What is the principle of life insurance?
The value for the policy owner is the 'peace of mind' in knowing that the death of the insured person will not result in financial hardship.
The foundation of life insurance is the recognition of the value of a human life and the possibility of [ indemnification for the loss of that value. Life-based contracts tend to fall into two major categories:
Protection policies – designed to provide a
benefit in the event of specified event, typically a lump sum payment. A common form of this design is term insurance.
Investment policies – where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms (in the US) are whole life, universal life and variable life policies. ]
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