Massachusetts Life Producer Practice Exam

What is one requirement for reinstating a lapsed life insurance policy?

1. Payment of a fine

2. Re-application for a license

3. Meeting company requirements

4. Completing additional training

The correct answer is: Meeting company requirements

The requirement for reinstating a lapsed life insurance policy centers on meeting the company's specific criteria. Typically, this involves the policyholder providing proof of insurability and paying any outstanding premiums along with any interest that may have accrued. Insurance companies often have specific guidelines outlining what the policyholder must accomplish in order to restore their policy to an active status. This reinstatement process ensures that the insurer can assess the risk and the insured's eligibility based on current health conditions, which may have changed since the policy was initially taken out. Other options, such as paying a fine or completing additional training, are not standard requirements in the reinstatement process of life insurance policies. Re-application for a license does not relate to the actions necessary for reinstating a policy; it pertains more to the licensing of insurance agents rather than policyholders. Therefore, the focus remains on meeting the insurer's established requirements to facilitate the reinstatement process.