What is a policy lapse? 6 important points to know about policy lapses
A policy lapse occurs when the benefits and coverage provided under an insurance policy are terminated for a policy holder. A policy is ‘lapsed’ when the policy holder misses the premium payments and the cash surrender value (in case of permanent life insurance) is exhausted. If your policy lapses, you and your family members who are insured under the policy are no longer eligible for insurance coverage or a death benefit in case of a term plan .