What is Life Insurance?
Life insurance may be defined as ‘a contract whereby the insurer, in consideration of a premium, promises to pay a designated beneficiary a sum of money, either on the death of the insured or on the expiry of a specified period, whichever is earlier. Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. The policy holder typically pays a premium annually, half yearly, quarterly or monthly, but it must be paid regularly during the period of the policy. The sum assured is paid to the policy holder on the expiry of the policy. In case of death before the expiry, the sum is paid to his nominees.

Importance of Life Insurance
• Protection against risk: Life insurance provides protection to the family after the death of the insured. In case of premature death, a huge sum of money is paid to the dependents of the insured.
• Provision for old age: A person can make a provision for old age by taking a life policy. The policy holder feels financially secured and can enjoy economic independence after retirement.
• Savings: The policy holder usually pays premium and gets a huge amount at the time of maturity.

What is Life Insurance Premium?
To get a Life Insurance an amount of money is to be paid to the insurance company by the policy holder. The premium is an important aspect. In case of failure in payment of the premium the policy will be considered as invalid. Premium can be paid annually, half yearly, or monthly. The premium amount depends on the following factors:
• Age: The premium amount for younger people is less than that of elderly people.
• Sum assured: The premium amount depends on the sum assured, the more the sum more is the premium amount.
• Policy term: The premium amount is higher for longer duration of the policy.