Questions and Answers
Who is protected under the In-Contestability Clause included under a Life Assurance Policy?
What does the beneficiary receive if the life-insured dies as a result of suicide after three years of the policy issue?
What does the First Premium Receipt (F.P.R.) signify in a life assurance policy?
How will a policy document with complex language leading to ambiguity generally be construed?
Signup and view all the answers
In the case of mis-statement of age, which statement is valid?
Signup and view all the answers
Study Notes
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.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on key aspects of life insurance policies, including the In-Contestability Clause, Suicide Clause, and the significance of the First Premium Receipt. This quiz covers essential terms and conditions that affect insurance claims and the rights of the insured.
