Lapsed Policy (Health Care) Law and Legal Definition

Lapsed policy refers to a policy that is terminated because the subscriber has not pay the premium within the grace period. It also refers to the cancellation occurring before the policy has a cash or other surrender value. Insurance companies must file an account about the unclaimed or lapsed policies to the state. The account must also include the funds related to those policies. Such fund will be labeled as unclaimed property with beneficiary as the owner.