Definition of Life insurance:
Insurance that pays out a sum of money either on the death of the insured person or after a set period.
Insurance cover that serves two major purposes: (1) to substitute for the insureds income if he or she dies, and (2) to qualify the insured for favorable tax treatment. The policy holders buy insurance cover from an insurance company, and pay specific periodic amounts (premiums) for the term (duration or life) of the policy. If the insured dies before the this term is completed, a guaranteed sum (the face amount of the policy) is paid to one or more named beneficiaries. If the insured survives the term then, depending on the type of the policy, he or she may receive the full or a part of the face amount of the policy. For young families, a life insurance policy creates an instant estate before they have enough time to accumulate other assets. And it provides liquidity to the named beneficiary (or beneficiaries) long before the deceaseds estate matters (which often call for substantial expense) are settled. Four main types of life insurance policies are (1) Term life insurance, (2) Whole life insurance, (3) Endowment life policy, and (4) Annuity. Life insurance has its origins in the old practice of saving money for ones own funeral costs, and is called also life assurance.
How to use Life insurance in a sentence?
- He has taken out life insurance.
- I took out a life insurance on myself so that in the case of my death, my family will be taken care of as well as the funeral costs.
- Some companies will offer life insurance as a benefit so that the employees know their family will be taken care of if there is an emergency.
- David always worried what would happen to his family if he were gone so he purchased a substantial life insurance policy to be sure that they would be taken care of if anything ever happened to him.
Meaning of Life insurance & Life insurance Definition