Chapter 12 - Optional Provisions Flashcards
Optional Provisions in a Life Policy
Designed to protect the company and given based on their decisions to do so. Double edge sword for the insured, make the policy cheaper but provides less coverage.
Suicide Clause: Voids coverage for 2 years but will refund the premiums without interest. If after 2 years, it pays the same as with any other death, even if there is proof of suicide.
Hazardous Occupation or Hobby Clause: a rated policy is issued based on discovery of hazardous occupation or hobby. If you take up a hazardous job or hobby is taken up after the policy is delivered, nothing would change.
Military Service Clause: also called War Clause. Excludes those in the military. Most policies don’t include these today. It will exclude death by war (all types of war) but will refund premiums paid.
Aviation Clause: mostly excludes student pilots/pilots/military pilots.
Foreign Travel or Residence Clause: older model that would include those traveling.
Arbitration: states that either party may request that any claim dispute be resolved by a mutually agreeable arbitrator rather than hiring lawyers for a court battle.
