State RegulationsMA specificDifficulty 2/5
A producer explains the difference between reinstating a lapsed policy and writing a new one. Under M.G.L. c. 175, § 132(11), which statement is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.G.L. c. 175, § 132(11) treats reinstatement as the revival of the existing life policy, not the creation of a new one: the same contract, with its original benefits and structure, comes back into force when the policyowner satisfies the statutory conditions of evidence of insurability and payment of the arrears with interest. That is the feature that makes reinstatement valuable — the policyholder steps back into the policy as it was, rather than replacing it. A brand-new policy, by contrast, would be issued and priced as of the new application date.
Why the other options are wrong
- B) Reinstatement under M.G.L. c. 175, § 132(11) revives the original contract on its original terms; it is not a fresh issuance.
- C) There is no statutory conversion into term coverage; reinstatement restores the policy as issued.
- D) The arrears are paid to the existing insurer as a condition of reinstatement; no new policy needs to issue first.
Memory hook
Reinstatement rewinds the old contract; a new policy starts the clock from scratch.