Life Insurance
Life Insurance:
Life assurance is a promise between an insurance company and you, the policy owner. It covers an individual (single life) or sometimes said to be a life assurance plan on one life.
This is a life insurance policy which is guaranteed to remain in force for the insured's entire lifetime, provided required premiums are paid, or to the maturity date.
Contract designed to pay a lump sum after a specific term (on its 'maturity') or on death. Typical maturities are five, ten, fifteen or twenty years or up to a certain age limit. Some policies also pay out in the case of critical illness.
If the assured survive to the policy maturity he/she is paid sum assured, if the assured dies the dependents will be compensated the sum assured.
The Term and Pure Endowment are said to be the subset of Endowment Assurance.
This policy provides for the payment of a sum at the end of a given term provided that the life assured is then living. In its purest form there is no payment whatever if the life should die before the expiry of the term.
Under the modified form of pure endowment the payment is made if death occurs before maturity
This payment may be:
- A return of premiums paid, with or without interest
- A return of premiums paid, excluding the first premium with or without interest.
Sometimes is known as a temporary assurance is the type of life policy which provides the payment of the sum assured only if the life assured dies within a defined period. If the life assured survives the period, the assurance comes to an end and there is no payment by the assurer by whom the premiums are retained.
This is an ordinary term assurance for a period of years (10yrs to 20 years) but gives the assured an option to convert to an ordinary whole life or endowment assurance.
The option can be exercised at any time except during the last few years of the selected period.