Lapse of a life insurance policy often leads to litigation seeking either death benefits or reinstatement. Life insurance lapse generally refers to coverage ending for insufficient or nonpayment of premiums. Insufficient premiums can cause lapse of a life insurance policy when applicable monthly mortality, fees, and expenses exceed the policy’s cash value. Nonpayment of premiums can cause a life insurance policy to lapse when the policy has no cash value and the premiums are not timely paid.
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