Life Insurance

Life insurance is some kind of a contract between the policy owner and the insurance company (the insurer) hat agrees to pay a certain amount of money when the person insured dies, or has terminal or critical illness. In exchange for that promise the policy owner pays monthly premiums at regular intervals. In most cases the insurance company will pay a lump sum in case the person insured died to the beneficiaries - people specified in the agreement. Some of the insured events covered by the policy may include serious illnesses. In some cases the agreement may be supplied with exclusions aimed at limiting the liability of the insurance company - including suicide, fraud, riot or war. Although in most cases the insured person and the policy owners are the same people, sometimes it's not like that. Someone's life can be insured by another person (for example, a wife insures the life of her husband and undertakes to pay monthly premiums) and the policy owner guarantees that he or she will be paying for the policy. In case there are special provisions to the agreement the coverage may be declared null if the insured person commits a suicide within a certain period (usually two years from the moment the policy was purchased). Special mortality tables provide bases for the calculations to be made. The person's age, sex and smoking are considered to be the defining parameters. Mortality tables can be modified by some insurance companies, but the trend stays the same - premium payments are lower for a young woman who is a non-smoker if compared to a 60-year old man who smokes regularly. The insurer is likely to investigate every individual that applies for life insurance to find our more about health and lifestyle. The insurer also receives the permission to obtain the necessary information from the physician treating the person who applied for insurance. It's up to a particular insurance company to determine insurability, as these companies are not required by law to provide coverage to anyone. There are a variety of factors that can affect the premiums and whether the person will be insured. These include travel, profession, lifestyle and other factors will be taken into consideration. Before the payment is made at the insured person's death the company is most likely to ask for some proof of death, such as a death certificate and the claim form. The beneficiary may ask for the amount due to be paid as a lump sum of over time in regular payments during a certain period or during the beneficiary's lifetime.