Which statement regarding the reinstatement provision of a life insurance policy is true?

The reinstatement provision of a life insurance policy is important as it allows a policyholder to reinstate a lapsed policy under specific conditions. The statement regarding the requirement for overdue premiums to be paid with interest reflects a key aspect of this provision. This means that if a policyholder wants to reinstate a lapsed policy, they must pay not only the overdue premiums but also any interest that has accrued on those premiums during the lapse period. This helps to compensate the insurance company for the time the policyholder was not contributing premiums.

The reinstatement provision typically has certain stipulations, such as requiring evidence of insurability and other conditions to be met, which do not guarantee reinstatement without regard to health. This is why the other options do not accurately represent the stipulations typically associated with a life insurance policy’s reinstatement provision. Reinstatement is generally allowed within a specified period—often 3 to 5 years—after a policy has lapsed, but the reinstatement terms may vary by insurer and specific policy conditions. Therefore, acknowledging the payment of overdue premiums with interest as a requirement gives a more accurate understanding of the reinstatement process.