Reinstatement

Reinstatement brings a policy back after it lapsed for nonpayment. Most individual life policies include a reinstatement provision that lets the owner apply within a set window after the lapse, commonly three to five years, as long as the policy wasn't surrendered for its cash value.

Requirements typically include a reinstatement application, evidence of insurability (health questions and sometimes an exam), payment of all overdue premiums plus interest, and repayment or reinstatement of any policy loan. Insurers often make it easier shortly after the grace period ends, sometimes asking only for a statement of good health. Hypothetically, an owner who missed four $100 monthly premiums might pay $400 plus interest and sign a health statement to restore coverage, rather than buy a new policy at an older age and a higher price.

Reinstating usually costs less than starting over because the original issue age and rate class still apply. But the insurer can decline if your health has changed, and statements on the reinstatement application may open a new contestable period for that information. Compare reinstatement with a new policy if you're healthier now or the old one was poorly priced. See reinstating a lapsed life insurance policy.