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    Question

    ____________ is the ratio of the number of life insurance policy that lapsed within a given period to the number of policy in Force at the beginning of that period.

    A Force ratio Correct Answer Incorrect Answer
    B Annuity ratio Correct Answer Incorrect Answer
    C Lapse ratio Correct Answer Incorrect Answer
    D Paid up ratio Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Lapse ratio is the number of policies that are that are not renewed compared to the number of policies that were active at the beginning of that same period. The lapse ratio represents the percentage of policies that were not renewed, and thus have lapsed in coverage. Lapsed policies are not the same as canceled policies.

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