2. Which of the following clauses of an insurance contract states that a specified amount of money will be paid to a designated person on the death of an insured?
Answer: C
The Insuring Agreement states that a specified amount of money will be paid to a designated person on the death of an insured.
The Insuring Agreement is a crucial component of an insurance contract that outlines the insurer's promise to pay a specified sum to the beneficiary upon the insured's death. This clause is essential as it delineates the scope of coverage and the conditions under which the payout will occur.
A) Consideration
Consideration refers to something of value that is exchanged between the parties in a contract, such as the premium payment in exchange for insurance coverage. While important for the validity of the contract, it does not specify the payment terms related to the insured's death.
B) Incontestable
The Incontestable clause protects the policyholder by preventing the insurer from voiding the policy after a certain period, typically due to misrepresentation. This clause does not address the payout amount or the designated beneficiary upon the insured's death.
C) Insuring Agreement
The Insuring Agreement explicitly states the insurer's commitment to pay a designated amount to a specified person upon the death of the insured. This clause is fundamental to the purpose of life insurance, making it the correct answer.
D) Entire Contract
The Entire Contract clause ensures that the insurance policy, along with any attached endorsements or riders, constitutes the complete agreement between the insurer and the policyholder. It does not specify payout details related to the insured's death.
Conclusion
The Insuring Agreement is definitively the correct answer as it directly relates to the payment obligations of the insurer upon the insured's death. The other options focus on different aspects of the insurance contract and do not specify the payment terms, making them incorrect in this context.