A condition is a
stipulation essential to the main
purpose of an insurance contract a breach of such condition gives
rise o a right to the insurer to
repudiate the contract. The conditions
limit the scope of insurance .
Certain conditions are only of
informative nature to the assured. Generally
the conditions are printed on the back of the policy bond. The conditions attached with Life
insurance policies are as
follows:
(1) COMMENCEMENT OF RISK: The
risk under a policy ordinarily commences on the date of receipt of the first
premium in full or from the date of the company’s acceptance letter whichever is later and the second instalments of the
premiums falls due on a date calculated from the above date of commencement of risks, if the acceptance letter is a conditional one, the risk will
commences on the fulfilment of that
condition.
(2) PROOF OF AGE: Age is
the very basis which governs risk level and its pricing in life insurance . Thus age is important for
determining the risk involved and the
premium amount. The life insurer will
insist on proof of age at the tome of
submitting the proposal. The following
are considered standard age
proofs. (a) Certified extract from Municipal or other records made at time of birth.
(e) Passport: In case the age of
the life assured at entry is found to be
lower than the age given the proposal from the premium shall be payable at the
correct age and the excess of premium already collected with will be refunded. If it is higher than the age given in the proposal the differences between the premium for the correct age and the original premiums already paid
will collected with interest.
(3) PAYMENT OF PREMIUM: The premium rate is
a calculated annually, but for the
convenience of the assured, it can be paid half-yearly, quarterly
or even monthly. It should be
noted that these premiums are not just
the portion of yearly premium since the
insurer losses interest on the unpaid premium
of a year and expenses are
involved for frequent calculations of premium. When premiums are not annual but fractional and if death takes
places before all the premiums have
fallen due for the current policy year, the insurer deducts the
unpaid instalments from the
assured sum at the time of settling the
claim.
(4): DAYS OF GRACE: To show consideration
for the unintentional delay in payment of premium on the due date a grace time is allowed for paying
the premium on the which is 30
days for yearly, half-yearly and quarterly
premiums and 15 days for monthly
premium. The days of grace means that if premiums is paid during the
period of grace, no interest or fine is charged, it being presumed
that premium has been paid when due. The rule for computation has been that the day upon which the premium
becomes due and payable is not to be
counted and the following day is the first day of grace.