Policy
Overview
When a claim is disputed, nobody argues over what was said across the counter. Everyone turns to one document: the policy. It is the black and white record of the bargain, and knowing how to read it is the difference between a candidate who guesses and one who can point to the exact clause that settles the matter.
This lesson opens the policy up and shows you what each part is for. You will learn why lawyers call the policy evidence of the contract rather than the contract itself, you will meet its seven parts in the order they appear, from the heading down to the signature, and you will learn who the parties to a policy are and what each of them stands to gain or lose.
Objectives
- Define an insurance policy and explain its status as evidence of the contract
- Identify the component parts of a policy: heading, recital, operative clause, exceptions, conditions and schedule
- State the purpose of each component part
- Identify the parties to a policy and explain the interest of each
Lesson Note
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Lesson Evaluation
Congratulations on completing the lesson on Policy. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- The part of an insurance policy that states the actual cover granted by the insurer is the: A. Heading B. Operative clause C. Schedule D. Attestation Answer: B
- Which part of a policy carries the sum insured, the premium and the period of cover for a particular customer? A. Recital B. Exceptions C. Schedule D. Conditions Answer: C
- An insurance policy is best described as: A. The contract itself B. Evidence of the contract C. An offer to contract D. A proposal for insurance Answer: B
- Which of the following is NOT a component part of an insurance policy? A. Recital B. Operative clause C. Proposal form D. Schedule Answer: C
- The two principal parties to an insurance policy are the: A. Insurer and the broker B. Insurer and the insured C. Insured and the beneficiary D. Broker and the third party Answer: B
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Recommended Books
Past Questions
Wondering what past questions for this topic looks like? Here are a number of questions about Policy from previous years
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