What does "inforce" refer to regarding insurance policies?

The term "inforce" refers to an active insurance policy for which the premiums have been paid and that is in effect. This means that the policyholder benefits from the coverage provided under the terms of the contract. A policy being inforce indicates that the coverage is currently valid, and the insurance company is obligated to fulfill claims as stipulated, assuming all conditions are met.

Other choices do not accurately describe policies that are inforce. For instance, a pending approval status does not equate to an active policy; it signifies that the policy has not yet been finalized. A policy that is inactive and canceled would be considered lapsed and would not provide any coverage. Similarly, while a policy that has exceeded its contestability period indicates it is no longer subject to certain disputes, it does not inherently mean that the policy is active or inforce without evidence of paid premiums.

Thus, an active policy with premiums paid accurately captures the essence of what it means for an insurance policy to be considered inforce.