Suicide Clause Insurers will not pay death benefits if the cause of death was suicide within the first two policy years after issuance of a life insurance policy. Suicide after the first two years is covered. If suicide is the cause of death during the first two years, the insurer will return all the premiums paid up to date of death to the insured’s estate. Incontestable Clause This clause states that the contract cannot be declared invalid for any reason (even outright fraud) once it has been in force for 2 years.

If an insured dies as the direct result of a self inflicted injury within 2 years of policy inception the policy will not pay the death benefit, but it WILL refund premiums paid.

Misstatement of Age If an insured misstated his/her age on the application, the policy will not be voided, but the insurer will adjust the face amount to properly reflect the face amount that the premiums being paid would provide had the correct age been known. Reinstatement Clause If a policy lapses, the policy owner may apply to have the policy reinstated. The insured must provide evidence of insurability; and pay past-due premiums, any outstanding policy loans. Reinstatement must be applied for within 3 years.

within 3 years. The misstatement of age provision is not governed by the incontestability clause. The death benefit will be adjusted for misstatement of age or gender, even if it is discovered over 2 years after policy issuance. Misstatement of age does NOT void the policy, but reduces death benefit.

Grace Period The grace period is a period of time, after the premium is due, during which the policy owner can make the past due premium payment avoiding cancellation of the policy. Grace periods: Industrial life 28 days Group life 31 days Everything Else 30 days During the grace period, the insurance remains in force. If the insured dies during this period, the insurer will deduct the amount of the premium due from the death benefit paid to the beneficary.

Change of Beneficiary Provision Allows the owner of the policy to change beneficiaries throughout the life of the policy. Policy Loan Provision If the policy accrues cash value, it is required that the cash value be available via policy loan to the owner. Automatic Premium Loan (APL) If a policy is going to lapse, this provision automatically directs the insurer to take out a loan from the cash value of the policy to pay the required premium.

Aviation Limitation Clause This clause originally prevented payment of a policy benefit for anyone who died as a result of an airplane crash. Today, it is much less restrictive and typically addresses student pilots. Fare-paying passengers on regularly scheduled commercial airlines are no longer excluded.

War Limitation Clause This clause limits the liability of the insurer in the event the insured loses his/her life at war. A Results Clause prevents payment only if the insured dies as a direct result of war injuries; while a Status Clause prevents benefit payments to any insured that dies while listed as active duty status during times of war, regardless of cause of death.

There are features available to a policy owner not required by regulation. These options are called riders and can be added to a policy (at extra cost) to make the policy better. The cost for these riders is very reasonable, considering the benefits offered, making them quite popular. They are available on most policies and include the following: Waiver of Premium If an insured becomes disabled and unable to earn a living, the waiver of premium rider will permit the policy to remain in force without requiring the policy owner to make premium payments. There is usually a waiting period after the onset of the disability before the rider becomes effective.

period after the onset of the disability before the rider becomes effective. The payor benefit rider is generally used with juvenile policies, providing that premium payments will be waived if the parent, who is paying for the policy, dies or becomes disabled before the insured reaches an age specified in the policy. Cost of Living The cost of living rider increases the face amount of your policy at the rate of inflation, to assure the policy owner that the death benefit will be adequate in future dollars.

Guaranteed Insurability (Additional Purchase Benefit) This option makes it possible for a policy owner to purchase additional amounts of life insurance in the future, even if he/she has become uninsurable. It allows the purchase of additional coverage in specified amounts, at specified intervals, until the insured attains a certain age. Amounts of additional insurance and dates on which the option can be exercised vary by insurers. Accidental Death Benefit Sometimes called double indemnity, this option can be added to a life insurance

option can be added to a life insurance policy for a small additional premium. The additional death benefit is usually equal to the face amount of the policy. For the benefit to be payable, the insured must die as the result of an accident. Return of Cash Value Many clients object to the fact that whole life companies keep the cash value upon death, as a result, insurers offer the return of cash value rider. This rider will pay an amount equal to the cash value of the policy in addition to the face amount of the policy at death.