Florida Life and Health Insurance License Practice Test

What is the insuring clause in a Life insurance contract?

1. The clause determining the premium

2. The exclusions of the policy

3. The insurance company's promise to pay stated benefits

4. The beneficiary's rights

The correct answer is: The insurance company's promise to pay stated benefits

The insuring clause in a life insurance contract is a crucial part of the agreement between the policyholder and insurance company. It is also known as the "promise to pay" clause, as it outlines the insurance company's obligation to provide the stated benefits to the designated beneficiaries in the event of the policyholder's death. This clause confirms that the insurance company will honor their financial commitment to the policyholder, making it the most important clause in a life insurance policy. Option A (the clause determining the premium) is incorrect because while the premium is an essential aspect of a life insurance policy, it is not the insuring clause. The insuring clause pertains to the benefits and obligations of the insurance company, while the premium is the cost of the policy for the policyholder. Option B (the exclusions of the policy) is incorrect because the exclusions of a life insurance policy refer to the