LAPSED POLICY Meaning and
Definition
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A lapsed policy refers to an insurance policy that has been terminated due to the policyholder's failure to pay the required premiums within the specified time period. When a policyholder fails to make timely premium payments, the insurance company may cancel the policy, resulting in it being classified as lapsed.
Lapsed policies typically arise when policyholders neglect or forget to make premium payments, leading to a temporary cessation of coverage. Once a policy lapses, the policyholder is no longer entitled to the benefits, protection, or financial backup that the insurance policy previously provided.
The consequences of a lapsed policy can be substantial, as coverage for various risks, such as accidents, illnesses, damage, or other unforeseen circumstances, are discontinued. Policyholders may become financially exposed and vulnerable in the absence of insurance coverage.
Reinstating a lapsed policy usually requires the policyholder to fulfill certain conditions, such as catching up on missed premium payments, paying any outstanding fees, and sometimes undergoing a medical evaluation or assessment. The process for reinstatement may vary between insurance companies and policies.
It is crucial for policyholders to meticulously manage their insurance policies, ensuring that premiums are paid on time to maintain continuous coverage without disruptions or lapses. Regularly reviewing the policy terms and conditions, understanding the premium payment schedule, and setting reminders can help policyholders avoid the unfortunate situation of a lapsed policy.
Common Misspellings for LAPSED POLICY
- kapsed policy
- papsed policy
- oapsed policy
- lzpsed policy
- lspsed policy
- lwpsed policy
- lqpsed policy
- laosed policy
- lalsed policy
- la-sed policy
- la0sed policy
- lapaed policy
- lapzed policy
- lapxed policy
- lapded policy
- lapeed policy
- lapwed policy
- lapswd policy
- lapssd policy
- lapsdd policy
Etymology of LAPSED POLICY
The etymology of the term "lapsed policy" can be understood by breaking down the individual words.
1. Lapsed: The word "lapsed" is the past participle form of the verb "lapse", which comes from the Latin word "lapsus", meaning "falling" or "to fall". In English, "lapse" refers to the act of something ending or ceasing to be in effect due to neglect or inactivity.
2. Policy: The word "policy" comes from the Latin word "politicus", meaning "civil" or "political". In English, "policy" refers to a set of principles or guidelines established by an organization, government, or insurance company to govern its actions or decisions.
Therefore, the term "lapsed policy" refers to an insurance policy that has expired or terminated due to the policyholder's failure to make the required premium payments within the specified timeframe.
