LLQP Life Insurance · Component 4.1 · 10% of the exam
To reinstate a lapsed policy, the insurer will typically require:
- AA new beneficiary designation, since the original designation lapsed with the policy and must be re-established on reinstatement
- An application within the contract's period, evidence of insurability, and payment of arrears
- CNothing beyond resuming the premium payments, since the insurer restores a lapsed policy automatically on receipt
- DA court order confirming that the policyholder is entitled to have the contract restored on its original terms
Correct answer: B) An application within the contract's period, evidence of insurability, and payment of arrears
Reinstatement restores the original policy — with its original age-based premium and dates — which is why it is often better than a new policy. But it requires proof the insured is still insurable and payment of arrears.
Why the other options are wrong
- ABeneficiaries need not change.
- CReinstatement has conditions.
- DCourts are not involved.
Exam tip
Reinstatement: within the contract period, evidence of insurability, overdue premiums plus interest.
Common mistake
Assuming a lapsed policy can be revived simply by resuming payments.
What this tests
CISRO competency component 4.1 — Provide customer service during the validity period of the coverage — which is weighted at 10% of the Life Insurance module. Written against the published curriculum.
More from component 4
- After a policy is reinstated, the contestability period:
- A revocable beneficiary designation is changed by:
- A client asks the agent to hold the beneficiary change form 'until next week' and dies in the meantime. The consequence is that:
- A client wants to reduce the face amount of her policy because her needs have fallen. The agent should note that:
- A client is unable to pay premiums temporarily on a whole life policy. Before letting it lapse, the agent should suggest:
- A client's term policy is being replaced with a new one from another insurer because it is cheaper and he remains healthy. To protect the client, the agent should ensure that:
Practice the whole Life Insurance module
Timed sets weighted like the exam, and review of every question you miss. Free to start.