Daily Archives: November 27, 2019

Life Insurance Policyholders Beware: California’s Statutory Lapse Safeguards Do Not Apply to Policies Issued Prior to January 1, 2013

Posted in: Bad Faith, Beneficiaries, Benefits, Insurance Litigation Blog, Life Insurance November 27, 2019

Life insurance lapse generally refers to coverage ending for insufficient or nonpayment of policy premiums. If premiums are not paid during the grace period to sustain the policy, then the life insurance ends.  The lapse of a life insurance policy at the wrong time could have disastrous consequences for persons or families because policyholders could easily lose their life insurance if a single premium is accidentally missed, even if they have been paying premiums on time for years. On January 1, 2013, California added new sections 10113.71 and 10113.72 to the Insurance Code, as a way of providing consumer safeguards against life insurance policy lapse.

California Insurance Code Sections 10113.71 and 10113.72 primarily do three things: (1) mandate that …

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