How to pay for life insurance

Most life insurance companies accept premium payments via bank transfer or check. Some let you use a credit card, but only for the your first premium payment.

Nupur Gambhir

Nupur Gambhir

Published March 5, 2020


  • Life insurance companies accept check and bank transfer for recurring policy premium payments

  • Cash is never accepted as a form of policy premium payment

  • Credit cards are accepted by life insurance companies for premium payments, but for the first premium payment only

One important consideration if you’re a new life insurance policyholder or if you’re considering purchasing a life insurance policy is how you’ll make the premium payments.

Not just how you’ll fit the payments into your budget — though finding affordable life insurance is a consideration, too — but how you’ll transfer the premium payment amount from your bank account into the insurance company’s bank account each month or year.

It’s not always as simple as handing over a credit card number or sending a PayPal payment. Paying for life insurance policies can vary across carriers.

In this article:

How to make your initial life insurance premium payment

The most common forms of payment accepted by life insurance companies for your initial life insurance premium payment are personal check, cashier’s check or an electronic funds transfer (EFT). Cash is never accepted.

Many carriers let you make your first premium payment with a credit card, but only accept check or bank transfer thereafter.

If you choose to make your premium payments annually as opposed to monthly, you may be able to save up to 8% on your insurance premiums.

Payment options vary for each carrier.

How to pay for temporary life insurance coverage

When you apply for life insurance, many insurance companies give you the option to opt into temporary life insurance coverage so that you are insured while your application is being processed.

The amount of temporary life insurance coverage varies by insurer: some offer a set benefit, but others will offer you the amount of coverage that you’ve applied for, up to a limit. The cost for this temporary coverage varies by carrier as well. Some insurers charge a flat fee for a set death benefit and others charge either a full month’s premium or a portion of a month’s premium, based on the quote from your life insurance agent.

Accepted forms of payment for temporary coverage also vary by company but may include check, credit card (see table below), or electronic funds transfer (EFT).

When applying for life insurance, be prepared to share your bank account number and routing number if you’d like to opt into temporary coverage.


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How to make recurring life insurance payments

Options for recurring payments to your life insurance company also depend on your carrier. Most life insurance companies accept electronic funds transfers (EFT) and checks for life insurance premiums.

While many life insurance companies allow you to make your initial premium payment with a credit card, it is rare that a life insurance company will let you make recurring payments by credit card as well.

How to pay for life insurance if you’re disabled

If you become disabled, the waiver of premium for disability rider allows you to waive premium payments if you develop a disability after your policy is in force. This is a rider you add when you purchase your policy and comes at a flat additional cost varies for each life insurance company.

Many carriers have a waiting period for this feature — six months is common. You’ll need proof from a medical professional that you have a "total and permanent disability", which is usually what your policy will state is required to meet the definition of disability.

Though it could be one way to pay premiums and keep your life insurance policy in force if you become disabled, it can be difficult to qualify for this provision due to its strict definition of a disability.

If you have a whole life policy you can pay premiums with your policy's cash value. The cash value of a life insurance policy usually takes decades to build up, but you may be able to use the accumulated value to pay your life insurance premiums for a short period of time.

Do life insurance companies accept credit cards?

Many people would like the flexibility of paying their premiums for life insurance with a credit card, but it’s not a common option when it comes to life insurance. There isn’t just one reason that life insurance companies don’t accept credit cards, though high fees and state regulations are the most commonly cited reasons.

When do life insurance companies accept credit cards?

Banner LifeYesNoNo
John HancockNoNoN/A
Liberty MutualYesNoNo
Lincoln FinancialYesNoN/A
Mutual of OmahaYesNoNo
Pacific LifeNoNoNo

N/A = Information unavailable at this time. Speak to a licensed Policygenius agent for more details.

Paying with a credit card may not be available to all policyholders in all states, especially Alaska, California, Maryland, Nevada, New Jersey, New York, North Carolina, and Pennsylvania. Ask your agent what payment methods are available to you.