Lapse. If you miss or discontinue paying the premiums, the policy coverage will lapse depending on the type of life insurance you have and the policy will no longer pay a death benefit for the insured person. Some studies claim that 80% of life insurance policies lapse in the U.S., which means the coverage runs out and is not available upon your death and therefore no payout is due to you. Surrender. A permanent policy may be surrendered for the accumulated cash surrender value of the policy. Premiums will be paid from the cash value, if any, until exhausted, at which time the policy coverage will terminate or lapse. By surrendering your policy, you’re agreeing to take the cash surrender value that the insurance company has assigned to your policy, and in return, forgoing the death benefit. Whole and universal policies accrue cash value, making them the most likely option for surrender.