CARD T118
Entire Contract Provision
A provision identifying the documents that make up the insurance agreement. It helps establish which statements and attachments are part of the contract.
How it works
The entire contract normally consists of the policy, attached application, and attached riders or endorsements. An insurer cannot treat an unattached application statement as part of the contract when the applicable entire-contract rule requires attachment. A producer’s oral promise does not rewrite the policy. [4]
An applicant receives a policy with an attached application and disability rider. Those documents are read together to determine the agreement.
Entire contract identifies the agreement’s documents; the insuring clause states the basic coverage promise.
CARD T119
Insuring Clause
The portion stating the insurer’s basic coverage promise. It identifies the benefit obligation, subject to policy terms.
How it works
The insuring clause states the insurer’s core promise: pay the stated benefit when the insured event occurs, subject to the policy’s terms. Read it with exclusions, conditions, beneficiaries, and any benefit adjustments. It is not a promise to pay every claim regardless of circumstances. [19]
A life policy promises to pay its death benefit upon the insured’s death while coverage is in force, subject to its provisions.
The coverage promise does not erase exclusions or the requirement that coverage remain in force.
CARD T120
Incontestability Provision
Generally prevents an insurer from voiding a life policy or denying a claim because of application misstatements after the policy has been in force during the insured’s lifetime for a stated period, usually two years. Nonpayment of premiums and policy exclusions still matter. Fraud exceptions vary by state.
How it works
A life policy commonly becomes incontestable after it has been in force during the insured’s lifetime for two years. This limits challenges based on application statements after that period. It does not excuse unpaid premiums or remove valid coverage exclusions. Fraud exceptions and treatment of newly added coverage depend on the state and contract; do not assume one national exception rule. [3] [4] [5]
With a two-year clause, an insurer discovers an ordinary application misstatement after the insured has lived through the two-year period. The clause generally bars using that misstatement to undo coverage. A policy that lapsed for nonpayment raises a different issue.
Two years is a common exam rule, not a promise that every claim must then be paid. Age adjustments can still apply under their separate provision.
CARD T121
Suicide Clause
Usually limits payment to a refund of premiums, subject to policy adjustments, if the insured dies by suicide during an initial exclusion period, commonly two years. After that period, suicide alone does not bar the death benefit. The applicable period and refund calculation depend on the policy and state law.
How it works
A suicide clause commonly limits the benefit for suicide during the first two years, usually providing a return of premiums subject to permitted adjustments instead of the full death benefit. State rules and policy wording determine the exact period and refund. After that exclusion period, suicide alone generally does not prevent payment under the policy. [3]
A contract explicitly excludes suicide during its first two years and provides a premium refund. A suicide death in month eight is handled under that clause rather than as an ordinary full-benefit claim.
The suicide exclusion and contestability period may both be two years, but they address different issues: cause of death versus application statements.
CARD T122
Misstatement of Age or Sex Provision
A provision adjusting benefits or premiums when recorded age or sex is incorrect. Adjustment typically reflects what the correct information would have purchased.
How it works
If age or, where lawfully used, sex is misstated, the policy ordinarily adjusts the benefit to the amount the paid premium would have purchased using the correct information. This is different from automatically voiding coverage. An age-adjustment provision may operate even after the contestability period. Some contracts also specify premium or value adjustments. [3] [4]
For a simplified calculation, the paid annual premium is $1,000 and the correct rate is $5 per $1,000 of coverage. The premium purchases 200 units, so the adjusted benefit is $200,000.
Use the correct rate and premium in the question. A younger stated age commonly means the premium bought less coverage at the actual older age.
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Practice questions
Select an answer, then check it to see why each option is right or wrong.
T118 · Entire Contract Provision
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T119 · Insuring Clause
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T120 · Incontestability Provision
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T121 · Suicide Clause
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T122 · Misstatement of Age or Sex Provision
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Sources & further reading
Original explanations and practice scenarios informed by the following regulatory, legal, and product resources. State examples are not presented as nationwide deadlines or requirements.