Lapse
A lapse occurs when your insurance policy ends because premiums haven't been paid or the policy has otherwise been cancelled. Once a policy has lapsed, your cover generally stops.
A lapsed policy means your insurance is no longer active. The most common reason for a policy to lapse is missed premium payments, although there may be other circumstances where cover ends, such as if the policy is cancelled by the owner.
When a policy lapses, you generally won't be able to make claims for events that occur after the cover has ended. If you later decide you want insurance again, you may be able to reinstate the old policy or apply for a new policy. This could involve completing a new health assessment, and your premiums, terms or cover may be different depending on your age and health at the time.
Some insurers provide a grace period after a missed payment, allowing you time to bring your premiums up to date before your policy lapses. If your policy has recently lapsed, it may also be possible to reinstate it, although this depends on the insurer's requirements and how long the policy has been inactive.
Keeping your contact details and payment information up to date is one of the simplest ways to help ensure your insurance remains in place when you need it most.
Why It Matters
A lapsed policy can leave you without valuable financial protection when life takes an unexpected turn. Understanding how lapses occur can help you avoid losing cover and the need to reapply in the future.
Common Misunderstandings
"I can claim for something that happened after my policy lapsed."
No. Once your policy has lapsed, you're generally no longer covered for new events or claims.
"I can simply restart my old policy whenever I want."
Not always. Depending on the insurer, you may need to apply for reinstatement or take out a new policy.
"Missing one payment means my policy ends immediately."
Not necessarily. Many insurers provide a grace period before cancelling a policy, but this varies between insurers.
"My premiums will stay the same if I take out a new policy."
Not always. A new policy may have different premiums or terms based on your current age, health and circumstances.
FAQs about Lapses
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The most common reason is unpaid premiums, although policies can also end if they are cancelled.
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Possibly. Some insurers allow reinstatement if certain conditions are met and the lapse occurred recently.
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You may. If you need to apply for new cover or reinstate your policy, the insurer may ask for updated health information.
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Keeping your payment details up to date and contacting your adviser if your circumstances change can help keep your cover active.
Life changes, and sometimes keeping up with insurance premiums can become challenging. If you're worried about your policy or have missed a payment, speak with a New Vision Financial Services adviser as soon as possible. We may be able to help you explore your options before your cover is affected.