What is Lapsed Policy? Definition of Lapsed Policy, Lapsed Policy Meaning

lapse

a temporary deviation; a slip or error: a lapse of judgment; discontinuance due to a late payment: She let her insurance lapse.

Not to be confused with:laps – more than one lap: She swam five laps in the pool. My cat sits in the laps of all of my guests whether they like her or not.

Abused, Confused, & Misused Words by Mary Embree Copyright © 2007, 2013 by Mary Embree

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lapse

Past participle: Gerund:
Imperative
lapse
lapse
Present
I lapse
you lapse
he/she/it lapses
we lapse
you lapse
they lapse
Preterite
I lapsed
you lapsed
he/she/it lapsed
we lapsed
you lapsed
they lapsed
Present Continuous
I am lapsing
you are lapsing
he/she/it is lapsing
we are lapsing
you are lapsing
they are lapsing
Present Perfect
I have lapsed
you have lapsed
he/she/it has lapsed
we have lapsed
you have lapsed
they have lapsed
Past Continuous
I was lapsing
you were lapsing
he/she/it was lapsing
we were lapsing
you were lapsing
they were lapsing
Past Perfect
I had lapsed
you had lapsed
he/she/it had lapsed
we had lapsed
you had lapsed
they had lapsed
Future
I will lapse
you will lapse
he/she/it will lapse
we will lapse
you will lapse
they will lapse
Future Perfect
I will have lapsed
you will have lapsed
he/she/it will have lapsed
we will have lapsed
you will have lapsed
they will have lapsed
Future Continuous
I will be lapsing
you will be lapsing
he/she/it will be lapsing
we will be lapsing
you will be lapsing
they will be lapsing
Present Perfect Continuous
I have been lapsing
you have been lapsing
he/she/it has been lapsing
we have been lapsing
you have been lapsing
they have been lapsing
Future Perfect Continuous
I will have been lapsing
you will have been lapsing
he/she/it will have been lapsing
we will have been lapsing
you will have been lapsing
they will have been lapsing
Past Perfect Continuous
I had been lapsing
you had been lapsing
he/she/it had been lapsing
we had been lapsing
you had been lapsing
they had been lapsing
Conditional
I would lapse
you would lapse
he/she/it would lapse
we would lapse
you would lapse
they would lapse
Past Conditional
I would have lapsed
you would have lapsed
he/she/it would have lapsed
we would have lapsed
you would have lapsed
they would have lapsed
Collins English Verb Tables © HarperCollins Publishers 2011

Understanding Lapses

When something has lapsed, the benefits and everything stated in the lapsed contract or agreement no longer remain active.

Lapse is most often used in the context of insurance, where the term implies a "lapse in coverage," a direct translation of how a lapsed policy no longer confers benefits or provides coverage. Lapsing can also occur in other contexts.

Lapse FAQs

What Percentage of Life Insurance Policies Lapse?

As of 2018, the lapse rate for individual life insurance policies was 4.7% and for group policies was 5%.

How Does a Lapse in Coverage Affect My Car Insurance Rates?

A lapse in auto coverage generally results in higher rates being applied. The longer the lapse, the higher the rate. For example, drivers with policies that have lapsed for up to 30 days see an 8% increase in auto insurance rates. For those with lapses greater than 30 days, the rate increase is about 35%.

Does an Insurance Lapse Affect Your Credit Score?

Most policies lapse without affecting credit. However, if the policyholder owes the insurer for coverage, the insurer may report the debt to a collection agency. Under those circumstances, the lapse can precipitate a decrease in the policyholder's credit score.

What if I no longer need car insurance?

If you’re not driving, you obviously won’t need auto insurance. Perhaps you’ll be traveling out of the country, biking, or just bumming rides off friends. Keep in mind, that if you get behind the wheel again, you might pay an increased rate. That’s because insurance companies may consider you a riskier driver than those who keep active policies.

Can my other insurance policies lapse?

Yes, your other insurance policies can lapse. A lapse in home or life insurance often occurs when you stop paying the premium.

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