PSI Ohio Insurance Practice Exam

What right is granted to the insured in the consideration clause?

1. The right to convert the policy

2. The right to insurance coverage if premiums are paid

3. The right to choose beneficiaries

4. The right to request higher coverage limits

The correct answer is: The right to insurance coverage if premiums are paid

The consideration clause in an insurance policy establishes the obligations of both the insurer and the insured, particularly focusing on the insured's requirement to pay premiums in exchange for coverage. In this context, the correct answer highlights that the insured is granted the right to insurance coverage so long as the premiums are paid. This reflects the fundamental principle of insurance contracts, which states that the insurer has a duty to provide coverage in return for the premium payments made by the insured. Other choices may refer to various rights that policyholders might have, but they are not directly related to the consideration clause. The right to convert the policy, choose beneficiaries, or request higher coverage limits pertains to other aspects of an insurance contract and not specifically to the mutual exchange of consideration, which is central to the consideration clause.