What is the primary advantage for obtaining a reinstatement of a policy rather than obtaining a new one?
Asked by: Kianna Erdman | Last update: July 27, 2025Score: 4.1/5 (68 votes)
What is the advantage of reinstating a policy instead of applying a new one?
Reinstating your life insurance policy allows you to keep the original terms, rates, and benefits, which can help you avoid higher premiums due to any deterioration in your health since the policy was first purchased.
What is the primary advantage to the policy owner and the reinstatement of a life insurance policy?
What is the primary advantage to the policyowner in the reinstatement of a life insurance policy? Reinstatement restores the policy to its original condition as if it were never lapsed. Even though the policy is reinstated at a later age, the original issue premium is all that the insurer will require.
What is the reinstatement provision in a health insurance policy called?
The reinstatement provision in a health insurance policy is mandatory. This means that insurance providers are required by law to include a clause that allows a policyholder to reinstate their policy under certain conditions after it has lapsed due to non-payment of premiums.
Which one of the following represents an advantage of obtaining a policy loan versus a withdrawal?
Which one of the following represents an advantage of obtaining a policy loan versus a withdrawal? The loan is not taxed while a withdrawal is taxed for amounts above the contract cost basis.
Policy Provisions - Life Insurance Exam Prep
What are the pros and cons of obtaining a loan from a bank?
Interest rates on bank loans are usually lower than that in other financing methods (e.g. inventory and invoice financing). Bank loan applications require collection and submission of lots of paperwork. The process could be taxing and time-consuming.
What is the primary purpose of the entire contract provision in a life insurance policy?
The entire contract provision means that the life insurance policy along with the application represents the complete contract. The insurer has no leeway to make arbitrary changes at their will and surprise policyowners when a claim is presented.
What is a reinstatement of insurance policy?
Key Takeaways
Reinstatement in the insurance industry means a person's previously terminated policy can resume if the already insured meets the specific requirements for reinstatement. Typically insurance companies offer policyholders a grace period for late payments before a policy terminates.
What is the purpose of the reinstatement provision of a life insurance policy to provide a period of time?
The purpose of the reinstatement provision of a life insurance policy is to provide a period of time during which the policyowner may reactivate a lapsed policy.
What does the reinstatement of an individual health insurance plan require?
Final answer: To reinstate an individual health insurance plan, one typically needs to pay back premiums and provide evidence of insurability. This ensures the insurer can accurately assess the risk based on the individual's current health. Without this documentation, reinstatement may not be granted.
Which of the following statements about the reinstatement provision is true?
The correct statement about the reinstatement provision is that it requires the policyowner to pay all overdue premiums with interest before the policy is reinstated. Reinstatement provisions typically allow policyholders to reinstate a lapsed insurance policy within a certain period, usually 2-3 years, not 10 years.
What is the reinstatement basis of insurance?
Reinstatement is the repair or replacement of property so that it is in the same condition or a materially equivalent condition to that which it was in prior to the loss occurring. The wording of reinstatement clauses, however, varies from Policy to policy with very different Outcomes for the policyholder.
What are the main advantages to the insured if the homeowners policy is a package policy?
Homeowners insurance is a package policy. This means that it covers both damage to property and liability or legal responsibility for any injuries and property damage policyholders or their families cause to other people. This includes damage caused by household pets.
What is the primary advantage to the policyowner in the reinstatement of a life insurance policy?
What is the primary advantage to the policyowner in the reinstatement of a life insurance policy? Reinstatement restores the policy to its original condition as if it were never lapsed. Even though the policy is reinstated at a later age, the original issue premium is all that the insurer will require.
What is the purpose of reinstate?
to put someone back in a job or position previously held, or to put a law or rule back into effect: She will be reinstated to her full professorship and receive back pay and benefits. The hospital suspended Goldstein during the investigation but reinstated him when the report cleared him of any wrongdoing.
What is the advantage of reinstating an original life policy brainly?
Reinstating an original life policy allows the insured to often retain the premiums that were set at a younger age, which is advantageous since premiums generally increase as one ages.
What is the advantage of reinstating a policy?
A reinstatement clause in a life insurance policy allows the policyholder to restore a lapsed policy to its original terms within a specified period, typically up to five years. This clause helps policyholders maintain their original coverage without purchasing a new policy after a lapse.
What is the advantage of reinstating a policy instead of applying for a new one on Quizlet?
What is the advantage of reinstating a policy instead of applying for a new one? Correct! The reinstatement provision allows the policyowner an opportunity to put a lapsed policy back in force, subject to proving continuing insurability.
Why is reinstatement important?
Reinstatement is an important concept in employment law because it protects the rights of employees and ensures that they are treated fairly by their employers. In this section, we will explore the concept of reinstatement in more detail and discuss why it is important for both employees and employers.
What is reinstatement process?
Reinstatement is an application submitted to U.S. Citizenship and Immigration Services (USCIS) by a student who has violated their F-1 status to request return to legal student status. A reinstatement application costs $370 and can take approximately five months to be processed by USCIS.
What are the two major actions required for a policyholder to comply with the reinstatement clause?
What are two major actions required for a policyholder to comply with the Reinstatement Clause? Provide evidence of insurability and pay past due premiums.
When can a lapsed life insurance policy usually be reinstated?
Typically, insurers allow parties to reinstate a lapsed policy within three to five years after the lapse.
What is reinstatement provision?
Reinstatement Provision
This provision allows a policy to be reinstated if for some reason the policy has lapsed. The reinstatement is subject to the limitations and requirements spelled out in the policy.
What is the primary purpose of a contract?
The main purpose of a contract is to formalize new relationships and outline the various legal obligations each party owes to the other.
What is the primary purpose of insurance?
Purpose of insurance
Its aim is to reduce financial uncertainty and make accidental loss manageable. It does this substituting payment of a small, known fee—an insurance premium—to a professional insurer in exchange for the assumption of the risk a large loss, and a promise to pay in the event of such a loss.