Life Insurance

Insurance policy is a contract between two parties.The first party ,the insured agrees to make one or more payments (premiums) to the second party, the insurer.The insurer, agrees in return to make payment (the amount of insurance) to the insured, if and when the event insured against occurs.

In case of life insurance ,there are many parties involved.If the insured death,the third party to whom the insurance is payable is called beneficiary.

It is not necessary that the insureds pay the premiums.It can be paid by fourth party which is called policyholder or owner.In return for payment of premium, the policyholder has the rights including to name the beneficiary.