Traditional Product (Part - 2) - Life insurance product, Principles of Insurance Video Lecture | Principles of Insurance - B Com

Ans. A life insurance product is a financial contract between an individual and an insurance company. It provides financial protection to the policyholder's beneficiaries in the event of the policyholder's death. The policyholder pays regular premiums to the insurance company, and in return, the insurance company pays out a death benefit to the beneficiaries upon the policyholder's demise.

Ans. The principles of insurance related to life insurance products are: 1. Principle of Utmost Good Faith: Both the policyholder and the insurance company must disclose all relevant information honestly and accurately. 2. Principle of Insurable Interest: The policyholder must have a financial interest in the life of the insured individual, typically a family member or a business partner. 3. Principle of Indemnity: The insurance company will compensate the beneficiaries for the actual financial loss suffered due to the policyholder's death, up to the policy's coverage limit. 4. Principle of Contribution: If the policyholder has multiple life insurance policies, they can claim benefits from all policies, but the total compensation cannot exceed the actual loss. 5. Principle of Subrogation: If the insurance company pays a claim, it gains the right to take legal action against any third party responsible for the policyholder's death.

Ans. Life insurance products work by providing financial protection to the policyholder's beneficiaries. The policyholder pays regular premiums to the insurance company based on factors such as their age, health, and coverage amount. If the policyholder passes away during the policy term, the insurance company pays out a death benefit to the designated beneficiaries. This death benefit can be used to cover funeral expenses, replace lost income, pay off debts, or provide financial security to the beneficiaries.

Ans. There are various types of life insurance products available, including: 1. Term life insurance: Provides coverage for a specific term (e.g., 10, 20, or 30 years) and pays out a death benefit if the policyholder dies within that term. 2. Whole life insurance: Provides coverage for the policyholder's entire life and includes an investment component that accumulates cash value over time. 3. Universal life insurance: Offers flexibility in premium payments and death benefit amounts, allowing policyholders to adjust their coverage throughout their lifetime. 4. Variable life insurance: Combines life insurance coverage with investment options, allowing policyholders to allocate a portion of their premiums into various investment vehicles. 5. Final expense insurance: Specifically designed to cover funeral and burial expenses, providing a smaller death benefit compared to other types of life insurance.

Ans. Yes, you can cancel your life insurance policy. Most life insurance policies have a provision called a "free look period" that allows policyholders to review their policy after purchase. During this period, typically 10-30 days, you can cancel the policy and receive a full refund of any premiums paid. After the free look period, you may still be able to cancel your policy, but there might be certain fees or surrender charges involved, and you may not receive a full refund of premiums. It is important to review the terms and conditions of your specific policy and consult with your insurance company or agent for accurate information on cancellation procedures and potential consequences.