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 ?
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.
In India, for every 100 renewals, there are roughly about 30 of those for lapsed policies, and these require physical inspection of the vehicle and documentation, which takes anywhere between two to five working days.
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.
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.
He added that no maximum limit for ordinary policies, Revival of lapsed policies on easy terms, Loan on policies, Highest rate of bonus, open to all, rebate on advance payment of premia, Payment of premia through salary bill deduction, Non-lapsing of policies of two years duration, liberal surrender value of PLI policies and payment guaranteed by government of Pakistan.