Different clauses in the insurance policy

Many people are not able to understand the terms of the contracts signed with theorganizations that supply whole life indemnity. However, it is mandatory for you to know at least a few details about the clauses contained in those policies, as you must be certain you are making a good choice. Here are the most important clauses that must be contained in the life insurance contracts.

The owner clause of the policy

If such a clause is imposed, the owner of the policy has the right to transfer the policy, to change the beneficiary and to execute any of the options stipulated in this clause.

The payment clause

This clause establishes the volume of the insurance primes and the method chosen by the client to pay those rates (the whole sum, annual, biannual).

The partial buy-back clause with reimbursement

The owner of the policy might receive a sum of money under the form of a loan, but the value of this loan can’t be greater than the sum present in the account of the insured person. The reimbursement conditions are different from one company to the other. There is also a grace period, during this period, you can pay the money back without any interests, and the insured person still benefits of the policy during this period.

For certain products, there is also the possibility of an automated loan. The insured can receive this loan to pay for the remaining rates of the contract, as long as the payments are not made after the expiration of the grace period.

The cession is a clause that allows transferring the rights of the insurance policy to a designated beneficiary. This clause can state an absolute cession, when all the rights are transferred, it a collateral cession when only a few rights are transferred, usually only a part of the generated income.