A lapse in life insurance means a termination or end of the life insurance coverage because of failure to pay your premium, and lack of sufficient cash value inside the policy to make a loan.
For example, if you own a life insurance policy and your monthly premiums are $20 and they are due on the 15th of each month:
If you have not paid your life insurance premium by the 15th of the month, and the grace period has passed (eg.10 grace period), then the life insurance policy may be considered lapsed, and coverage no longer provided by the policy.
Always review the terms and conditions of your life insurance policy and contact your life insurance agent for assistance if you have any questions.
Make sure you take the following steps to keep your life insurance in place:
- Read and understand the life insurance contract.
- Review the definition of lapsed policy in your life insurance contract.
- Review all premium payment conditions and what may lead to termination of the coverage provided by your life insurance policy.
- Always pay your life insurance premiums on time, it may be a good idea to have the premiums deducted directly from your checking account.
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