What is a Life Insurance policy?
A life insurance policy is a contract between two parties, the life assured or the insured, also known as the policyholder, and an insurance company or the insurer. The insurer promises to pay a predetermined amount of money to the policyholder’s family in case the insured passes away during the course of the policy term.
The insured will, in return for this coverage, pay regular premiums to the insurer for a set number of policy years i.e. Premium Payment Term. In some life insurance policies, there may also be maturity benefits offered to the policyholder, if they survive the policy term.