The reinstatement provision specifies what an insured must do if a policy has lapsed in order to put it back in force?

• A. Grace Period
• B. Reinstatement
• C. Nonforfeiture
• D. Settlement

Answer: (B)

Reinstatement provisions describe how to bring a lapsed policy back into force. When a policy lapses, the insurer typically requires the insured to meet several steps to restore coverage. These usually include paying all overdue premiums with interest, providing evidence of insurability (often through new underwriting), and settling any outstanding policy loans or debt. There is usually a time limit within which reinstatement must be requested, commonly a few years from lapse. If these requirements are met and approved, the policy is reinstated as if it had not lapsed, preserving the original benefits (subject to any changes from new underwriting).

The other terms don’t describe how to restore coverage after a lapse. A grace period is extra time after a premium due date during which the policy remains in force; nonforfeiture deals with options for you if the policy lapses, such as cash value or reduced paid-up options; settlement refers to paying the death benefit or other claim.