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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