Guru Speak

So, how do you decide?

Most importantly, talk to your lifeinsurance agent, your insurer's customerservice centre or your bank (for bancassurance policyholders). It is all too easy under these circumstances to take a very shortterm view, looking no further than next week or next month. Yet at times like these, it is more important than ever to think long term and focus on your future. You do not want your temporary financial crisis to become a permanent disaster.

If you allow your lifeinsurance policy to lapse, you must be sure your family can survive in the event of your death or serious illness. Also, without your lifeinsurance policy you may need to make future, more expensive arrangements to ensure you have enough money for retirement.

This is not to say you should pay your premium at the expense of your family going without food or losing their home. But your agent or bank will be able to help you manage the situation by assessing your priorities.

Even if you believe you can manage by letting your lifeinsurance policy lapse, you may find it difficult to take out a new one. You will almost certainly pay more for the same coverage, as you will be older. If you have a health problem that has arisen since you first took out your policy, you could become uninsurable.

So what are the options?

First, you need to check which type of policy you have. If you have term life insurance, missing a payment may result in your policy lapsing altogether. However, if you have an endowment type programme, you may have an option. You probably can allocate some of the future value of the policy to pay for today's premiums. Of course, both these solutions are not ideal, because they reduce the future value of your policy, but at least they ensure you stay afloat in the meantime.

Second, look at your lifeinsurance policy's payment method. If you are paying your premium annually, you may be able to change it to quarterly or monthly, to help your budgeting.

Third, do you have the right amount of coverage? Are your goals the same as they were when you first took out the policy? Maybe you do not need to pay a rider premium or you can lower your sum assured.

Finally - again, most important of all - talk to your agent or bank. There are usually several options that will help you keep your protection in force without putting your present finances under more pressure. If you have chosen a financially strong and secure lifeinsurance company, your agent or bank will be able to discuss the options available to you. You will be surprised how much peace of mind you gain simply by making that one telephone call.

Above all, do not give away your future for today.