Life Insurance Lapse

New York, New Jersey & Massachusetts

Too often, a life insurance beneficiary submits a claim for payment of life insurance benefits only to have that claim rejected on the grounds that the policy lapsed, often for failure to pay the premiums owed. Such a lapse often results from the policyholder being ill for a long period of time and being unable to pay the premiums or unaware that the policy is in danger of lapsing. Lapses can also occur when the policyholder has employer-provided health insurance and that employment ends – with the coverage ending as well.

In certain situation, life insurance companies are required to provide certain advance notice if a policy is about to lapse and most policies provide a grace period for reinstating the policy if the overdue premiums are paid. For employer-provided policies, the employer or life insurance company should provide the employee with notice that the policy would terminate when employment ends, and in many cases, the employee must be given the opportunity to convert the group coverage (provided by the employer) to an individual policy. To learn more, see Employment Based Life Insurance (ERISA).

If your loved one has passed away and the insurance company has denied your claim based on a supposed lapse in coverage, the life insurance attorneys at Trief & Olk are available to answer your questions and represent you if you have a claim that the requirements were not followed to provide notice to your family member.