Life insurance is a contract where insurer in exchange of a sum we call premium, agrees to pay a agreed sum to beneficiary, on the death of the insured or to insured himself on expiration of a predetermined period we call term.
Life insurance is very important for any person. There are some risks that each individual face. To mitigate these risk one must know them properly. They are :-
Three Significant Risks:-
1) Danger of dying too soon.
2) Danger of dying too old.
3) Danger of Disability and Sickness.
How Life Insurance Mitigates Them:-
If one dies too soon insurance company will pay the amount of insurance to his family. It mitigates the hardship of the family and helps them to survive. If one dies too old, he will get maturity value of insurance if the policy has this feature other than term insurance. So he will be supported on old age. So insurance covers both long life and short life risks.
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