A life policy lapses because a premium was not paid.

Reinstatement restores a lapsed life insurance policy to active status if the policyowner satisfies the policy’s requirements. Those requirements generally include applying for reinstatement within the permitted period, providing evidence of insurability satisfactory to the insurer, and paying overdue premiums plus interest. The exact reinstatement period and underwriting requirements are controlled by the policy and applicable law.

A new medical examination is not required in every case. The insurer may request medical information or an examination when needed to evaluate the applicant’s current insurability, but it is not an automatic universal requirement. The key examination principle is that evidence of insurability is required, not that a physical examination must always occur. Reinstatement is often preferable to purchasing a new policy because the existing policy may have more favorable premium rates, accumulated cash value, or a prior issue age. However, the policyowner must understand that contestability and certain exclusions may begin again with respect to the reinstatement.

A producer should explain the difference between reinstatement and renewal. Reinstatement restores a policy that lapsed; renewal continues or extends a policy under its existing terms. Neither should be assumed available without reviewing the contract.

References/topics from the Study Guide: Reinstatement Provision; Policy Lapse; Evidence of Insurability; Premium Payment; NRS 688A.130.

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