These are the search results based on your query.
Life Insurance
Life insurance is a legal contract between an insurance company (the insurer) and a policyholder, where the insurer agrees to pay a designated beneficiary a sum of money upon the death of the insured person, or sometimes upon the occurrence of other specified events such as terminal or critical illness. In exchange for this coverage, the policyholder pays regular or lump-sum premiums to the insurer.
Key elements of a life insurance policy include:
- Policyholder: The person or entity that owns the policy and is responsible for paying premiums.
- Insured: The person whose life is covered by the policy.
- Beneficiary: The person or entity designated to receive the death benefit upon the insured’s death.
- Death Benefit: The amount paid to the beneficiary when the insured dies.
- Premium: The payment required to keep the policy active.
- Policy Length: The duration of coverage, which can be for a specific term (term life insurance) or for the insured’s lifetime (permanent life insurance).
Life insurance policies are designed to provide financial protection to beneficiaries, helping them cover expenses such as lost income, debts, funeral costs, and other financial obligations after the insured’s death. Policies may also include exclusions for certain events, such as suicide, fraud, or death resulting from war or riot, as specified in the contract.
There are two main categories of life insurance:
- Protection Policies: Provide a lump-sum payment upon the occurrence of a specified event, such as death or critical illness. Term life insurance is a common example.
- Investment Policies: Combine life insurance with an investment component, allowing for the growth of capital. Examples include whole life, universal life, and variable life policies.
Life insurance contracts are legally binding and outline the rights and obligations of both the insurer and the policyholder.