Lapse

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Related to lapsing: call on, so far, brought out, took over

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 ?
Table 3 and Figure 3 show that even a 40 percent earnings multiplier proves rather ineffective in preventing the policyholder from lapsing and reentering.
To make this decision, the policyholder must estimate the conditional expectation of the payoff that is derived from no lapsing; this conditional expectation can be estimated using least squares.
Policyholders may leave their current insurer, thereby lapsing the contract, or alternatively, they may remain with the insurer but choose different coverage at a different tariff.
But good business sense requires a close look at the possibility of selling such policies as an alternative to simply surrendering or lapsing a policy.
two trusts in which the beneficiaries had lapsing powers to withdraw trust corpus.
(2011) find that policyholders lapsing contracts have better health histories than do their peers continuing the contracts.