State RegulationsIL specificDifficulty 3/5
An Illinois whole life policy lapsed for premium default 4 years ago. The owner now offers to pay all arrears with interest and to furnish evidence of insurability. Under 215 ILCS 5/224, what is the outcome?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
215 ILCS 5/224 gives the policyowner a reinstatement right within 3 years of premium default upon evidence of insurability and payment of arrears with interest, with the overdue-premium interest capped at 6% per annum. Four years into default the statutory window has closed, so reinstatement is no longer automatic; the owner's only path is whatever new application the insurer chooses to offer.
Why the other options are wrong
- B) Arrears and insurability satisfy the reinstatement formula only within the 3-year window, which has already run.
- C) The reinstatement right is time-limited by statute; the insurer's recordkeeping creates no obligation to reinstate.
- D) 215 ILCS 5/224 describes reinstatement of the existing policy within 3 years; it provides no conversion mechanism at the original issue age.
Memory hook
Reinstate within 3 years at 6% — after that, all bets are off.