Washington Life Producer Practice Exam

Which of the following is a typical condition for reinstatement of a lapsed policy?

1. Paying a penalty fee

2. Proof of insurability

3. Submission of a new application

4. Providing evidence of a change in health

The correct answer is: Proof of insurability

The typical condition for the reinstatement of a lapsed policy often includes proof of insurability. This requirement means that the insured must demonstrate that they are still in good health or meet the insurance company's criteria for insurability at the time of reinstatement. This is important because the underwriting process initially assesses the risk associated with insuring an individual, and if a policy has lapsed, the insurer needs reassurance that the risk has not significantly changed since the policy was originally issued. Providing proof of insurability protects the insurer by ensuring that the individual still qualifies for coverage. Other conditions such as paying past due premiums may also be required, but the necessity of establishing current insurability is a critical factor in reinstatement practices across many insurers. While it's common for insurers to have provisions that might include the payment of premiums owed, submission of a new application, or evidence of a change in health, these are not as universally required as proof of insurability when a policy is reinstated.