Life Assurance Information

Life assurance is a contract between the policy owner and the company selling the insurance, where the company selling the insurance approves to pay money upon the occurrence of the covered individual's or individuals' termination or other action, such as terminal illness or critical disorder. In return, the insurance buyer accepts to pay a stipulated sum that is called a premium, at arranged intervals or in one lump amount. In some countries bills and termination expenses plus catering for after funeral expenses should be included in the insurance policy Premium. In the united states of america, the predominant form simply specifies a lump sum of cash to be given on the covered's passing away.

As with most assurance policies, life insurance is an agreement between the insuring company and the insurance buyer whereby a benefit is given to the specified beneficiaries if an covered event occurs which is covered by the insurance policy. To be a life life policy the insured circumstance has to be based upon the lives of the people approved in the insurance policy.

Covered circumstances that can be covered include:

Terminal disorder
Life documents are legal agreements and the terms of the deal describe the limitations of the policy owner conditions. Specific exclusions are often printed into the document to limit the liability of the insurer; as an example, insurance claims relating to war or suicide.

Life-based contracts tend to fall into two major categories:

Protection policies - set up to dispense a benefit in the episode of certain happening, most usually a lump sum payment. A common form of this type of insurance is variable life assurance.
Investment policies - where the main objective is to facilitate the growth of capital by regular premiums. Some common forms (in the US anyway) are whole life, universal life and variable life documents.

By: Tim Strye

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Insurance Tim is an advocate for aarp term life insurance and life insurance for seniors over 50.