Life insurance claims are frequently denied after an insurer claims the policy lapsed for nonpayment. In many cases, that lapse never should have happened. We regularly see MetLife and other major insurers deny valid claims based on administrative mistakes, failed notices, or auto pay issues that were entirely outside the policyholder’s control. These denials are often reversible with legal action.
How Administrative Errors Create Invalid Lapses
Life insurance companies manage millions of active policies using automated systems. When something goes wrong inside those systems, the consequences fall on families unless the insurer is held accountable. Common administrative failures that lead to wrongful lapse denials include the following.
Incorrect data entry
A simple internal error such as entering the wrong premium amount, date, or policy number can cause the system to flag a fully paid policy as unpaid.
Mailing and address errors
Insurers are required to send lapse notices to the policyholder’s correct address. If notices are mailed to an outdated address, misrouted, or never sent at all, the policyholder may have no idea coverage is at risk.
Failed automatic payments
Many policyholders rely on automatic drafts to avoid missed payments. When a bank changes routing numbers, a card expires, or a draft fails for technical reasons, insurers sometimes cancel the policy without clearly notifying the insured.
Inadequate notice procedures
In many states, insurers must provide clear advance warning before canceling coverage. A single vague letter or one missed notice often does not satisfy legal requirements, especially when years of premiums have been paid.
Failure to follow state lapse laws
Some states require insurers to notify not only the policyholder but also a secondary contact before canceling a life insurance policy. If that step is skipped, the lapse can be legally invalid.
Insurers Have Legal Obligations Too
Policyholders are expected to pay premiums and keep contact information updated. Insurers, however, have their own legal duties. They must maintain accurate billing records, honor grace periods, and provide proper notice before terminating coverage. Courts have consistently ruled that insurance companies cannot benefit from their own administrative failures. When an insurer cancels a policy without following the law, denying the claim may amount to bad faith.
We Routinely Overturn Lapse Based Denials
Our firm has successfully reversed lapse denials involving MetLife and other major carriers. In one case, a policyholder’s bank updated routing information, causing an automatic draft to fail. The insurer canceled the policy without providing proper notice and then denied a substantial death benefit. We proved the lapse was invalid due to notice failures, and the full claim was paid.
These cases are not rare. Insurers often deny lapse related claims assuming beneficiaries will accept the explanation without pushing back. When challenged, many of these denials collapse.
What to Do If Your Claim Was Denied for Lapse
A denial letter citing lapse should never be taken at face value. A life insurance attorney can take steps that families cannot, including:
• Reviewing the full premium payment history
• Reconstructing the exact lapse timeline
• Demanding internal insurer records and billing logs
• Verifying whether legally required notices were sent
• Determining whether state lapse laws were violated
• Pursuing breach of contract or bad faith claims when appropriate
Many families are shocked to learn the policy never legally lapsed at all.
Do Not Let an Administrative Error Erase Your Claim
Years of paid premiums should not disappear because of a clerical mistake, a failed auto draft, or a missing notice. If your life insurance claim was denied due to an alleged lapse, legal review can make the difference between nothing and full recovery.
We handle lapse related denials nationwide and routinely challenge insurers that attempt to avoid payment through technicalities. If your claim was denied because the insurer says the policy lapsed, that decision may be wrong and it may be reversible.