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What Happens When a Life Insurance or Long-Term Care Policy Lapses?

Typically, to keep Life Insurance & Long-Term Care Insurance in force, it is necessary to pay premiums. However, failure to pay premiums on time does not automatically mean the coverage cannot be reinstated, or that claims cannot be paid even if the premiums were not paid.

In the situation involving life insurance, before lapsing a policy, the life insurer has strict obligations regarding giving insureds notice of premium payments that are coming due, as well as the legal obligation to reinstate the coverage within a short period of time after it comes due but has not been paid. If the carrier does not comply with all requirements, legal arguments can successfully be made that the coverage never lapsed; and if the insured remains alive, a payment made late must sometimes be accepted by the insurance company.

Even after the death of the insured, the carrier may have to pay the death benefits, notwithstanding the fact that premiums were not paid, if the carrier has not complied with its obligations, and the obligations are strictly applied against the insurance company. Failing to send timely lapse notices, sending the notices to an incorrect address despite having the correct address, or not properly accounting for payments made by the insured are all examples of cases we have won for beneficiaries of “lapsed” policies as the result of our successfully arguing the insurer failed to comply with its obligations.

In California, since 2013, life insurance carriers have been obligated to offer to life insurance policy owners the right to designate a third party to receive premium lapse notices to avoid policies’ lapsing. This “right to designate” must be provided to owners every year, regardless of whether they made prior designations or not. If the carrier didn’t strictly comply with its obligations, and the policy lapsed for non-payment of premiums, the lapse may have been invalid. If a lapse was not valid, the policy may have remained in force, requiring the benefits be paid to the beneficiary if the insured died after the purported lapse.

Some life policies have what is called Waiver of Premium provisions, which allow the insured to NOT pay premiums if they are disabled. We have seen situations where the insured qualified for Waiver of Premium, but did not advise the insurance company of their disability and the right to have their premiums waived during their lifetime. We have prevailed in court to require the insurance company to apply the Waiver of Premium provision, even after the insured has died, and successfully obtained the denied life insurance benefits for our client. (See the published decision in Lat v. Farmers New World Life Insurance Company).

Also, in the last 10 years, many states have extended what is known as the “grace period” for paying premiums from 30 days to 60 days. However, not all insurance carriers properly apply the new laws. We have seen cases where the insured died after the 30-day grace period, but within the 60-day grace period, but the insurance company ignored the new law (claiming ignorance), and denied the claim. Kantor & Kantor successfully obtained not only life benefits but also damages for the insurance company’s wrongful denial of benefits.

Simply put, if your loved one has been told by the insurance company that they lost their coverage, either before or after a death, that may not be the end of the story. You should always check with a law firm with extensive experience in the laws surrounding life insurance before accepting what is told to you by the insurance company.

LONG-TERM CARE policy lapses can be even more complicated, as many states provide even greater protection against lapses of policies issued to cover care when an insured can’t care for themselves. These protections often go above and beyond what is required in the life insurance context. For example, if a long-term care insured can demonstrate the reason the premium was not paid was due to their cognitive impairment, long-term care insurers have an obligation to investigate the situation and reinstate the policy if it is established that the reason for the policy lapse was the insured’s mental infirmity.

Once again, as with life insurance, you should never just accept the explanation of a long-term care insurance company that your loved one’s coverage has lapsed and cannot be reinstated.   Often, the position of the insurance company is not supportable given the circumstances of the lapse and the applicable law. You should always check with a law firm with extensive experience in the laws surrounding long-term care insurance before accepting what is told to you by the insurance company.

You May Be Able to Fight a Life Insurance Policy Lapse

Was Your Life Insurance Claim Denied Because of a Policy Lapse?

If you have been denied life insurance benefits because your policy lapsed, you may have options to retain your benefits. Unlike many bills, life insurance payments may not necessarily be monthly. Premiums may be due quarterly, semi-annually, or even annually. Infrequent premium due dates can make it hard to remember to pay a life insurance premium.

Some policyholders mistakenly assume that if they miss a life insurance premium payment, they will lose their benefits permanently. If your policy was terminated due to missed premiums, your insurer may have acted in bad faith. A policy cannot be terminated without prior notice.

Whether you face an unfair termination of your life insurance policy or your claim for life insurance benefits was denied, Kantor & Kantor can help. Call 818-886-2525 to get your case evaluation with our attorneys today. We are located in California, and our skilled attorneys handle cases nationwide.

When a life insurance company terminates your policy or denies a claim because the policy lapsed, don’t give up without a fight. Our attorneys can go to battle on your behalf.

What If Your Life Insurance Claim Was Denied Because of a Policy Lapse?

When you lose a loved one who carried life insurance, and you are a beneficiary, you expect to receive the financial security you knew that policy would provide. All too often, what you receive instead is a horrible surprise: Your claim is denied.

