Under what condition can a life insurance company declare a policy lapsed after a premium payment default?

A life insurance company can declare a policy lapsed after a premium payment default only if a premium due notice was mailed to the policyholder. This requirement is in place to ensure that policyholders are adequately informed about their premium obligations and the potential consequences of failing to make a payment. By sending a notice, the insurer provides the policyholder with an opportunity to rectify the situation before the policy lapses, which is an important aspect of fair practice in the insurance industry.

Other durations of time, such as one year or two years without payments, do not apply because the crucial factor is the provision of notice to the policyholder, which protects their rights. Additionally, the type of policy—whether term or otherwise—does not inherently change the fundamental requirement for notice regarding the lapse due to non-payment. Thus, the condition that the premium due notice was mailed is essential for the proper and ethical enforcement of policy lapse.