State RegulationsNC specificDifficulty 3/5
A North Carolina life policy was incontestable after its original two-year contestable period, then lapsed for nonpayment and was later reinstated. Under G.S. 58-58-170, for how long may the insurer contest the policy on grounds of fraud or misrepresentation material to the reinstatement?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under G.S. 58-58-170, a reinstated policy or annuity may be contested for fraud or misrepresentation material to the reinstatement only for the same period following reinstatement as the policy provides after original issuance — in effect a fresh two-year window, limited to reinstatement-related fraud. This narrower ground supplements the general incontestability rule of G.S. 58-58-22(2).
Why the other options are wrong
- B) Five years is the reinstatement application window of G.S. 58-58-22(5), not the post-reinstatement contest period.
- C) Reinstatement does not make the policy permanently incontestable; reinstatement-related fraud may be challenged for the same period as after original issuance.
- D) There is no 30-day contest limit; G.S. 58-58-170 keys the period to the policy's original contestable period.
Memory hook
Reinstatement buys a fresh 2-year window — but only for reinstatement fraud.