NON-FORFEITURE
o AUTOMATIC LOAN PROVISION
o DIVIDEND ACCUMULATION TO AVOID RELAPSE
• DIVIDEND OPTIONS
o CASH PAYMENT
o REDUCTION OF PREMIUMS
o ACCUMULATION OF INTEREST
o PAID-UP ADDITIONS
o ONE-YEAR TERM
• LIFE INSURANCE POLICY RIDERS
o WAIVER OF PREMIUM
o ACCIDENTAL DEATH AND DISMEMBERMENT



4. Automatic Loan Provision

In this case, the insured can authorize the company to extend an automatic loan
from the policy’s cash value to settle any outstanding premium payments.

5. Dividend Accumulations to Avoid Lapse

In the case of dividend payments, these may be applied to any premiums
outstanding by the end of the grace period. In the event that these accumulated
dividends are not enough to cover unpaid balances, coverage is applied in an
amount proportionate with the premium paid by the accumulated dividends.
Dividend Options
A participating life insurance policy entitles the policy owner to receive dividends from
the earnings of the insurance company. The policy owner may choose one of the
following options to receive the dividend:

• Cash Payment

Under this dividend option, the insurance company sends the insured a check
equal to the amount of the declared dividend payment.

• Reduction of Premium

The premium due on the policy for the upcoming year will be reduced by the
amount of the current year’s declared dividend and the balance becomes the
new premium due for the upcoming year.

• Accumulation of Interest

The dividends may be retained with the insurance company to accumulate with
interest paid at the specified rate. The policy owner reserves the right to withdraw
accumulated dividends at any time.

• Paid-up Additions

Dividends are used to purchase paid-up additions, which have the same
provisions as the original policy.

• One-year Term

In some cases, dividends are used to purchase one-year term coverages, which
are added to the base policy in the event of the insured’s death.
Life Insurance Policy Riders
Life and Health Insurance jargon uses the term “rider” instead of “endorsements”.
Riders amend the terms of the basic policy coverage. The commonly used riders are:

• Waiver of Premium

In case the policy owner becomes totally disabled, the premiums are waived after
a waiting period of six months. Some policies also refund the premium payments
by the insured during the waiting period.

• Accidental Death and Dismemberment

Also known as “double indemnity”, this clause offers a payment of double the
face value in the event of the accidental death of the insured. Of course, the
clause is very carefully worded so as to specify the term accidental bodily injury.
The dismemberment rider entitles the insured rather than the beneficiary for
payment. Benefits typically paid for are loss of sight, hand(s), feet or foot. In this
case, the loss of the limb must involve “complete severance through or above the
wrist or ankle joint”. Amputations are admissible only if medically necessary and
a result of accidental injury.