What is the name of the provision that specifies what an insured must do to put a lapsed policy back in force?

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

Answer: (B)

Reinstatement is the provision that describes how a lapsed policy can be brought back into force. When a premium isn’t paid and the policy lapses, reinstatement allows the insured to restore coverage within a specified period by meeting certain requirements. Typically, that means paying all overdue premiums with interest, repaying any policy loans and interest, and providing evidence of insurability (which may include a medical exam) if required. This option is usually available for a set window after lapse, and the policy generally must be in acceptable condition for reinstatement to apply.

Grace period is simply extra time to pay the premium while the policy remains in force, not a process to restore a lapsed policy. Nonforfeiture deals with protecting any cash value when a policy ends, and settlement relates to how the death benefit is paid. The reinstatement provision is the one that specifies the steps to put the policy back in force after lapse.