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Life insurance (life assurance)

Life insurance is a contract between the policy owner and the company selling the insurance, where this company agrees to pay certain sum of money in case of the occurrence of the insured individual’s or individuals’  terminal illness,critical illness or death. While the policy owner agrees to pay a premium at certain regular intervals or in fixed sums.

Life insurance is a contract between the the company selling the insurance (insurer) and the policy owner whereby a benefit is paid to the indicated beneficiary when an insured event occurs (event covered by the policy).

Insurance vs Assurance

Thought in general terms “insurance” and “assurance” are used to name the same service, in these jurisdictions “insurance” refers to providing cover for an event that might happen, while “assurance” refers to providing cover for an event that is certain to happen. In the US both forms of coverage are called “insurance”.

Types of life insurance

Life insurance is usually presented by two basic classes - temporary and permanent. Otherwise life insurance is divided into following subclasses: term, universal, whole life and endowment life insurance.

1. Temporary Term Insurance
2. Permanent Life Insurance

Life insurance subclasses

• Whole life coverage
• Universal life coverage
• Limited-pay
• Endowments
• Accidental Death