The following is a list of provisions and terms you should know before purchasing a life insurance policy:

Assignment provision: Determines whether a policy owner can assign or promise all or a portion of the death benefit to an individual.

Automatic Premium Loan (APL): Automatically pays premiums from policy's cash value to prevent policy from lapsing.

Beneficiary designation: The policyholder designates who will receive death benefits.

Cash surrender value: The amount the policy holder receives if the policy's coverage is terminated and the policy's cash value is paid to the policyholder in a lump sum.

Extended term insurance: Uses policy's cash value to pay premiums for original policy face amount without further premium payments; new policy is term insurance.

Grace period: Extends period to pay premiums without lapse of coverage; the typical grace period is 31 days.

Incontestability clause: Provides the terms under which the insurer guarantees distribution of death proceeds after policy has been in force for a certain number of years.

Non-forfeiture provisions: Generally enables the owner of permanent insurance to discontinue paying premiums without forfeiting policy cash values.

Policy loan: The permanent insurance policy allows the policy owner to borrow money from the insurer generally at a lower interest rate than a bank or other creditor. The unpaid loan balance is usually subtracted from accumulated cash value when the policy is surrendered or from the death benefit if death occurs before the loan is repaid.

Reduced paid-up insurance: Uses cash values to buy a new policy at a discount.

Simultaneous death provision: Provides how benefits are paid when the owner and beneficiary die simultaneously. Typically policies assume the beneficiary died first.

Suicide provision: Provides what happens if the insured commits suicide. Typically if the insured commits suicide during first two years policy is in force, the company's liability is limited to returning premiums.