Life assurance

Life Assurance or insurance is a contract between the policy holder and the insurance company. The assurance company agrees to pay a sum of money, as deemed in the contract, on the policy holder’s death or other events such as the policy holder acquiring any terminal sickness. On the policy holder’s death, the sum insured is paid to the beneficiaries or nominees named in the contract. Here, the death of the policy holder or the policy holder acquiring terminal illness is called an insured event. The policy holder, on his part, agrees to pay an amount called premium regularly or in a single installment.

Life assurance is a plan so intended to provide assurance for an individual’s life and pay the sum insured as a lump sum on the death of the policy holder. The nominees or beneficiaries are guaranteed of a cash sum on the death of the policy holder. Premiums are paid throughout the period of coverage or until the insured reaches a certain age. Depending on the contract, the coverage continues till the death of the policy holder. Whole life assurance policies are costlier than regular policies as the assurance company has to pay more in the event of death of the policy holder.

Life Assurance is otherwise called whole life or permanent insurance. While it could be called by various names it functions in the same way. A monthly premium is paid for which the policy holder is insured against an event that is likely to take place, like death or chronic illness. On the event taking place, the sum assured is paid to the policy holder or the beneficiaries. As the premiums are higher in comparison to other types of coverages, it is essential that you compare the quotes of other companies. In some cases, there are certain stipulations at the time of payment and hence it is essential that all details of the policy are perfectly understood before you sign on the dotted line.