What is the function of the payment-of-claims provision, cited by the Pennsylvania Insurance Department's outline at 40 P.S. § 510(l), in a life insurance policy?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The payment-of-claims provision, cited at 40 P.S. § 510(l) in the Insurance Company Law's standard provisions, supplies the mechanics of settlement: it identifies who is entitled to receive the proceeds and in what form payment is made, including the insurer's ability to pay in the manner the policy provides when the designated payee cannot take the funds directly. Every other provision governs whether and how much is owed; this one governs delivery of the money. The Pennsylvania Insurance Department's outline lists it among the standard provisions every Pennsylvania life policy must carry.
Why the other options are wrong
- B) Premium timing belongs to the payment-of-premiums and grace-period provisions of 40 P.S. § 510(a) and 40 P.S. § 510(b), not the payment-of-claims provision.
- C) Assignment is governed by the ownership and assignment rules, and nothing in the payment-of-claims provision bars assignment.
- D) Contestability is the subject of 40 P.S. § 510(c); the payment-of-claims provision addresses settlement mechanics after liability is fixed.
Memory hook
Payment of claims: who gets the check and how — not whether the check is owed.