New Jersey Life Insurance Exam Practice Question
Lapsed individual life insurance may be reinstated at any time within
Correct Answer: B
Rationale: Lapsed individual life insurance can typically be reinstated within 3 years, allowing policyholders time to recover from lapses in premium payments. This period is established to provide a balance between the insurer's risk and the policyholder's ability to reinstate coverage.
Option A (2 years) is too short, as it does not accommodate sufficient time for policyholders facing financial difficulties. Option C (4 years) and Option D (5 years) extend beyond standard practice, which may lead to increased risk for insurers. Therefore, 3 years is the appropriate timeframe for reinstatement.
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