Reinstatement Premium
Updated: 22 October 2024
What Does Reinstatement Premium Mean?
A reinstatement premium is a payment required to reactivate an insurance policy after coverage has lapsed. Reinstatement premiums are commonly associated with life insurance, as policyholders often choose to resume coverage after their term life policies have expired.
Insuranceopedia Explains Reinstatement Premium
Coverage can sometimes cease before the policy’s actual expiration date, typically when a policyholder fails to make timely premium payments. In such cases, the policyholder may be required to pay both the missed premium payments and a reinstatement premium to restore coverage. However, reinstatement is not guaranteed, and insurance companies may decline to reinstate the policy if too many payments have been missed.
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