The basic concept of a life insurance policy is simple; it is a written contract between a policy holder or owner and insurer where the insurer agrees to pay the owner a sum of money if an accident or death occurs. In the contract it will be said as to who will be beneficiary, to that amount, usually it will be family members and in some rare cases it may be a friend. To get that sum the owner pays a monthly installment known as a premium some what like a mortgage There may be different clauses in the contract that may include funeral expenses and so on.
Humankind has been using a basic concept that resembles modern day insurance for centuries. As far back as the ancient Chinese, Greeks and Romans have been using a type of insurance policy for various objects as well as their life.
In those days they didn’t have access to the sophisticated technology like nowadays but the basic idea was the same. That is a, type of premium was paid to the insurer with the understanding that if anything happens to the owner then the insurer would pay a certain amount as after death cost.
We all know that life is basically dangerous; it is fraught with many different types of danger that we accept and move on. After all nobody or at least most people do not plan their life around what the future is holding for them.
Most people do not plan their life around uncertain possibilities, we do the best we can and live accordingly. It is because of this unforeseen aspect of life that some people get insurance so that in such a situation their family members are not left with a huge burden. After all death is a certainty and when it happens some folks would like to be prepared.
In order to get a policy one will have to pass through certain guidelines before getting accepted by an insurer. This generally includes a work profile, health profile and what type of hobbies the potential customer may have and also the age of the potential owner.
An example would be if you are a young person with good health and no dangerous hobbies like mountain climbing then the premiums would be on a lower scale. If any of these factors change, such as dangerous job, hobby etc then your life insurance policies premiums would go up.
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