Question

On January 1, 2009, Jack Zheng bought a $1 million whole life insurance contract on his life from HRD Life Insurance Co. Answer each of the following questions pertaining to that contract. Note that the dates are highly important. Be sure to name any policy provision that is relevant to your answer.

A. On December 21, 2012, Jack committed suicide. Will HRD Life pay the claim when the beneficiary files it? Why or why not?

B. Jack was murdered by a stranger on December 1, 2012. The insurer discovers that Jack gave false information about his health on his application.

i. What is required for false information to render an insurance contract voidable?

ii. Will Jack’s contract be voidable? Explain why or why not, referencing any relevant policy provisions.

C. When Jack bought his policy he told the agent he was age 22. In fact, he was age 28. If he died in a boat accident on June 3, 2011:

i. Would the insurer pay the death benefit? Explain why or why not?

ii. If the insurer would pay, name and describe the provision that would govern the payment; explain whether the payment would have been the “face value of the policy,” “more than the face value,” or “less than the face value.”

D. On June 1, 2015, Jack left for a cruise to Patagonia. When he returned on August 31, 2015, he found a premium notice stating that the premium on his policy was due on July 1, 2015. Even though the grace period has passed, if Jack has elected to add a certain option to his policy the policy would remain in force until he returned from the cruise. Name and describe that option.

E. When Jack submitted his application, he also tendered a check for the first premium and received an insurability premium receipt. If Jack was hit by a truck and killed the next day, explain whether and under what circumstances the company would pay his beneficiary. Give your legal reasoning as to why or why not.

Answer 1

ANSWER A

Yes, hrd life insurance will pay the claim to the beneficiary.

Most life insurance plans offer unsafe death cowl once an amount of 1 year. However, if the client commits suicide before an amount of 1 year then his/her family (whosoever is that the nominee) might not be able to avail the good thing about obtaining the total add assured. Rather, the insurance firm may offer the family (whosoever is that the nominee) the profit equals to a particular share of the premium paid throughout the policy term by the client.

Usual exclusions of suicide in a very life assurance policy
Let us take LIC's jack life assurance policy as Associate in Nursing example. As per the policy wording

1. If the life assured (whether sane or insane) commits suicide at any time at intervals twelve months from the date of commencement of risk, the beneathwriter|underwriter|nondepository financial institution} won't pay any claim under the policy apart from eighty % of the premiums paid excluding further premium if any, provided the policy is operative.

This clause won't be applicable just in case the age at entry of the life assured is below eight years, consistent with the conditions mentioned within the Jack LIC policy.

2. If the customer (whether sane or insane) commits suicide at intervals twelve months/1 years from date of revival, Associate in a Nursing quantity that is higher of 80% of the premiums paid until the date of death (excluding further premium, if any,) or the surrender worth shall be collectible.

The beneathwriter|underwriter|nondepository financial institution} won't entertain the other claim under this policy. This clause won't be applicable:
a) just in case the age of the customer is below eight years at the time of revival, and
b) For a policy that has nonchurchgoing while not feat paid the worth. Nothing is going to be collectible beneath such policies.

Answer B

I. conditions to made jack's a contract voidable claim settlement are

• Health History: If somebody within the applicant's family is suffering (or has suffered) from vital ailments like cancer or heart issues, then someone also will be thought-about as a risky someone. to boot, if they need to be undergone some serious surgeries within the past or if they frequently fall sick, their application could be rejected by underwriters on the bottom of upper-risk involvement.

• Smoking Habits: If someone may be a smoker, the premium rates for her or him will increase by 100%.

• Nature of Job: just in case the applicant's job needs him/her to often be in very venturous surroundings or scenario, like fire-fighting, mining, etc., underwriters can regard his/her case as risky and therefore s/he is also granted the life coverage policy at a high premium rate, or within the worst-case state of affairs, s/he could be denied the insurance.

Therefore any of these factors may cause voidable claims settlement

ii. Yes, jack's contract is voidable.as per the whole life insurance policy provisions act and regulations.