Life Insurance

Life insurance is a specific type of insurance. As in all insurance, the insured transfers a risk to the insurer. The insured pays a premium and receives a policy in exchange. The risk assumed by the insurer is the risk of death of the insured.


ABOUT LIFE INSURANCE

There are three parties in a life insurance transaction; the insurer, the insured, and the owner of the policy (policyholder), although the owner and the insured are often the same person.

For example, if David Smyth buys a life insurance policy on his own life, he is both the owner and the insured. But if Becky Smyth, his wife, buys a life insurance policy on David's life, she is the owner and he is the insured.

The owner of the policy is called the grantee (he or she will be the person who will pay for the life insurance policy).

LIFE INSURANCE BENEFICIARY Another important person involved is the beneficiary. The beneficiary is the person or persons who will receive the life insurance policy proceeds upon the death of the insured. The beneficiary is not a party to the policy, but is designated by the owner, who may change the beneficiary unless the policy has an irrevocable beneficiary designation. With an irrevocable beneficiary, that beneficiary must agree to changes in beneficiary, policy assignment, or borrowing of cash value. LIFE INSURANCE - PEACE OF MIND Taking out life insurance offers your family peace of mind in the unfortunate death of a loved one in a very distressing time. Life insurance gives your family security and comfort knowing that unfortunate events are accounted for financially.

LIFE INSURANCE POLICY

The life insurance policy, like all insurance policies, is a legal contract specifying the terms and conditions of the risk assumed. Special provisions apply, including a suicide clause wherein the policy becomes null if the insured commits suicide within a specified time for the policy date (usually two years). Any misrepresentation by the owner or insured on the application is also grounds for nullification.

Most life insurance contracts have a contestability period, also usually a two-year period; if the insured dies within this period, the insurer has a legal right to contest the claim and request additional information before deciding to pay or deny the claim.

The Internet provide an unparallel opportunity to find the cheapest life insurance or the best life insurance for you. It enables you to locate sites offering Life Insurance Policies whereby you can compare the ones that suit your situation and pick the best life insurance policy for you.