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 ?
Director General, Federal Audit Works, Maqbool Ahmad Gondal revealed the Ministry of Housing and Works was allegedly involved in transfer of Rs4.9 billion from a lapsable to non-lapsable account during FY 2012-13, 2015-16 and 2016-17 using fake documents.
Third, Fata be declared as a war turn zone and be allotted with none lapsable special relief package on the pattern of a marshal plan.
The Governor of Rajasthan, Margaret Alva, while presenting the recommendations of the group at the Conference of Governors at Rashtrapati Bhawan recently, said the Tribal Affairs Ministry should draft a uniform model for Tribal Sub Plan Budget Allocations and ensure that the allocations were made non transferable and non lapsable.