When a policyholder's payment is late, what must the insurer inform the policyholder regarding policy reinstatement?

When a policyholder's payment is late and the policy has lapsed, the insurer must inform the policyholder that reapplication is required for reinstatement. This process typically involves submitting a new application for coverage, as the original policy is no longer in effect. Insurers usually prefer to review a new application to assess the current risk and underwriting conditions before reinstating coverage.

By informing the policyholder that reapplication is needed, the insurer ensures that they are in line with underwriting standards and can evaluate any changes in the policyholder's risk profile since the lapse occurred. Providing clarity on this process helps the policyholder understand the steps they must take to regain coverage and ensures there are no misunderstandings about the status of their policy.

Understanding this aspect of policy reinstatement helps reinforce the importance of timely payments and serves as a reminder for policyholders to maintain communication with their insurers regarding any potential issues with their premiums.