Policy Provisions and Options

Question 1

Insuring Clause

Answer 1

Found on schedule of benefits page
Company’s promise to pay policy’s face ammount

Question 1

Entire Contract

Answer 1

Policy and completed (signed) application make up entire contract

Question 2

Owner’s rights

Answer 2

Provision establishes the rights of the policyowner and the conditions under which those rights can be exercised

Question 3

Consideration

Answer 3

states that the applicant’s consideration (one of the three basic elements of a legal contract) consists of both the signed application and payment of the first premium.

Question 4

Free Look

(aka Right to Examine)

Answer 4

Provision granting policy owners time to review the policy and decide on weather to keep it (usually 10 days)

Question 5

Modes of payment

Answer 5

• Monthly
• Quarterly
• Semiannually
• Annually

Question 6

Grace period

Answer 6

Regular grace period

Question 7

Reinstatment

Answer 7

Provision that allows owner to reinstate policy if done within a specified amount of time

Question 8

Incontestability

Answer 8

after a policy has been in force for a certain period (usually two years) the insurer cannot contest a claim for any reason except for nonpayment of premiums

Question 9

Misstatement of age or gender

Answer 9

Not material misrepresentation
Insurer has the right to adjust the poilcy’s benefits to reflect true facts