Life
insurance or
life assurance is an agreement
between the policy owner and the
insurer. The insurer (life
Insurance Company) agrees to pay a
designated beneficiary a certain sum of
money/compensation upon the occurrence
of the insured individual's or
individuals' death or other event, such
as terminal illness or critical illness.
In return, the policy owner agrees to
pay a stipulated amount at regular
intervals or in lump sums. There may be
designs in some countries where bills
and death expenses plus catering for
after funeral expenses should be
included in Policy Premium. In the
United States, the predominant form
simply specifies a lump sum to be paid
on the insured's demise.
As with
many insurance policies, life insurance
is a contract between the insurer and
the policy owner whereby a
benefit is paid to the designated
beneficiaries if an insured event
occurs which is covered by the policy.
The value
for the policyholder is derived, not
from an actual claim event, rather it is
the value derived from the 'peace of
mind' experienced by the policyholder,
due to the negating of adverse financial
consequences caused by the death of the
Life Assured.
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