A lapse means a life insurance policy is no longer an active contract.  A life insurance policy will lapse when premium payments are missed and cash surrender value is exhausted on a life insurance policy.  The term lapse refers to a “lapse in coverage”, meaning the life insurance contract will no longer pay a death benefit or provide any insurance coverage for the insured person.  A policy will only lapse after a grace period has passed, and most companies will allow their clients to reinstate their policies for a short period after the policy has lapsed without further underwriting.  Read on to learn how to reinstate your policy.

Grace Period Must Happen Before Lapse

To prevent a life insurance policy from lapsing each and every time a premium payment is slightly late, every state in the country requires that a life insurance policy first go through what is known as a grace period after a payment is missed.  This is a period of time (usually 30 days) where despite the missed payment, the insurance policy will still provide coverage and make a full payout if the insured dies.  To reach more about the grace period, read our reference here.

Only after the grace period has passed without receiving the due premiums can the life insurance company consider the policy to be lapsed.  Once a life insurance policy lapses the life insurance company is not under any legal obligation to pay the beneficiaries if an insured person passes away.

Most Policies Can Be Reinstated After Lapsing

For some period of time (depending on company and policy type) after a policy first lapses, the owner may have the option to reinstate the policy. You want to make sure that you reinstate your policy as quickly as possible after a lapse.  Different companies have different rules for reinstatement.

This can usually be done with no underwriting within the first 30 days, and with limited underwriting after 30 days but for less than six months.  The limited underwriting usually requires that the insured person answers some health questions, and attests that no material changes in health have occurred since the policy was underwritten.  Lying on this questionnaire, if caught during the claims process, can negate a life insurance claim from being required to be paid. Never lie on the reinstatement questionnaire or you may force your beneficiaries to forgo the benefits they were expecting.

Importance Of Reinstatement PeriodLapse

The reinstatement period is very important to policy owners and insured persons for a couple of reasons.  The first reason is as discussed, the insured person may not need to go through the underwriting process.  If a person has had a major health change, he/she may not necessarily be aware of the change.  As long as he/she doesn’t lie on the reinstatement form and can prove that they were unaware of any changes in health,  the insurance company will reinstate the policy and make a payout if a claim is filed.  The underwriting process may uncover more about a person’s health than they ever knew, for better and worse.  Avoiding underwriting when possible almost always leads to lower insurance premiums.

The second reason the reinstatement period is very important is that even with the same health rating, a new life insurance policy will always be more expensive than an old policy, because the insured person has aged.  The older the insured person, the higher the rates will be, all else being equal.  The bottom line is: Reinstating a life insurance policy rather than taking out a new policy will save money.

Reinstatement Will Cost More Than One Month Premium

After a policy has lapsed, a larger payment must be made to reinstate the policy.  It is in the best interest of a policy holder never to let a policy lapse.

Avoiding Lapses

The best way to avoid a lapse is to always make premium payments on time.  All major life insurance carriers offer the ability to automatically draft payments from your checking account to pay the policy on time every month.  This is a nice feature because it removes the need to think about life insurance premium payments every month, which is not at the top of most people’s priority lists.

Whole life, universal life, and variable universal life insurance policies will generally take the cost of insurance from the cash value in some way if a premium payment is missed.  While this can ease the burden for clients during times when it is not possible to make payments into the policy, clients must stay on top of the policy values.  If the value slips near zero and there is not sufficient funds to cover the cost of life insurance, the policy will lapse.

Term life insurance has no cash value.  Therefore when a premium payment is missed, the policy will immediately go into grace period, and then lapse after the prescribed amount of time.  Always make a premium payment on time for a term life insurance policy, and do not miss payments.

Insurance companies will always put out lapse notices to their client prior to the lapse taking place, and immediately after it has.  By doing something as simple as opening and reading your mail from your insurance company, you will be kept aware of any changes to your insurance policy’s status and avoid lapses.

A life insurance policy lapse means that life insurance coverage is no longer active.  No death claim payments will be made if an insured passes, no policy changes can be made, and there is no cash surrender value at this point.  To avoid lapse always make your scheduled payments on time to your life insurance company.

