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Life Insurance: Information, News & Policies

  • Synopsis: Information news and updates on life insurance products including policy types accidental death and critical illness policies.

Definition: Life Insurance

Life insurance (or commonly life assurance, especially in the Commonwealth) is a contract between an insured (insurance policy holder) and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the "benefits") in exchange for a premium, upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured.

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What is a Life Insurance Policy

Life insurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a designated beneficiary a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness or critical illness. In return, the policy owner agrees to pay a stipulated amount (at regular intervals or in lump sums)

The face amount on the policy is the initial amount that the policy will pay at the death of the insured or when the policy matures, although the actual death benefit can provide for greater or lesser than the face amount. The policy matures when the insured dies or reaches a specified age (eg. 90 years old).

Upon the insured's death, the insurer requires acceptable proof of death before it pays the claim. The normal minimum proof required is a death certificate and the insurer's claim form completed, signed (and typically notarized). If the insured's death is suspicious and the policy amount is large, the insurer may investigate the circumstances surrounding the death before deciding whether it has an obligation to pay the claim.

Life-based insurance policies:

Insurance Policy Nullification:

Special provisions may apply, such as suicide clauses wherein the policy becomes null if the insured commits suicide within a specified time (usually two years after the purchase date; some states provide a statutory one-year suicide clause).

Any misrepresentations by the insured on the application is also grounds for nullification.

Most US states specify that the contestable period cannot be longer than two years; only if the insured dies within this period will the insurer have a legal right to contest the claim on the basis of misrepresentation and request additional information before deciding to pay or deny the claim.

Quick Facts: Purpose of Life Insurance

Latest Life Insurance Publications

  1. $1.39 Billion Dividend Payout for MassMutual Policy-owners
    MassMutual approves payment of estimated $1.39 billion in dividends to eligible participating policy-owners in 2013.
  2. Life Insurance Helps Provide Critical Retirement Safety Net
    Life insurance can work for retirees from providing tax benefits to protecting their estates to providing financial security.
  3. Life Insurance Awareness Month Tips
    Life Insurance tips to raise awareness among consumers and producers about the need for life insurance.
  4. Longevity Insurance - Income Supplement for Old Age
    Information on longevity insurance a type of policy for seniors that issues payments when you hit an advanced age generally 85.
  5. 401-Kaye Insurance Plan - Path to Financial Security
    401KAYE Plan will educate savvy young individuals on how to guarantee themselves an inheritance in their retirement years.

Full List of Life Insurance Documents (27 Items)


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