What is the free look period for a new life insurance policy?

State law typically gives a new policyholder a short window after the policy is delivered, commonly 10 to 30 days, to review it and return it for a full refund of premiums paid.

The exact length depends on the state, and several states require a longer window for older applicants.

How long is the grace period if a premium payment is late?

Most individual life policies carry a grace period of at least 31 days after a premium due date, and coverage stays in force during that window even though the payment has not arrived yet.

A policy can deduct the overdue premium from a death claim if the insured dies during the grace period; interest cannot be charged on that late payment.

What does the incontestability clause do?

Once a policy has been in force for a set period, generally two years from the date it was issued, the insurer generally cannot void it or deny a claim based on a misstatement in the application.

Exceptions can apply for nonpayment of premium or, where state law allows it, outright fraud.

A later change that required new underwriting, such as a coverage increase, can start its own two-year window limited to that specific change.

What happens if an application lists the wrong age or sex?

A misstatement-of-age-or-sex provision adjusts the benefit instead of voiding the policy.

If the error is found, the death benefit is recalculated to the amount the premium already paid would have purchased at the insured's correct age, and correct sex on a sex-distinct policy.

What is the entire contract provision?

Standard policy language states that the policy and the attached application together are the entire contract, so the insurer cannot point to a separate document the owner did not receive.

Statements made in the application are treated as representations, not warranties, absent fraud, so an honest mistake is handled differently than a knowing misstatement.

Who can be named a beneficiary, and what is a contingent beneficiary?

The owner names a primary beneficiary to receive the death benefit and can also name one or more contingent beneficiaries, who are only paid if the primary beneficiary has already died.

The designation can generally be changed while the policy is in force, unless the owner made a beneficiary irrevocable, which then requires that beneficiary's consent to change it.

What is the ownership provision?

Separate from the beneficiary, the ownership provision identifies who controls the policy: who can change the beneficiary, borrow against it, or assign it, which may be someone other than the insured.

A common example is a policy on one spouse's life that is owned by the other spouse.

Current policy standards call this the ownership provision; terms like "possession" or "proprietorship" clause do not appear in it.

What is an assignment, and can a policy be assigned to a lender?

An assignment provision lets the owner transfer some or all of their rights in the policy to someone else, such as a bank that requires the policy as backing for a loan.

If the insured dies while an assignment for a loan is in place, the lender is generally paid what is owed from the proceeds first, and the remaining amount goes to the named beneficiary.

Can a policyholder borrow against a life insurance policy?

Only a policy that builds cash value, such as whole or universal life, can offer a loan provision.

Term insurance has no cash value, so there is nothing to borrow against.

Many cash-value policies also let the owner elect an automatic premium loan, which draws on the cash value to pay a premium that would otherwise go unpaid so the policy does not lapse by oversight.

The amount drawn is a loan like any other; the eventual death benefit is lower if it is not repaid.

What is the reinstatement provision?

If a policy lapses for nonpayment, standards require insurers to let the owner apply to reinstate it for a period of at least three years from the date of lapse, by paying the overdue premiums with interest and showing evidence of insurability.

Reinstatement is not automatic; the company can decline it if the applicant's health no longer meets its standards.

Can a term policy be renewed or converted to permanent coverage?

A renewable term policy can be continued for further terms without new proof of health, though the premium rises at renewal to reflect the insured's age.

A convertible term policy can instead be exchanged for a permanent policy within the conversion period stated on the policy, generally without evidence of insurability for the amount already in force.

What is the suicide exclusion?

Most individual policies exclude or limit the death benefit if the insured dies by suicide within a set period after the policy was issued, commonly up to two years, though a few states set a shorter period.

A death from suicide during that period typically results in a refund of premiums paid rather than payment of the full death benefit.

What is an accelerated death benefit?

An accelerated death benefit lets the owner receive part of the death benefit while the insured is still living.

A qualifying event is typically a diagnosis that is expected to limit life expectancy to a period insurers commonly define as 6 to 24 months, or a chronic illness that limits specified daily activities.

Amounts paid this way to a terminally ill insured, and amounts paid to a chronically ill insured within federal limits, are generally excluded from gross income under the same tax treatment as a death benefit.

What is a spendthrift provision?

A spendthrift provision lets the policy state that proceeds held by the insurer, or paid out over time rather than in one sum, cannot be transferred, borrowed against, or reached by a beneficiary's creditors through legal process.

It is meant to keep the money available for the beneficiary's own use rather than letting a third party claim it first.

Are deaths from war or aviation excluded?

Some policies exclude or limit payment for a death connected to war within a set period, commonly up to two years from issue, for an insured who is not serving in the military.

Current standards bar excluding the death benefit of a service member who dies as a result of U.S. military service.

An aviation, occupation, or hazardous-hobby exclusion is optional and must be based on what the applicant disclosed when applying; it is uncommon in current individual policies.

How does the IRS tax employer-paid group life insurance above $50,000?

When an employer pays for group-term life coverage, the first $50,000 of coverage is generally excluded from the employee's income.

The value of coverage above that amount is added to taxable wages using IRS age-based rates.

For 2026, that rate is $0.15 per $1,000 of excess coverage per month for an employee age 45 to 49, rising to $2.06 per $1,000 at age 70 and older.

The employer reports this imputed income on the employee's Form W-2, and it is subject to Social Security and Medicare tax even though no cash changed hands.

What happens to group life coverage when employment ends?

Standards generally give a departing employee at least 31 days after coverage ends to apply for conversion to an individual policy without new proof of health.

Some plans also let eligible coverage be ported, continued under a separate policy, rather than converted, and the governing plan document controls which option applies and how the new premium is set.

Does a divorce automatically remove an ex-spouse as beneficiary?

For life insurance provided through an employer plan governed by ERISA, the U.S. Supreme Court has held that the plan must pay the beneficiary on file in the plan's own records.

That holds true even if a state law would otherwise revoke that designation on divorce, because ERISA requires administrators to follow the plan documents.

The Court reached a similar result when an ex-spouse had waived her interest in a divorce decree: the plan still paid her, because her waiver had not been filed with the plan administrator.

A different rule can apply to an individual life insurance policy bought outside an employer plan.

The Supreme Court has also upheld a state law that automatically revokes a beneficiary designation to a former spouse once a divorce becomes final, unless the policyholder names that person again afterward.

Because the outcome depends on who is actually named in the plan or policy records, a beneficiary designation should be checked after a divorce in case an older form is still on file.

How does Kimberly-Clark's group life insurance work?

Those plan rules matter only once you know who actually insures Kimberly-Clark's own group life coverage. Kimberly-Clark automatically provides Basic Group Life and Business Travel Accident coverage to employees at no cost, and separately lets employees buy Supplemental Life Insurance, Critical Illness Insurance, Accident Insurance, Accidental Death & Dismemberment, and Hospital Indemnity coverage during enrollment. Minnesota Life Insurance Company is named as the carrier for an accidental death and dismemberment contract on the health and welfare plan's 2024 Form 5500, which lists about 22,382 people covered under it that year. The same health and welfare plan, which also carries medical, dental and vision coverage, reported 34,809 total participants at the end of 2024. Check your own enrollment materials or the Benefits Center for the dollar amount or pay multiple that applies to your Basic Group Life coverage, since that detail is not spelled out in the plan's public filings.