Question

Which of the following provisions is one that recognizes rights of ownership in a policy?

Option 1: Entire contract provision
Option 2: Ownership clause
Option 3: Free-look provision
Option 4: Insuring clause

Answer 1

The Ownership clause is the provision that recognizes rights of ownership in a policy, granting the policy owner the right to control, change, or transfer the policy. So, the correct answer is option 2.

Step-by-step explanation:

The provision that recognizes rights of ownership in a policy is the Ownership Clause. This clause is fundamental as it states who owns the policy, thus establishing who has the authority to exercise the rights conferred by the policy, such as the right to name beneficiaries, transfer ownership, and making changes to the policy.

The ownership clause establishes that an individual or firm must own the property in order to enter into a contract regarding its use. This is crucial for economic growth, as it facilitates contractual agreements and the legal enforcement of these contracts, which in turn supports business transactions and contributes to an increasing standard of living.