Meaning of US Life insurance

US Life insurance

Life insurance (especially in the Commonwealth life insurance called life assurance) is a contract between an insured (insurance policy holder) and an insurer or assurer, where the insurer contact to pay a selected beneficiary a sum of money (the "benefits") upon the death of the insured person. Signing on the contract, other events such as terminal illness or critical illness may also eventual payment. The policy holder normally pays a premium, or as a lump sums either regularly. Additional expenses (such as funeral expenses) are also sometimes included in the benefits.





Life policies are legal contracts and the terms of the contract describe the restrictions of the insured events. Particular exclusions are often written into the contract to limit the liability of the insurer; common examples are claims relating to riot, fraud, war, suicide  and civil commotion.
Two major categories in Life based contracts:

Protection policies – designed to provide a benefit in the event of particular event,  normally  a lump sum payment. This design of term insurance in a common form.

Investment policies – where the main objective is to facilitate the growth of capital by regular or single premiums. Whole life, universal life and variable life policies in a common forms (in the US).


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