Reinstatement
Definition of "Reinstatement"
Restoration of a policy that has lapsed because of nonpayment of premiums after the grace period has expired. In life insurance the reinstatement time period is three years from the premium due date. The company usually requires the insured to show evidence of continued insurability (for example, by taking a medical examination); to pay all past premiums plus interest due; and to either reinstate or repay any loans that are still outstanding. Because the insured is now older and a new policy would require a higher premium, it may be to the advantage of an insured to reinstate a policy.
Popular Insurance Terms
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