Life insurance (or commonly life assurance, especially in the Commonwealth) is a contract between an insured (insurance policy holder) and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the "benefits") in exchange for a premium, upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment. The policy holder typically pays a premium, either regularly or as a lump sum. Other expenses (such as funeral expenses) are also sometimes included in the benefits. Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; common examples are claims relating to suicide, fraud, war, riot, and civil commotion. Life-based contracts tend to fall into two major categories: Protection policies – designed to provide a benefit in the event of specified event, typically a lump sum payment. A common form of this design is term insurance. Investment policies – where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms (in the US) are whole life, universal life, and variable life policies.
Terms of Life Insurance:.Special exclusions could apply, like suicide clauses, whereby the policy becomes null and void if the insured commits suicide inside a fixed time (usually 2 years once the acquisition date; some states offer a statutory annual suicide clause). Any misrepresentations by the insured on the appliance may additionally be grounds for nullification. Most America states specify a most contestability amount, typically no quite 2 years. providing the insured dies inside this era can the insurance underwriter have a right to contest the claim on the idea of deception and request extra data before deciding whether or not to pay or deny the claim. The face quantity of the policy is that the initial quantity that the policy pays at the death of the insured or once the policy matures, though the particular benefit will offer for bigger or lesser than the face quantity. The policy matures once the insured dies or reaches a fixed age (such as a hundred years old).
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