Legal Tips

Common Clauses in NTUC Income Life Policies

Document Date: 15 February 2011

Here are some Frequently Asked Questions on the topic "Common Clauses in NTUC Income Life Policies":

Please explain the following common clauses that are found in life insurance policies

• Free look provision
• Incontestability clause
• Suicide clause
• Grace period
• Non-payment of premium

Free Look Provision

Under this provision, the policyholder is allowed to write in and cancel the insurance policy within 14 days of receipt of the policy document. The premium paid will be refunded after deduction of any medical expense incurred.

For NTUC Income investment linked and annuity policies, there is no medical expenses incurred but NTUC Income will deduct administrative charges.

Incontestability clause

This clause prevents the insurer from contesting or disputing the validity of the policy except on grounds of fraud or non-payment of premiums. The clause applies to policies which have been in force for at least one year from the date of issue or date of reinstatement, whichever is later, of the policy.

Suicide clause

If the life assured dies as a result of suicide within one year from the date of issue or date of reinstatement, whichever is later, of the policy, the insurance policy is void. If the policy is assigned for valuable consideration and notice of the assignment has been received by us, we will pay the assignee the amount of such valuable consideration or sum assured, whichever is lower.

Grace Period

This clause allows the policyholder a grace period of 30 days after the premium due date for payment of premium. The policy continues to be in force during the grace period and no interest is charged for premiums received during the grace period and if a claim is made within that period, the settlement sum will be paid after deducting the premium due.

Non-Payment of Premium

If the premium is not paid within the grace period and

1. if the cash value of the policy exceeds the amount of unpaid premium, an automatic premium loan will be granted. The amount of the loan will be equivalent to the cash value and the policy will remain in force for as long as there is sufficient cash value to offset the premium.
   
   
2. if the policy has no cash value or the cash value is less than the amount of unpaid premium, the policy will lapse

[Ref: LG/VY/LPN/Feb2011]