Insurance Policy Lapses Text Size:

Insurance policies, whether they are life, health, disability or homeowners' insurance policies, have premiums which must be paid in order to keep the policy in effect. Sometimes the insured pays the premiums, and sometimes the insured's employer pays the premiums. If you are thinking about retiring from your job, you should find out who will pay your insurance premiums after you retire.

The failure to pay insurance premiums usually results in a policy lapse. That means that the insurance policy is no longer in effect. It also means that you have forfeited your policy. So make sure that your insurance premiums are paid according to the schedule included with the policy.

Waiver of Forfeiture

If an insurance policy has lapsed due to nonpayment of premiums and you sue the insurer for failure to provide benefits, there are several ways that you can show that the insurer waived the forfeiture of the policy. These include:

• The insurer offered to settle the dispute over the policy lapse and did not deny liability
• Your attorney had a telephone conversation with the insurer and an agreement was reached
• The insurer knew about the forfeiture and demanded premiums anyway
• The insurer knew about the forfeiture and accepted or retained proofs of loss
• The insurer sent letters about the forfeiture indicating that the forfeiture could be waived
• The insurance industry has a custom regarding lapse notification and reinstatement opportunities
• The insurer's agent informed the beneficiary that premiums did not have to be paid

If the insurer waived the forfeiture of the policy, you are still eligible for benefits.

Questions for Your Attorney

• What happens if I fail to pay my insurance premiums?
• Am I still eligible for benefits if my insurance policy lapses?
• What are some of the ways that I can show that the insurer waived the forfeiture of my insurance policy?

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