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Insurance Riders and Coverage Rules

An insurance rider is not a separate policy but rather a piece of paper attached to the main insurance policy. The rider must have its title written in the space provided in the policy and be countersigned by the insured, unless it was applied for by the rider. A cover note provides temporary valid insurance coverage for up to 60 days while an application is pending or premium payment is delayed. A binding receipt acknowledges receipt of payment but coverage is still subject to approval. An incontestability clause bars an insurer from cancelling a life policy after two years except for non-payment of renewals. Premium payment is essential to the insurance contract but there are exceptions like grace periods or credit agreements.

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Anthony Tamayosa Del Ayre
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152 views3 pages

Insurance Riders and Coverage Rules

An insurance rider is not a separate policy but rather a piece of paper attached to the main insurance policy. The rider must have its title written in the space provided in the policy and be countersigned by the insured, unless it was applied for by the rider. A cover note provides temporary valid insurance coverage for up to 60 days while an application is pending or premium payment is delayed. A binding receipt acknowledges receipt of payment but coverage is still subject to approval. An incontestability clause bars an insurer from cancelling a life policy after two years except for non-payment of renewals. Premium payment is essential to the insurance contract but there are exceptions like grace periods or credit agreements.

Uploaded by

Anthony Tamayosa Del Ayre
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

A rider is an integral part of the insurance

Not a separate insurance policy

Separate piece of paper

Attached into the policy

If it is a rider, the caption or the title of the rider should be written on the blank space provided in the
insurance policy.

Normally may blank space talaga sa insurance policy to accommodate ung mga rider.

The rider should be countersigned by the insured

Except if the rider is applied by the rider. Kapag ganyan kahit wala ng counter signature.

Not countersigned, insurer becomes liable

Cover note

- Valid insurance coverage


- Even without formal insurance policy approved by the head office of insurance company
- Happens when insurer accepts the application of the insured subject to examination by the
insurance company.
- Or if the insured asked for more time to pay the premium
- 60 days lang. may be extended subject to approval of insurance commission

Binding receipt

- Insurance company acknowledges the payment of premium


- With a colatilla that the application is still subject for evaluation by the head office
- Will not constitute a valid insurance overage

Contract of adhesion

- A perfect valid contract


- Drafted by the insurer
- The only thing is that if the provisions are clear then we don’t bother interpreting
Incontestability clause

- Gen rule, a life insurance policy once it becomes effective for a minimum period of 2 years, the
insurer is barred from rescinding or cancelling the insurance policy after that period.
- Exceptions
a. Non payment of renewal premiums

Premium

- Vital to a contract of insurance


- Significant because it is the valuable consideration in an insurance contract
- The thing that makes the insurer assume the risk
- It is where they get the payment

Is there a risk on the part of the insured?

- YES
- His risk is that the event that he is insuring does not happen

Cash and carry rule

- SEC 77
- No payment of the premium no insurance policy coverage
- It is not an absolute rule
- There are exceptions
a. When the grace period provision applies – 30 days after payment of first premium
b. Acknowledgement receipt that the insurer receive the premium – different from a binding
receipt.
c. When there is an agreement allowing the insured to pay on installment basis and partial
payment has already been paid by the insured.
d. If there is an agreement granted by the insurer giving a credit extension of 90 days. Ung iba
diyan 30, 60 days. Max ung 90 days
e. Estoppel – insurer will be deemed estopped to deny because they have been granting you
credit extension.

Can the insured be entitled to a return of the premium?

- General rule no.


- Insurance codes provided exception
a. When the insurer was never exposed to the risked insured against.

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