In the midst of your grief, the last thing you need to take on is a fight with an insurance company for life insurance benefits. This is the time to turn to Kantor & Kantor.

But what if your loved one failed to make premium payments on time and the policy lapsed? Does that mean the company can deny your life insurance claim due to a policy lapse? Not always.

Perhaps your loved one became seriously ill not long before their death. During this illness, they missed a premium payment, but, given their condition, they did not discover notice of the late payment. Companies are required to provide policyholders with a grace period during which late premiums can be paid. What if your loved one died during that grace period? Can an insurance company deny a life insurance claim made during a grace period? Typically, no, it cannot. If your loved one dies during the grace period, the benefits of the life insurance policy must still be paid. Whether their death came a week after having received a late payment notice or a day before the end of the grace period, the beneficiary must still be paid.

Depending on the circumstances, the policy may still have been in effect when your loved one died. Talk to our life insurance attorneys at Kantor & Kantor to find out if your claim should be paid: 818-886-2525.

Laws Governing Life Insurance Policy Lapses

Our Attorneys Hold Insurance Companies Accountable

There are laws that require an insurance company to notify a policyholder if a premium payment is late. Companies must also provide separate notice if a policy is at risk of lapsing. Laws stipulate how and when an insurance company may terminate a life insurance policy.

Companies must abide by the law, even if it changes. If life insurance policies are not updated following a change in laws, or if notification requirements related to late premiums are not followed, making a legal challenge to a policy lapse may be the best course of action.

Often, state law requires a life insurance company to provide notice 30 days prior to terminating a policy, as is the case in California (INS §10113.71(b)(1)) 1. If the insurance company sends you a life insurance lapse notice in a shorter time frame – perhaps two weeks before your policy is to be terminated – you should fight back. Many states have this notification requirement for a pending policy lapse, but they also have legal requirements for a grace period during which a late premium payment can be made. In California, the full grace period is 60 days (INS §10113.71(a)).

Knowing what law applies is important, too. Consider that California’s lapse statute applies only to policies “issued or delivered” in that state. If a current resident of California plans to rely on this law to take their case to court, but their policy was purchased in another state, the California lapse law may not protect them.

Kantor & Kantor serves clients nationwide, so you can count on our detailed knowledge of insurance laws in your state. Trust in our legal representation to get the full life insurance policy benefits you deserve.

When an Insurer Is Responsible for a Life Insurance Policy Lapse

Life insurance companies will work hard to find ways to deny a claim so they can avoid paying benefits. The steps they take may unfairly deny you the benefits you deserve. Sometimes, responsibility for a missed premium payment lies with the insurance company.

Examples of When Life Insurance Companies Are Responsible for a Lapse

Example 1: Ignored Change of Address

If the insured moved and filed a change of address with the company, but the insurer failed to send the premium notice to the new address, it may result in a late payment due to the insurance company’s mistake. What if the payment was so late (or not made at all) that the policy’s grace period ended? In states like California, the insurance company is also required to send notice that a life insurance policy will lapse. If either of these notices is not sent to the correct address, it may be possible to appeal an unfair termination or a denied life insurance claim.

Example 2: Lapse Notice Not Sent to Designee

If the insured is elderly and can no longer live on their own or take care of themselves, they may move to an assisted care or nursing home facility. In this situation, they may be unable to handle their financial affairs, so a family member manages and pays bills for them. A notification of this change may be provided to the life insurance company, and that relative thus becomes a “designee” to receive notice of bills and policy lapse.

Even when an insurer knows there is a designee, it may choose to send notice of an impending policy lapse directly to the elderly policyholder, assuming that the letter will not be opened. Or the company may hope that the insured will not understand what the letter says about the lapse of their life insurance policy. This is unfair and, often, illegal.

When a Company Misleads Life Insurance Policyholders

Example 3: Misleading or Unclear Notice Sent to Policyholders

Our attorneys took on Primerica Life Insurance Company because the company’s communications to insureds about the option to designate another party to receive notifications were misleading. Primerica sent the notice of this option only electronically, which can present difficulty to older policyholders. Furthermore, the subject line of the message was “Your Annual Privacy Notice Is Now Available.” That language says nothing about assigning a designee for a lapsed life insurance policy notice. This example shows how companies may intentionally try to avoid letting insureds know about their rights under the law.

In California, an insurance company is required by law to notify a policy owner of their right to designate another party to receive a lapsed policy notice. California law stipulates also that the insurer must send a life insurance policy lapse notice to both the policyholder and their designee (INS §10113.72) 2. When an insurance company fails to do so, it may have acted in bad faith. In this situation, there is an opportunity to get a policy reinstated to be sure it remains in force.

