Term life insurance is pure insurance protection that pays a predetermined sum if the insured dies during a specified period of time. 2 On the death of the insured person, term insurance pays the face value of the policy to the named beneficiary. All premiums paid are used to cover the cost of insurance protection.

What are nature and characteristics of insurance contract?

A contract of insurance has the following characteristics: Executed – as to the insured after the payment of the premium. Executory – as to the insurer as it is not executed until payment for a loss. Conditional – subject to conditions the principal one of which is the happening of the event insured against.

What are the 4 required elements of an insurance contract?

There are 4 requirements for any valid contract, including insurance contracts: offer and acceptance, consideration, competent parties, and.

What are the types of insurance contract?

Types of contracts

• The major types of life insurance contracts are term, whole life, and universal life, but innumerable combinations of these basic types are sold.
• Life insurance may also be classified, according to type of customer, as ordinary, group, industrial, and credit.

What are the six elements of an insurance policy?

These elements are a definable risk, a fortuitous event, an insurable interest, risk shifting, and risk distribution.

What are the features of an insurance contract?

The following are some of the important features of an insurance contract. 1. Insurable interest A person can enter into a contract of insurance only when he has some insurable interest on the life or property which is insured.

Which is a consideration in an insurance contract?

In Insurance contracts the consideration is the premium that the Insured pays to the Insurer as the price of the promise that the Insurer has made that he shall indemnify the insured. Hence premium payment is the consideration on part of the insured and the promise to Indemnify is the consideration on part of the Insurer. INTEXT QUESTIONS 3.1 1.

Which is the most important characteristic of insurance?

Characteristics Of Insurance. 1 1. A CONTRACT: The most important feature of insurance is that it is legal contract between the insurer and insured, under this insurer promises to 2 2. UNDERTAKING OF RISK: 3 3. A COOPERATIVE DEVICE: 4 4. PAYMENT OF POLICY AMOUNT ON THE HAPPENING OF EVENTS: 5 5. PREMIUM: