What Are Important Provisions In Most Life Insurance Policies? 
Some important provisions in most life insurance policies are as follows . These are regulated by state code and the insurance company , so can vary . 1 -RRB- Grace period . This is a period that your policy will stay in effect if you neglect to pay your premium on time , usually one month for term insurance . With permanent insurance , the policy may stay in effect longer if cash values automatically go to pay the premium . 2 -RRB- Suicide clause . This is a clause stating that the insurance policy will not pay out the death benefit for two years after the policy goes into effect . 3 -RRB- Convertibility . Some Term policies can be converted to permanent life insurance without evidence of insurability , if the conversion is done within a certain time period before the term ends . 4 -RRB- Incontestability clause . This protects the consumer by requiring that payment of the death benefit can not be contested two years after the policy goes into effect . 5 -RRB- Guarantees . Premiums , death benefits , interest rates , and cash values can all have guarantees in some types of policies . It is important to check the guarantees when purchasing a policy . 6 -RRB- Settlement options . Upon death of the insured , this provision allows the death benefit to be paid in one lump sum , in monthly payments , or some other way . 7 -RRB- Loans , reduced paid up , etc . There are many number of provisions associated with permanent policies that do not apply to term insurance . 8 -RRB- Riders . Riders provide added features to policies that the policy owner desires . Usually , riders cost extra . 