Life insurance policy lapse occurs when the policyholder fails to pay the required premiums on their life insurance policy and the policy terminates. When a policy lapses, the coverage provided by the policy ends and the policyholder is no longer entitled to any benefits or payouts from the policy.
If a policy lapses and the policyholder passes away, their beneficiaries will not receive any death benefit payout from the policy. Additionally, the policyholder may lose any accumulated cash value in the policy, depending on the terms of the policy.
It’s important for policyholders to be aware of the premium payment requirements for their life insurance policy and to make timely payments to avoid policy lapse. In some cases, policyholders may be able to reinstate a lapsed policy by paying past due premiums and meeting other requirements, but this may not be possible in all situations.
If you are concerned about the possibility of your life insurance policy lapsing, it’s important to review your policy documents and contact your insurance company or a licensed insurance professional for guidance on your options.
