Utah Life Producer Practice Exam

Reinstatement in life insurance specifically refers to the process of restoring a lapsed policy to active status. This situation occurs when a policyholder fails to pay premium payments on time, which can lead to the policy being considered "lapsed" or inactive. When reinstating a policy, the insured typically must provide evidence of insurability or meet other requirements outlined in the policy terms, such as providing back premiums that were due along with interest.

This process allows the policyholder to regain their coverage after a lapse, ensuring that they can continue to hold onto their benefits without having to apply for a new policy. The ability to reinstate a policy is crucial for individuals who might encounter temporary financial hardships, allowing them to maintain their insurance protection.

The other choices do not accurately define reinstatement. Increasing the death benefit, canceling a policy due to non-payment, or reducing premiums after a claim don't align with the essence of reinstating a policy. Instead, reinstatement focuses on bringing a previously inactive policy back into force.