Can Life Insurance Deny a Claim for Lapse Before Death?
Yes, a life insurance company may deny a claim by alleging the policy lapsed before death due to nonpayment of premiums. However, lapse based denials are frequently disputed and often overturned when the insurer failed to follow required notice, grace period, or billing rules.
A lapse allegation does not automatically defeat a life insurance claim.
What Insurers Mean by Policy Lapse
A policy lapse occurs when the insurer claims coverage ended because premiums were not paid on time. Insurers often rely on lapse arguments when they want to avoid paying benefits, especially if payment history is complicated or automated payments failed.
Not every missed or late payment results in a valid lapse.
Notice and Grace Period Requirements
Most life insurance policies require insurers to provide:
• Advance notice of missed payments
• A defined grace period before coverage ends
• Clear instructions for reinstatement
If proper notice was not sent or the grace period was not honored, a lapse denial may be invalid.
Automatic Payment and Billing Errors
Many lapse denials stem from administrative problems, not true nonpayment.
Common issues include:
• Failed automatic bank drafts
• Credit card expirations
• Insurer processing errors
• Notices sent to the wrong address
When the policyholder reasonably believed premiums were being paid, lapse claims deserve close scrutiny.
Reinstatement and Waiver Issues
Some policies allow reinstatement after lapse, even if death occurs shortly afterward. Others contain waiver provisions that suspend premium obligations due to disability or serious illness.
Insurers do not always apply these provisions correctly.
Elderly and Long Term Policyholders
Many lapse disputes involve elderly policyholders who had coverage for years or decades. Courts often look closely at whether insurers took advantage of confusion, declining health, or administrative complexity when asserting lapse.
Long payment history matters.
Does a Lapse Denial Mean the Claim Is Over?
No. Lapse based denials are among the most frequently challenged life insurance denials. Many are reversed when notice defects, payment records, or insurer errors are uncovered.
A lapse allegation is often just the insurer’s opening position.
What to Do If a Claim Is Denied for Lapse
If an insurer claims the policy lapsed before death:
• Request full premium payment history
• Obtain copies of all lapse and billing notices
• Review the policy grace period language
• Preserve bank and payment records
• Avoid accepting the denial at face value
Early review often exposes problems with the lapse claim.
Related Guidance
For a broader discussion of lapse related denials and how they are challenged, see our Life Insurance Lapse page, and our Life Insurance Lapse Fact Sheet.
If a life insurance company denied a claim by alleging the policy lapsed before death, it may still be possible to recover the full policy benefits.
Our FAQ
Have questions? We are here to help. Still have questions or can't find the answer you need? Give us a call at 800-330-2274 today!
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A grace period is the time after a missed payment during which the policy remains in force, usually 30 to 60 days depending on state law and policy terms.
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No. In most states, insurers must send a written notice of overdue premiums and warn of pending lapse before terminating coverage.
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The policy may still be enforceable. Beneficiaries can challenge the lapse based on the insurer’s failure to provide required notice.
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Yes. If the insured dies during the grace period, the policy is still considered active, and benefits should be paid.
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Yes. In group life insurance policies, employers sometimes fail to forward premiums properly, leading to wrongful lapse denials.
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Yes. If automatic payment setups fail through no fault of the insured, lapses may be challenged.
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Some policies automatically borrow against cash value to cover missed payments. Failure to apply this correctly can lead to wrongful lapse claims.
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Possibly. Some courts excuse nonpayment if the insured was mentally incapacitated and missed premiums without proper notice.
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No. Reinstatement must occur while the insured is alive, but wrongful lapse denials can still be challenged posthumously.
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Not without following strict notice and grace period rules. Beneficiaries can often challenge technical denials.
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Deadlines vary by state, but it’s critical to act within 1 to 5 years depending on the policy and jurisdiction.
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Not necessarily. Payments mailed within grace periods or accepted by insurers may keep coverage active.
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Bank records, payment receipts, insurer correspondence, and premium notices are key evidence.
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If the insurer used an outdated address despite updated information, lapse denials can often be overturned.
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Possibly. If the insured submitted a reinstatement application before death, it may help challenge a lapse denial.
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In some states, special grace periods and protections applied during COVID-19 emergencies. They can help fight wrongful lapses.
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Only if the insurer followed all legal notice and grace period requirements. Otherwise, beneficiaries may still recover.
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Misapplied premiums can lead to wrongful lapses — and courts often hold insurers accountable for these errors.
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An attorney can obtain records, challenge improper lapses, negotiate settlements, and litigate if necessary to enforce payment.
Our Clients Speak Volumes
The Right Choice for Your Claim
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“We were told the policy lapsed before my mother died. But we had receipts showing otherwise. Lassen Law Firm used them to force the company to honor the contract. They don’t mess around.”- David K.
Why The Lassen Law Firm Is Different
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Proven National Results
With over two decades of exclusive focus on life insurance litigation, we’ve helped thousands of families recover wrongfully denied benefits. Our reputation for fast, strategic resolutions has made us a trusted national resource for complex claim disputes.
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