Insurance is priced so that if you buy insurance for some period of time, the likelihood of dying (and thus the payout) during that time is balanced by the premiums. This applies just as much to people who let their insurance lapse as to people who people who intentionally buy insurance for only a limited period.
Note that someone who lets his insurance lapse will not only not get a payout, he will also not be paying premiums after he lapses. Since the post-lapse premiums are balanced against the post-lapse payout, and the no-lapse premiums are balanced against the no-lapse payout, you can subtract the two scenarios and conclude that premiums-with-lapsing are balanced against no-payout-after-lapsing.
Insurance is priced so that if you buy insurance for some period of time, the likelihood of dying (and thus the payout) during that time is balanced by the premiums. This applies just as much to people who let their insurance lapse as to people who people who intentionally buy insurance for only a limited period.
Note that someone who lets his insurance lapse will not only not get a payout, he will also not be paying premiums after he lapses. Since the post-lapse premiums are balanced against the post-lapse payout, and the no-lapse premiums are balanced against the no-lapse payout, you can subtract the two scenarios and conclude that premiums-with-lapsing are balanced against no-payout-after-lapsing.