Life Provisions, Options, and Riders
Modification Provision
A clause in a life insurance policy stating that any changes to the policy must be in writing and endorsed or attached to the policy
Owner's Rights Provision
A clause in a life insurance policy that defines the rights of the policyowner, including beneficiary designation and financial benefits
Insuring Clause
A clause in a life insurance policy that sets forth the company's promise to pay benefits upon the insured's death
Entire Contract
A clause stating that the policy document and attached riders constitute the entire contract in a life insurance policy
Entire Contract Provision
A clause stating that the policy document, application, and attached riders constitute the entire contract in a life insurance policy
Grace Period Provision
A period of time after a missed premium payment during which the life insurance policy remains in force
Beneficiary
A person or entity designated to receive the policy proceeds upon the insured's death
Accelerated Benefits
A provision in a life insurance policy that allows policyowners to receive a portion of the death benefit while still alive, typically in the case of a terminal illness
Free-Look Provision
A provision in a life insurance policy that allows the policyowner to return the policy for a full premium refund within a specified period of time
Waiver of Premium
A provision in a life insurance policy that waives premium payments if the insured becomes disabled
Life Insurance
An insurance contract that pays benefits upon the insured's death
Extended Term Option
An option in a life insurance policy to convert the cash value of the policy into extended term insurance
Net Income Benefit
An option in a life insurance policy to receive policy dividends as income
Rights of Policy Ownership
Important rights of policyowners in a life insurance policy, including beneficiary designation, death benefit payment options, policy cancellation, and policy assignment
Nonforfeiture Options
Options available to policyowners when a life insurance policy is surrendered or lapses, such as receiving the cash value or converting it into extended term insurance
Cash Surrender Options
Options for policyowners to surrender their life insurance policy in exchange for its cash value
NAIC Model Regulations
Standard wording of insurance regulations adopted by most states, ensuring consistency and uniformity in life insurance policies
Policy Proceeds
The amount of money paid out by the insurance company upon the insured's death
Premium
The amount paid by the policyowner to keep the life insurance policy in force
Surrender Value
The cash value available to the policyowner upon surrendering the life insurance policy
Uniformity of Insurance Policies
The high degree of similarity among life insurance policies due to state-level regulation and adoption of NAIC (National Association of Insurance Commissioners) guidelines
Reinstatement
The process of restoring a lapsed life insurance policy to active status
Cancel the Policy
The right of the policyowner to terminate the life insurance policy
Assign Ownership
The right of the policyowner to transfer ownership of the life insurance policy to someone else
Absolute Assignment
The transfer of ownership of a life insurance policy to another person or entity
Consideration
The value given in exchange for a contractual promise in a life insurance policy
