Life insurance is a contract between the insured and the insurer, the insurer agrees to pay a specific recipient an amount of money ("profit") after the death of the insured person. Depending on the contract, other events such as terminal illness or serious illness may also trigger payment. In return, the insured agrees to a fixed amount (the "premium") paid at regular intervals or in lump sums. In some countries, such as funerals, death expenses included in the premium, but in the United States, the predominant form is a fixed amount of the insured's death will be paid.
The value for the policy owner is the "rest" in the knowledge that the death of the insured person does not translate into financial difficulties.
Life insurance is legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often in the contract to limit the liability of the insurer; Typical examples are claims relating to suicide, fraud, wars, riots and civil unrest.
Contracts of life tend to fall into two broad categories:
* Protection policies - designed to offer a service to a specific event, usually the payment of a lump sum payment. A common form of this design is term insurance.
* Investment policies - where the main objective is to facilitate the growth of capital by regular or single premiums. The most common (in the U.S.) are whole life, universal life and variable life insurance.
The value for the policy owner is the "rest" in the knowledge that the death of the insured person does not translate into financial difficulties.
Life insurance is legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often in the contract to limit the liability of the insurer; Typical examples are claims relating to suicide, fraud, wars, riots and civil unrest.
Contracts of life tend to fall into two broad categories:
* Protection policies - designed to offer a service to a specific event, usually the payment of a lump sum payment. A common form of this design is term insurance.
* Investment policies - where the main objective is to facilitate the growth of capital by regular or single premiums. The most common (in the U.S.) are whole life, universal life and variable life insurance.
