In general, “Life insurance is a contract between an insurance policy holder and an insurer or assured, where the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of an insured person”.
Insurance is a risk-spreading situation. Basically, the insurance company pools the premiums paid by all of its clients. Theoretically speaking, the pool of premiums answers for the losses of each insured. An important point to note is that life insurance is a valued policy. This means that it is not a contract of indemnity. You can visit us at Frisco, TX if you want to know more about home insurance coverage.
Life insurance is a contract whereby one party insures a person against loss by the death of another. Insurance on life is a contract by which the insurance company for a stipulated sum engages to pay a certain amount of money if another dies within the time limited by the policy.
Therefore, the life insurance policy contract is between the policyholder (the assured) and the life insurance company. In return for this protection or coverage, the policyholder pays a premium for an agreed period of time, dependent upon the type of policy purchased. The payment of the insurance money hinges upon the loss of life and in its broader sense, life insurance includes accident insurance, since life is insured under either contract.