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Reinstatement Provision

What Does Reinstatement Provision Mean?

A reinstatement provision in a life or property insurance policy is a clause that grants the policyholder a limited period of time to reinstate their policy after it has lapsed. To reinstate the policy, they will need to provide evidence of insurability, along with back premiums and interest.

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Insuranceopedia Explains Reinstatement Provision

Policies can lapse for a number of reasons, including a failure to pay premiums. Unless there is a reinstatement provision in place, this lapse results in the termination of the policy, and the policyholder must re-apply for the policy if they wish to resume coverage. In doing so, however, they may face higher premiums or less favorable policy terms.

Under a reinstatement provision, an insurance policy can be restored to its full original coverage and under the same conditions. The insurance company, however, has a right to attach a rider to the policy to limit the coverage based on an updated health history.

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