Policy provisions, part 1. Mnemonic: OEFG.
Ownership and assignment: the owner holds all policy rights. An absolute assignment permanently transfers all ownership rights. A collateral assignment temporarily transfers part of the rights as security for a loan; the lender is repaid first from the proceeds and the rest goes to the beneficiary. A California life policy may pass by transfer, will or succession to anyone (§10130).
Entire contract: the policy plus the attached application make up the whole contract. Nothing else, such as bylaws or other writings, is part of it unless it is attached or endorsed on the policy. Absent fraud, the insured's statements are representations, not warranties (§10113). Later changes need the agreement of both parties.
Free look (right to examine): after receiving the policy, the owner may return it for cancellation.
Individual life policies and annuities: the insurer sets a period of at least 10 and no more than 30 days (§10127.9). Returning a non-variable policy voids it from the start, and premiums and fees are refunded within 30 days.
Owners age 60 or older on the purchase date: at least 30 days (§10127.10).
Grace period: in California every life policy must give at least 60 days after the premium due date, and the policy stays in force during the grace period (§10113.71). If the insured dies during the grace period, the claim is typically paid minus the unpaid premium. A notice of lapse for nonpayment is not effective unless mailed to the owner, any designee and known assignees at least 30 days before termination.