If your life insurance policy has lapsed and you would like to find the least expensive option for new life insurance coverage, use our quote comparison tool to save money on your next life insurance policy.


  1. Barbara A Jordan-Lyons

    What if your employer doesn’t pay their part of the premium, and your policy lapses. But they are still taking money out of your paycheck?

    1. Hi Barbara, I am guessing that you are referencing a group policy. An employer is not generally obligated to offer group life insurance to their employees, and they can cut this benefit if they wish. As long as they did not take money from your check to pay premiums after the lapse began, there probably isn’t much that you can do. If they are still taking money from your paycheck after the lapse, this is considered fraud and is illegal.

  2. What if a person had a policy that lapsed and died during the time it had lapsed, can you reinstate it by paying what’s due?

    1. If the death was within 30 days of the policy lapse, you have a chance. The insurance company is not required to pay after a lapse, by law. Even so, many will pay with death within 30 days of a lapse in order to avoid contestations. Outside of this you likely can not. You can check with the state insurance bureau for laws regarding policy lapse, in the State that the policy was issued in.

  3. what happens if the employee was removed from Site and havent worked from two months because he was very sick and his policy lapse

    1. If an employee was a part of a group plan, and the coverage ended because of termination of employment, the employer could add them again if they resumed work. If the policy has lapsed, you can always call the insurance company to see if their grace period allows them to reinstate coverage, but likely not once full lapse has taken place.

  4. Hi…what if my due date was last July 10 2019..and I haven’t paid it till now. Is my insurance policy considered lapsed already?

    1. Hi Evan. Usually, a life insurance company will give you a 30 day grace period before your life insurance policy lapses. Since it is now more than 30 days late, you likely do have a lapsed policy. You may still be able to reinstate the policy if you sign an affidavit saying that you have not had any material changes in your health. You will need to contact your insurance company to see what their policy is regarding reinstatement and what exactly what you will need to do to possibly reinstate the policy.

  5. I recently had a policy lapse after 17 years for missing a payment.
    The policy had $116,000 dollars of cash value. However after applying for reinstatement the insurance company refused this due to changes in my health..
    They offered me another policy at a lower payment and a higher benefit to placate me
    as they reviewed my reinstatement request . They then cancelled policy as a result of health concerns. Do I have any rights to demand reinstatement of the original policy. Thank you

    John F Sullivan

    1. Hi John. Unfortunately, it sounds like the life insurance company acted according to their rights within the contract. You should review the actual policy since it will spell out the grace period, lapse, and possible reinstatement. Because life insurance companies are required by law to provide a grace period where the coverage remains in force after a missed payment, they are not required to reinstate a policy after a lapse. They must treat your case according to their internal procedure for handling reinstatement the same way that they would treat any other similar case, however, it sounds like they did in this case. You should have received your cash value, and if reinstatement is not an option you can apply for a new policy. If you can not get coverage, you may need to apply to multiple companies to see if one is willing to issue the policy. Certain agents and brokerages specialize in high-risk cases. You can also investigate a guaranteed issue policy.

  6. What if the insured was hospitalized and never received notice of the missed premium payments and then the insured subsequently dies a few days after the lapse?

    1. Hi Ezi, unfortunately, the life insurance company is not obligated to pay. If the death is within a few days of lapse the life insurance company may still pay the claim. You should pursue a claim and research laws in the state of jurisdiction to ensure that there are no provisions for lapse while incapacitated. The life insurance company may pay, but likely is not bound to by the terms of the contract.

  7. Hi Thomas,

    My gran had a policy that I was paying on her behalf for a long time, last year I fell on bad times in that I lost my job and I couldnt keep up with the payments, because she is on pension, I couldnt transfer the debit order to her, she gets a govt grant only. I am now working but it has been a while since the policy, is there anything I can do to try and get her covered again on the same policy. I dont know what to do

    1. Hi Amanda. The first thing that you should do is to contact the life insurance company that wrote the policy immediately to see if the coverage lapsed and to see if you have any options to reinstate it. You may if the coverage has not been lapsed for long, and your Gran has not experienced any changes in her health. If not, you will need to get a new policy. You can look at final expense plans if you don’t need more than $50,000 of coverage, or you can try to get a traditional whole life or term policy. It is best to compare quotes for people over the age of 50, because the price of the premiums can really become a factor.

