InsuranceFinancial Glossary
Reinstatement
Definition
The process of reviving a lapsed insurance policy by paying all overdue premiums along with interest and sometimes a penalty. Most life and health insurance policies allow reinstatement within 2-5 years of lapsing. The insurer may require fresh medical tests before reinstating a health policy.
Why It Matters
Reinstating a lapsed policy is often better than buying a new one because you preserve your original policy date, which affects waiting period calculations. However, reinstatement may come with additional terms or exclusions. Act quickly when a policy lapses — reinstatement becomes harder (and more expensive) with each passing year.