Guide · Lapses · 2 min read
I got a lapse notice
A lapse notice means the insurer believes a premium wasn't paid in time. Read the dates on it closely, because your options depend on them.
Is it a warning or a final notice?
Some letters warn that a policy will lapse on a future date if payment isn't made. Others say it already has. Look for words like "grace period," "pending lapse" or "terminated." If the date hasn't passed yet, paying what's due may be enough. That depends on your contract.
If the policy has already lapsed
Many contracts include a reinstatement section. It often has a time limit, counted from the lapse date, and may require past-due premiums with interest. The insurer may also ask for updated information before deciding. Whether a policy is reinstated is the insurer's decision.
Check for value left in the policy
Whole life and some universal life policies build cash value. When payments stop, some contracts use that value to keep smaller coverage going, or to extend it for a while. Ask whether anything like that applied to yours.
What to ask your insurer
- Has my policy lapsed, or is it still in a grace period?
- What is the exact date, and what would I need to pay to keep it in force?
- Does my contract allow reinstatement, and what does it require?
- Did any cash value keep some coverage in place?
- Can you send me all of this in writing?
This guide gives general information and is not advice on your own policy. Your policy contract and the insurer make the final call.