Parts of an Insurance Policy Flashcards
What are the four main parts of an insurance policy?
RECITAL CLAUSE OPERATIVE CLAUSE SCHEDULE EXCLUSIONS & CONDITIONS SIGNATURE
Explain the concept of the “Recital Clause”.
The policy form will contain:
- Registered name
- Address of the insurance company
- Refer to the other party as the insured described in the schedule
What is the definition of “preamble”?
an introductory and expressionary statement in a document.
It explains the document’s purpose and underlying philosophy.
When applied to the opening paragraphs of a statute, it may recite historical facts pertinent to the subject of the statute.
Explain the concept of the “Operative Clause”.
The cover provided and specifies the event upon which the policy becomes operative to trigger a claim.
Explain the concept of the “Schedule”.
Contains the insured’s particulars and details of the risk and subject matter insured.
What is included in the schedule:
- Commencement date or period of insurance
- Date of proposal and declaration
- Description of the interest insured
- Sum insured
- Situation of risk
- DOB
- Amount of premium, service tax and stamp duty
Explain the concept of the “Exclusions”.
There are certain risks that are more appropriately covered by a separate policy. Exclusions are also excluded perils which may be extended on payment of additional premium by endorsement to the policy.
Explain the concept of the “Conditions”.
Policy terms and conditions exist so that parties to the contract understand their respective duties, rights, and obligations.
It restricts the scope of cover. There are special conditions that provide privileges.
Explain the concept of the “Attestation” (Signature)
It is a declaration by a witness that an instrument, in this case, an insurance policy, has been executed according to the formalities required by law. (Authorized person affirms that it is genuine)
