Life Insurance

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Life insurance is the contract between the insurance company and the insured as per which the insurance company promises to pay a designated beneficiary a pre determined sum of money, in exchange for the premium, upon the death of the insured person. Depending upon the insurance policy some events apart from death like terminal illness will trigger the payment. Policy holder pays the premium either in lump sum or in installments at regular intervals of Time and some times other expenses like funeral expenses are also covered by the life insurance Policy.

Life Insurance policies are legal contracts and it also contains various exclusions which limit the liability of the insurance company. Some common examples are claims relating to suicide, fraud, war , riot etc. Life Insurance policies fall into two major policies. They are as follows :

1. Protection Policies
2. Investment Policies

Protection policies are those policies which are designated to provide a benefit, typically a sum of money, in the event of a certain specified event. A most common form of Protection Policy is the Term Insurance.

The main objective of an Investment policy is to facilitate the growth of the capital by regular or lump sum premiums. Common Forms of Investment Policies in USA are whole life, Variable Life and Universal life.

The life Insurance business has grown leaps and bounds since its inception and a study has revealed that EU is the largest market for the Life Insurance Policies.