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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.


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 ?
Padilla told the Philippine Daily Inquirer in a separate interview that the administrative lapses were a 'possibility because the BOI still has recommendations to further look into the accident at the level of all our inits and major services.
The unintentional lapse feature requires that the insurance company provide the opportunity for the policy owner to set up an authorized representative, or third party contact.
The matching percentage declines as the lapses get older, but even 10+ year lapses can match up to 20 percent.
There are two reasons for this: (1) brokers financially benefit from statutory lapses (tied agents do not), and (2) this age group is more mobile due, in general, to smaller financial losses in case of statutory lapse (compared to older age groups).
The right to reside in Denmark will lapse unless doing so would conflict with Denmark s international obligations.
Mistakes occurring due to such short-term lapses can become a hazard in cases where, e.
As companies were trying to conserve as much of their term business at adequate margins as possible, policyowners can be expected to make the logical, if not obvious, decision to either let their policies lapse, convert to permanent insurance or continue on with the coverage for at least a limited time period.
OVERALL LAPSE RATES for whole life plans were down in 2003 and 2004, according to a joint study sponsored by LIMRA International, Windsor, Conn.
Hill, Kelley, Agle, Hitt, & Hoskisson, 1992) demonstrates that addressing such questions requires identifying as full a range of organizational ethical lapses as possible.
As illustrated in this study, lapses in data transmission occur during initial deployment of automated reporting systems.
The FAA security personnel have been ordered by US Transportation Secretary Norman Mineta to crack down on security lapses at airport screening checkpoints, Reuters reported.
To obtain an annual gift tax exclusion for property subject to a withdrawal power, Revenue Ruling 81-7 (1981-1 CB 474) requires that the powerholder must be given notice of the power and a reasonable time within which to exercise the power before it lapses.