Disability Insurance Reinstatement
I had a call today from a client who purchased a policy from another broker over 15 years ago. When he moved, he failed to change his address. As a result, he didn’t receive his premium notice and the policy lapsed. By the time he received the notification, he found out he had to go through reinstatement.
Reinstatement means that in order to resume the policy, the client must go through the underwriting process again. If you have had an adverse change in health or a reduced income or occupational change, your reinstatement may come back unfavorable.
The same holds true for long term care and life insurance. If you are going through reinstatement and have had a change in health, the policy may be reinstated, but at a higher premium.
To avoid going through reinstatement, it is important to keep in contact with your agent or broker to inform them of any address changes or bank account changes if you are on a bank draft.