What is normally required of an insured to reinstate a policy after lapse?
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A reinstatement provision is a clause in some life insurance policies that allows the insured to reinstate a lapsed policy provided they meet certain parameters and execute the provision within the specified time frame. Reinstatement provisions most often come into play after a policy has lapsed because of nonpayment. Show Reinstatement during the grace periodIn order to keep your life insurance policy active, you need to continually make the agreed-upon premium payments. The day you miss a payment, a clock starts ticking. Life insurers generally offer a grace period of around 30 days. During that grace period, you can reinstate your policy very easily. Usually, you’ll just need to make up the missed premium. You might be subject to interest on that missed payment or a reinstatement premium, too. Still, though, reinstating a policy during the grace period is significantly easier than doing so afterward. Reinstatement after the grace periodIf the grace period expires without you making up the missed payment, the life insurance policy lapses. If you don’t have a reinstatement provision, that’s that. If you want life insurance coverage moving forward, you’ll need to apply for a new policy. If you have a reinstatement provision, though, you have options. Yes, you can choose to let the policy lapse at that point, but you can also call on the revision to get coverage back in place. Most reinstatement provisions give you a specific window — like 3-5 years — to reinstate your policy after a lapse. To reinstate your coverage, you’ll usually need to do two things:
A reinstatement provision gives you the option to apply for reinstatement. It does not, however, guarantee that your insurer will grant reinstatement. If your EOI submittal turns up any red flags, they could deny reinstatement or increase your premiums accordingly. That might make it tempting to not disclose any health conditions that have popped up since you initially purchased your coverage — but don’t. If your insurance company learns that you intentionally misled them during the reinstatement process, they can void your policy. And since that truth might not come out until after you pass away and they review your records, it could leave your beneficiaries empty-handed. The benefits of using a reinstatement provisionIf your premiums could go up during reinstatement, you might wonder why you’d bother with it at all. The main benefit of policy reinstatement hinges on your age. When you reinstate a policy, you still get the premiums based on the age when you initially purchased the policy. If you buy new life insurance, that policy will get priced according to your age now — and life insurance costs increase steadily as you get older. That means that even if a new health condition means you’ll pay higher premiums after reinstatement, your policy will probably cost less than an entirely new one. If you want to be sure, you can pursue reinstatement with your current insurer while gathering quotes from other insurance providers, then compare the costs. (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)  Experience Your Economic Times Newspaper, The Digital Way! Read Complete Print Edition »
Read More News onlife insurancelapsed life insurance policyinsurancerevival of life insurance policypremiumlife insurance policymedical check up What is the way to revive a lapsed policy of life insurance?Beyond this, if the premium is unpaid, the policy is considered to have lapsed. However, lapsed policies can be revived. A policy can be revived by paying the past premiums, and additional charges as levied by the insurer. Often, insurers come up with special schemes or campaigns to revive lapsed policies.
What is the reinstatement procedure?Definition. In reinstatement procedures, the laboratory animals are trained to self-administer drugs and are then subjected to extinction training, during which lever presses are not reinforced with drugs.
When can you reinstate a policy?Reinstatement in the insurance industry means a person's previously terminated policy can resume if the already insured meets the specific requirements for reinstatement. Typically insurance companies offer policyholders a grace period for late payments before a policy terminates.
What happens when your policy has lapsed?Once a policy has lapsed, you no longer have coverage. That means the insurer does not have to pay a death benefit to your beneficiaries if you die. But you may be able to reinstate a lapsed policy, depending on how long ago it lapsed.
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