Policy Riders, Provisions, Options, and Exclusions
Why might an owner prefer reinstating a lapsed policy over buying a new one?
Answer and explanation
Answer: B. Reinstatement restores the original contract rather than issuing a new one, which preserves the terms it was written on. It requires payment of overdue premiums and may require evidence of insurability, it does not erase contestability, and the standards set the period at not less than three years from lapse rather than without limit.Source: Interstate Insurance Product Regulation Commission — Individual Term Life Insurance Policy Standards — Uniform standards, Reinstatement compared with a new policy
More policy riders, provisions, options, and exclusions questions
- Why do uniform product standards prescribe what a policy must describe?
- Why does consumer guidance advise against naming a minor child directly as beneficiary?
- Why does the ability to assign a life policy matter to an owner?
- Why is naming a minor child directly as a life insurance beneficiary problematic?
- A beneficiary asks which part of the policy states the insurer's core promise to pay. Which provision should the producer point to?
- A buyer compares annual and monthly premium modes for the same term policy. Which cost point should the buyer verify?
592 Georgia questions like this one.
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