Badal Chandra Rajbangshi Company Secretary, UICL

Life insurance

Insurance cover that serves two major purposes: (1) to substitute for the insured's income if

he or she dies, and (2) to qualify the insured for favorable tax treatment.
The policy holders buy insurance cover from an insurance company, and pay specific
periodic amounts (premiums) for the term (duration or life) of the policy. If the insured dies
before the term is completed, a guaranteed sum (the face amount of the policy) is paid to
one or more named beneficiaries. If the insured survives the term then, depending on
the type of the policy, he or she may receive the full or a part of the face amount of the
policy. For young families, a life insurance policy creates an 'instant estate' before they
have enough time to accumulate other.

Usage Example

A life insurance contract will state that a specific amount of money is to be paid to the
designated beneficiary upon the death of the insured, or once the insured has reached a
specific age.

Whole life insurance

Life insurance policy that (1) normally covers an individual until his or her death, unless

it lapses due to non-payment of premium or is cancelled, (2) builds up a
cash value (called cash surrender value), (3) pays a fixed death benefit, and (4) where
(unlike in a term life insurance) the premium amount remains constant despite the
advancing age of the insured. The insured or policyholder may obtain a loan (called policy
loan) against the accumulated cash value. Also called continuous premium whole life
insurance,  ordinary life insurance, permanent life insurance, or straight life insurance.

Usage Example:

Whole life insurance is a very popular type of life insurance because your premium amount remains
the same despite your age.
Badal Chandra Rajbangshi Company Secretary, UICL

Life insurance company

Financial intermediary (the insurer) that shares the financial risk of untimely death of

its policy holder (the insured).

Usage Example:

Before selecting a life insurance policy it is important to do your research and purchase
the policy through a reputable life insurance company.

Adjustable life insurance

Type of policy which allows (within certain limits) the policyholder to (1) raise or lower

the face amount of the policy, (2) lengthen or shorten the protection period and
the associated premium, and (3) change the type of protection.

Acceleration life insurance

Type of policy which pays a portion (typically 25 percent) of the death benefits(face
amount of the policy less any outstanding loans, fees, etc.) in case of a specified
illness or medical emergency.

Usage Example
Acceleration life insurance is a viable option for individuals who don't want to spend
a lot of money on a life insurance policy, but still want partial coverage if a death or
medical emergency were to occur.