Life Insurance: What Is It ?
A life insurance contract is signed by the insured and the insurer. A life insurance policy guarantees that the insurer will pay a certain sum to chosen beneficiaries when the insured passes away in exchange for the premiums paid by the policyholder over the course of their lifetime.
The life insurance application must properly detail all of the insured’s past, current, and high-risk behaviors in order for the contract to be enforceable.
- The financial soundness of the company that offers a life insurance policy determines how excellent the coverage will be. In the event that the issuer cannot pay claims, state guarantee funds may.
- The policy’s face value, or death benefit, will be paid to the designated beneficiaries in the event that the insured passes away.
- Life insurance is a legally enforceable contract that pays a death benefit to the policyholder in the event that the insured passes away.
- Plans for term life insurance expire after a predetermined number of years. Until the insured person dies, the premiums are discontinued, or the policy is relinquished, permanent life insurance plans are in force.
- To keep a life insurance policy in force, a one-time premium or recurring premiums must be paid.