Which provision allows a lapsed policy to be reinstated, usually within three years of lapse?

Which provision allows a lapsed policy to be reinstated, usually within three years of lapse?

• A. Reinstatement
• B. Incontestability
• C. Exclusions
• D. Status Clause

Answer: (A)

Reinstatement is the provision that lets a life insurance policy lapse for nonpayment be brought back into force within a set period, usually about three years. To reinstate, you typically pay the overdue premiums plus interest, provide evidence of insurability (health questions or a new medical exam), and resolve any outstanding policy loans or withdrawals. If approved, the policy generally resumes with its original terms, though underwriting may adjust future premiums or benefits based on current health. Incontestability isn’t about bringing a lapsed policy back; it restricts how the insurer can challenge statements on the application after the policy has been in force for a period. Exclusions describe what the policy does not cover. A status clause isn’t a standard reinstatement concept in most contracts.

Reinstatement is the provision that lets a life insurance policy lapse for nonpayment be brought back into force within a set period, usually about three years. To reinstate, you typically pay the overdue premiums plus interest, provide evidence of insurability (health questions or a new medical exam), and resolve any outstanding policy loans or withdrawals. If approved, the policy generally resumes with its original terms, though underwriting may adjust future premiums or benefits based on current health.

Incontestability isn’t about bringing a lapsed policy back; it restricts how the insurer can challenge statements on the application after the policy has been in force for a period. Exclusions describe what the policy does not cover. A status clause isn’t a standard reinstatement concept in most contracts.