In what situation is a life insurance policy considered lapsed?

A life insurance policy is considered lapsed when no premium is paid within the grace period. The grace period is a specified time frame, usually 30 days, during which a policyholder can make a premium payment after the due date without losing coverage. If the payment is not made by the end of this period, the policy will lapse, meaning that the insurance coverage is terminated, and the policyholder would not be entitled to any benefits until the policy is revived or reinstated.

This concept is integral to understanding policy maintenance and the obligations of the policyholder to keep the coverage active. Maintaining awareness of premium payment schedules and the implications of a lapse is essential for anyone involved in managing life insurance policies. Other scenarios, such as reaching an age limit or deciding to discontinue payments, may affect coverage status but do not specifically indicate a lapse due to missed premiums.