State RegulationsVA specificDifficulty 2/5
A Virginia policyowner applies to reinstate a lapsed life policy within the statutory window. Under Va. Code § 38.2-3311, what must she furnish to obtain reinstatement?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Va. Code § 38.2-3311 spells out the reinstatement package: the policyowner must apply with evidence of insurability satisfactory to the insurer, pay the overdue premiums with interest at a rate not exceeding 6% per year, and repay or reinstate any outstanding policy debt. The insurer's insurability requirement is the heart of the provision — the same underwriting concern that justified the original application applies to reviving lapsed coverage.
Why the other options are wrong
- A) Reinstatement is not automatic on a written request; evidence of insurability and payment of the arrears with interest are required under Va. Code § 38.2-3311.
- B) Reinstatement revives the existing contract on its original terms; it is not a new issuance with a fresh fee.
- D) There is no face-amount penalty; the statute requires arrears with interest capped at 6% per year and repayment of policy debt.
Memory hook
Reinstate = prove health, pay arrears with 6% interest, clear the policy debt.