State RegulationsNC specificDifficulty 2/5
An insured in Durham allowed a life policy to lapse and now wants it back. Under G.S. 58-58-22(5), within what period after the premium default may the insured apply for reinstatement, and what must accompany the application?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under G.S. 58-58-22(5), a lapsed North Carolina life policy may be reinstated on application within five years after the premium default, unless the policy was surrendered or its cash value exhausted. Reinstatement requires a written application, evidence of insurability satisfactory to the insurer, payment of all overdue premiums, and repayment of any policy debt with interest. The five-year statutory window — not the shorter figure found in some commercial textbooks — controls on the North Carolina examination.
Why the other options are wrong
- A) Three years is not the North Carolina statutory window, and payment alone is insufficient.
- B) The five-year window is right, but payment alone is insufficient; a written application, evidence of insurability, and repayment of policy debt with interest are also required.
- C) Three years is not the North Carolina statutory window, even though the list of requirements is correct.
Memory hook
Five years, full paperwork — NC reinstatement is generous but demanding.