Policy Provisions, Options & Riders

The grace period keeps coverage in force for a limited time after a premium due date. If death occurs during the grace period, the unpaid premium is generally deducted from proceeds. Reinstatement restores a lapsed policy subject to policy requirements.

The incontestability provision limits the insurer's ability to contest coverage after a stated period, subject to applicable exceptions. A suicide clause limits the death benefit for suicide during an initial exclusion period and generally provides for return of premiums under policy terms.

If age or sex is misstated, benefits are generally adjusted to the amount the paid premium would have purchased at the correct age or sex, according to policy terms.

The policyowner controls ownership rights such as assignment, loans, and beneficiary changes unless restricted. Beneficiaries may be primary or contingent, and may be revocable or irrevocable.

Absolute assignment transfers all ownership rights. Collateral assignment transfers limited rights, often to secure a loan.

Cash-value policies may permit policy loans. Outstanding loans plus interest reduce available proceeds. An Automatic Premium Loan provision can use cash value to pay overdue premiums and help prevent lapse.

Common nonforfeiture choices are Cash Surrender, Reduced Paid-Up Insurance, and Extended Term Insurance.

Participating policies may pay dividends. Common options include cash, premium reduction, accumulation at interest, paid-up additions, and one-year term insurance.

Settlement options determine how policy proceeds are paid. Common choices include lump sum, interest-only, fixed period, fixed amount, and life income options.

Common riders include Waiver of Premium, Accidental Death, Guaranteed Insurability, Payor Benefit, and Accelerated Death Benefit.