Reinstatement

AAA

DEFINITION of 'Reinstatement'

1. The process of re-establishing the status of a person, company or law.

2. In regards to insurance, reinstatement allows a previously terminated policy to resume active coverage. Depending on the circumstance of the termination, such as failure to pay the premium, the insured person may be required to compensate the insurer before reinstatement occurs.

INVESTOPEDIA EXPLAINS 'Reinstatement'

1. For example, the government may reinstate prohibition, making it illegal to consume or exchange alcohol.

2. Reinstating the policy would provide the insured with all the benefits of their original plan. In case of non-payment, the insured may be required to provide evidence of eligibility, such as taking a medical examination for life insurance. Additionally, the person might have to pay the insurance company for the missed premium dates.

RELATED TERMS
  1. Life Insurance

    A protection against the loss of income that would result if ...
  2. Universal Life Insurance

    A type of flexible permanent life insurance offering the low-cost ...
  3. Premium

    1. The total cost of an option. 2. The difference between the ...
  4. Whole Life Insurance Policy

    A life insurance contract with level premiums that has both an ...
  5. Insurance

    A contract (policy) in which an individual or entity receives ...
  6. Lapse

    The cessation of a privilege, right or policy due to time or ...
RELATED FAQS
  1. What economic indicators are important to monitor when investing in the insurance ...

    Inflation and interest rates are the best economic indicators to monitor when investing in the insurance sector. Unlike with ... Read Full Answer >>
  2. Why do some companies in the insurance sector engage in reinsurance?

    Some companies in the insurance sector engage in reinsurance because they want to reduce risk. Reinsurance is basically insurance ... Read Full Answer >>
  3. Why is the insurance sector considered a low-risk investment?

    Historically, the insurance sector has enjoyed modest returns and perceived safety. It's been a favorite for investors who ... Read Full Answer >>
  4. What price-to-book ratio is considered average in the chemicals sector?

    You can use Microsoft Excel to calculate the loan-to-value ratio if you have the mortgage amount and appraised value of a ... Read Full Answer >>
  5. How are open market operations and monetary policy related?

    An aggregate limit is the maximum amount an insurance company agrees to pay to cover claims during a defined period, generally ... Read Full Answer >>
  6. What caused the European / Eurozone debt crisis?

    Insurance companies base premium pricing on the amount of risk they take on for each individual policy. For instance, life ... Read Full Answer >>
Related Articles
  1. Home & Auto

    A Look At Single-Premium Life Insurance

    Want to provide for your dependents and finance your own long-term care? Learn more here.
  2. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  3. Home & Auto

    A New Approach To Long-Term Care Insurance

    This practical product can protect you from the rising cost of care and provide for your beneficiaries at the same time.
  4. Home & Auto

    Taking The Surprise Out Of Long-Term Care

    Don't be caught unprepared - find out what to look for in LTC insurance policies.
  5. Home & Auto

    Long-Term Care Insurance: Who Needs It?

    No one is immune to the possibility of one day needing long-term care - and the costs can deplete a life savings.
  6. Insurance

    Life Insurance: Putting A Price On Peace Of Mind

    Would your death leave loved ones financially stranded? Find out how to ease your mind and keep them protected.
  7. Professionals

    An Advisor's Guide to Prof. Liability Insurance

    A guide to what financial advisors need to know about professional liability insurance.
  8. Insurance

    India's Two-Child Policy

    As of 2014, 11 Indian states have passed laws to restrict Indian citizens from having no more than two children.
  9. Economics

    What Does Asymmetric Information Mean?

    Asymmetric information describes a situation where one party in a transaction knows more than the other.
  10. Fundamental Analysis

    How to Calculate a Combined Ratio

    Combined ratio is a formula used in the insurance industry to measure the performance of an insurance company.

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center