When Does Insurance Policy Lapse. The most immediate effect of an insurance lapse is the loss of coverage. “lapse” is shorthand for a “lapse in coverage,” which means the policy will no longer pay a death benefit for the insured person.
For the insurance carrier’s eyes, a lapse in your auto insurance policy means that you haven’t had insurance for 30 to 60 days. If your life insurance policy does happen to lapse, you need to move very quickly. Insurance lapses can happen at different times, depending on the type of insurance.