Life insurance is a contract where an insurance companyprovides financial security against the loss caused by the death, accident, natural calamities and other causes of the insured. Life insurance is done only of such things having life besides all non-life insurance. Any person willing to do insurance can do their life insurance for certain period as their wish and as their requirement. If a person wishes to do his/her life insurance, he/she has to pay certain amount for doing life insurance. That certain amount paid by the insurer to the insurance company is known as premiumor insurance premium. The amount of insurance can be paid in installment basis or in lump sum basis.
When the amount of insurance is paid on installment basis, then the payment may be monthly, tri-monthly, semi-annually, and annually. After the person or insured pays the premium amount to the insurance company, the company promises to pay back the person with the insured amount that has been mentioned in the policy to the person himself/herself if he/she is alive. If the insured person dies before the maturity period of the policy or before the expiry date of the insurance policy, the amount of insurance promised is given to his/her nominee as mentioned in the application earlier. So, we can call life insurance as a contract related to the human beings.
When the amount of insurance is paid on installment basis, then the payment may be monthly, tri-monthly, semi-annually, and annually. After the person or insured pays the premium amount to the insurance company, the company promises to pay back the person with the insured amount that has been mentioned in the policy to the person himself/herself if he/she is alive. If the insured person dies before the maturity period of the policy or before the expiry date of the insurance policy, the amount of insurance promised is given to his/her nominee as mentioned in the application earlier. So, we can call life insurance as a contract related to the human beings.Under the life insurance contract, the risk classification is simply easier than other insurance. In this contract, the risks are divided in three groups: healthy life, normal life and semi normal life. In other non-life insurance, the payment collection might not be sure and slightly delay. But in life insurance contract, the payment is certain. It can be proved in that sense, if the person holding the insurance policy dies before or during the period of insurance policy, then the insurance company are obliged to pay the promised insurance amount to his/her nominee which have been earlier mentioned in the application form. The insurance company must pay whole amount of the insurance though it is very large or small. There are many insurance companies which have insurance policies. Even there are many types of life insurance with different insurance companies. Some of the known life insurance, policies are: endowment life insurance, whole life insurance, anticipated endowment life insurance, endowment insurance with double accident benefit, fixed term children’s marriage and education endowment life insurance, term life insurance, collective endowment life insurance and so on. Different types of life insurance have their different policies and procedures based on their nature and the requirement.
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