What does an "active policy" refer to in life insurance?

• A. A policy that is canceled and cannot be reinstated
• B. A policy currently enforced with all premiums paid
• C. A policy that will not pay out until a specific age
• D. A policy that only covers accidental death

Answer: (B)

An "active policy" in life insurance refers to a policy that is currently in force, meaning it is still valid and operational. This status is achieved when all required premiums have been paid, ensuring that the coverage remains intact and the policyholder is eligible for the benefits outlined in the policy terms.

When considering what constitutes an active status, it's essential to recognize that policies can become inactive due to non-payment of premiums, meaning they would not provide any benefits. Additionally, definitions such as those describing conditional payouts or specific limitations, like age restrictions or accidental death coverage, do not align with the fundamental requirement of active status, which is simply the continuation of benefits based on timely payments. Thus, the definition of an active policy is straightforward and directly tied to its enforcement and premium payment history.