A company may take intentional steps that could lead to a life insurance policy lapse. Regardless of what tricks an insurance company plays, our attorneys can help you. Call Kantor & Kantor today at 818-886-2525.

Reasons Why Your Life Insurance Company May End Your Policy Coverage

While late payments can eventually lead to the termination of your life insurance policy, there are other reasons that an insurance company may cancel or rescind it. Often, those reasons relate to information provided in the application process. If the insured did not accurately answer questions in the application, that may lead to termination of the policy.

Incorrect Answers on Life Insurance Application

If the insured smoked two packs of cigarettes a day for decades, including when they filled out the application, but stated they were a non-smoker, an insurer may have just cause to terminate the policy. However, action taken by the insurer related to the misrepresentation must happen in a reasonable time frame.

State laws typically specify the time period in which an insurance company is responsible for investigating the accuracy of statements made in an application. During that time, it may terminate a policy if the information provided by the policyholder was not accurate and the insurance company would have issued the policy differently if accurate information had been provided. If the company waits too long and then cites a misrepresentation on an application as its reason for denying a life insurance claim, that denial may be in bad faith. In most states, the time during which an insurance company can contest inaccuracies in a life insurance application is two years (INS §10113.5(a))3.

Concealed Health Information

Life insurance applications often inquire about the policyholder’s health history. Concealing relevant health information, such as a pre-existing medical condition or a history of serious illnesses, can be grounds for policy termination. Insurance companies rely on accurate health information to assess risk and determine premiums. If a policyholder fails to disclose significant health issues during the application process, it may lead to the cancellation of their life insurance policy.

Financial Fraud or Misrepresentation

Dishonesty regarding financial information, such as income, assets, or outstanding debts, may result in policy termination. Life insurance companies use this information to determine the appropriate coverage amount and premium rates. If a policyholder provides false financial details during the application process, it may impact the insurer’s ability to assess risk and provide the appropriate coverage accurately.

Why Choose Kantor & Kantor in Your Lapsed Life Insurance Policy Dispute?

Don’t Give Up Without a Fight

Was your claim denied? Do you believe a policy lapse may not be your fault? Turn to Kantor & Kantor for help. Our attorneys have decades of experience fighting insurers on behalf of our clients. It is likely that we have handled a lapsed life insurance policy case that is similar to your situation.

When other law firms are quick to settle, we are ready to take your case to court. Our fierce litigators have a strong winning record against life insurance companies. Learn how we have helped other clients and discover how our attorneys can help you today.

Below are examples of cases we have taken to court and prevailed against insurance companies on denied life insurance claims:

  • Established precedent in the 9th Circuit determining what constitutes an Accidental Death. Dowdy v. Metropolitan Life Insurance Company, 890 F.3d 802 (9th Cir. 2018).
  • Incontestability clause in the life-insurance policy required the insurer to pay $678,000 in life insurance benefits. Pottayil v. Thyssenkrupp Elevator Corporation, — F.Supp.3d —- (USDC N. Dist. Georgia, 2021).
  • A voluntary group life insurance plan’s incontestability clause precluded the plan insurer’s denying the benefit claim. Patterson v. Reliance Standard Life Ins. Co., 986 F.Supp.2d 1140 (USDC C.D. CA., 2013).
  • Beneficiary of group life insurance plan established that her late husband’s employer acted as fiduciary in failing to inform him about his eligibility for continued coverage. Dawson-Murdock v. National Counseling Group, Inc., 931 F.3d 269 (4th Cir. 2019).
  • The insured’s death was a sudden, unforeseeable external event that had to be considered accidental. Wolf v. Life Insurance Company of North America, 541 F.Supp.3d 1191 (W.D. Wash., 2021).
  • Husband’s fatal heroin overdose was an “accident” for which the employee could recover accidental death benefits from their employer-sponsored ERISA plan. Yates v. Symetra Life Insurance Co., — F.Supp.3d —- (E.D. MO. 2022).
  • California’s Notice Prejudice Rule applies to a life insurance policy even after lapse so as to reinstate the policy and require death benefits to be paid. Lat v. Farmers New World Life Ins. Co., 29 Cal.App.5th 191 (2018)


1 California Insurance Code. INS §10113.71(b)(1).

2 California Insurance Code. INS §10113.72.

3 California Insurance Code. INS §10113.5(a).

Attorney Glenn Kantor, California

Attorney Glenn R. Kantor

Glenn Kantor is a founding partner of Kantor & Kantor LLP. As a young attorney, Glenn saw the injustice of wrongful insurance denials and created a law firm to represent individuals seeking to obtain their rightful benefits. Glenn is committed to ensure that clients receive the benefits they are entitled to under their insurance policies or group health plans. [Attorney Bio]