State RegulationsGA specificDifficulty 2/5
A Georgia individual life policy lapsed after the policyowner stopped paying premiums. Under O.C.G.A. § 33-25-3, within what period may the policy be reinstated, and on what financial terms?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under O.C.G.A. § 33-25-3, a lapsed life policy may be reinstated within three years of premium default upon payment of all overdue premiums plus interest not exceeding 6% per annum compounded annually, with evidence of insurability if the insurer requires it. The 6% ceiling mirrors the maximum policy loan interest rate in the same statute.
Why the other options are wrong
- B) Two years is a documented distractor window, and there is no authority for interest above the statutory cap.
- C) Five years overstates the period, and reinstatement requires overdue premiums plus interest — not premiums alone.
- D) Six months is far short of the three-year window, and evidence of insurability alone does not satisfy the overdue premium and interest requirement.
Memory hook
Three years, six percent, back on the books.