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Life Insurance Policy Clauses Which Protect YOU

It's a good idea to know your rights before you sign on any dotted line. So, once you have your potential life insurance policy's terms and conditions in hand, read over it carefully.

Use insurance term definitions listed below to guide you through any confusing terminology.


This page:

Lists standard life insurance clauses that protect you.

Gives insurance terminology definitions for these clauses


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If you want additional protection or rights, you will have to attach a rider to your policy. You can find common riders listed here.

Be wary of policies that try to limit your rights or impose rules and regulations beyond these listed below.

Standard clauses

Beneficiary Clause
Incontestable Clause
Grace period clause
Spendthrift Clause
Preference Beneficiary Clause
Survivorship Clause

Insurance terminology definitions

Beneficiary Clause
This is customary to most policies and allows you to name the recipient of your death benefit. Generally the recipient is either an individual or your estate. It is a wise decision to make an individual the beneficiary to insure prompt payment of the death benefit.
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Incontestable Clause
Usually a required clause on all life insurance policies, this provision limits the time your insurer is allowed to dispute the validity of the statements you have made on your application. Typically the duration is about two years, but this is not guaranteed. You should read over any policy you are considering purchasing to make sure it is included. Otherwise you run the risk of you insurer canceling your policy on a formality. With the clause, your policy is incontestable after it has been active for more than the stated period of time. This ensures that the death benefit is paid promptly without the insurance company hassling your family.
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Grace period clause
Late premium payments can result in the termination of your policy. However, your policy may contain a grace period clause, which allows you 31 days to make the delinquent premium payment without canceling your policy. This clause is usually required by state law, but make sure it is included in any policy you purchase. With this clause, your policy does not lapse for a full thirty days even if you miss your payment. Therefore, in the event of your death, your family would still receive the death benefit even if your premium payment had not yet been paid for the month before. The unpaid premium will, however, be deducted from the death benefit proceeds.
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Spendthrift Clause
This option protects the proceeds received from your beneficiary from being confiscated by any creditors to whom s/he owes money.
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Preference Beneficiary Clause
If you fail to indicate your life insurance beneficiary, the proceeds will be awarded to the individuals listed on the policy.
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Survivorship Clause You can elect to include this clause in your policy as a method of postponing the payment of the death benefit. After your death, the policy's proceeds will not be awarded until it is confirmed that your primary beneficiary has survived you for a pre-determined number of days.
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