Reinstatement

What Does Reinstatement Mean?

Reinstatement refers to reclaiming a position or status that has been removed from an individual or entity. In the context of insurance, it means restoring a policy that had become void due to non-payment.

Insuranceopedia Explains Reinstatement

If a policyholder misses a premium payment, the insurance company typically provides a grace period before the policy is terminated. If the policyholder makes the payment within the grace period, the policy remains valid. However, if the payment is not made within the grace period, the policy becomes invalid, and the policyholder can no longer make claims. Should the policyholder wish to be covered under the same policy again, they may need to undergo a new underwriting process. For example, in the case of life insurance, a new health assessment might be required. In the United States, there is no specific law governing reinstatement; the procedure and costs vary depending on the type of policy and insurance company. In some cases, a new policy may even be less expensive than reinstating the existing one.