Can Life Insurance Deny a Claim for Lapse Before Death?
Yes, a life insurance company may deny a claim by alleging that the policy lapsed before the insured’s death due to nonpayment of premiums. However, lapse based denials are among the most frequently disputed life insurance denials and are often overturned when insurers fail to follow required notice, grace period, or billing rules.
A lapse allegation does not automatically defeat a life insurance claim.
What Insurers Mean by a 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 payment history is complex, automated payments failed, or records are unclear.
Not every missed or late payment results in a valid lapse under the policy or the law.
Notice and Grace Period Requirements
Most life insurance policies require insurers to take specific steps before coverage can terminate, including:
• Advance written notice of missed payments
• A defined grace period during which coverage remains active
• Clear warnings that coverage will end if payment is not made
If proper notice was not sent or the grace period was not honored, a lapse denial may be invalid.
Automatic Payment and Billing Problems
Many lapse denials arise from administrative or billing errors rather than intentional nonpayment.
Common issues include:
• Failed automatic bank drafts or credit card expirations
• Insurer processing or posting errors
• Notices sent to incorrect or outdated addresses
• Employer payroll or deduction failures in group policies
When the policyholder reasonably believed premiums were being paid, lapse claims deserve close scrutiny.
Death During the Grace Period
Coverage typically remains in effect during the policy’s grace period. If death occurs during that time, insurers are generally required to honor the claim, even if the premium had not yet been paid.
Denials based on death occurring shortly after a missed payment are often challenged successfully.
Reinstatement and Waiver Provisions
Some policies allow reinstatement after lapse, even when death occurs soon afterward. Others include waiver provisions that suspend premium obligations due to disability or serious illness.
Insurers do not always apply these provisions correctly, which can make lapse denials improper.
Elderly and Long Term Policyholders
Lapse disputes frequently involve older policyholders who maintained coverage for many years. Courts often examine whether insurers took advantage of confusion, declining health, or administrative complexity when asserting lapse.
A long history of timely payments can be highly relevant.
Does a Lapse Denial Mean the Claim Is Over?
No. Lapse based denials are among the most commonly overturned life insurance denials. Many are reversed once notice defects, payment handling errors, or policy protections 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 the full premium payment history
• Obtain copies of all lapse, billing, and grace period notices
• Review the policy language carefully
• Preserve bank, payroll, and payment records
• Avoid accepting the denial without further review
Early review often reveals problems with the insurer’s 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.
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Written & Reviewed by Christian Lassen, Esq., Nationally recognized life insurance lawyer: 25 years experience, hundreds of millions recovered. Quoted in The Wall Street Journal ( May 17, 2025).
Last reviewed: Jan 3, 2026 | Contact 800-330-2274
Our FAQ
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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.
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