Chapter 3 - Policy Provisions Flashcards Preview

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Flashcards in Chapter 3 - Policy Provisions Deck (12)
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1
Q

Entire contract clause

A

States that the policy, the application, and the riders all combined complete the contract.
Policy
Application
Rider
Also states that only the insurer can make changes

2
Q

Assignment

A

The transfer of ownership in a policy. The original policyowner loses the rights

3
Q

Two types of assignment

A

Absolute and collateral

4
Q

Absolute assignment

A

100% and permanent.

5
Q

Collateral assignment

A

A portion of the policy is assigned. Typically as a means of paying the balance. Partial and temporary assignment

6
Q

Ownership clause

A

Designates the owner of the policy when owner is someone other than the insured.

7
Q

Insuring clause

A

The purpose of the policy. Identifies parties in contract and amount of death benefit. It’s what the insurer cares about

8
Q

Consideration clause

A

Establishes amount of premium per payment for insurer’s promise to pay

9
Q

Incontestability clause

A

After two years, insurer cannot contest or void policy

10
Q

Suicide clause

A

If insured commits suicide within two years, insurer refunds premiums only

11
Q

Misstatement of age or gender

A

Allows for insurer to adjust the death benefit according to correct age or gender of insured

12
Q

Free look period

A

10 days from date of delivery to owner