You might have heard or even may have gone ahead with the revival of your lapsed insurance policy. But, yes the surrendered policy subject to compliance with some terms and conditions by the life assured can also be reinstated. Only some of the insurers including Life Insurance Corporation of India however offer the facility for few of the insurance plans only. In general, health insurance policies, annuity plans, ULIPs and other plans cannot be reinstated after surrender.

With it the previous surrender action deemed to be the last taken for a particular policy can be reversed and again the policy will come in force.

Interestingly, while many may confuse reinstatement with revival, the two terms in the insurance parlance differ. While, reinstatement is bringing back the insurance policy into the books of the insurer again, revival of the policy is pursued when it has lapsed on account of non-payment of premiums. For revival of the policy, life insured needs to pay arrears and also medical proofs as the case may be.

Cases in which reinstatement of a life insurance policy is effected by the life insurance company

In a case when the insured assumes loss in case of policy surrender: Policyholder who had recently surrendered a particular insurance policy and feels he is at loss on surrendering the policy an option of reinstatement is available for him.

But, insurance companies do not honour the request for reinstatement at any time i.e. policy can only be reinstated in a maximum of six months time from the date surrender action was taken. Also, insurers go about with the necessary verification concerning the insured who has placed the request for reinstatement before bringing the policy into its documents. To this effect, insurers demand of a medical declaration of the healthy condition of the life assured;. To effect the reinstatement, insurers issue either a new policy bond or via an endorsement for the specific policy.

Other cases when policy is reinstated on an automatic basis by the insurer: In the other case, when after placing the request for surrender along with requisite documents with the insurer, assured person unfortunately meets death, and still the amount accruing or surrender value still remains payable.

Also, in a case when the surrender value provided by the insurer as cheque or money order fails to reach the concerned and insured life dies before that. Nonetheless, even in a case when the received cheque for the surrender claim is not encashed by the concern, policy is reinstated. As and when the death of the assured is brought to the notice of the insurance company, surrender action is reversed and death claim is settled with full benefits for the nominee.

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