What is a key benefit of reinstating an original life insurance policy?

Reinstating a life insurance policy allows the policyholder to regain coverage as if the policy had never lapsed. One of the significant advantages of reinstating an original policy is that the premiums are calculated based on the insured's age at the time the policy was originally issued, rather than the individual's current age at the time of reinstatement. This can lead to lower premiums since premiums generally increase with age due to the higher mortality risk associated with older age.

This feature is particularly beneficial for policyholders who may have let a policy lapse but wish to maintain the same coverage and associated costs as when they first took out the policy. It ensures that individuals do not have to pay higher premiums that would be applicable if they were to apply for a new policy at an older age. Thus, the ability to reinstate a policy at younger rates can be a crucial deciding factor for individuals weighing their options.