Being aware of the various contract clauses and provisions available will help you select the ones most suitable for your situation. Most of these provisions will add to the cost of the insurance premiums.

Face Value

Face value of a policy is the amount stipulated in the contract when the policy is written. A $10,000 life insurance policy has a face value of $10,000 which will be paid at the death of the policyholder.

Accidental Death Benefit

An accidental death benefit or "double indemnity" promises to apply an additional sum equal to the face value of the policy if accidental death occurs to the insured. This feature adds to premium cost.

Disability Income Rider

The disability income rider is a provision that pays the insured a set amount per month after the first six months of disability. This feature adds to premium costs. Check your policy for exact amount.

Guaranteed Insurability

Guaranteed insurability or the "additional purchase benefit" is an option on permanent policies allowing the policyholder to purchase additional insurance even if you have become uninsurable. A fee is added to the basic premium costs so additional insurance can be purchased every three years, usually starting at age 25 and ending at age 40.

Incontestable Clause

The incontestable clause states that after the policy has been in force for one or two years it can't be contested by the company. This fixes the time limit on the company to check and verify all information within the time period. Some companies make suicide a contestable issue for longer periods of time. No added premium costs are charged.

Policy Loan Provision

A policy loan provision allows the policyholder to borrow on permanent life insurance any amount up to the current cash value of the policy by paying interest. No added premium cost is charged.

Waiver of Premium Benefit