Quick Flash Review
MR. WATSON: The insuring clause, where are you going to find it? First page, on the cover of the policy. What two signatures are at the end of every insuring clause?
ALL: President and secretary.
MR. WATSON: When does a 14-day free look begin?
MAN: Policy delivery.
MR. WATSON: Under the 14-day free-look period in Florida, the free-look period for insurance is 14 days from delivery.
MR. WATSON:Consideration clause. That's the frequency of premium payments. Specifies the amount and frequency of premiums.
MR. WATSON: Grace period. Four weeks for industrial policies. One month but not less than 30 days for ordinary policies.
MR. WATSON:Reinstatement:
- pay back premiums,
- pay all the interest,
- prove insurability, and
- pay back loans.
MR. WATSON: The period you can reinstate it can be three years with one company or up to seven with another. Be careful.
MR. WATSON: When you reinstate, a new contestable period goes into effect, but there is no new suicide clause.
MR. WATSON: Policy loan. If it's a fixed rate, what's the maximum? 10 percent. If fixed rate, maximum 10 percent. If adjustable, will be tied to Moody's Bond Index.
MR. WATSON: Incontestable clause. How many years?
ALL: Two.
MR. WATSON: Exceptions: First "I," impersonation. Next "I," no insurable interest. And next "I," intent to murder.
MR. WATSON: Assignment. Who must approve the assignment? Policy owner. The policy owner does not need the insurance company's permission.
MR. WATSON: Absolute assignment and collateral assignment. Which one am I not getting back?
ALL: Absolute.
MR. WATSON: Suicide, how many years? Two years. If you commit suicide within the first two years, the policy is voided and the premiums paid will be refunded.
MR. WATSON: If the age or sex was misstated?
MR. WATSON: Did we deny the claim? What did we do?
ALL: Adjusted the premiums, if living, or the benefits, if deceased.
MR. WATSON: Very good. So under misstatement of age or misstatement of sex, the company will adjust the benefits. You-all remember that.