New Jersey Life Producer Practice Exam 2026 – Your Complete All-in-One Guide to Exam Success!

To protect against an unintentional lapse of a life insurance policy, setting up automatic payments is a highly effective strategy. When an insured opts for automatic payments, premiums are deducted directly from their banking account on a scheduled basis. This ensures that payments are made on time without the need for the insured to remember to send in a check or manually process a payment each month.

This method significantly reduces the risk of lapsing the policy due to missed payments, which can occur easily if the insured forgets or fails to make timely payments. Automatic payments help maintain the policy's active status, thus providing the ongoing coverage that the insured relies on.

Although options such as requesting a grace period or changing to a whole life policy can offer certain benefits, they do not inherently prevent a lapse from occurring; rather, they may provide some relief after a lapse has potentially taken place. In contrast, automatic payments proactively prevent the lapse in the first place.