A life policy delivered in North Carolina has lapsed for nonpayment of premium, has not been surrendered, and still has cash value available. How long after the default may the owner apply to reinstate the policy?

Why A is correct

Under G.S. 58-58-22(5), the owner of a lapsed life policy may apply for reinstatement within 5 years after the date of premium default, unless the policy was surrendered or its cash value has been 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 3-year figure is a commercial-textbook value that North Carolina's statute does not use.

Why the other options are wrong

• B) 3 years is a textbook figure found in some study materials; the North Carolina statute says 5 years.
• C) 2 years is the incontestability and suicide-limitation period under G.S. 58-58-22(2) and (4), not the reinstatement window.
• D) 1 year is not a North Carolina reinstatement figure; the statutory window runs 5 years from the default.

Memory hook

Life lapse? You have 5 years to apply your way back in.