A Lapsed Policy: What Is It? & Five Ways to Avoid it
We cannot overstate the importance of having a life insurance policy in place to protect yourself and your loved ones. However, a life insurance policy can lapse if the policyholder fails to pay their premiums on time. A lapsed policy is an insurance policy that has expired due to non-payment of premiums. In this article, we will discuss the meaning of a lapsed policy, what happens when a life insurance policy expires, how to revive a lapsed policy, and how to avoid policy lapses.
Meaning of a Lapsed Policy
A lapsed policy is a life insurance policy that has been terminated because of non-payment of premiums. Policyholders have a certain amount of time to pay their premiums, which is known as the grace period. If the policyholder fails to pay their premiums within the grace period, the policy is considered lapsed.
What happens when a life insurance policy expires?
When a life insurance policy expires, the policyholder is no longer covered by the policy. The policyholder’s coverage ends when a policyholder stops paying the premiums on their life insurance. The policyholder is no longer protected when the unexpected happens. The premiums paid on the policy are what keep the policy active. When a policyholder doesn’t pay within the grace period, the policy lapses and the life insurance protection ceases.
How to Revive a Lapsed Policy
If your life insurance policy has lapsed, you may be able to revive it by following these steps:Step 1: Contact Your life insurance provider. The first step is to contact your insurer. Explain your situation and ask if there’s a possibility to revive the policy.Step 2: Review the details of your policy. Before taking any steps, review your policy documents to understand the lapsing and revival procedures.Step 3: Determine if you need to submit a written request. Some insurers may require a written request to revive a lapsed policy, so check with your company to see if this is the case.Step 4: Inquire whether a written request is required. You will need to pay any overdue premiums that are owed on the policy in order to revive it. Step 5: Pay your current premiums on time. Once your policy is revived, it is important that you start paying your current premiums on time to ensure that your policy does not lapse again in the future.
How do I avoid a policy lapse?
To avoid letting your policy lapse, you can follow these tips:
Review your life insurance policy regularly. You should review your life insurance policy regularly to ensure that you understand the terms and conditions of the policy.
Keep your contact information up-to-date. Make sure your contact information is up-to-date with your insurance company so that they can reach you if there are any issues.
Pay your premiums on time. It is important to pay your premiums on time to ensure that your life insurance policy will not lapse.
Set up automatic payments. To make sure you never miss a payment, set up automatic payments with your insurance company.
Review your coverage regularly. Review your coverage regularly to ensure that it still meets your needs. If it doesn’t, consider making changes to your life insurance policy.
In summary, a “lapsed policy” is a type of insurance policy that has expired as a result of non-payment of premiums. If your life insurance policy has lapsed, you may be able to reinstate it by contacting your life insurance company and paying any outstanding premiums. To avoid policy lapse, pay your premiums on time and review your life insurance policy on a regular basis.
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