What does Forfeiture mean? Read on to discover the definition & meaning of the term Forfeiture - to help you better understand the language used in insurance policies.
A forfeiture is the loss of a property without compensation in favor of one party to a contract when the other party defaults or fails to comply with its obligations. In terms of insurance, a forfeiture takes place when the policyholder defaults on the payment of premiums, which is also known as an insurance policy lapse. As a result, the policy is no longer in effect and the premiums already paid are forfeited by the insurer.
We hope the you have a better understanding of the meaning of Forfeiture.