In a life insurance policy, the most common event is the death of the person who is insured—in which case the payment is made to the beneficiary.
Depending on the type of policy, it sometimes may be the insured person attaining a certain age, or the owner requesting to surrender the policy for its cash value, or to take that cash value out in the form of monthly payments for a set number of years of the insured’s life.
Reasons For Purchasing Life Policies
People purchase life insurance for many reasons. Some of them are discussed here:
- Family protection – To provide financial security to surviving family members upon the death of the
- Insurance to cover a particular need – Such as paying off a mortgage or consumer debt upon the insured’s
- Business insurance – To compensate a company on the death of a key employee or to provide a surviving partner the resources to buy out the deceased partner’s share of the
- To provide funds – To pay estate taxes or other final obligations necessary to settle a deceased person’s