GENERAL KNOWLEDGE

Detailed explanation-1: -What is Lapsed Policy. Definition: The policy for which all benefits to the policy holder cease and is terminated due to non payment of premium amount on the due date or even after the grace period is called a lapsed policy.

Detailed explanation-2: -If you miss a payment on a life insurance policy, you normally have a 30-day grace period in which to make the payment. If you die within the grace period, your beneficiary will receive the benefit minus the overdue payment. If you miss the grace period, the policy will lapse.

Detailed explanation-3: -Surrender refers to the policyholder’s request to exit the policy before maturity. Every policyholder can choose to surrender the policy before the policy tenure is over. Surrendering life insurance effectively cancels the benefits immediately.

Detailed explanation-4: -It is usually a period between 15 to 30 days within which premium payments are accepted without any extra charges. During the grace period, you and your family can avail of the insurance benefits as usual. However, if the insured is unable to pay the premium even after the grace period, it will lead to a lapsed policy.