Life insurance is a contractual agreement between a person (insured)

and a life insurance company (insurer/life office) guaranteeing the payment

of a specific sum of money to a designated beneficiary upon the death of

the insured, or to the insured if he survives till the end of a certain period.

IN ESSENCE:

ü    It is a legally binding agreement between a person (the insured) and a Life Office;

ü An agreed consideration (premium) for the contract is paid to the Life Office by

      the insured;

 ü   The Life Office pays an agreed amount (sum assured) on death of an identified

       individual or group of individuals (e.g. employees);

 ü    Payment is made by the Life Office in the event of death within an agreed

         period (say, 1 year) in line with the terms of the agreement.

Life insurance is not death insurance. It does not prevent people from dying.

Rather,  it ensures that others (dependants) continue to live.