Jury Backs Widow in $1M Life Insurance Lapse Lawsuit
A California widow took her late husband's life insurer to federal Court after it refused to pay the $1,000,000 benefit on his term life policy. The insurer said the policy had lapsed in March 2016 because a single monthly premium went unpaid. The widow argued the company never followed two California laws that require a 60-day grace period, a written 30-day notice before any termination, and an annual notice telling policyholders they can name someone else to receive lapse warnings. Her husband, who was incapacitated at the time, died in May 2016 while the family waited to learn the policy's status. After a trial before Judge Jinsook Ohta, the Court had already ruled the statutes applied to the policy and that the insurer broke the law by failing to notify her husband of his right to designate another person. On January 13, 2026, the jury sided with the widow, finding her husband did not knowingly let the policy lapse and that the insurer's missing notices caused the lapse.
