This page applies after you have received a denial letter stating that the life insurance policy lapsed due to missed premium payments. It is not a general overview of lapse law. It focuses on the practical steps beneficiaries can take once an insurer has already refused to pay.
If a life insurance claim is denied because the insurer claims the policy lapsed, do not assume the decision is correct. Missed payment denials are frequently overturned when insurers fail to follow required notice rules or misapply grace period provisions.
Steps to Challenge a Missed Payment Denial
If the insurer claims the policy lapsed, the following actions are critical:
Review the Policy
Carefully examine the policy provisions addressing premium due dates, grace periods, reinstatement rights, and notice requirements. Many denials collapse when these sections are read closely.
Check the Premium Payment History
Confirm whether payments were actually missed, misapplied, or rejected due to insurer or bank error. Also verify whether automatic payments were in place.
Request Written Documentation
Demand a written explanation of the denial and request copies of all premium notices, lapse warnings, cancellation letters, and mailing records. Insurers must be able to prove proper notice.
Evaluate Grace Period Timing
If the insured died during the grace period, the claim is often still payable with premiums deducted. Insurers frequently miscalculate or misrepresent grace period deadlines.
Appeal the Denial
If the insurer failed to follow policy terms or state notice requirements, you may have strong grounds for appeal. This is where many lapse denials are reversed.
Involve Legal Counsel Early
Missed payment denials are technical and document driven. An experienced life insurance attorney can identify notice failures, billing errors, and procedural violations that beneficiaries often miss.
Do Not Let a Claimed Lapse End the Claim
A lapse determination is only valid if the insurer strictly followed the policy and applicable law. Many denials rely on assumptions rather than proof. Whether the issue involves a missed notice, a grace period death, or an improperly processed payment, these cases are often recoverable.
If your life insurance claim was denied due to non-payment of premiums or a claimed lapse, legal review can make the difference between a permanent denial and a full payout.
Frequently Asked Questions
What happens if a life insurance policy lapses due to missed premiums?
If premiums are not paid and the grace period expires, the insurer may claim the policy lapsed. However, the lapse is not valid unless required notices were properly sent.
Can a life insurance policy be reinstated after a lapse?
Some policies allow reinstatement if premiums are paid with interest and underwriting requirements are met. Reinstatement rights vary by policy and timing.
How long is the grace period on most life insurance policies?
Grace periods typically range from 30 to 60 days, depending on the policy and governing law.
Can a claim be denied if death occurs during the grace period?
Generally no. If death occurs during the grace period, the claim is often payable with unpaid premiums deducted.
What if the insurer never sent a lapse notice?
Failure to send required notices is one of the strongest grounds for overturning a lapse denial.
Can beneficiaries still recover benefits after a lapse denial?
Yes. Many lapse denials are reversed once notice failures, payment errors, or grace period violations are uncovered.
How can a life insurance attorney help?
An attorney can demand records, identify procedural defects, appeal the denial, and pursue litigation if necessary.