Life Insurance

It is one of the most common form of insurance. Life insurance is a contract in which insured promises to pay a uniform rate of premium at fixed interval against which the insurer agrees to pay a fixed amount on the happening of the event which may be the death of the insured or the expiry of a certain amount of years. This contract cab be described as 'contingent contract' because the loss of life can't be compensated but only a specified sum of money is paid if the insured dies.
It is assumed that life insurance companies so percent of the total insurance business performed in the world. It was believed to be started in England and other European countries in 16th century.

Types:
1. Endowment Life Insurance: The endowment policy is issued for a fixed period of time, e.g. 15 yrs, 20 yrs, 25 yrs, etc. The premium is payable during that period only the sum assured is payable to the policy holder on the maturity of the policy or the dependent of the policy holder on the death before the maturity of the policy.

2. Whole life insurance: In this insurance, insured person will have to pay premium amount in whole of his life time and sum assured is paid to the dependent insured person on his death. After the death of insured person, no need to pay premium by the dependent of insured person.

3. Term life insurance: It is a short term insurance. It is made only for the short period until and unless the amount of loan is repaid. It is made to give security to the creditors or lenders premium of such insurance will be very much nominal.