What is Life Insurance ?
We all know that life insurance is products that would be cover your life, But are you really know what actually mean for life insurance ?
Life insurance policy in terms of law means a reciprocal agreement that one party, which is called the ‘insured’, has a duty of paying the premium to the other party, which is called ‘Life insurance company’. When the insured passed away or has reached a maturity of the contract with life insurance company, he/she needs to pay a compensation, or so called ‘’Life insurance fund’, to a policyholder or beneficiary specified in the insurance policy as agreed.
To be concluded, life insurance is like averaging the damage whether it is death, limb loss, a total disability, or loss of income in an old age. It may affect from one person to another and the life insurance company would have to deal with such risks. With the policyholder pays premium yearly as a common fund, when he/she has been damaged then the life insurance company would use the fund to pay a compensation for the damage as the amount of money or capital specified.