State RegulationsNC specificDifficulty 1/5
A life policyholder in Charlotte stops paying premiums and the policy lapses. Unless the policy was surrendered or its cash value exhausted, how long after the premium default may the policyholder apply to have the policy reinstated under North Carolina law?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under G.S. 58-58-22(5), an application for reinstatement may be made within 5 years after the date of premium default, unless the policy has been 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.
Why the other options are wrong
- B) A three-year window is a commercial-textbook figure, not the North Carolina statutory period.
- C) Two years is the incontestability and suicide-limitation period, not the reinstatement window.
- D) One year is far shorter than the statutory window and would improperly cut off reinstatement rights.
Memory hook
NC lets lapsed life policies come back for five full years.