What is Life Insurance Policy?

If you are wondering what is life insurance meaning, you should know that a life insurance policy is a contract between an individual and an insurance provider, in which the insurance company gives financial protection to the policyholder in exchange for monthly fees (known as premiums).

As per the life insurance definition, the insurer (insurance company) pays a sum assured to the policyholder or to the named nominees in case the policyholder meets with an untimely demise in exchange for the premium payments made towards a life insurance policy. Based on the arrangement, in the event of the death of the policyholder or, if the policy matures, the insurance provider shall pay the person or his family a lump sum amount after a certain amount of time. There are different types of life insurance policies to suit the individual needs and requirements of the policy buyers. Understanding life insurance definition, its benefits and features is important before you buy one. Read on to know more about what is life insurance meaning for you. What Are the Benefits of Life Insurance Plans? Once you get an understanding of what is life insurance meaning, as well as the different types of life insurance policies, you will find that there are 3 main advantages of getting the best life insurance policy that you should know about. Following are the 3 primary benefits offered by different types of life insurance policy: 1. Financial Security Life is unpredictable and can be full of uncertainties. It is difficult to reduce the possibility of an unfortunate event like death. In such a scenario, the family faces financial constraints arising from the lack of a steady income. Investing in the best life insurance policy early on in life acts as a safety blanket during such eventuality. According to the life insurance definition, the insurance provider is obliged to pay the nominee or beneficiary the pre-defined sum assured. As a result, even in the policyholder’s absence, his family stays protected.