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The Policy Contract

Place of Payment: It is frequently provided in the policy that both premiums and proceeds of the insurance are payable at the home office of the company. But there is also generally a provision that premiums are payable elsewhere to an authorized agent in exchange for a re ceipt signed by certain officers of the company, and coun tersigned by the agent. Proceeds of the insurance are usually actually paid by draft on the company, or on some depository of the company, which is delivered to the claimant at any convenient place.

Annual or More Frequent Premiums : The privilege is usually given to pay premiums annually, semi-annually or quarterly, and to change from one to the other form of payment upon request. In the United States, however, semi-annual or quarterly premiums are merely instal ments of the annual premium.

Prepayment of Premiums : Most policies contain no provision for prepayment of premiums, but companies 149 will permit such prepayment in one of two ways, viz.: by depositing the discounted sum required to prepay the same, the unused amount of the deposit with interest thereon being payable with the sum insured, if the life fails before the premiums, thus prepaid, are due; or by actually prepaying the premiums at their present values, treated as pure endowments, in which case nothing addi tional is allowed, in event of death on account of the pre payment.

Time of Payment of Premiums : Premiums are usually payable on definite days, but are practically always re ceivable before the due dates. Unless the policy provides otherwise, or a contrary custom amounting to a waiver can be clearly proved, a company will not be required to accept premiums when they are overdue.

Grace in Payment of Premiums : A grace of thirty days in some cases and of one month in others is often granted by the provisions of policies for the payment of all pre miums after the first or after the first year's premiums as the case may be. The insurance remains in force during the grace, subject usually to deduction of the forborne premium. Interest is charged on the overdue premium in most cases.

Time of Payment of Sum Insured : The value of a policy at the completion of an endowment or deferred dividend period is usually payable at once. Death claims are nearly always payable at once upon approval of proof of loss.

To Whom Payable: In event of the survival of an en dowment or deferred dividend period the cash proceeds of a policy are usually payable to the insured; in event of death, either to a designated beneficiary or benefi ciaries, or to the executors, administrators or assigns of the insured. If taken out by a designated beneficiary

upon the life of another, there must be an insurable inter I$0 est to support the insurance. Any insurable interest, though for a less amount than the sum insured, is in some States held to be sufficient to sustain it, payable to the beneficiary; in other States the excess is required to be paid to the personal representatives of the insured. If taken out by the insured, it is usually held that, since he had an insurable interest in his own life, he may name the beneficiary. Nowadays most policies grant the in sured the privilege of changing the beneficiary, which, being equivalent to a "general power of appointment," leaves the policy his property until his death. The courts have held that a policy which gives to the insured the power to realize upon it, or to dispose of it at a certain time, has a value as a part of his personal estate and is liable for his personal debts even though payable to a given beneficiary in event of death. The proceeds, in event of death, however, are not so liable, except that in several States the amount of insurance which may be carried in favor of a wife, the same being paid for by the husband, is limited directly or indirectly by limiting the amount of premiums thus payable.

Conditions of Payment: The payment at the comple tion of an endowment or deferred dividend period is usually conditioned only upon the premiums having been paid as stipulated. The payment of death claims, how ever, is usually subject to certain conditions, as, for in stance : That the statements in the application and to the medical examiner are true and the promises there made, if any, fulfilled; that the insured has not engaged in cer tain prohibited occupations or done certain specified acts; that he has not traveled or resided beyond certain limits; and that death has not been by suicide or the result of duelling, or of other violations of the law. These condi tions are usually removed after one, two or three years by an "incontestable" provision. Some companies impose 151 no condition from the outset. Such companies, of course, aim to make a very thorough investigation before issuing the policy.

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premiums, payable, usually, payment and insured