A life insurance policy delivered in Manhattan lapses for nonpayment of premium. Under N.Y. Ins. Law §3203(a)(10), the policyowner may reinstate the policy by:

Why D is correct

Under N.Y. Ins. Law §3203(a)(10), a lapsed life policy may be reinstated within 3 years of the date of default, upon evidence of insurability as the insurer may reasonably require, and payment of all overdue premiums with interest at no more than 6% per annum compounded annually. Reinstatement restores the original contract - with its original premium class and provisions - rather than forcing the insured to buy a new, more expensive policy at an older age, which is why the statute makes the remedy available for a full 3 years.

Why the other options are wrong

• A) The statute does not allow interest or evidence of insurability to be waived; overdue premiums must carry interest at no more than 6% per annum compounded annually.
• B) Reinstatement is not confined to the grace period; the right survives for 3 years after default, subject to evidence of insurability.
• C) Buying a new policy is the alternative to reinstatement, not reinstatement itself; §3203(a)(10) revives the original contract on its original terms.

Memory hook

Reinstate within 3 years: evidence of insurability, back premiums, interest capped at 6%.