• 31
  Aug
  2009

• What is Life Insurance?

  
  Filed Under: Blogging
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What is Life Insurance?

Speaking in very simple legal terms - it is a contract between a Policy Holder (Insured) and an Insurance Company (Insurer) which states that in lieu of a stipulated amount of premium paid over a period of time (or in lump sum) by the Insured, the Insurer will pay a pre-decided amount in case of the death of the Insured.
Now, there are many, many types of Insurance Policies, and this simplistic definition might not hold good at all times. Many new schemes are introduced, and many previously introduced schemes are taken back by Insurance Companies on a regular basis.
With so many options all around, how is one to know more details on which Insurance Company to deal with or which scheme to choose? Well, watch this space, as more introductory posts will follow this, and try to clear some basic concepts about this highly essential part of every investment plan for every earning person.

There is an old joke about life insurance – Life Insurance is a scheme to make sure that you stay poor all your life, so that you can die rich.
Now, the question is - Is there actually some truth to this line. Looking from a cynic’s point of view, it does seem to make sense. One might say, “I can’t take the money with me, so what is the point of getting so much money after I die?”, and it seems pretty difficult to fault that logic. Over a period of time, with many simple and basic articles, we will attempt to fault this logic and bring you more clarity on this topic. Watch this space.