Policy termination due to nonpayment of premium is called what?

Prepare for the Primerica Insurance Licensing Exam efficiently. Study with quizzes and multiple choice questions, each with detailed explanations. Get exam-ready!

Lapse happens when a policyholder doesn’t pay the premium within the allowed grace period, causing the policy to terminate and its coverage to end. The grace period gives a short window to pay overdue premium; if payment isn’t made by its end, the policy lapses. Surrender is when you give up the policy for its cash value, not simply because of nonpayment. Revival is restoring a lapsed policy after meeting certain conditions, such as paying back premiums and possibly providing proof of insurability. Extension isn’t a standard term for this situation. So the term for termination due to nonpayment is lapse.