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Evaluating The Cost Of A Lapse In Life Insurance And Its Implications On Developing A Policyholder Retention Strategy For A Company, Peiyi Zhang

Honors Scholar Theses

In the insurance industry, many companies focus on policyholder retention as one of their key tools to retain premiums collected from customers. Customers may lapse after their purchases. Insurance companies will not receive premiums and have to pay out surrender benefits which makes it costly for an insurer. Indeed, understanding the cost of a lapse is important to retain policyholders. This paper focuses on the cost of a lapse in life insurance, and its implications on developing policyholder retention strategies. The first part of the paper summarizes the general background of life insurance, lapses, and conservation strategies. The second part …