Recent studies show that 15.9% of all whole life policies remain in force for just one year (first year lapse ratio). In years three through five, another 5.7% of policyowners will lapse their coverage. Universal Life which usually has lower premiums, loses 8.1% of policyowners in the first year and another 9.5% in the second year. After 6 years about 40% of all whole & universal life insurance policies have lapsed. The worst part is that in these early years, the surrender charge is 100% or close to it - so no cash value. (Figures courtesy of Moody’s Review- Errold Moody).