When we take up an insurance policy, whether it may be a health insurance, property or life insurance we are obliged to make periodic payments in the form of premiums as a security for our insured value. But due to various reasons a person may fail to deposit the premiums, putting the insurance policy in lapse. Thus the process of renewing the insurance policy that has been terminated due to non-payment of premiums or extending insurance beyond its timeline is termed as reinstatement.
Reinstatement happens only if you are not able to pay the premiums even after the grace period given by your insurer. The availability and the process of reinstatement will differ between various insurance providers.
How can you Reinstate your policy?
In order to renew your policy after a lapse, various factors are taken into account when you try for reinstatement.
- Reinstatement of policy is allowed only for a specific period of time for which the policy holder still remains insurable.
- You will have to understand the pros and cons of reinstating your policy. The insurer might demand premiums for reinstatement as a compensation for your failure in payment of regular premium.
What to do when you need a reinstatement policy?
In case if you have failed to pay your premiums and require a reinstatement on your lapsed policy, then:
- Contact your insurance company or your insurance broker and know about the payment that is to be made for reinstatement.
- Understand about the various procedures and in the case of shortage of capital, do know how much longer you can delay your reinstatement.
- You need to fill in all the paperwork and submit it along with the premiums as described by your insurer.
- Make sure that all your future payments are planned earlier and thus prevent the policy from lapsing again.