  8. In Nov of 2014 my mother died. She was insured as a retiree of the state. There was a change over with insurance companies therefore subsequently we did not know which company held her life insurance and we were misdirected to the wrong company; which stated that she was not in possession of a policy. However a policy did exist and two months later in January 2015 no one had made a claim so the policy lapsed and it was termed out. Four years later after much thought and research It was discovered that after that switch over she did in fact have life insurance at the time of her death; is there any recourse in this case?

    1. Hi Robert. Yes! If your mother had an active policy at the time of her death, you will still be able to make a claim. You need to follow up with the correct life insurance company and file a claim. They will process it for you!

  9. Good day,
    My husband was sick the whole of last year, was bed bound. In October he was admitted the whole month and discharged in November, I was received a letter from his insurance company, which he was too sick to open, I got to open it later and realized that his policy has lasped, I didn’t understand the implication of that as I was focusing on my husband’s life, after many hospital visitations, he died in December. According to the letter, the policy lasped in October 19th and my husband died on the 16th of December. Will he get payout if I present the necessary documents showing his been hospitalized?
    Thank you.

    1. You can certainly try. The insurance company may not be legally obligated to pay the claim, but still may.

  10. Hi,
    Last premium paid on policy in 2014. Now policy status is showing lapsed.
    Revival is also not possible. So can i get the refund of the premium paid till date?

  11. Hello, my husband has a $100,000 universal life policy that we’ve been paying monthly premiums since the 1990s – we’ve never missed a payment. We have AutoPay from out account and our regular premium was withdrawn as recent as yesterday. We found out looking through old mail which we though was junk that his MetLife policy was bought out and they were requesting we pay $120 per month instead of our regular $50 AutoPay amount. We contacted them recently and an agent said now the policy has lapsed. He is 64 years old on Social Security disability due to injury but is healthy, no diseases, and I am retired, only have my Social Security as well, cannot afford this high premium. What are our options?

  12. We had two term life insurance policies with a payroll deduction through my work. I retired in July and apparently was supposed to be notified by HR to do something to continue the polices as a retiree. I don’t remember seeing anything.

    I didn’t receive any correspondence from the life insurance company that we hadn’t been paying the monthly premiums. When I contacted them to ask about a bill they informed me we were no longer covered since I retired. Shouldn’t they have sent correspondence telling me to pay our premiums or to tell me what the status was before they cancelled us?

    1. Yes they normally will send a notice.

  13. What if your policy lapses because you cancel the policy because of the company…they added a policy which i did not apply for and I tried canceling that policy and they failed to cancel and I end up cancelling all my policy with them .is it possible for me to get all my money back?

    1. If the policy was taken out fraudulently, probably yes.

  14. I have two life insurance policies each with a cash value of about $125,000 and death benefits of about $200,000 each. I have been paying for these for about 30 years thru my company. I now wish to take out policies on three other employees and quit paying for these policies as advised by my agent. He says that my policies will continue in force and the premiums will just be deducted from the cash values. He says that in the event of my death the policies will pay the total death benefit as of nearly $200,000 less the amount of cash values that have been used to pay for the policies. The home office sent me letters on the policies stating ‘since the premiums have not been paid as of due dates, they are in danger of lapsing’. In order for the policies to pay the insured amounts should I continue to pay these policies? I
    have the feeling the agent did not advise me of the best option. Please advise ASAP.

    1. Contact the home office immediately to review your options. If these are universal policies, they should pull from cash value automatically. If this is a whole life policy, you may need to instruct the insurance company to pay the premium with dividends or a loan against cash value. Either way, get it on a recorded line so that your policies do not surrender.

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