What Does Lapsed Mean In Life Insurance? 
`` Lapsed '' in life insurance means that the policy is expired . If the insured person were to pass away , the policy would not pay anything to his/her beneficiary . People generally end up with lapsed policies because they chose not to pay the premium , because they cancelled their policies , or they forgot to pay their premiums within the grace period . The best way to keep from forgetting is to set up an automatic bank draft to pay your premiums , and then make sure to tell your life insurance company if you switch banks . 