A policy is a particular useful cover for advances made to sole traders or professional men where otherwise on death difficulty might occur in respect of repayment....

      

A policy is a particular useful cover for advances made to sole traders or
professional men where otherwise on death difficulty might occur in respect of
repayment. Highlight Disadvantages of taking Life policy as a security

  

Answers


Ruth
a) Insurance contracts are uberrimac fidci (of the outmost good faith):
therefore non-disclosure by the assured enables the insurer to avoid the
contract.
b) The proposer must have an insurable interest the life assured, otherwise
the contract is void.
c). The policy may be avoided because of a breach of covenant by the assured.
d).The premiums may fall in arrears. But if the bank advance is below the surrender
value of the policy this will not affect it. Further, by virtue of a clause in the
assignment the bank may debit its customers account to meet outstanding
premiums. Usually the bank requires premiums to be paid by standing order or
premium receipts produced.
NatalieR answered the question on April 4, 2022 at 05:46


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