Incontestable clause
Misstatement of Age Clause
Suicide Clause
Grace Period
Reinstatement Clause
Entire Contract Clause
Ownership Clause
Beneficiary Designation
Assignment clause
Policy Loan Provision
if the insured did not state his/her correct age, the life insurance proceeds are adjusted. It’s a “misstatement,” not a misrepresentation.
the policyowner has up to 31 days (“one month”) to pay an overdue premium. If the insured dies during this period, the premium is de-ducted from the policy proceeds.
the insurer cannot deny a claim after the policy has been in force for two years.
the policyowner selects the beneficiary.
permits the policyowner to borrow the cash value, at interest. If the loan is not repaid at the time of death, it is deducted from the proceeds. An automatic premium loan provision may also be used.
permits the policyowner to reinstate a “lapsed” policy. Overdue premiums plus interest must be paid, and insurability must be established. Why not buy a new policy instead?
states that the application and the pre-printed material (policy) constitute the complete agreement between the parties.
if the insured commits suicide during the first two years the policy is in force, the insurer must only refund the premiums. The insurer must prove death was a suicide.
Says that the policyowner makes major decisions, not the insured or the beneficiary.
a life insurance policy is an asset, and policy rights are valuable. Policy rights may be fully or partially transferred through an assignment. An absolute assignment transfers all interests in the policy (often used in “gift” and estate situations). A collateral assignment is limited to the amount of the outstanding debt.
