Life insurance is different from fire, marine and other kinds of insurances. in all other forms of insurances except life. the insurance company undertakes to indemnify the loss caused by hazards mentioned in the policy to the policyholder. the risk involved in fire, marine and accident insurance policies are uncertain. The house may or may not catch fire.
So if the insured suffers no loss from etc. during the period of insurance policy, no payment will be made to the insured. in case of life insurance, The contingency insured against is death. Death is universal and certain. The uncertainty is about the place and time of occurrence. Life insurance is primarily designed to cover the death and affers financial protection to the dependants in case of the death of the insured.
The insurer or assured takes out a policy for a
specified number of years.if he survives to the
end of the period,he receives the amount paid
as premium along with any bonus his policy has
earned. In case he dies within the period insured,
full amount of the policy will be paid to the nominee
of the deceased (insured)
Dafinition of life insurance
life insurance is defined as a contract whereby
the insurer in consideration of a premium paid in
lump sum or in periodic instalments undertakes to
pay a specified sum either on the death of the
insured or on the expiry of specified number of years
in the policy."
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