CMFAS M9 Underwriting, Servicing & Claims question: reinstating a lapsed life policy

CMFAS M9Underwriting, Servicing & Claims

Which statement about reinstating a lapsed life policy is correct?

A It is available at any time after lapse, with no time limit and no evidence of health
B It requires only payment of the current year's premium, without any arrears or interest
C It keeps the incontestability and suicide clauses running from the original issue date, not the reinstatement date
D It is usually allowed within two to three years of lapse and restarts the suicide and incontestability clocks

Show the answer and explanation

Answer: D. It is usually allowed within two to three years of lapse and restarts the suicide and incontestability clocks

A lapsed policy can usually be reinstated within two or three years of lapse if the owner pays all premium arrears with interest and shows continued insurability; reinstatement re-subjects the policy to underwriting and restarts the incontestability, suicide and waiting-period clauses.

Common mistake

Reinstatement is time-limited and resets the incontestability/suicide/waiting-period clocks — it is not open-ended, nor does it preserve the original dates.

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Related CMFAS M9 questions

Ben absolutely assigns his life policy to his brother Chris (the assignee) as a gift. Which of the following is a recognised disadvantage if Chris dies before Ben?A life insured dies two and a half years after the policy was issued. In assessing the claim the insurer discovers that, at application, the owner had deliberately and fraudulently concealed a serious pre-existing heart condition. Can the insurer contest the policy despite the incontestability clause?In underwriting a contributory Group Life scheme, why does the underwriter usually specify a minimum participation level (e.g. 70%–90% of eligible members)?

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Original study material mapped to the public CMFAS M9 syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.