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Life Insurance Policy Features And Clauses

Life Insurance Policy Features And Clauses

Policy Features And Clauses

There are some features and clauses that are included in the life insurance policy as a basic necessity. These topics will be discussed in detail and are given below:-

Some of the policy features are given below:-

1: policy effective date:-

This is the date at which:

1: at the policy start then full protection takes place.
2: the incontestability clause’s period also begins.
3: the clause of suicide also begins.

2: backdating policies:-

1: Backdating is the rule in which the policy effective date can be also set into past.
2: The maximum time for backdating life insurance is only six months.
3: the advantage of this term is that it can reduce the age limits for the restricted age people.
4: by aligning with the policy Owners income dates and pattern can be made payments convenient.

Ownership clause:-

The policy owner possesses all contractual rights even when the insured person is still alive.
It includes the following rights:-

1: assigning the ownership of the policy to someone’s else.
2: also changing of the benefciary name and designation.
3: selection of dividend options.
4: taking a policy loan out.

Entire contact clause:-

By this the life insurance documents and other documents such as application form and other such things constitute the complete contract between the insurer and policy owner.

Incontestability clause:-

Under the incontestability clause, usually two years are given to the company to find out any cause our reason for contesting this policy. After this period the insurer cannot contest the policy.

Suicide clause:-

According to this clause the face amount is not payed by the company in the condition that insurer commits suicide within specific period of time and this time is usually two years. The payment done in this case is only the refund of premiums.

Reinstatement clause:-

In case during the grace period if premium is not payed,  a life insurance policy may lapse for the non payment of the premiums. By this policy the policy owner has right to reinstatement of a lapsed policy under specific conditions. These conditions are given below:-

1: the insured person should give the evidence of insurability,  this is a condition by which the insurer often waive for the lapse of two months or less.

2: All the premiums and interest overdue  must be paid.

3: the lapsed policy should also be reinstated within a specific period of time and this time is usually the to seven years.

4: a policy loan should be repaid or reinstated to the company.

There is a large advantage of reinstating the insurance policy because if the period of the life insurance has come to end then the policy owner reinstates the old policy then to buy a new one.

Misstatement clause:-

There could be a mistake of age entering during the form filling. According to this clause the amount paid to the insurer is the amount of premium that would have purchased at his correct age.

Beneficiary designations:-

A person or party named in the policy that can recieve the policy proceeds after the death of insurer. There are several beneficiary designations included in the life insurance policy. These are given below on details:-

1: The primary beneficiary:-

It is very first person who recieves the policy proceeds after the insurer’s death.

2: The contingent beneficiary:

It is the second beneficiary who recieves the policy proceeds in case when the primary beneficiary is not alive. It is also called secondary beneficiary.

3: The revocable beneficiary:-

The policy owner has right to change the beneficiary without the consent of first one. But the revocable beneficiary is the one without whose consent policy owner cannot change beneficiary.

4: The specific beneficiary:-

The special beneficiary whose name and identification is specially written to recieve the policy proceeds is called the specific beneficiary.

5: The class beneficiary:-

This is a specific person who is specially to recieve the policy proceeds and is member of a specific group. The simple example of it is the children of insured person.

There are several other clauses and policy features to maintain the discipline and management of the policy. The agent guides the policy owner in every matter and he can also take guidance from internet. There are several other resources from which the policy owner can take guidance and also the other beneficiary designations. In this way the policy owner can manage the life insurance policy in a better way.


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