What is the Reinstatement Rule in Insurance

Nobody ever expects that they will need long-term health care. Even if you think you might need it someday, you probably have other expenses that take priority over coverage for something that might happen. The older we get, the higher the chance we will need long-term care.

When you decide to purchase long-term insurance, it is very important to keep up with the payments because your policy may be canceled if you accidentally miss a payment. This can be a  serious mistake because the coverage might not be there when you need it most. Fortunately, there are rules to protect your long-term health insurance policy should you forget to make a payment.

How Long Term Disability Policies Work

According to https://www.longtermcarelawoffice.com/long-term-careinsurance-policy-reinstatement, long-term disability is a  type of insurance policy that will cover a person if they are injured so severely that they cannot work for over three months. Long-term care will also cover people who can never return to work. 

People often take out long-term insurance because the premiums are low, and the benefits are great if they are ever used. Some policies require people to pay upfront, and others allow people to pay once a month. Others will require payments on a quarterly or semi-annual basis.

The long-term disability policy will spell out how much time has to go by before your benefits take effect, how much your monthly payments will be, how long you will receive payments, and what types of illnesses are covered.

A long-term insurance policy will sometimes offer a holder the option of having a third party notified about upcoming billing dates and late payments. Although it is a very good idea to have this third party appointed, most people do not do it.

Reasons People Miss Payments

A person might miss a payment because they are having financial problems. In some cases, they may simply decide to do something else with the money. 

Someone might miss a payment because they were in the hospital and unable to do anything. A cognitive disability may also cause someone to forget payments.

Although it is not required by law, most insurance companies will have a reinstatement clause. This clause allows for a certain amount of time to restart your policy. Most reinstatement clauses will give you five or six months to restart the policy. There are some cases in which you may have to prove that you had a physical or mental disability that prevented you from paying the bill.

What to do if Your Policy has Lapsed

If your insurance has lapsed, you should check the language in the policy to learn when you can reinstate it. If you are within that time, you should call the insurance company and try to have your policy reinstated. If the insurance company denies you, contact an attorney who can negotiate with them on your behalf.  

If you are within the time frame to have a reinstatement done and the insurance company refuses to let you reinstate your policy, an attorney can be helpful. Your request may be taken more seriously if you are represented by a lawyer. They can also help you in the unlikely event that you must take an insurance company to court.

The whole point of insurance is to protect you when something goes awry. You should not be denied benefits because of a temporary lapse in payments.

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