Life Provisions, Options, and Riders

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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


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