Final answer:
A life insurance Lapse Notice is generally required to be mailed to the policy owner within 30 days before the effective date of lapse. This allows the policyholder sufficient time to take necessary actions to prevent the lapse of their life insurance policy.
Step-by-step explanation:
The requirement for a life insurance Lapse Notice is generally determined by regulation and can vary by jurisdiction. However, commonly, a Lapse Notice must include certain critical information to be valid. Specifically, the correct choice regarding the content of a Lapse Notice is B. Notice mailed to policyowner within 30 days before the effective date of lapse. The policyholder needs to be given ample time to take action to prevent the policy from lapsing, which is why sufficient notice is a regulatory requirement.
While mentioning the reason for the policy lapse, providing an automatic premium loan explanation, and other such details can be part of best practices, they are not universally mandated as part of a lapse notice. However, policyholders typically receive information about what they can do to prevent the lapse, such as paying the overdue premiums or using nonforfeiture options if they are available and applicable.