State RegulationsNC specificDifficulty 3/5
A lapsed North Carolina life policy is reinstated after the owner completes a reinstatement application answering health questions. Later the insurer discovers the owner's answers were fraudulent. For how long after reinstatement may the insurer contest the policy on that ground?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under G.S. 58-58-170, a reinstated policy 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, fraud in the reinstatement application gets a fresh contest window measured the same way as the original two-year incontestability period.
Why the other options are wrong
- A) The statute expressly allows a contest for fraud material to the reinstatement even though the original contest period had run.
- B) The original issue-date clock does not cover fraud committed in the reinstatement application.
- D) Five years is the life reinstatement application window, not the contest period for reinstatement fraud.
Memory hook
Reinstatement fraud earns its own fresh two-year clock.