Most horror sequels are cynical cash grabs, pointlessly rehashing a concept to diminishing creative returns. And while it's possible to make that case against "Insidious: Chapter 2," it would be a disservice to the sincere ways director James Wan and screenwriter Leigh Whannell build on what they started in the clever 2011 original.

The "Chapter 2" subtitle is telling -- this really is a continuation of the first film (closer to "Kill Bill: Vol. 2" than "Exorcist II: The Heretic"). If it's not quite as fresh or frightening, Wan and Whannell do enough to expand and explore the world they've created to satisfy fans and justify a sequel. In the horror genre, that's a huge win.

The first "Insidious" ended on a cliffhanger involving happily married couple Josh (Patrick Wilson) and Renai Lambert (Rose Byrne), whose son Dalton (Ty Simpkins) inherited a special ability from his father that allowed him to travel to the spirit world, sparking all sorts of supernatural trouble for the family. "Chapter 2" opens with a brief '80s-set prologue focused on young Josh (Garrett Ryan), his concerned mother Lorraine (Jocelin Donahue, the star of Ti West's "The House of the Devil") and the ghostbusters Lorraine hires to help: Elise (Lindsay Seim) and Carl (Hank Harris). Then it's right back to the cliffhanger moment to reveal what exactly happened after Renai discovered an older, more experienced Elise (Lin Shaye) strangled to death in the family living room.

Something's not quite right with Josh, and most of "Chapter 2" is devoted to his family figuring that out before it's too late. While "Insidious" owed a clear debt to "Poltergeist," "Chapter 2" adds a serious dose of "The Shining" but puts its own spin on a man descending into madness. That provides Wilson with the film's meatiest role and he tackles it head-on in a delightfully twisted performance that walks the line between terrifying and tormented. Actors rarely get attention for horror films, but this easily ranks among Wilson's best screen work to date. Among the supporting cast, Barbara Hershey enjoys a deservedly beefed up role as the present day Lorraine, who reaches out to Elise's assistants Tucker (Angus Sampson) and Specs (Whannell) and tracks down Carl (now played by Steve Coulter) to end the Lambert family haunting once and for all.

The low-budget "Insidious" was a genuine surprise coming from Wan, who made his name ushering in horror's lamentable torture porn era with 2004's "Saw." Eschewing graphic violence for good old-fashioned scares, "Insidious" was a refreshing haunted house throwback pitched on the edge between campy and creepy (occasionally tipping too far into the former for some). It foreshadowed Wan's mainstream breakout with this past summer's sleeper hit "The Conjuring," and "Insidious: Chapter 2" remains faithful to his new brand of classy horror. But with his third consecutive film featuring a family battling unwelcome supernatural intruders, the formula for scares is beginning to show. There's nothing in "Chapter 2" quite as freakishly inventive as the first film's red faced demon or use of "Tiptoe Through the Tulips," or as memorable as bigger set pieces in "The Conjuring."

Still, Wan's intelligent filmmaking and command of unsettling atmospherics continue to impress, and Whannell's script is committed to pushing the mythology forward, deftly moving back and forth through time and even literally revisiting the first film to provide a new perspective on a key event. "Chapter 2" won't make much sense to anyone who hasn't seen "Insidious," but that's the point. Instead of a typical disposable sequel, Wan and Whannell have created two films that could easily be united as a single, satisfying, work.

"Chapter 2" also provides closure in a way the first film didn't, while also leaving a door wide open for "Insidious: Chapter 3" (or, more likely, a Lambert-less spinoff). But a good horror threequel? That would really be a stunner.