New York Insurance Exam Practice Question
What is the purpose of a reinstatement provision in a life insurance policy?
Correct Answer: B
Rationale: A reinstatement provision in a life insurance policy is designed to allow the policyholder to restore a lapsed policy, ensuring continued coverage after missed payments.
Option A is incorrect as it implies cancellation, which contradicts the purpose of reinstatement. Option C is misleading; a reinstatement provision does not increase the death benefit but simply reinstates the original policy terms. Option D is also wrong, as waiving premiums is a different feature, typically found in riders rather than a reinstatement provision. Thus, the focus remains on restoring coverage rather than altering policy terms.
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