Payment, lapse and reinstatement

How do we run a missed payment through the grace period notices, the payment and, for a lapsed policy, the reinstatement with the health or no-loss statement, so the policy is reinstated or lapsed correctly in billing?

Run the missed payment as a clock with a path back. Callvu classifies the missed payment on the day it is missed (the line of business, the state's grace period and notice rules, the policy's own terms, any lienholder, the payment method and whether a return caused it), sends the grace period notices on the state's schedule with a payment link in each, collects the payment through the secure payment process, and if the policy lapses, takes the reinstatement application with the statement the line requires (a statement of health for life, a no-loss statement for property and casualty), chases what is missing, routes the reinstatement decision to underwriting in the Decision Desk, and writes the reinstatement or the lapse to the billing system and the policy system with every notice and date on the record.

In scopeComplex: multi-party handoffsCallvu moves: classify, chase and verify, decide, write back

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Last updated November 7, 2026.

The problem today

The grace notice went out two days late, the policy lapsed, and the reinstatement was approved without a statement of health.

Today, without Callvu

A life premium is missed. The billing system generates a notice in its weekly batch, two days after the state's clock required it. The grace period runs out, the policy lapses, and the policyholder pays the next month. The service team reinstates it on the payment alone, without the statement of health the contract requires. The insured had a diagnosis in between. The claim, two years later, is contested on both the lapse and the reinstatement.

Each state sets the grace period for the line (thirty or thirty-one days for life and health under the standard provisions laws, varying periods for property and casualty), the notice of lapse and its content and timing, and the reinstatement rights (a life policy reinstated within the contract's period on evidence of insurability and payment of back premiums with interest, a property policy reinstated on a no-loss statement with coverage resuming from the reinstatement date). The policy's own terms add to it. A lienholder has notice rights of its own.

The clock is the compliance; the path back is the retention.

How it runs

From the requestto the system of record.

A premium installment is missed or a payment is returned. Callvu classifies the event and opens the lapse case on the policy.

Policyholder: Receives the notices with a payment link, pays, and for reinstatement completes the application and the statement.
Billing: Holds the installment status, the notices and the reinstatement in the billing system.
Underwriting: Decides reinstatements that require evidence of insurability in the Decision Desk.
Callvu: Classifies, runs the notice clock, collects payment, chases the statement, routes and writes.

Classify the missed payment
The line, the state, the policy's grace period and notice terms, the reason (a missed installment, a returned debit, a declined card), any lienholder or mortgagee, the policy's age and the prior lapse history classify the clock: the grace period's end, the notices required and their timing and content, and the reinstatement rules that will apply.
Notify and collect
The grace period notices go out on the state's schedule with the required content (the amount, the date coverage ends, the consequences, how to pay) and a payment link to the secure payment process; the lienholder receives its notice; a payment inside the grace period posts to billing in real time and closes the case; the policyholder sees the clock in any channel.
Lapse, then chase and verify the reinstatement
If the grace period ends unpaid, the lapse is written with its date and the lapse notice issued; a policyholder who returns inside the reinstatement period receives the reinstatement application with the statement the line requires (a statement of health for life or health, a no-loss statement for property and casualty) and the amount due with interest where the contract charges it; the statement and the payment are chased on a clock and checked on arrival.
Decide and write back
A property and casualty reinstatement on a no-loss statement within the policy's rules is applied by rule from the reinstatement date; a life reinstatement goes to underwriting in the Decision Desk with the statement of health and the contract's evidence rules and only approve, approve with conditions, or decline with reasons; the reinstatement or the final lapse is written to the billing system and the policy system with the dates, the notices and the statement on the record, and the lienholder notified.

Where it ends: Every missed payment ran on the state's notice clock with a way to pay in each notice, lapses carry their dates and notices, and reinstatements were decided on the statement the contract requires, all recorded in billing and the policy system. The Decision Trace shows the classification, the clock and the reinstatement decision; the Audit Trace shows each notice, payment and statement with its time.

Runtime enforcement

What is enforcedwhile the work runs.

