What Causes a Life Insurance Lapse
A life insurance policy can lapse for several reasons. The most common reason is failure to pay premiums. Life insurance policies typically require regular premium payments to stay active. When these payments are missed or delayed, the insurance company may send a notice and eventually allow the policy to lapse after a certain grace period. This can happen even if the lapse was unintentional, such as when a payment was forgotten, or the policyholder did not receive the bill. In other cases, there may be issues related to the insurance company’s handling of the payments, such as errors in processing or communication. There are also situations where policyholders may not fully understand the terms of their life insurance policies. Some policies come with additional requirements beyond just paying premiums, such as maintaining certain levels of health or completing paperwork to keep the policy active. If these conditions are not met, the insurance company might consider the policy lapsed. Understanding these reasons is the first step in determining how to move forward, but it can also be overwhelming and difficult to navigate without legal assistance.
The Emotional Impact of Life Insurance Lapse
Dealing with the lapse of a life insurance policy is not just a financial issue, but also an emotional one. The feeling of security that a life insurance policy provides can be taken away in an instant when the policy lapses. For many people, life insurance is a safety net for their loved ones, and when that safety net is suddenly gone, it can feel like a huge weight has been placed on their shoulders. Whether the lapse is due to a missed payment, a misunderstanding of the policy terms, or an administrative error, the impact can be profound. If you find yourself in this situation, it’s important to remember that you have options. The lapse does not always have to be permanent. There may be ways to reinstate your policy or take legal action if the lapse was caused by an error or misunderstanding. You don’t have to face this challenge alone. With the right legal guidance, you can explore your options and work towards a favorable outcome.
We contacted Trief & Olk to help us with a life insurance issue and Shelly Friedland was the attorney assigned to our case. Before Shelly took our case she explained to us that the likelihood of our success without going to court was possible but not likely. Unfortunately we did not get the outcome we had hoped for but it was our decision to not move forward and have our case litigated. Shelly is very knowledgeable and was very straight-forward in her assessment of our case as we moved forward. She was very patient and thorough in answering our questions. She always responded in a timely manner and listened to our concerns. We would certainly recommend Shelly and would use her firm again in the future.”
- John Ramig
If there is any possibility of winning your life insurance case – this is the place to do it for you. They are efficient, honest and will achieve the best possible outcome.
Shelly Friedland worked on my case where a life insurance policy had lapsed and was even a few days beyond the grace period. Farmers had rejected my claim twice and was unwilling to take a second look. Shelly was able to get them to pay the entire claim without going to court, and the full amount was deposited in my account within a couple months. Highest recommendation.”
- Kathleen Brown
Trief & Olk is a superior law firm. Their attorneys and other legal professionals have a brilliant understanding of the law and the litigation process. They diligently perform their work in an efficient, strategic and cost-effective manner to ensure the best possible outcomes for their clients.
- Christopher Hughes
Understanding the Legal Options After a Life Insurance Lapse
When a life insurance policy lapses, the policyholder may have several options depending on the circumstances. One option is reinstating the policy, which might be possible if the lapse was recent and if certain requirements are met. Insurance companies often allow a grace period after a missed payment, and in some cases, a policy can be reinstated by paying any overdue premiums. However, the process of reinstatement can be complicated, and there may be time limits or additional fees involved. If you believe that the lapse was caused by an error, such as a failure to process a payment or a misunderstanding of the terms of the policy, you may have grounds to take legal action against the insurance company. The laws governing life insurance in New Jersey provide certain protections for policyholders, and if the insurance company failed to act in good faith or violated the terms of the policy, you may be able to recover the benefits you were entitled to. Legal action can take many forms, including filing a complaint with the New Jersey Department of Banking and Insurance or pursuing a lawsuit against the insurer. If you’re facing a situation where your life insurance policy has lapsed, an attorney can help you understand your rights and explore the best course of action to take. The legal landscape surrounding life insurance lapses can be complex, but with the right help, you can work towards getting the results you need.Reinstating a Life Insurance Policy in New Jersey
Reinstating a life insurance policy is often the first option to consider after a lapse. In New Jersey, life insurance policies may have a reinstatement provision, which allows you to bring a lapsed policy back into force under certain conditions.Life Insurance Denial Statistics
20%
The annual average number of life insurance claims denied.
$50 Million
The yearly average dollar amount of claims denied by life insurance companies.
.2%
The number of claims appealed annually by consumers.