Certified Financial Consultant (CFC) Practice Exam

Which component of a life insurance policy specifies the parties involved?

1. Declarations page

2. Endorsements

3. Riders

4. Beneficiary clause

The correct answer is: Declarations page

The declarations page is a vital component of a life insurance policy as it clearly outlines the parties involved in the contract. This includes the insured party, the policyholder (who may be the same as the insured), the insurer, and any additional participants such as policy beneficiaries. This page serves as a summary of the policy details and identifies all key individuals and entities, making it a fundamental aspect of understanding the contractual relations inherent in the policy. Other components, such as endorsements, riders, and beneficiary clauses, serve different functions. Endorsements and riders modify the original policy terms or provide additional benefits but do not define who the involved parties are. The beneficiary clause specifically names individuals or entities that will receive the policy proceeds upon the death of the insured but doesn’t encompass or clarify all parties involved in the contractual agreement. Therefore, the declarations page is the correct choice for indicating the parties in a life insurance policy.