Rhode Island Life Insurance Practice Exam

What provision requires proof of insurability after a life insurance policy has lapsed?

1. Reinstatement

2. Conversion

3. Contestability

4. Nonforfeiture

The correct answer is: Reinstatement

The provision that requires proof of insurability after a life insurance policy has lapsed is the reinstatement provision. This provision typically allows the policyholder to reinstate a lapsed policy within a certain period, usually up to three years, provided they meet specific conditions set by the insurance company. When a policy lapses, the coverage ends due to non-payment of premiums. To reinstate the policy and restore coverage, the insurer often requires the insured to submit proof of insurability, which may include providing evidence of good health. This requirement helps insurers evaluate the risk associated with reinstating the policy, especially if the insured's health has changed since the policy lapsed. The other provisions listed pertain to different scenarios. Conversion involves changing a term insurance policy to a permanent policy without evidence of insurability, contestability allows an insurer to contest a claim within a specific period if there are misstatements in the application, and nonforfeiture pertains to the benefits a policyholder retains if they stop paying premiums. Each serves a distinct purpose, but it's the reinstatement provision that specifically addresses the requirement for proof of insurability after a lapse.