What starts over upon the reinstatement of a life insurance policy?

When a life insurance policy is reinstated, the incontestability and suicide clauses start over. The reinstatement process typically occurs after the policy has lapsed due to non-payment of premiums. These clauses are important because they govern the conditions under which an insurance company can contest a claim.

The incontestability clause provides that after a specified period following the reinstatement (commonly two years), the insurer cannot contest the validity of the policy based on misstatements, with certain exceptions. The suicide clause, likewise, generally states that if the insured commits suicide within a specific period (often two years) from the reinstatement date, the policy may not pay out the death benefit.

These clauses start anew because the insurer needs to establish a fresh contract after a lapse, allowing them to reassess risk based on the changed circumstances that may have occurred during the interval when the policy was not active. The initiation of these clauses upon reinstatement protects both the insurer against unforeseen risks and the insured's rights, ensuring clarity in coverage terms after the policy is back in force.

Contextually, beneficiary designations and coverage levels remain unchanged unless explicitly altered by the policyholder during the reinstatement process. Premium payments are resumed but do not "start over"