Primerica Life Producer Practice Test

What provision of a life insurance policy specifies the insurer's responsibility to pay benefits upon the insured's death?

1. Beneficiary clause

2. Insuring clause

3. Payout clause

4. Coverage clause

The correct answer is: Insuring clause

The insuring clause is a critical provision in a life insurance policy that explicitly outlines the insurer's commitment to pay a specified benefit upon the death of the insured. This clause serves as the foundational element of the insurance contract, providing assurance to the policyholder that, upon the occurrence of the insured event (which is typically the death of the insured), the insurer is obligated to fulfill its promise of benefit payment to the designated beneficiary. The insuring clause typically includes essential details such as the amount of the death benefit, the circumstances under which it will be paid, and any conditions that might affect the payout, such as exclusions or limitations. By clearly defining the insurer's responsibilities, the insuring clause helps to establish the contractual obligations that govern the policy, ensuring both parties understand their rights and duties under the agreement. Understanding this clause is fundamental for anyone involved in life insurance, as it not only influences the policyholder's decisions but also provides crucial information to beneficiaries about what to expect in the event of a claim.