Lapse

A Lapse in insurance terms refers to the termination of a policy due to non-payment of premiums within the allotted grace period. Key consequences in an Indexed Universal Life (IUL) policy include:

• Loss of Death Benefit Protection: The safeguard against financial hardship upon the policyholder's demise is forfeited.
• Forfeiture of Index-Linked Gains: Potential increases in cash value, tied to index performance, are lost.

For IUL policyholders, maintaining timely premium payments is crucial to avoid a lapse and preserve the comprehensive benefits of their policy.