Question

1. 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.

1. On December 21, 2012, Jack committed suicide.  Will HRD Life pay the claim when the beneficiary files it?  Why or why not?  
2. Jack was murdered by a stranger on December 1, 2012.  The insurer discovers that Jack gave false information about his health on his application.
   1. What is required for false information to render an insurance contract voidable?
   2. Will Jack’s contract be voidable?  Explain why or why not, referencing any relevant policy provisions.
3. 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:
   1. Would the insurer pay the death benefit?  Explain why or why not?  
   2. 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.”
4. 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.  
5. 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