Policy mechanics

Reinstatement

Reinstatement is the process of restoring a lapsed life insurance policy to active status. The owner usually pays past-due premiums and may need to show the insured is still insurable.

Why it matters

Many policies allow reinstatement within a set time after lapse, often three to five years, but rules vary. The carrier may ask health questions and charge back premiums with interest. The contestability period may start again for the reinstated policy. It is often cheaper than buying a new policy at an older age, so ask quickly.

Source: law.cornell.edu

Where we use this term

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