What is "reinstatement of policy" in life insurance?

Reinstatement of a policy in life insurance refers specifically to the process of restoring a lapsed policy back to active status. When a policyholder fails to make premium payments, the life insurance policy may lapse, meaning it is no longer in force and the coverage is terminated. Reinstatement allows the policyholder to regain coverage without having to start a new policy, which can be beneficial because it often preserves the original age, health status, and benefits of the initial policy.

Typically, to reinstate a policy, the policyholder must meet certain conditions, such as paying any outstanding premiums and possibly providing evidence of insurability, depending on the company’s requirements. This process allows individuals who may have faced temporary financial difficulties to continue their life insurance coverage without losing the advantages provided by the original policy.