- An insurance policy that is no longer in effect due to non-payment, time elapsed or inaction. The insured party may or may not receive benefits in a lapsed policy, depending on the terms of the contract. If the lapse is due to non-payment, the policyholder consequentially forfeits the policy and any benefits the policy provides, but the insurer reserves the right to waive the forfeiture of the policy if the insured resumes payment.
policy lapse, lapsed insurance policy, delinquent policy
Related Terms and Acronyms
- Disability Insurance (DI) — Acronym, Important,
- Insurance that covers individuals who develop a condition that hinders their ability to work.
- Forfeiture — Definition,
- Loss of property because of violation of law or contract.
- Health Insurance (HI) — Acronym,
- Insurance that covers the costs of medical expenses for insured persons.
- 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.
- Lapse Ratio — Definition,
- A ratio that compares how many life insurance policies have lapsed from the beginning year to the end.
- Life Insurance — Definition, Very Important,
➥ CanEquity offers life insurance.
- An arrangement where an insurer agrees to pay a benefit to one or more beneficiaries in the event of the policyholder's death.
- 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.
- Reinstatement — Definition,
- Resuming an insurance policy that has either lapsed or been terminated.
- Waiver of Premium — Definition,
- A clause that allows an insurer to waive a policyholder's premiums while still keeping the policy in effect.
- Waiver of Restoration Premium — Definition,
- A provision that frees an insurance policyholder from needing to pay a fee in order to resume coverage after a claim.