Definition: The policy for which all benefits to the policy holder cease and is terminated due to non payment of premium amount on the due date or even after the grace period is called a lapsed policy.
Description: Excessive delay in payments and servicing of the policy leads to the policy being dead or lapsed. However, a lapsed policy may be revived by fulfilling the terms and conditions as per the policy statement. To avoid losses to all parties, generally the revival and reinstatement is encouraged and facilitated.
Also See: Insurance, Guaranteed Survival Benefit, Guaranteed Surrender Value, Insurability