What happens if a policy lapses and is reinstated?

• A. The policy is automatically reinstated with no conditions.
• B. The policy may be reissued under new terms but usually requires proof of insurability and payment of overdue premiums and interest.
• C. The policy cannot be reinstated.
• D. The policy must be surrendered.

Answer: (B)

When a life policy lapses, coverage ends because premiums were not paid. Reinstatement is possible, but it isn’t automatic. To bring the policy back in force, the insurer typically requires several things: evidence of insurability (to ensure the risk is acceptable under current health and other factors), payment of all overdue premiums plus interest, and often restoration of any loans or riders tied to the policy. Because the insurer may reassess risk at reinstatement, the policy is usually reissued under new terms, which can affect premiums, benefits, or riders.

So the best answer reflects that reinstatement involves underwriting and paying back missed premiums (plus interest) and is often issued under updated terms, rather than being automatic, impossible, or requiring surrender.