What is life Insurance ?
Life insurance is an agreement between life insurance coverage company (the insurer) and policy's owner
(insured person) under the terms of a life insurance contract.The contract is in consideration
of certain payments (known as the premium) to be made to the insurer either in a lump sum or perhaps in
any other periodical payments.The insurer promises to pay a certain sum to some designated beneficiary
when insured person die, in return for your premium payments,this is actually the basic principle behind
all life insurance coverage contracts.
Life insurance may be the financial resource of an individual’s family during the happiest moments
of his or her life but during unhappy moments as well.
In human life death is Uncertainty,so having family means dependants, meaning financial
commitments.What would happen if you were to lose your life suddenly or become disabled and
cannot earn.In this situation Life insurance gives some form of protection against the financial
loss and gives guarantees that your dependants will be able to continue living without financial
hazards even just in case of your demise.
There are several kinds of policies that may be available,some major types are
1 Term Life Insurance:
Term life insurance provides protection for a specified number of years. A death benefit is
paid towards the beneficiary if the insured dies inside the time while the policy is in force.
2 Permanent life insurance or Whole life insurance :
Permanent life insurance designed to provide protection for a lifetime.Permanent life
insurance policies are generally designed to possess a level premium.
3 Universal Life Insurance:
Universal life insurance policies vary from whole life insurance policies in that they
offer some flexibility to change the premium payments and death benefit. Even though premium
payments are flexible, the absolute minimum premium is required to keep your life insurance protection
in force.
What is life Insurance ?
