State RegulationsNJ specificDifficulty 2/5
An individual health policy lapsed for nonpayment of premium, and the insured wants it reinstated. What does the reinstatement process generally require?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
N.J.S.A. 17B:26-7 governs reinstatement of lapsed individual health policies: the insured applies for reinstatement and pays the overdue premiums, and the insurer may require evidence of insurability before agreeing to revive coverage. Reinstatement restores the existing policy rather than forcing the insured to buy a new one, which matters because a new policy could impose fresh limitations. The New Jersey Department of Banking and Insurance oversees compliance with these policy standards.
Why the other options are wrong
- A) Claim forms relate to submitting losses on existing coverage, not to reviving a lapsed policy.
- C) Coverage does not restart on its own at an anniversary; lapse ends coverage until reinstatement is completed.
- D) A lapsed policy can be revived through reinstatement under N.J.S.A. 17B:26-7; buying new coverage is not the only path.
Memory hook
Reinstate = apply again plus pay the arrears; the insurer may ask for insurability.