Question

why is the policy issue date important?
it determines the insured age
it starts the contestability and suicide periods
it establishes the beneficiary
it determines the face amount
if the insured dies during the grace period before the premium is paid, the insurer will:
deny the claim
pay the claim minus the unpaid premium
pay only cash value
refund premiums
a life insurance policy lapses when:
the insured dies
cash value reaches zero
premiums are not paid by the end of the grace period
a loan is taken

Explanation:

1. For the first question: The policy issue date marks the start of time-sensitive clauses like contestability (where the insurer can challenge policy validity) and suicide periods (where suicide claims are restricted). Insured age is based on birth date, beneficiaries are chosen by the policyholder, and face amount is set during policy setup, not by the issue date.
2. For the second question: During the grace period, the policy remains in force. If the insured dies, the insurer pays the death benefit but subtracts the unpaid premium, as the grace period is a short window for late premium payment without immediate policy lapse. Denying the claim, paying only cash value, or refunding premiums are not standard practices here.
3. For the third question: A policy lapses when the policyholder fails to pay premiums by the end of the grace period, which ends the policy's active coverage. The insured's death triggers a claim, a loan against cash value does not cause lapse, and cash value reaching zero is a consequence of non-payment leading to lapse, not the direct trigger.

Answer:

1. It starts the contestability and suicide periods
2. Pay the claim minus the unpaid premium
3. Premiums are not paid by the end of the grace period