Policy Provisions Flashcards
What is the Entire Contract provision in life insurance?
The Entire Contract provision stipulates that the insurance policy, application copy, riders, and amendments together form the complete contract. Changes require mutual agreement and an amendment to the contract.
What does the Insuring Clause in a life insurance policy specify?
The Insuring Clause outlines the insurer’s promise to pay the death benefit upon the insured’s death, detailing the agreement terms, coverage duration, and loss type insured against.
What is the Free Look provision in life insurance?
The Free Look provision gives the policyowner a set number of days to review the policy and return it for a full refund if dissatisfied, starting from the receipt date of the policy.
What does the Consideration provision in a life insurance policy entail?
The Consideration provision indicates the value each party provides: the insured offers the premium and application statements, while the insurer promises to pay according to the contract’s terms.
What are the Owner’s Rights in a life insurance policy?
The policyowner, who may or may not be the insured, has rights including naming and changing beneficiaries, selecting benefit options, receiving living benefits, and assigning the policy.
What are Assignments in the context of life insurance?
Assignments allow the policyowner to transfer partial or full ownership rights of the policy to another party, requiring written notification to the insurer to be recognized.
How are Premium Payment Modes structured in life insurance?
Premium Payment Modes determine the payment frequency of premiums (monthly, quarterly, semiannually, or annually), with non-annual modes possibly incurring additional charges.
What is the Grace Period in life insurance policies?
The Grace Period allows additional time (usually 30 or 31 days) to pay the premium past the due date without policy lapse, with death benefits payable minus unpaid premium if the insured dies within this period.
What does the Reinstatement provision in life insurance policies allow?
Reinstatement permits a lapsed policy to be restored, usually within three years, if the policyowner can prove insurability and pay back premiums, interest, and any outstanding loans.
What is the Incontestability clause in life insurance?
The Incontestability clause prevents the insurer from denying a claim due to application misstatements after the policy has been in force for two years, except for fraud or premium nonpayment.
How does Misstatement of Age and Gender affect life insurance policies?
This provision allows the insurer to adjust the death benefit or premiums if the insured’s age or gender was misstated, to reflect what the premiums would have purchased at the correct age or gender.
How are Beneficiary Designations managed in life insurance?
Beneficiary designations specify who receives the policy proceeds after the insured’s death, with options for primary, contingent, revocable, and irrevocable beneficiaries.
What are Policy Loans and Withdrawals in life insurance?
Policy Loans allow borrowing against the policy’s cash value, reducing the death benefit by the loan amount if not repaid; withdrawals are direct reductions from the cash value.
What are common Exclusions in life insurance policies?
Exclusions are conditions or activities not covered by the policy, such as death from hazardous activities, aviation, military service, or acts of war.
How is Suicide addressed in life insurance policies?
Suicide clauses deny full death benefits if the insured commits suicide within a specified period (typically two years) after the policy inception, offering only premium refunds during this period.
