What Does It Mean If Your Life Insurance Lapses? 
While the term lapse is commonly used , the technical definition of a lapse is a policy that terminates when there is no cash surrender value . A surrender would be the alternative to this , which is a policy that terminates with cash surrender value . A policy will terminate if premiums are not paid on time or there is not enough cash value in the policy to cover policy charges when due . Most states have a 30 day grace period for unpaid premium before a policy terminates . The state of New York requires all policies with a non-forfeiture benefits -LRB- i.e. any policy with a cash value -RRB- to have a 60 day grace period . 