A policyholder in Durham stopped paying premiums on an individual life policy three years ago; the policy was not surrendered and its cash value is not exhausted. Under G.S. 58-58-22(5), for how long after the premium default may he apply to reinstate the policy?

Why C is correct

Under G.S. 58-58-22(5), a lapsed individual life policy may be reinstated on application within 5 years after the date of premium default, unless the policy was surrendered or the cash value exhausted. Reinstatement requires a written application, evidence of insurability satisfactory to the insurer, payment of all overdue premiums, and repayment of any policy debt with interest.

Why the other options are wrong

• A) Three years is a commercial-textbook figure; the North Carolina statute gives 5 years.
• B) Two years is the incontestability and suicide window under G.S. 58-58-22(2) and G.S. 58-58-22(4), not the reinstatement window.
• D) One year is not the reinstatement window under G.S. 58-58-22(5).

Memory hook

Five years to bring a lapsed life policy back to life.

Why D is correct

Under G.S. 58-58-22(5), a lapsed North Carolina life policy may be reinstated on application within five years after the premium default, unless the policy was surrendered or its cash value exhausted. Reinstatement requires a written application, evidence of insurability satisfactory to the insurer, payment of all overdue premiums, and repayment of any policy debt with interest. The five-year statutory window — not the shorter figure found in some commercial textbooks — controls on the North Carolina examination.

Why the other options are wrong

• A) Three years is not the North Carolina statutory window, and payment alone is insufficient.
• B) The five-year window is right, but payment alone is insufficient; a written application, evidence of insurability, and repayment of policy debt with interest are also required.
• C) Three years is not the North Carolina statutory window, even though the list of requirements is correct.

Memory hook

Five years, full paperwork — NC reinstatement is generous but demanding.

Why A is correct

Under G.S. 58-58-22(5), an application for reinstatement may be made within 5 years after the date of premium default, unless the policy has been surrendered or its cash value exhausted. Reinstatement requires a written application, evidence of insurability satisfactory to the insurer, payment of all overdue premiums, and repayment of any policy debt with interest.

Why the other options are wrong

• B) A three-year window is a commercial-textbook figure, not the North Carolina statutory period.
• C) Two years is the incontestability and suicide-limitation period, not the reinstatement window.
• D) One year is far shorter than the statutory window and would improperly cut off reinstatement rights.

Memory hook

NC lets lapsed life policies come back for five full years.

Why A is correct

Under G.S. 58-58-22(5), a lapsed life policy may be reinstated upon application within 5 years after the date of premium default, unless the policy was surrendered or its cash value exhausted. Reinstatement requires a written application, evidence of insurability satisfactory to the insurer, payment of all overdue premiums, and repayment of any policy debt with interest.

Why the other options are wrong

• B is wrong because 2 years is the incontestability and suicide-limit window under G.S. 58-58-22(2) and (4), not the reinstatement window.
• C is wrong because the 3-year figure comes from commercial textbooks and other jurisdictions; the North Carolina statute gives 5 years.
• D is wrong because no 7-year reinstatement window exists in the North Carolina standard provision.

Memory hook

NC life reinstatement: 5 years to come back, insurability and back premiums required.

Why A is correct

Under G.S. 58-58-22(5), the uniform reinstatement provision, the insured may apply to reinstate a lapsed policy within five years after the date of premium default, unless the policy was surrendered or the cash value was exhausted. Reinstatement requires a written application, evidence of insurability satisfactory to the insurer, payment of all overdue premiums, and repayment of any policy debt with interest. Because the lapse is only three years old, the five-year window is still open.

Why the other options are wrong

• B) The statutory window is five years after the default, not one year; a lapse of three years leaves the reinstatement right intact.
• C) The statute requires repayment of all overdue premiums AND any policy debt with interest, so a no-interest, no-debt formulation misstates the reinstatement conditions.
• D) Reinstatement is not automatic or unconditional; the insured must submit evidence of insurability and pay the overdue amounts within the five-year window.

Memory hook

Five years to revive a lapsed NC life policy - with proof of insurability and back pay.

Why A is correct

Under G.S. 58-58-22(5), the owner of a lapsed life policy may apply for reinstatement within 5 years after the date of premium default, unless the policy was surrendered or its cash value has been exhausted. Reinstatement requires a written application, evidence of insurability satisfactory to the insurer, payment of all overdue premiums, and repayment of any policy debt with interest. The 3-year figure is a commercial-textbook value that North Carolina's statute does not use.

Why the other options are wrong

• B) 3 years is a textbook figure found in some study materials; the North Carolina statute says 5 years.
• C) 2 years is the incontestability and suicide-limitation period under G.S. 58-58-22(2) and (4), not the reinstatement window.
• D) 1 year is not a North Carolina reinstatement figure; the statutory window runs 5 years from the default.

Memory hook

Life lapse? You have 5 years to apply your way back in.