Lapsed Policy

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Lapsed Policy

The termination of an insurance policy due to inaction on the part of the policyholder. In general, lapses occur if the policyholder fails to pay premiums. In this case, the right to receive the benefit if an insured event occurs ceases to exist.
References in periodicals archive ?
Sanjeev Mantri, Executive Director, ICICI Lombard, said that close to 15,000 cases of lapsed policies are reported every month .
Summary: Gurugram (Haryana) [India], Dec 5 (NewsVoir): Did you know that six out of ten Indians buying two-wheeler insurance online in 2018 were using the digital platform to revive lapsed policies? These are the findings of the Policybazaar.com's Product and Innovation Centre (PIC) latest study taking into account the behaviour of almost 10 lakh plus consumers purchasing two-wheeler insurance online across the nation.
A company in an orderly 'run-off' is restricted from writing new insurance contracts or extending existing contracts and their activities are limited only to accepting premium payments from their policyholders, paying cash surrender values of outstanding policies to their policyholders, reviving lapsed policies, and other related services,' he said.
An interesting aspect of the German private health insurance system is that high lapse rates (exceeding expected lapse rates) may increase the short-term profit as reserves of lapsed policies in most cases enlarge the annual gross surplus.
* Lapsed policies. Subsidized rates on certain lapsed policies will be eliminated, so increases could vary.
There is widespread consensus that a significant portion of lapsed policies result from such situations.
An Indian life insurance provider has launched a service to revive lapsed policies.
Reliance Life Insurance Company announced the introduction of a new initiative for reviving lapsed policies for its policy-holders.
As a general trend in India, Jalan said "a large proportion of life insurers' profits have come through lapsed policies, reiterating the need to promote life insurance as a long-term product and to curb mis-selling."
The bank said that the businessman initially requested to reinstate lapsed policies where he had stopped contributing.
With lapsed policies, the policyholder loses the entire value of their investment.
If Ulips are also taken into account, the number of lapsed policies will be higher.