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Life Insurance: Classifications Classification according to method of payment premiums. Single premium insurance is paid for in advance in a single payment. Limited payment life contracts provide insurance through the whole life but limit the premium-paying period to a term of years, most frequently twenty. Level premium means a uniform payment throughout the premium-paying period. The most frequent types are the level annual premium and the level weekly premium collected on so-called. industrial policies. A natural premium is a premium which increases from year to year as the risk increases. This type of premium is most frequent in renewable term policies. Classification according to number insured. This classification is nearly self-explanatory. Individual policies cover single lives, joint life policies mature at the death of either of two or more persons; group policies are written to cover a large number of persons jointly. Group policies differ from joint life policies in that they are not terminated by the death of one of the insured.The classification of policies according to type of insurer is given detailed consideration in later sections of the chapter, and need not be analyzed here. Classification according to right to share in profits. Participating policies provide for the return to the insured of a portion of his premium in the event that earnings of the insurer justify such a "dividend." Customarily the premiums on such policies are made high enough so that there is sure to be some dividend. In other words, the dividend is in part a rebate of excess premium and only in part a true dividend or distribution of profits. Non-participating policies, as the name implies, carry no claim to dividends. "Participating policies at nonparticipating rates" are sold by a few companies. These are participating policies whose premium rates carry no excess "loading" to provide for dividends, hence pay only relatively small amounts, which are, however, true dividends. Standard policy conditions. The conditions embodied in standard types of policy issued by the majority of companies have been summarized by one writer as follows: 1.  A copy of the application is attached to the policy, so that the insured may be in possession of the complete contract.   2.  The policy contains a clause setting forth that it shall not go into force and effect until delivered during the lifetime and good health of the insured, and after the required premium has actually been paid.   3.  The majority of companies have some restrictions relating to hazardous occupations during the first or first two policy years.   4.  Most companies have some restrictions pertaining to military and naval service during war.   5.  Practically every policy contains a "suicide clause" in one or another form.   6.  The policy becomes incontestable after one or two years. 7.  Provision for reinstatement of lapsed policies is made under varying conditions.   8.  Thirty-one days' grace is allowed in the payment of every premium after the first.   9.  Participating policies contain a clause stating the conditions under which dividends will be paid.   10.  Every policy embraces a table specifically indicating the surrender values and loans available in each year, generally beginning with the third.   11.  Most companies undertake to pay claims immediately after the receipt of proofs of death. Most of these clauses require no explanation. The suicide clause, formerly very sweeping in the policies issued by many companies, now generally covers only the first policy year. Its effect is to free the company from liability in the event that the insured dies by his own hand, whether sane or insane. The clauses relating to military and naval service usually only have application to the first one or two years, and the same thing is still more generally true of the clauses which restrict the insured in the choice of occupations and in his freedom of travel. In all these causes, the intent of the clause is not to protect the company from liability in the case of such individuals as would normally run the proscribed hazards, but simply to prevent the insurer's securing an undue proportion of such hazards on account of a tendency of people to take out insurance after they have decided to commit suicide, to engage in dangerous occupations, or to travel in unhealthy environments. The "incontestable clause" operates to debar the company from contesting the policy after a specified time, usually one year Exception is always made of certain cases, including those in which the policy is invalidated on account of non-payment of premium, and sometimes such other items as military and naval service, fraud in application, etc. In case the age of the applicant has been understated, the company's remedy is not cancellation of policy, but the reduction of its liability to such amount as the premium actually paid would have purchased at the correct age of applicant. Incontestable clauses never waive the application of this remedy.