Life insurance or life assurance is a contract
between the policy owner and the insurer, where the insurer agrees
to pay a sum of money upon the occurrence of the insured's death.
In return, the policy owner (or policy payer) agrees to pay a
stipulated amount called a premium at regular intervals.
As with most insurance polices, life assurance is a contract between the insurer and the policy owner (policyholder) whereby a benefit is paid to the designated Beneficiary (or Beneficiaries) if an insured event occurs which is covered by the policy. To be a life policy the insured event must be based upon life (or lives) of the people named in the policy.
Insured events that may be covered include:
- death,
- accidental death
Conditions not covered but which might be insured by forms of insurance or riders on life insurance policies:
- need for long term care.
- diagnosis of a terminal illness,
- diagnosis of a critical illness,
- disability due to ill health,
- permanent disability.
