Question

What is Life Insurance?

Explain the concept of life insurance.

What is Life Insurance Policy?

Answer 1

1. Life insurance may be defined as a contract whereby the insurer, considering a premium, undertakes to pay a certain sum of money or an annuity, either on the death of the insured or on the expiry of a specified period, whichever is earlier.
2. Life insurance provides protection to the family after the death of the insured.
3. Life insurance is a good method of investment.
4. A person can make provisions for old age by taking a life insurance policy. The policyholder feels financially secure and can enjoy economic independence after retirement. He need not be a financial burden on his family.
5. The policy contains:
   1. The name, address, date of birth and occupation of the insured,
   2. The amount of the policy or the sum insured,
   3. The amount of premium and when it is payable,
   4. Whether it is with or without profit
   5. Surrender value, assignment, etc., of the policy, and
   6. Settlement of the claim.