Insurance Policy Quiz

In-Contestability Clause

• Protects the Insured, preventing claim rejection after a set period.
• Under Section 45 of the Insurance Act, claims cannot be rejected if the policy has been in force for three years.

Suicide Clause

• If the life assured commits suicide after three years of policy issuance, the beneficiary receives the full amount of the policy.
• This clause establishes a waiting period to ensure the insured's intent is established.

First Premium Receipt (F.P.R.)

• Signifies the initial payment for the policy and indicates that the policy contract has begun.
• Acts as preliminary evidence of the transaction between the insurer and the insured.

Evidence of Contract

• The Policy Document serves as the formal contract between the insurer and the insured.
• This document outlines the terms and conditions of the insurance agreement.

Ambiguity in Policy Language

• If complex language creates ambiguity in a policy document, the construction will generally favor the Insured.
• This rule is to protect policyholders from unclear or misleading terms.

Mis-Statement of Age

• An under-statement of age typically leads to the original policy being re-issued for a reduced amount.
• An over-statement of age generally allows for a refund of premium payments.
• Only one of these scenarios will apply, depending on the specific mis-statement made.