Reinstatement of a Lapsed Permanent Life Insurance Policy

A Permanent Life Insurance policy can lapse if the cash value is insufficient to cover the monthly charges (in UL/IUL) or if the premium payment is missed past the grace period (in Whole Life). However, policyholders often have the option to **reinstate** the coverage.

The Reinstatement Process

Reinstatement is the process of putting a lapsed policy back into effect. This typically requires:

• **Proof of Insurability:** The insured may need to provide satisfactory evidence of insurability (often a simplified health form, or a full medical exam if lapsed for a long time).
• **Payment of Back Premiums:** Paying all past-due premiums, plus interest, or the difference needed to restore the cash value to a solvent state.
• **Repayment of Loans:** Repaying or reinstating any policy loans that may have contributed to the lapse.

The Benefit of Reinstatement

Reinstatement is generally preferable to purchasing a new policy because it restores the policy’s original issue date, preserving the lower Cost of Insurance based on the younger age and maintaining the original cash value growth schedule.

Disclaimer: This content is for informational purposes only and is not financial or legal advice. Reinstatement has time limits (often three to five years after lapse) and is not guaranteed.