Life Insurance

Life insurance is a policy that guarantees a lump sum payment to the family or any named beneficiary of an insured person upon his death. If the insured holds a cash-in policy, he may get the cash value of his plan when he outlives it. As with any other insurance, a life plan also has exclusions, or conditions or activities that increase a person’s net risk to a level that is considered too high by insurance companies. For example, insured people who commit suicide or those who died while engaging in such activities as war and terrorism will not have their policy’s proceeds made available to their named beneficiaries. Other exclusions include death from substance abuse, commission of unlawful acts and all unnatural causes, except for accidents where the insured is not the responsible party. The benefits of life insurance are, thus, hinged on the manner of death of the insured person which can determine whether or not payouts can be made to beneficiaries.