10.1c

Question 1

If a life insurance policy does lapse, either by accident or on purpose, the policyowner has, within a specified amount of time, the right to reinstate his or her contract as of the date that the policy lapsed. Under policy ‘reinstatement,’ once the policy is reinstated by the insurer, the original provisions of the life insurance contract continue to apply as if coverage never lapsed. Although the policyowner is responsible for fulfilling certain requirements in order to reinstate a lapsed policy, it is often wiser to ______ than to purchase a new policy.

Answer 1

reinstate a long-term policy

Question 2

In the case of a long-term life policy, one benefit of policy reinstatement is that a policy issued years ago, or at a younger age, would generally be issued at a ______ than what would be available for a similar policy purchased today. Maintaining the original policy’s lower interest rate on policy loans may also be beneficial in comparison to current rates associated with a new policy.

Answer 2

lower premium rate

Question 3

In the case of a policy issued recently that has lapsed, it might prove to be more beneficial to attain a new policy if a lower premium rate is offered in comparison to the original lapsed policy’s rate; however, it is never advised to repeatedly allow life policies to lapse as the underwriting and issuance of a life insurance policy is ______.

Answer 3

costly to the insurer

Question 4

______ is often required to reinstate a life policy

Answer 4

Evidence of insurability

Question 5

To reinstate a lapsed life insurance policy, any missed premiums must ______.

Answer 5

be paid with interest