The correct answer is: D. Premium under a new policy would be more based on his latest age.
When you revive a lapsed policy, you are essentially restarting the policy from the beginning. This means that your premium will be based on your current age, rather than your age when you originally took out the policy. This can be a significant savings, especially if you have aged since you took out the policy.
In addition, reviving a lapsed policy can help you to maintain your coverage. If you let a policy lapse, you may not be able to get the same coverage if you try to take out a new policy later. This is because insurers may consider you to be a higher risk if you have a lapse in coverage.
Finally, reviving a lapsed policy can help you to build up cash value. If you keep a policy in force for a long period of time, you will build up cash value that you can use for a variety of purposes, such as retirement or college savings.
Here is a brief explanation of each option:
- A. Fresh conditions may be imposed under a new policy. This is true, but it is not the most important reason to revive a lapsed policy. The premium under a new policy will be higher than the premium for a revived policy, even if the new policy has the same conditions.
- B. Policyholder may not get the same policy benefits. This is also true, but it is not the most important reason to revive a lapsed policy. The premium under a new policy will be higher than the premium for a revived policy, even if the new policy has the same benefits.
- C. That policy may longer be available for sale. This is true, but it is not the most important reason to revive a lapsed policy. If the policy is no longer available for sale, you may be able to find a similar policy from another insurer. However, the premium for the new policy will be higher than the premium for the revived policy.
- D. Premium under a new policy would be more based on his latest age. This is the most important reason to revive a lapsed policy. The premium under a new policy will be based on your current age, rather than your age when you originally took out the policy. This can be a significant savings, especially if you have aged since you took out the policy.