Standard Provisions

Question 1

The Policy Loan Provision

Answer 1

allows the insured to borrow against the cash value in a whole life policy

Question 2

The Incontestability Clause

Answer 2

states that after specified period the insurer can no longer void an insurance contract except for nonpayment

Question 3

The Insuring Clause

Answer 3

includes the companys promise to pay

Question 4

length of typical grace period

Answer 4

31 days

Question 5

usually conditions of policy reinstatement

Answer 5

policyowner must pay all back premiums plus interest, insured must prove insurability, less than 3 yrs must have elapsed

Question 6

time frame for incontestability clause

Answer 6

in effect after 2 years

Question 7

per capita distribution

Answer 7

named individuals only. not a deceased estate

Question 8

per stirpes distribution

Answer 8

simply split among group, includes deceased estate

Question 9

Facility of Payment provision

Answer 9

insurer may select beneficiary if named beneficiaries cannot be found

Question 10

consideration for an insurance policy includes

Answer 10

the statements made in the application and the premium

Question 11

common time period for free look

Answer 11

10 days

Question 12

policy withdrawal available on which policies

Answer 12

universal life and variable universal life only

Question 13

automatic premium loans provision

Answer 13

“cash value” is required, not available on term insurance. uses “cash value” instead of a payment for premium if owed.