to prevent lapse.

• Enroll in automated payments and payment reminders to avoid forgetting premium dates.

• If already lapsed, act quickly on reinstatement or alternate options to restore insurance coverage.

• Maintaining an active policy by paying premiums on time should be the top priority as a policyholder.

While paying late in the grace period is permissible, it is certainly not advisable for Sun Life policyholders who want to maximize benefits and maintain insurability. The impacts of lapses make it critical to pay premiums on or before the due dates. With proper planning and proactive measures, policyholders can ensure payments are made timely and coverage remains intact.