What Do You Mean It's Not Covered: A Key Issue: Reinstatement of Coverage That Lapses

Reinstatement: If premiums are not paid within the grace period and later we accept a premium without requiring an application, the policy shall be reinstated. However, if we require an application for reinstatement and issue a conditional receipt, the policy will be reinstated when we approve the application, or on the 45th day after the date the conditional receipt is signed, unless we have previously notified you, in writing, of its disapproval. Upon reinstatement, the policy shall cover loss resulting from injury sustained after the date of reinstatement and loss due to sickness which begins more than 10 days after reinstatement. In all other respects, you and we shall have the same rights as we both had under the policy before the policy ended, subject to any conditions attached to this policy upon reinstatement. The premium, we accept for a reinstatement shall be applied to a period for which premium has not been paid, but not to any period more than 60 days before the reinstatement date. Our agents do not have authority to accept reinstatement premiums without requiring a reinstatement application and issuing a conditional receipt.

The policy will lapse if a premium payment is not received by the end of the grace period. If the insurance company does not require an application for reinstatement, the policy will be automatically reinstated as soon as it accepts a late premium payment. If the insurance company does require an application for reinstatement, the policy will be reinstated when it approves the application or 45 days after it has issued a receipt for the premium payment (unless it has previously given notice of disapproval). A reinstated policy covers injuries immediately upon reinstatement, but only covers sickness which begins more than 10 days after reinstatement. The reason for this is that it is difficult to fake an accidental injury and easy to verify when it occurred. Without a waiting period for sickness, a person might reinstate a policy after the sickness begins in order to claim benefits, and then claim that it actually started a few days later. An agent may accept a premium for reinstatement only by requiring an application and issuing a conditional receipt which gives the insurance company the option of accepting or rejecting the application.