Reinstatement is the process of restoring a lapsed life insurance or annuity policy to in-force status after the premium has not been paid within the grace period. Most contracts allow reinstatement within a specified window, often up to three or five years from lapse, provided certain conditions are met. These typically include completion of a reinstatement application, evidence of insurability, payment of all past-due premiums with interest, and sometimes repayment of outstanding loans. The insurer reviews current health, financial, and lifestyle information, and may impose new underwriting decisions, such as ratings or exclusions. Reinstatement can preserve original policy features, guarantees, and cost basis that might be less favorable or unavailable on new coverage issued at older ages or under changed underwriting classes.

In day-to-day servicing, advisors and policyowners consider reinstatement when a valuable policy has lapsed but the client still wants coverage. Service teams obtain in-force ledgers showing amounts needed to bring the policy current and outline underwriting requirements. Advisors help clients compare reinstatement versus replacement, taking into account age, health changes, surrender charges, and contestability periods. Carriers may limit reinstatement if significant adverse health changes have occurred or if the lapse was long. Good communication about deadlines and required documentation is critical, as delays can cause reinstatement rights to expire. Successfully reinstating a policy can avoid the higher costs and underwriting uncertainty associated with starting over on a new contract.