Principles of Risk Management and Insurance, 13th Edition

Summary

• The ownership clause states that the policyholder possesses all contractual rights in the policy while the insured is living.

• The entire-contract clause states that the life insurance policy and attached application constitute the entire contract between the parties.

• The incontestable clause states that a life insurer cannot contest the policy after it has been in force 2 years during the insured’s lifetime.

• The suicide clause states that if the insured commits suicide within 2 years after the policy is issued, the face amount is not paid. There is only a refund of the premiums paid.

• The grace period allows the policyholder a period of 31 days to pay an overdue premium. Universal life and other flexible premium policies have longer grace ...