14. If my insurance policy has lapsed and I try to "reinstate" my policy by paying the premiums again, can I submit any claims to the insurance company at this stage?
Normally, there is a "reinstatement" clause by which a life insurance policy that has lapsed (usually due to non-payment of premiums) can be reinstated. The policy can be brought back into force again even though the policy was no longer in force.
It will usually be less expensive to reinstate a policy than to purchase a new one. The premium for a new policy would likely be more expensive due to the fact that the insured person is older. Therefore, the person's risk profile would likely fall into a higher premium category.
The "reinstatement" clause usually permits the policyholder to reinstate the policy , provided that certain conditions are met with, for example:
- The insured person shows to the insurance company evidence of insurability (e.g. a satisfactory medical report). This condition is usually waived for lapses of less than two months;
- All the overdue premiums plus any interest payable are all paid up-to-date;
- Any policy loan (derived from the cash value of the policy) taken out must be either repaid or reinstated;
- The policy has not been surrendered to the insurance company in return for cash; and,
- The period lapsed must not be more than three years.
During the time in which the reinstatement of the policy is being processed, any claim submitted would be held pending the approval of the reinstatement application by the insurance company.