Final answer:
Payment of Claims is a mandatory provision in insurance policies, requiring insurers to pay out when a covered event occurs. This ensures protection for policyholders and stability for the insurance system.
Step-by-step explanation:
Among the options provided, Payment of Claims is considered a mandatory provision in insurance policies. This term relates to the requirement that insurance companies must pay out claims to insured parties when a covered event occurs. In contrast, provisions such as Insurance with Other Insurers, Misstatement of Age, and Change of Occupation may be parts of some policies but are not universally mandatory across all types of insurance.
In the context of Pension insurance, for instance, employers are legally obligated to contribute to the Pension Benefit Guarantee Corporation to protect employees' pensions in the event of bankruptcy. Similarly, other types of mandatory insurance provisions include contributions to the Federal Deposit Insurance Corporation (Deposit insurance) and state-level funds for Workman's compensation insurance.
The fundamental law of insurance requires that the collected premiums must cover the costs of claims, company operations, and allow for profits. Mandatory provisions in insurance policies ensure a level of protection for policyholders and financial stability for the insurance system.