Life Insurance – Meaning. Life Insurance can be defined as a contract between an insurance policy holder and an insurance company, where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period.

Who is the proposer of a life insurance policy?

Proposer: It is the person who pays the premiums of the policy. For example: If you have bought the policy for yourself, then you are both the Life Assured as well as the Proposer. Similarly, if you purchase an insurance policy for a family member, then you are the proposer and the family member is the Life Assured.

How does money back policy work in life insurance?

Money back policy gives you money during the policy tenure. It gives you a percentage of the sum assured at regular intervals during your policy term. If you live beyond the term of the insurance policy then you will receive the remaining portion of the corpus and the accrued bonus also at the end of the policy term.

How does the principle of insurable interest apply to life insurance?

In case of life insurance, however, it is not possible to estimate the loss caused due to the death of the insured; as life is invaluable. Hence, the full amount of insurance policy can be claimed from the insurance company. The principle of insurable interest is the foundation of a contract of insurance.

Which is the best definition of term insurance?

Term Insurance – Definition & Meaning. There are two ways the individual can take life insurance: 1. By opting for a pure life cover, also known as term insurance 2. By taking life cover with a savings component built-in,also called endowment insurance.

What does it mean to pay a premium for life insurance?

Premium: A premium is the amount you pay to the insurer for receiving the benefits of the insurance policy. These payments can be made on a regular basis throughout the policy duration, for a limited number of years or just once, as per the options available under the policy you choose.

Who is the beneficiary of a life insurance policy?

Nominee or Beneficiary: It is the person you appoint at the time of buying the policy to receive the benefits of your insurance policy, in your absence. Insurer: The insurance company that sells the life insurance policy is called the Insurer (for example, ICICI Prudential Life Insurance).