What is a common result of failing to pay premiums on a life insurance policy?

When premiums on a life insurance policy are not paid, one of the most common consequences is that the policy may lapse. A lapse occurs when the insurance company terminates the coverage due to the policyholder's failure to make required premium payments. This means that the policy is no longer in force, and the insured person no longer has coverage or benefits under the policy.

In most life insurance policies, there is typically a grace period during which the policyholder can still make a premium payment after the due date without losing coverage. However, if the premiums are not paid within this period, the policy lapses. Once a policy lapses, the insured generally loses their benefits and rights under the policy, including the death benefit, unless reinstatement provisions are met.

The other alternatives do not accurately reflect the typical consequences of non-payment of premiums. A non-participating policy refers to a type of insurance policy that does not provide dividends to policyholders; it is not directly related to premium payments. Immediate reinstatement of a policy usually requires the payment of outstanding premiums and may depend on specific terms set by the insurance company, and it does not occur automatically. Lastly, returned premiums are typically not provided when a policy lapses; rather, paid premiums are usually