what is life insurance policy ?

what is life insurance policy ?

life insurance is the safest and the most secure way to protect your family or dependents against finacial contingencies that may arise post the unfortunate event of your untimely demise. Under a life insurance contract in india.the insurer assures to pay a definate sum to the policyholder's family on his demise during the policy term.

life insurance policy is an agreement between an insurance company and a policyholder, under which the insurer guarantees to pay an assured some of the money to the nominated beneficiary in the unfortunate event of the policyholder's demise during the term of the life insurance plan.in exchange, the policyholder agrees to pay a predefined sum of money in form of premiums either on a regular basis or as a lump sum. if included in the contract, some other contingencies, such as the critical illness or the terminal illness can also trigger the payment of benefit. if mentioned in the contract, a policy may also cover some other costs like funeral expenses as a part of benefits.

The insurance company will determine the premium payment that has to be made by the policyholder to the company.

why it is important to buy life insurance policy ?

It acts a finacial net in case of eventuality linked with human life, such as retirement disability, accident, death, etc. Life is umpredictable one can never guess what happens next. In case of sudden demise of the primary breadwinner of a family, aparat from the emotional trauma, his/her family is at the risk of a finacial crunch. In case this person is the sole breadwinner of the family dependents face a loss income.

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