A contract in which the insurer agrees to pay, on payment of premium,
a well defined sum of money to the beneficiary in case of death of the
insured is known as Life insurance. Thus, it refers to the protective
cover on the life of an individual.
The various terms related to a life insurance contract are defined as follows:
1. Insurer: Insurer refers to the party assuring to make the payment in case of death of the individual.
2. Insured: Insured refers to the person whose life is secured by the contract. In other words, his life forms the subject matter of the contract.
3. Premium: The premium refers to the stipulated amount paid by the insured to the insurer either in installments or in lump sum to cover his life.
4. Beneficiary; Beneficiary refers to the person entitled to receive payments from the insurer in the event of death of the insured.
In order to be considered a life policy, the insured event must be based upon the lives of the people named in the policy.
There are several advantages of having life insurance. Some of them are detailed below:
1. Liquidity:
In the event of death of the breadwinner, the family is posed with a cash crunch. In that situation, life insurance provides cash.
2. Security:
The basic benefit of life insurance policy is the sense of well-being and security. During his life, the breadwinner is assured by taking a life insurance that his family will be secure. After his death, a life insurance policy can cushion the blow and make the financial and personal adjustments to the new financial arrangement much easier.
3. Maintenance of living standard:
The life insurance policy has an added advantage of maintaining the living standard of the family even after the death of the earning person.
4. Regular flow of income:
Life insurance policy makes a provision of providing regular income to the living spouse.
5. Providing funds for education of children:
In the case of death of the breadwinner, the continuation of education of children becomes really difficult for the living parent. This policy provides allocation of funds for the education of children, thus providing a helping hand.
6. Source of income in the old age:
Some insurance policies provide for age old benefits in which a certain amount is regularly paid after a certain age. Thus, it provides income when ability to earn is lost.
7. Loans and Credibility
When a life insurance policy is taken, financial credibility is enhanced. Loans can be taken against these policies.
8. Payment of debts
A life insurance policy is a great source in order to clear the debts left over from the deceased. The existence of a life insurance policy gives peace of mind that a solid income will be quickly available to deal with several debts.
Thus, it is correct to say that life insurance is a friend in need. It supports the family financially and mentally when it is needed the most.
The various terms related to a life insurance contract are defined as follows:
1. Insurer: Insurer refers to the party assuring to make the payment in case of death of the individual.
2. Insured: Insured refers to the person whose life is secured by the contract. In other words, his life forms the subject matter of the contract.
3. Premium: The premium refers to the stipulated amount paid by the insured to the insurer either in installments or in lump sum to cover his life.
4. Beneficiary; Beneficiary refers to the person entitled to receive payments from the insurer in the event of death of the insured.
In order to be considered a life policy, the insured event must be based upon the lives of the people named in the policy.
There are several advantages of having life insurance. Some of them are detailed below:
1. Liquidity:
In the event of death of the breadwinner, the family is posed with a cash crunch. In that situation, life insurance provides cash.
2. Security:
The basic benefit of life insurance policy is the sense of well-being and security. During his life, the breadwinner is assured by taking a life insurance that his family will be secure. After his death, a life insurance policy can cushion the blow and make the financial and personal adjustments to the new financial arrangement much easier.
3. Maintenance of living standard:
The life insurance policy has an added advantage of maintaining the living standard of the family even after the death of the earning person.
4. Regular flow of income:
Life insurance policy makes a provision of providing regular income to the living spouse.
5. Providing funds for education of children:
In the case of death of the breadwinner, the continuation of education of children becomes really difficult for the living parent. This policy provides allocation of funds for the education of children, thus providing a helping hand.
6. Source of income in the old age:
Some insurance policies provide for age old benefits in which a certain amount is regularly paid after a certain age. Thus, it provides income when ability to earn is lost.
7. Loans and Credibility
When a life insurance policy is taken, financial credibility is enhanced. Loans can be taken against these policies.
8. Payment of debts
A life insurance policy is a great source in order to clear the debts left over from the deceased. The existence of a life insurance policy gives peace of mind that a solid income will be quickly available to deal with several debts.
Thus, it is correct to say that life insurance is a friend in need. It supports the family financially and mentally when it is needed the most.
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