Policy lapse notice is an official communication from an insurance company informing a policyowner that their life insurance policy is in danger of terminating, or has already terminated, due to nonpayment of required premiums or insufficient cash value to cover ongoing charges. For policies with cash value, the notice often indicates that the grace period has begun, the minimum payment needed to keep the policy in force, and the deadline by which payment must be received. In some cases, especially for flexible-premium universal life, the notice may also explain how current funding and performance have diverged from the original illustration. Policy lapse notices are critical consumer protection tools, ensuring policyowners are warned before losing valuable coverage.

In everyday practice, policy lapse notices are trigger events for advisors and service teams to proactively reach out to clients. Upon receiving a copy, an advisor may contact the policyowner to confirm whether premiums were accidentally missed, whether there are cash flow issues, or whether the client intentionally allowed the policy to drift. They review the notice details, explain the grace period, and discuss options: paying the requested amount, restructuring premiums, reducing the face amount, or, if the client truly no longer wants coverage, understanding consequences such as surrender charges, loss of benefits, or potential lapse gains on loaned policies. Carriers and regulators place strong emphasis on proper delivery and timing of lapse notices, especially for seniors. Understanding policy lapse notices allows advisors to treat them as urgent service opportunities, helping clients make informed decisions quickly and avoid losing protection through misunderstanding or neglect.