Life insurance is popularly referred to as life assurance. In this case, the underwriter agrees to pay the assured or his heirs, a certain sum of money on death or on the happening of an event dependent upon human life in consideration of premiums paid by the assured. It also grants disability and accident benefits annuities and super-annuation allowances.
A life insurance policy is mainly to two types, (1) the whole life policy and (2) the endowment policy. In the former one, the premiums have to be paid either for a specified number of years or till the death of the assured. The policy matures on the death of the assured. But in the case of the latter type, the amount assured is payable either on the death of the assured or on the expiry of a specified number of years whichever is earlier.
Again, a life insurance policy may be either, (1) with profits or (2) without profits. In the case of the former policy, the assured gets not only the sum assured but also a share in the profits of the underwriter in the form of bonus. But he has to pay more premium in this case than that is payable in respect of “without profits” policy. But in the case of “without profits” policy, the assured is not entitled to any share in the profits.
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