diff --git a/src/Makefile b/src/Makefile
index 5c4e44f..4058f19 100644
--- a/src/Makefile
+++ b/src/Makefile
@@ -2045,6 +2045,7 @@
 	test_packadd \
 	test_partial \
 	test_perl \
+	test_popup \
 	test_quickfix \
 	test_regexp_latin \
 	test_regexp_utf8 \
diff --git a/src/edit.c b/src/edit.c
index 0ba2627..234e03d 100644
--- a/src/edit.c
+++ b/src/edit.c
@@ -649,7 +649,11 @@
 	if (update_Insstart_orig)
 	    Insstart_orig = Insstart;
 
-	if (stop_insert_mode)
+	if (stop_insert_mode
+#ifdef FEAT_INS_EXPAND
+		&& !pum_visible()
+#endif
+		)
 	{
 	    /* ":stopinsert" used or 'insertmode' reset */
 	    count = 0;
diff --git a/src/option.c b/src/option.c
index b17fc28..80bd867 100644
--- a/src/option.c
+++ b/src/option.c
@@ -8001,7 +8001,8 @@
 		need_start_insertmode = TRUE;
 	    stop_insert_mode = FALSE;
 	}
-	else
+	/* only reset if it was set previously */
+	else if (old_value)
 	{
 	    need_start_insertmode = FALSE;
 	    stop_insert_mode = TRUE;
diff --git a/src/testdir/test_alot.vim b/src/testdir/test_alot.vim
index d8d460a..444085e 100644
--- a/src/testdir/test_alot.vim
+++ b/src/testdir/test_alot.vim
@@ -21,6 +21,7 @@
 source test_menu.vim
 source test_messages.vim
 source test_partial.vim
+source test_popup.vim
 source test_reltime.vim
 source test_searchpos.vim
 source test_set.vim
diff --git a/src/testdir/test_popup.vim b/src/testdir/test_popup.vim
new file mode 100644
index 0000000..a5673c9
--- /dev/null
+++ b/src/testdir/test_popup.vim
@@ -0,0 +1,35 @@
+" Test for completion menu
+
+inoremap <F5> <C-R>=ListMonths()<CR>
+let g:months = ['January', 'February', 'March', 'April', 'May', 'June', 'July', 'August', 'September', 'October', 'November', 'December']
+let g:setting = ''
+
+func ListMonths()
+    if g:setting != ''
+	exe ":set" g:setting
+    endif
+    call complete(col('.'), g:months) 
+    return ''
+endfunc
+
+func! Test_popup_completion_insertmode()
+    new
+    call feedkeys("a\<f5>\<down>\<enter>\<esc>", 'tx')
+    call assert_equal('February', getline(1))
+    %d
+    let g:setting = 'noinsertmode'
+    call feedkeys("a\<f5>\<down>\<enter>\<esc>", 'tx')
+    call assert_equal('February', getline(1))
+    call assert_false(pumvisible())
+    %d
+    let g:setting = ''
+    call feedkeys("a\<f5>". repeat("\<c-n>",12)."\<enter>\<esc>", 'tx')
+    call assert_equal('', getline(1))
+    %d
+    call feedkeys("a\<f5>\<c-p>\<enter>\<esc>", 'tx')
+    call assert_equal('', getline(1))
+    %d
+    call feedkeys("a\<f5>\<c-p>\<c-p>\<enter>\<esc>", 'tx')
+    call assert_equal('December', getline(1))
+    bwipe!
+endfunc
diff --git a/src/version.c b/src/version.c
index a810da5..0c74464 100644
--- a/src/version.c
+++ b/src/version.c
@@ -754,6 +754,8 @@
 static int included_patches[] =
 {   /* Add new patch number below this line */
 /**/
+    1961,
+/**/
     1960,
 /**/
     1959,