Minnesota Life Insurance License Practice Exam

What is the primary function of an insuring clause in a life insurance policy?

1. To outline the payment structure

2. To define the policyholder’s rights

3. To specify payment of the death benefit

4. To detail exclusions from coverage

The correct answer is: To specify payment of the death benefit

The primary function of an insuring clause in a life insurance policy is to specify the payment of the death benefit. This clause is a fundamental part of the policy as it establishes the insurer's obligation to pay a specified amount upon the death of the insured, provided the policy is in force at that time. It clearly states the terms under which the death benefit will be paid, which is essential for both the policyholder and the beneficiaries. The clarity and definition provided by the insuring clause ensure that there is no ambiguity regarding what will occur upon the death of the insured, which is primarily what life insurance exists to address. Understanding this clause is crucial for policyholders as it directly relates to the financial security and benefits they intend to provide to their beneficiaries.