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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Second, OnTrack was successful at predicting lapse.
kung baga [if] something is wrong, yung talagang posibleng nangyari kung eventually may mga lapses dun.
RAWALPINDI/KARACHI -- The Safety Investigation Board (SIB) tasked with a probe into the 2016 crash of a domestic flight that killed all the 47 people on board, including singer-turned-evangelist Junaid Jamshed, has found a 'lapse' on the part of the Pakistan International Airlines (PIA) and a 'lack of oversight' by the Civil Aviation Authority (CAA) that may have led to the tragic incident.
Again, the total fee without lapses, [[phi].sup.1], is given as the solution to Equation (3), whereby the expected present value of expenses [EPVE.sub.0] is still specified by Equation (4).
Lawmakers also let the program lapse in 2017 and 2018.
As set out in the scheme document, the offer would lapse if the court meeting and general meeting were not held on or before 21 July 2016 being the 22nd day after the expected date of such meetings.
This is not a complete list of LTC consumer protections, but, rather, a list of protections that specifically help protect the policy from unintended lapse or the insured from loss of benefits.
You can reactivate the greatest number of lapses through a program that combines basic RFMA segmentation with third-party recency matching.
During the review period, Moody's will refine its analysis of potential policy lapses, and will evaluate the potential impact to credit enhancement for the Class A and Class B Notes that would result from such lapses.
This study, however, is the first to show not just lapses of attention in children with TBI but also that these lapses are related to intelligence and attention problems, said lead author Marsh Konigs of VU University Amsterdam in The Netherlands.
Psychologists from the University of Bonn have found a connection between such everyday lapses and the DRD2 gene.
The Federal Reserve has ordered Bank of Montreal (BMO.TO) to correct lapses related to money laundering.