What typically happens during the policy lapse period?

What typically happens during the policy lapse period?

• A. The policy benefits are doubled.
• B. The premium payments must be made to maintain coverage.
• C. The coverage remains in effect indefinitely.
• D. The policyholder can choose new beneficiaries.

Answer: (B)

During the policy lapse period, premium payments must be made to maintain coverage. When a policyholder fails to pay the required premiums within a specified grace period, the insurance policy can lapse, which means that the insurance coverage is no longer active. To avoid this lapse and ensure that coverage continues, the policyholder needs to pay their premiums on time. This concept emphasizes the importance of timely payments in maintaining a life insurance policy. If payments are neglected, the policy may not only lapse but could also lead to the loss of any death benefit or coverage. Understanding this helps policyholders recognize their responsibilities in managing their policies effectively.

During the policy lapse period, premium payments must be made to maintain coverage. When a policyholder fails to pay the required premiums within a specified grace period, the insurance policy can lapse, which means that the insurance coverage is no longer active. To avoid this lapse and ensure that coverage continues, the policyholder needs to pay their premiums on time.

This concept emphasizes the importance of timely payments in maintaining a life insurance policy. If payments are neglected, the policy may not only lapse but could also lead to the loss of any death benefit or coverage. Understanding this helps policyholders recognize their responsibilities in managing their policies effectively.