THE 13 MANDATORY POLICY PROVISIONS

Question 1

The Entire Contract Provision

Answer 1

provision states that the contract is made up of the policy,
application (if attached), endorsements, and riders.

Question 2

Time Limit on Certain Defenses (a.k.a. Incontestability Period)

Answer 2

states that after a
policy has been in force for two years, the insurer cannot contest or void the claim, nor can it
cancel the policy other than for non-payment of premium.

Question 3

Grace Period

Answer 3

weekly payments: 7 day grace, Monthly payments: 10 days grace. more than monthly payments(quarterly etc), 31 days

Question 4

Reinstatement

Answer 4

allows a lapsed policy to be put back in force. However, an application
for reinstatement might be required. The insurer must respond within 45 days of the
reinstatement application or the policy is automatically reinstated

Question 5

. Notice of Claim

Answer 5

A written notice of claim must be given to the insurer within 20 days
after the date of loss, if reasonably possible. Notifying the producer is acceptable. In the
event of legal incapacity, this provision will be waived.

Question 6

Claim Forms

Answer 6

e used by the insured to file a proof of loss. The insurer should send the
claim form within 15 days after notice of claim. If the forms are not furnished, the insured
may submit a written statement of the occurrence and the loss to the insurance company to
satisfy the proof of loss.

Question 7

. Proof of Loss

Answer 7

tates that the insured or claimant has 90 days from the date of the loss
to file a proof of loss with the insurer. This could be extended for up to one year or waived
entirely in the event of legal incapacity.

Question 8

Time of Payment of Claims

Answer 8

nsurer must pay claims immediately
after receipt of proof of loss, except for claims involving periodic payments such as disability
income policies. Disability income (loss-of-time) benefits must be paid at least monthly.

Question 9

Payment of Claims

Answer 9

s will be made to the owner, beneficiary, or to the insured’s estate if
there is no beneficiary. Indemnity for loss of life will be paid to the designated beneficiary.
Indemnities for hospital, nursing, medical, or surgical services may be paid directly to the
health care provider.

Question 10

Physical Exam/Autopsy

Answer 10

states that the insurer may require a physical exam of the
insured at reasonable intervals (usually every six months) should the insured be receiving
benefits. In the event of the death of the insured, an autopsy may be sought at the
insurance company’s expense, unless prohibited by law.

Question 11

Legal Actions

Answer 11

This provision requires that no legal
action be started to collect benefits sooner than 60 days after the proof of loss is filed with
the insurer. This waiting period allows the insurer time to evaluate the claim. The statute of
limitations is three years.

Question 12

Change of Beneficiary

Answer 12

For
the change to be effective, it must be in writing by the owner and approved by the insurer in
the form of an endorsement.
A beneficiary is the person to whom the benefits of a policy are payable:
 Primary/Contingent = First/Second in line to receive the death benefits. The contingent
beneficiary only gets the death benefit if the primary beneficiary dies before the insured
dies. If there is no beneficiary, the death benefit will go to the insured’s estate.

Question 13

Misstatement of Age/Gender (Sex)

Answer 13

benefits will be adjusted so
the insurer pays for the benefit the premium would have purchased had the correct age or
sex been known. Time limit on certain defenses does not apply to this provision.