Life Insurance Basics
What is a life insurance lapse?
A life insurance lapse occurs when a policy terminates due to non-payment of premiums. After the grace period (typically 30-31 days), the policy lapses and coverage ends. Reinstating a lapsed policy may require new medical underwriting and payment of back premiums with interest.
Key Points
- Lapse: policy terminates due to non-payment of premiums
- Grace period: typically 30-31 days after missed payment
- After grace period: coverage ends
- Reinstating a lapsed policy: may require new medical underwriting
- Set up automatic payments to avoid policy lapse