Review of the Lapse and Reinstatement System and Practice of Life Insurance
The lapse and reinstatement system of personal business insurance is essential to the continuation of the protection plan, which allows the insurance contract that lasts for decades will not be terminated for the short-term financial fluctuation of the policyholder. The practice of reinstatement allows the insurance contract to continue and provide the policyholder with complete protection in a period of time. On the occasion of the cancellation of the reinstatement waiting period for this cancer insurance and critical illness insurance, this paper attempts to introduce the lapse and reinstatement of the insurance contract, the legal effect of policy lapse, and the different practices of reinstatement during different lapse periods. We also discuss whether the practices of life insurance company in reinstatement conform to legal norms, and the range of reinstatement of underwriting rights. Finally, we try to find a solution from the morality risk that may be caused by article 116 of the Insurance Law.