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What does "no lapse" mean? Does it mean that you will always be insured and the beneficiary will always be paid, even if you miss payments?

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  • Is this in United States?
    – Dheer
    Aug 17, 2015 at 8:24
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    "no lapse" is generally only offered with universal life policies, which are awful. Aug 17, 2015 at 13:27
  • There are secondary policies available -- at extra cost, of course -- which will make some number of policy payments for you if you have to go on unpaid leave after burning all your sick days and vacation. As with any form of insurance, you need to think about whether it would be more effective to self-insure.
    – keshlam
    Sep 14, 2015 at 2:34

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No. The "no lapse guaranteed premium" (NLPG) refers to how a universal life policy with this feature attached will:

1) Not lapse if the cash value goes to zero, so long as you pay your premiums (note NLPG policies actually have LESS premium flexibility than universal life policies withOUT them...though I can definitely see how the name might appear to imply otherwise)

2) The premium will be level (i.e. stay the same $ amount) for your entire life

Depending on what your goals are, you might want to also consider term (if you're trying to replace your income in the event of early / unexpected death) or whole life (if you're doing estate planning and want liquidity for your heirs to pay taxes / non-taxable death benefit).

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