When does the policy lapse?

This is an automatic termination of the policy by our system. The policy would lapse if it has cumulative arrears of three months and does not have surrender value. If it falls in to three months arrears and it has some value it would automatically make premium advances from the value to maintain the policy. However these advances made from the value of the policies would attract a 1.5% interest on a monthly basis until the arrears are cleared. This automatic premium advances is termed NON–FORFEITURE LOAN.