The following are examples of the application of reservation rules applying to policies.

Example 1

Eric effects a whole life policy for the benefit of his children. Premiums are payable annually and Eric pays those premiums direct to the insurance company.

Strictly speaking, possession and enjoyment of the property disposed of by way of gift (the cash) has not been assumed by the donee. However, this particular point is not one which should of itself be taken to constitute the gift as one with reservation.

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