life insurance


life insurance

Life insurance is a contract concluded between the owner of the insurance policy and the insurance company or the insurer, in which the insurance company undertakes to pay a sum of money (a benefit) upon the death of the insured person in return for insurance premiums paid by the insured to the insurance company on a regular basis or as a lump sum payment. Depending on the type of insurance contract, insurance can cover other cases such as terminal illness or critical illness, as the insurance company pays a certain benefit to the insured person. Guarantee Life insurance other expenses such as funeral expenses. The insurance policy is considered an official document and its clauses specify the limitations of the accidents covered by the insurance. Specific exceptions are often written into the contract for the insurance company to disclaim. Examples of these exceptions are allegations of suicide, fraud, war, riots, and public disorder. Modern life insurance is similar to the asset management industry, as companies are diversifying their offering adding retirement insurance such as annuities.

Life insurance policies are divided into two main types:

*Protection Insurance: Provides a one-time financial benefit as a lump sum in the event of a specific accident. common form

The most popular in the past years is a life insurance policy for a limited time.

* Investment Insurance: The main objective of this policy is to facilitate capital growth by means of regular or individual premiums. Common forms (in the US) are life insurance, comprehensive life, and variable term life insurance.

 contract parties

The owner of an insurance policy is the person responsible for making payments for a policy, while the insured is the person whose death results in the payment of death benefits. The owner and the insured may or may not be the same person. For example, if Joe buys a life insurance policy, he is the owner and the insured. But if his wife buys his life insurance policy, she is the owner and he is the insured. The owner of the policy is the guarantor and is the person who pays for this policy. The insured is a participant in the contract, but not necessarily a party to it. The beneficiary receives the policy proceeds upon the death of the insured person. The owner chooses the beneficiary but is not a party to the policy.
The owner can change the beneficiary person if he is not on the policy provided that the name of the beneficiary is not changed. In the absence of this requirement, any changes to the beneficiary's name, policy assignments, or cash value borrowing can be made but require the consent of the original beneficiary. In cases where the policy holder is not the insured person; Insurance companies seek to restrict the purchase of insurance policies to insurance stakeholders. For the insurance policy
 For life, close family members and business partners usually have an insurable interest. An insurable interest clause means that the buyer will bear some kind of loss in the event of the death of the insured person. This condition prevents people from benefiting from the purchase of purely speculative policies on people whose death they anticipate. in the absence of an insurable interest clause; The risk to insurance proceeds as a result of the buyer killing the insured would be significant.

 Terms of the contract

 Special exceptions such as suicide clauses may apply, where the policy becomes null and void if the insured committed suicide within a specified period of time (usually two years after the date of purchase; some states provide a legal one-year suicide clause). Any misrepresentations by the insured in the application may also be grounds for invalidating the policy. Most US states set a maximum competition period, often no longer than two years. Only if the insured dies during this period, the The insurer has the legal right to challenge the claim on the grounds of misrepresentation and request additional information before deciding to pay or reject the claim. The face value of the policy is the initial amount that will be paid upon the death of the insured or when the policy becomes due, although the actual death benefits can be greater or less than the nominal amount. The policy becomes due when the insured dies or reaches a specified age of, say, 100 years.

Two types of life insurance

 - Life insurance only, and this type includes the contract according to which the insurance company pays a certain amount of money to the heirs or beneficiaries registered in the contract in the event of the death of the policy holder during the validity period of the contract, (the policy interest is to insure the heirs for a specified period of time, by obtaining the The agreed amount in the event of the death of the insured (the head of the family), to secure the family’s living needs and to continue living in comfort, stability and a decent life after the death of the breadwinner (the head of the family)
 - A contract that includes life insurance and savings: under this contract, the insurance company pays the contracted amount to the heirs or beneficiaries in the event of the policy holder’s death, or pays the policy holder another contracted amount if he reaches the age of 65 years, for example, which is part of his pension .

Due to the different types of insurance contracted, the monthly premium/contribution that the policy holder pays to the insurance company according to the first type is much less than the premium he pays if he concludes a contract of the second type that includes savings. The monthly subscription / installment may be increased by adding any of the additional protection contracts such as (accidents and amputations, serious diseases, total and permanent disability) that entail additional obligations and costs.

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