Life Insurance may be regarded as the contract which occurs with the owner of the policy and the insurer. The insurer has to pay the sum of money if the policy holder becomes ill or faces any kind of unfavourable incident. The policy holder has to pay a certain amount of money which is known as the premium in a particular interval of time interval. In USA at a time certain good amount of money is paid of the insurer dies. The insurer’s health is critically examined during the time of making the policy.
The certain occasions when the insurance becomes important are:
1) Illness of serious nature
2) Death. ( Suicide, war, riot does’nt cover these things)
3) Protection Policies
4) Policies fro investment. Here the major objective is to facilitate to the growth of capital by the investment of premiums paid regulaly
In the certain cases like as suicide the clauses of the insurance becomes null if the insurer commits suicide within a particular specified time which is generally two years. The maturity of the policy occurs when the policy holder attains a particular specified age.( Such for example 90 years). The amount which is provided when the policy holder dies is known as the face amount.
The families of the insurer have an insurable interest.