What are the requirements for reinstating a lapsed policy?

The reinstatement of a lapsed policy typically requires a written request from the policyholder, proof of insurability, and payment of all back premiums along with any applicable interest. This process ensures that the insurer has the most updated health information about the insured, which is crucial for assessing risk. Reinstating a policy is essentially an acknowledgment by the insurer to reestablish the coverage, and the requirements help safeguard against insuring individuals whose health may have significantly changed since the policy lapsed.

By demanding proof of insurability, the insurer mitigates the risk of having to cover someone whose condition may have worsened, thus protecting their financial interests. The payment of back premiums plus interest compensates the insurer for the time the policy was inactive and acknowledges any potential loss of investment income resulting from the delay in premium payments. This combination of requirements ensures a fair balance between the insurer's risk management and the policyholder's ability to regain their insurance coverage.