A provision allowing an insured to reinstate their policy after a lapse is known as:

The term "reinstatement" specifically refers to the provision in an insurance policy that allows an insured individual to restore their lapsed policy without having to go through the entire application process again. This is particularly important in the context of life or health insurance, where an insured may be unable to maintain premium payments for a temporary period but wishes to regain their coverage afterward.

Reinstatement provisions typically come with specific guidelines that may require the insured to pay back premiums and possibly provide evidence of insurability, depending on the insurer’s terms. The significance of this provision is that it provides flexibility and security for insured individuals who might encounter financial difficulties, ensuring that they can regain their coverage and avoid losing benefits.

In contrast, the other terms listed do not specifically refer to the act of restoring a lapsed policy. "Renewal" typically refers to the continuation of a policy at the end of its term, "extension" might suggest prolonging the current policy period or benefits, while "restoration" is often used in different contexts, such as restoring coverage limits or benefits rather than reinstating a policy itself. Therefore, reinstatement is the precise term that encapsulates the process of returning a lapsed policy to active status.