Lapse

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Lapse

The termination of a right or privilege due to inaction. In insurance, lapses occur on a policy if the policyholder fails to pay premiums. In this case, the right to receive the benefit lapses. In options, the contract lapses if the option is not exercised on or by the expiration date. In this case, the right to buy or sell the underlying asset lapses.

Lapse.

A lapse causes a policy, right, or privilege to end because the person or institution that would benefit fails to live up to its terms or meet its conditions.

For example, if you have a subscription right to buy additional shares of a stock at a price below the public offering price, you must generally act before a certain date. If that date passes, your right is said to lapse.

Similarly, if you have a life insurance policy that requires you to pay annual premiums, the policy will lapse if you fail to pay the premiums in time.

References in periodicals archive ?
Deputy financial advisor admitted before PAC, the finance secretary had given personal approval for moving of funds from lapsable to non-lapsable accounts.
The revolving fund account would be lapsable at the end of each fiscal year.
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the continuation of the existing Non Lapsable Central Pool of Resources (NLCPR) scheme with funding pattern of 90:10 till March, 2020 with an outlay of Rs.