Life insurance, which is also known as life assurance in some nations especially the Commonwealth of Nations, is a contract that is in between an insurer (insurance service provider) and the one who has purchased the insurance that is the insurance policy holder.
The insurance policy holder is promised an amount/sum of money by the insurance service provider or the insurer, upon the death of the policyholder. This is done in exchange of the premium for which the policyholder pays to the insurer.
If the policy covers terminal or critical illness, the insured can get payment for these also. The premium is paid by the insurance holder as one approximate sum or regularly like yearly. You can also look for Kensmalleyinsurance to gather more information and benefits on Life Insurance Policies.
Life insurance policies are basically legal contracts between insurers & the insured. The insured should study all the documents carefully before signing the contract as there are certain exclusions & limitations described in the terms of the contract.
The exclusions are mentioned in the contract to limit the liability of the insurer. Some of the common examples are claims which are related to riot, suicide, war, fraud, and civil commotion.
There are 2 major types of life insurance policies:-
- Protection policies – These policies are designed to provide a benefit in case of a specified occurrence & payment id done to the insured or the nominee. This is also known as term insurance.
- Investment policies – these policies are designed mainly for the purpose of investment and getting returns. Here the premium is deposited as an investment to which the insured will get some specified interest after the policy gets matured.