- A ratio comparing the amount of lapsed life insurance policies at the beginning of the year to the end of the year. The lapse ratio is used to determine how many life insurance policies are set to come off the books in a year and in turn how much money the insurance company may lose in the process.
lapsed policy ratio, life insurance policy lapse ratio
Related Terms and Acronyms
- Incontestability Clause — Definition,
- A clause that places a time limit on how long an insurer has to void a policy due to a policyholder's accidental misstatement in his or her life insurance application.
- Insurance Policy — Definition,
- A legal contract between an insurer and entity that specifies what the insurer is required to cover and any benefits the insured entity is entitled to.
- Lapsed Policy — Definition,
- A policy that is no long in effect due to missed payments, inaction or its term ending.
- Life Insurance — Definition, Very Important,
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- An arrangement where an insurer agrees to pay a benefit to one or more beneficiaries in the event of the policyholder's death.
- Loss Ratio — Definition,
- A method of comparing an insurer's losses to premiums earned in a specific period of time.
- Medical Loss Ratio — Definition,
- A method of comparing the medical costs paid to the premiums earned by an insurance company in a specific period of time.
- Non-Forfeiture Clause — Definition,
- A clause that allows a policyholder to receive partial or full benefits and/or a refund of premiums if the policy lapses due to unpaid premiums.
- Policy Illustration — Definition,
- An outline of how a policy will perform under various conditions over a period of time.
- Reinstatement — Definition,
- Resuming an insurance policy that has either lapsed or been terminated.