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What is the Definition of Life Insurance by Authors?


Generally, people buy life insurance to protect their loved ones from financial disaster after their death. Often it’s used to cover funeral costs, debt, mortgage, or education expenses.

Policyholders can choose different options for underwriting, such as accelerated underwriting, simplified issues,s or guaranteed issues. They also have a free look period to examine the policy and return it for a refund.


A life insurance policy is a contract between the insurer and the insured where the company promises to pay a lump sum amount to the nominee in the event of death. In return for the promise, the insured pays a premium regularly or in a single installment over a certain period.

The policy is a legally binding contract between the insured and the insurance company. It is a substitute for the will that transfers assets to the beneficiaries in the case of death. It is also a tool to manage risks and provide financial security for the family in the event of the insured’s demise.

Policy term – the number of years during which the Life Cover continues. Premium payment term – the number of premium payments you make before you get your Maturity Benefit. Riders – supplementary coverage that you can add to your policy.

Insurable interest – the level of interest you are expected to have in an individual’s life insurance policy; for persons related by blood, a substantial interest is established through love and affection, and for all others, a lawful and substantial economic interest to have that person’s life continue.

Underwriting – the process by which a life insurance company decides whether an applicant for a policy is acceptable and at what premium rate. Substandard risk – the classification of a person applying for a policy who does not fit the physical, occupational, and other standards on which the average premium rates are based.


A contract between the life insurance company and the insured in which the company promises to pay a certain sum of money to the beneficiary named in the policy upon the insured’s death. The policy is an alternative to a will and can also function as a form of trust.

The beneficiary is the person whom the insured names when buying the policy. It can be a person, partnership, or corporation. ICICI Prudential pays a lump sum to the Nominee (beneficiary) upon completion of the policy term, known as Maturity Benefit.

Application – A statement of information made by the applicant that helps the insurance company decide whether to accept the applicant as a life insurance risk and what underwriting classification should be assigned to him/her. The information in the application can include evidence of health, occupation, and financial status.

Expenses – A portion of the policy’s premium covers the insurer’s operating costs, such as fees for medical examinations and inspection reports, commissions, agency expenses, and underwriting and printing costs. Expenses are an important factor in determining the premium charged for a particular policy.

Cash Value – The investment component of a permanent life or universal life policy builds over time and can be cashed out or borrowed against. It results from current mortality, expense, and investment experience.


Life insurance benefits include providing financial security for your loved ones in the event of your death. At ICICI Prudential, we provide this security with our Life Cover, which is paid out as a Maturity Benefit at the end of your policy term. This amount is payable to your beneficiary and can be used to support their immediate and ongoing needs.

Your beneficiaries can use this lump sum amount to meet various expenses in your absence, including debts, taxes, and funeral costs. In addition, we offer an interest option wherein your death benefit can be left on deposit, with the insurer earning a regular income for a set period.

To avail of these benefits, you need to make timely premium payments. Depending on the type of policy you choose, this can be done annually, semi-annually, quarterly, or monthly. The premium amount charged reflects the combination of expected mortality, expense, and investment experience.

Upon receiving your life insurance policy, you will have 30 days to review the terms and conditions. If you are dissatisfied with the terms and conditions, you can return the policy to us within this period stating the reasons. Upon returning the policy, we will refund the total premium paid, subject to the deduction of any amounts incurred by the company on medical examination of the life insured, stamp duty charges, and proportionate risk premium for the period of cover.


A life insurance policy pays out a death benefit tax-free in the event of your death. It is typically purchased to help your beneficiaries cover debts or expenses you would leave behind, such as funeral costs, mortgages, and education. To maintain the insurance, you will need to pay a premium regularly. The premium can be paid in one lump sum or throughout your lifetime. It can also vary depending on factors such as risk class, policy term, contestability period, and riders.

An agent is a person licensed by the state who solicits and negotiates insurance contracts on an insurer’s behalf. They can be an independent agent representing multiple companies or a direct writer selling policies for only one company. A risk class is how a company decides what type of life insurance coverage an applicant will receive and at what premium rate. This includes underwriting classifications such as preferred, standard, and smoker.

A rider is a supplemental coverage that can be added to a life insurance policy. These can include accelerated benefits, which allow you to receive some death benefits if you are diagnosed with a terminal or long-term illness. In addition, some whole or universal life insurance policies may have a cash value that can be borrowed.