A missed premium does not immediately cancel your policy. All 9 panel insurers provide a grace period (typically 30 days) during which cover continues even if the premium is unpaid. If you do not pay within the grace period, the policy lapses.
A lapsed policy can usually be reinstated within a reinstatement window, but this often requires fresh medical evidence, payment of arrears, and potentially restarted waiting periods (including the 13-month suicide exclusion). Letting a policy lapse is rarely the right move if you intend to keep cover.
The 30-day grace period across the panel
- AIA Priority Protection PDS (Version 32, 9 November 2025), Section 4 area: 30-day grace standard.
- Zurich Wealth Protection PDS (1 November 2025), premium non-payment: if the premium is not received within 30 days of the due date, the insurer writes formal notice.
- TAL Accelerated Protection PDS (12 December 2024): standard non-payment lapse with notice.
- OnePath OneCare PDS (1 October 2025): at least 30 days' notice in writing.
- ClearView ClearChoice PDS (13 May 2024, update 5 June 2025): 30-day grace.
- NEOS Protection PDS (6 December 2024): 30-day standard grace period.
- Encompass Protection PDS (26 September 2025): standard cancellation for non-payment.
- Acenda Insurance PDS (27 September 2025): standard structure with notice.
- Futura Protection PDS (1 October 2025): notify the insurer at least 30 days before the premium due date for cancellation; equivalent grace applies for missed payments.
What happens at each stage
Days 1 to 30 (grace period)
- Cover remains in force.
- If a claim event occurs, the insurer assesses the claim and may deduct outstanding premium from the benefit.
- You can pay the missed amount and continue without interruption.
Day 31 onwards (policy lapsed)
- Cover ends. No claim payable for events occurring after lapse.
- The insurer typically issues a written notice confirming the lapse.
- Reinstatement may be available within a stated window (commonly 6 to 12 months, sometimes longer).
Reinstatement
Reinstating a lapsed policy typically requires:
- Payment of all outstanding premiums (and sometimes interest).
- A declaration of continued good health, or fresh medical evidence depending on the lapse duration.
- New underwriting if your health has materially changed.
- Restart of the 13-month suicide exclusion period (industry standard across all 9 panel insurers).
- Potentially new or revised exclusions reflecting any health change since the lapse.
If your health has declined during the lapse window, the new underwriting can produce loadings or exclusions that did not apply on the original policy. In some cases, the insurer may decline reinstatement and require a fresh application.
Inside super: a different mechanism
For life cover held inside super, premiums are deducted from your super balance automatically. Missed payments are rare unless:
- Your super balance is depleted and cannot fund the next premium.
- Your fund applies the Protecting Your Super (PYS) or Putting Members' Interests First (PMIF) inactive-account or low-balance rules, which can cancel default cover after 16 months of no contributions or for accounts below $6,000 for members under 25.
- You opt out of insurance within the fund.
If super-held cover lapses, the reinstatement process depends on the fund's trustee rules and the underlying group insurer's transfer terms.
If you are struggling to pay
Most panel insurers offer hardship provisions short of letting the policy lapse:
- Premium holiday or suspending cover: pause premiums and cover for a defined period (commonly 3 to 12 months). Zurich documents 12 months of cover suspension over the life of the policy.
- Reduce the sum insured: lower the benefit and the premium drops proportionately.
- Switch to stepped premiums if you are currently on level: typically reduces near-term outgoings (the level versus stepped trade-off applies long-term).
- Extend the waiting period or shorten the benefit period on Income Protection (not directly applicable to life cover, but relevant if you hold combined cover).
- Premium Waiver Option if you are disabled: many panel insurers waive premiums while you are continuously disabled (usually 3 to 6 months), allowing cover to continue.
- AIA Premium Freeze: a Built-in Benefit (PDS Section 7.1) for clients aged 35+ on variable age-stepped premiums; the sum insured decreases next policy year to match the previous premium level.
Contact your insurer or broker before lapsing. The conversation is straightforward and reinstatement after lapse is materially harder than a hardship arrangement before lapse.
Why you should not just let it lapse if you no longer need it
If you genuinely do not need the cover anymore, formally cancel the policy (write or email the insurer). This:
- Stops further premium deductions.
- Triggers any pro-rata refund the insurer offers for unused annual premium.
- Creates a clean cancellation record (useful if you later apply for cover with the same or another insurer).
- Avoids the lapse-then-reinstate confusion if you change your mind within the reinstatement window.
Regulator anchor
Insurance Contracts Act 1984 s51 sets the framework for insurer-initiated cancellation. The Life Insurance Code of Practice 2019 binds all 9 panel insurers on plain-English communication and timely notice. For super-held cover, the Putting Members' Interests First Act 2019 and Protecting Your Super Package Act 2019 set the inactive-account and low-balance default-cover cancellation rules. AFCA at afca.org.au handles disputes about lapse, reinstatement, or hardship outcomes.