Lapse

The termination of an insurance policy because a renewal premium is not paid by the end of the grace period.

When premium payments are in default, an insurance contract is cancelled and is said to have "lapsed."

Termination of a policy due to non-payment of premiums.

A lapse causes a policy, right, or privilege to end because the person or institution that would benefit fails to live up to its terms or meet its conditions.

For example, if you have a subscription right to buy additional shares of a stock at a price below the public offering price, you must generally act before a certain date. If that date passes, your right is said to lapse.

Similarly, if you have a life insurance policy that requires you to pay annual premiums, the policy will lapse and you'll no longer be covered if you fail to pay.