Main contract – the foundation of the policy

In a typical life insurance structure, the main contract forms the basis of coverage. It defines the insurer’s basic scope of liability, which most often includes the death of the insured person. It should be remembered, however, that the scope of coverage resulting from the main contract depends on the terms of the particular product and is specified in the General Terms and Conditions of Insurance (OWU).

The main contract defines the key parties to the agreement:

  • the policyholder is the person or entity concluding the contract and obliged to pay the premium regularly,
  • the insured is the individual whose life is covered,
  • beneficiaries are the named individuals or institutions entitled to receive the benefit after the insured’s death. As a rule, naming beneficiaries enables the benefit to be paid. If no beneficiaries have been named, the benefit is paid to the closest family members in the order specified in the OWU.

The main contract specifies the Sum Insured (SU) for the basic risk, meaning the amount that may be paid to the beneficiaries or entitled persons in the event of the insured’s death, provided that no circumstances excluding the insurer’s liability occur.

Supplementary contracts, or extending the coverage

In many policies, the main contract primarily covers the benefit payable in the event of the insured’s death, which is why the coverage is often expanded with supplementary contracts. They may provide for an additional benefit if the insured suffers an accident or becomes ill.

Depending on the insurer’s offer and the selected contract option, supplementary contracts may include, among other things:

  • Accidental Death and Dismemberment (NNW),
  • serious illnesses,
  • hospital stays and surgery,
  • permanent incapacity for work.

Supplementary contracts usually have a separate sum insured and affect the total premium amount. It should be remembered that they may also contain additional exclusions of liability and waiting periods, meaning periods during which the insurer’s liability for specified events may not yet apply or may be limited.

Formal and legal elements of the documentation

In everyday language, the term “life insurance policy” is sometimes used to refer to the entire contract. Formally, however, a policy is one of the documents associated with the insurance. The documentation may include, among other things:

  • an insurance application and, depending on the product and the risk-assessment process, a medical questionnaire or other client declarations submitted before the contract is concluded concerning, among other things, health status, treatment history or information needed to assess the insurance risk.
  • the policy, meaning a document confirming the conclusion of the contract and containing the parties’ details, registration numbers, the coverage period, and the amount and frequency of premium payments;
  • the General Terms and Conditions of Insurance (OWU), the basic legal document defining the rights and obligations of the parties, including the detailed scope of coverage, payment limits, exclusions of liability and waiting periods;

See the details of the life insurance offered by Nationale-Nederlanden.

This article is sponsored and contains marketing content promoting “Protection for Tomorrow” Insurance, offered by Nationale-Nederlanden Towarzystwo Ubezpieczeń na Życie S.A. Details concerning the scope of coverage, exclusions and limitations of the insurer’s liability, and the conditions for providing benefits can be found in the General Terms and Conditions of Insurance (OWU), available at nn.pl under For You/Life and health/Life insurance in the Documents section.