Life insurance policy is an agreement between two parties, the insuring company (e.g., Life Insurance Corporation of India) and the insured (person who buys the policy) where the insuring company agrees to pay an assured amount to the insured upon the death of the person. Also, any emergency remittances like medical terminal illness, accident requiring medical attention, and other similar crisis may also be covered under the agreement. The tenure of the policy depends on the age of the person at the time of taking the policy.
When you buy an insurance policy you become the insurance holder and you get a certificate and agreement that you need to pay a premium either yearly or quarterly as per the agreement terms and conditions. Life insurance is considered the best investment and long-term saving as the insured gets the assured amount on maturity. It is a type of saving where the insured’s family is benefited more than the insured person. An insurance policy offers various plans to the individual and one can select a plan that is best suited to him.
Insurance policies are mainly two types:
1. Protection policies. This type of policy aims at providing benefit in crisis, like an emergency major surgery where the life of the insured person is at risk. The coverage here is usually a very big amount.
2. Investment purpose. Here the purpose is growth of the principal amount by regular premiums and is very popular in the United States like whole life universal life and variable life policies.
