LIFE INSURANCE Meaning and
Definition
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Life insurance refers to a contract between an individual and an insurance company, in which the policyholder pays a regular premium in exchange for a financial payout to be made upon their death. It is a type of insurance that offers protection and financial security to the policyholder's beneficiaries or dependents after their demise.
Life insurance serves as a safeguard against the unforeseen risks associated with mortality by providing a lump sum or regular payments to designated beneficiaries upon the insured individual's passing. The named beneficiaries receive the death benefit as specified in the insurance policy, typically tax-free, enabling them to cover various expenses such as funeral costs, mortgage payments, outstanding debts, education, and daily living expenses.
There are different types of life insurance policies available, including term life insurance, whole life insurance, and universal life insurance. Term life insurance offers coverage for a specific period, while whole life insurance provides lifelong protection with a savings or investment component. On the other hand, universal life insurance combines elements of both term and whole life insurance, granting flexibility in premiums, death benefits, and cash value accumulation.
Life insurance is primarily acquired to provide financial security and peace of mind to loved ones left behind, offering them a measure of stability during a challenging time. It is a crucial tool for estate planning, enabling the insured individual to leave a legacy and ensure that their family's financial needs are met even after their demise.
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• A contractual obligation assumed by a company or association of individuals to pay to the beneficiary or estate of a person, called the insured, a specified sum of money in the event of his death, on condition that the insured pay to the company either a certain amount yearly (a premium) or such sums as the company or association may from time to time call upon him to pay (assessments). See policy and premium.
A practical medical dictionary. By Stedman, Thomas Lathrop. Published 1920.
Common Misspellings for LIFE INSURANCE
- kife insurance
- pife insurance
- oife insurance
- lufe insurance
- ljfe insurance
- lkfe insurance
- lofe insurance
- l9fe insurance
- l8fe insurance
- lide insurance
- lice insurance
- live insurance
- lige insurance
- lite insurance
- lire insurance
- lifw insurance
- lifs insurance
- lifd insurance
- lifr insurance
Etymology of LIFE INSURANCE
The word "life insurance" has a straightforward etymology. The term "life" derives from the Old English word "līf", meaning "animate existence, living beings, human life". It has ancient Germanic roots and is related to words in several other Germanic languages, such as German "Leben" and Dutch "leven".
The word "insurance" comes from the Middle French word "assurance", which meant a pledge or guarantee. It originated from the Latin word "securus", meaning "secure" or "free from care". "Assurance" was later borrowed into English and evolved to the modern term "insurance".
Therefore, "life insurance" is a compound term formed by combining "life", referring to the concept of animate existence, and "insurance", which signifies the act of securing or guaranteeing against risks or potential losses.
Idioms with the word LIFE INSURANCE
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Life Insurance Settlement
A "life insurance settlement" refers to a financial transaction where the owner of a life insurance policy sells their policy to a third party for a lump sum cash payment. This arrangement allows the policy owner to receive a portion of the death benefit of the policy while still alive, rather than waiting for the beneficiary to receive the full amount upon their death.
Similar spelling word for LIFE INSURANCE
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