What provision allows an insurance policy to be put back in force after it has lapsed due to nonpayment?

The correct answer is reinstatement because it refers specifically to the provision in an insurance policy that gives the policyholder the right to revive their lapsed policy after it has been terminated due to nonpayment of premiums. This provision generally allows the policyholder to reinstate coverage within a specified period, which is often a few years from the date of lapse, as long as certain conditions are met. Conditions may include payment of outstanding premiums and possibly providing evidence of insurability.

This option is distinct as it directly addresses the actions taken to restore a policy that has lapsed, ensuring that the insured can regain their coverage under previously agreed-upon terms once they fulfill the necessary requirements. Other options do not accurately define this process or pertain to the specifics of reviving a lapsed policy. For instance, lapse provision and grace period extension refer to different stages related to nonpayment but do not focus on restoring a policy after it has lapsed. Policy restoration also may not be the commonly used term in insurance contexts compared to reinstatement.