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Life insurance clauses and exclusions



Clauses that protect the policy owner

Reinstatement clause – This clause is a bit 50/50. It protects both you and the insurance company. In the event that the policy is terminated due to non-payment, the policy owner may reinstate his policy by paying all previous premiums plus interest. However, proof of continued insurability, such as passing another medical exam, may be required.

Free appearance period – Although not technically a “clause”, a policy owner can return their policy within a certain period of time if they are not satisfied with the terms of the policy. The policyholder will then be reimbursed in full.

Free time clause ̵

1; Every policy has a grace period, a certain time usually 31 days, during which a policy is still active even if the premium is not paid. If after the end of the grace period and there is still no payment, the policy will be terminated. If the insured dies during the grace period, the death benefit will still be paid but the premium due may be deducted.

Non-contestability Clause – The insurance company has a certain time, usually two years, to dispute the validity of statements made in an application. If the company discovers falsehoods in the application, they can cancel the policy. After this time period is over, however, the company can no longer dispute statements made on the application and must pay out on the insured’s death.

beneficiary clause – This simply allows the policyholder to name the beneficiaries of the death benefit.

Survival Clause – This states that the policy owner can choose to postpone the payment of the death benefit to their beneficiary. For example, the policy owner may say “My spouse is my primary beneficiary, but I want to make sure that she survives at least 30 days after I die before she receives the death benefit payment.”

Thrift clause – This protects the policyholder’s beneficiaries from having the death benefit payment confiscated by creditors.

If you own life insurance and haven’t taken the time to carefully review your policy, now is a good time. If you did when you first bought it, be sure to review your policy from time to time so that the information is fresh in your mind and to make sure that nothing needs to be updated, such as your beneficiaries.

If you’re thinking about buying life insurance, start by getting a free anonymous life insurance quote today. Quotacy’s friendly agents are happy to review any questions you may have about specific clauses or life insurance in general.


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