The regulations preloaded in Callvu Studio and the bank's own policies, applied as steps that run, not lines in a binder. A step that breaks a rule does not run, so a completed run was compliant.

Regulations

State grace period and reinstatement statutes (the standard provisions laws for life and health, for example New York Insurance Law 3203(a)(1) and 3203(a)(10), California Insurance Code 10113.71 and 10113.72, and the property and casualty cancellation statutes): A life policy must provide a grace period of at least thirty or thirty-one days during which the policy stays in force, and a reinstatement right (commonly three years from default) on evidence of insurability satisfactory to the insurer and payment of overdue premiums with interest at the contract rate; some states (California since 2013) require a notice of pending lapse at least thirty days before termination and an opportunity to designate a third party to receive it, and treat a lapse without the notice as void.
State notice of cancellation rules for non-payment on property and casualty policies: Cancellation for non-payment requires advance written notice to the insured and any lienholder or mortgagee (commonly ten days for non-payment), with the content and proof of mailing the state prescribes; reinstatement after a non-payment cancellation is on the insurer's terms, usually with a no-loss statement and coverage from the reinstatement date without a gap filled.
Contract reinstatement provisions and the incontestability clause (state standard provisions): A reinstated life policy restarts the contestability period as to statements in the reinstatement application for the period the state allows (commonly two years), which is why the statement of health is a condition and not a formality.

Company policies

The grace period and the notice schedule are computed from the state and the contract the day the payment is missed, never from a weekly batch.
Every notice carries a payment link to the secure payment process.
A reinstatement requires the statement the line and the contract require; a payment alone never reinstates a lapsed life policy.
The billing system and the policy system are the systems of record for the lapse and the reinstatement.

Controls

Day-of classification with the state's clock.
Notice generation with prescribed content and proof of delivery.
Lienholder notices.
Real time payment posting inside the grace period.
Reinstatement application and statement chase with checks.
Decision Desk underwriting decision and writes with the dates.

Clocks and deadlines

Grace period: The state's and the contract's period from the due date (thirty or thirty-one days for life and health).
Pending lapse notice: At least thirty days before termination where the state requires it, with the designee notified.
Reinstatement period: The contract's period after lapse (commonly up to three years for life), with the statement and the back premiums with interest.

Documents and checks

The classification with the state's rules
Each notice as sent with proof of delivery
The payment or the lapse record
The reinstatement application and the statement of health or no-loss statement
The underwriting decision and the billing and policy system records

In the Decision Trace

The classification and the clock computed.
Each notice and why.
The reinstatement decision and the person.

In the Audit Trace

Each notice with time against the clock.
Each payment and statement with time.
The writes.

The handoff

Between the front doorand the back office.

The front door

The notices and their payment link, the app, or a call; the policyholder sees the clock and the path back in any channel.

The back office

Billing runs the clock by rule; underwriting decides only reinstatements that need evidence.

The Decision Desk

A life reinstatement goes to underwriting in the Decision Desk with the statement of health and the contract's evidence rules; a disputed lapse or a notice defect goes to the billing lead with the notice record and only the allowed outcomes.

Proof

In scope.Proof at scale, not one process at a time.

The kind of process Callvu runs in production for customers in this industry. Ask for a reference on this exact process. The results below are the industry's published proof; each claim code links to its record on agents.callvu.com.

Phoenix put more than 100 processes live in under 3 months.

Across Callvu customers

More than 1,000 processes are live across Callvu customers.

Across Callvu customers

Questions

What buyers ask next,answered plainly.

How long is the grace period?

The state's and the contract's period for the line, commonly thirty or thirty-one days for life and health, computed the day the payment is missed with the notices on that clock.

What does reinstatement require?

The application, the overdue premiums with interest where the contract charges it, and the statement the line requires: a statement of health for life and health decided by underwriting, a no-loss statement for property and casualty.

Is a lienholder told?

Yes; a lienholder or mortgagee on the policy receives the notice of pending cancellation and of the reinstatement, from the record.

Related processes

Non-payment cancellation notice Premium payment by phone or link Policy cancellation request Payment plan enrollment Try it in the sandbox All insurance processes

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