Life Assurance. Image credit afterjujuman.com

Life Assurance. Image credit afterjujuman.com

ZIMSEC O Level Commerce Notes: Insurance: Life Insurance

Life assurance

  • Covers against events that will certainly occur e.g. death.
  • The principle of indemnity does not apply.
  • Benefits are paid to spouses and children who are the beneficiaries of the policy.

Whole life policy.

  • One assures his/he life for a certain sum of money,
  • Which matures at the time of death.
  • The sum assured is paid to the beneficiaries.
  • The assured does not enjoy the benefits.
  • The assured pays premiums for his entire working life of until death.
  • The insurance company calculates the premium based on age and the sum to be assured.
  • Endowment policy
  • Taken for a specific period of time e.g. 15 years.
  • Premiums are paid up at the end of the period or upon death of assured before the policy matures.
  • If the assured dies before maturity date the sum assured is paid to his/her beneficiaries.
  • If the assured lives up to the end of the period up until the policy matures then the sum assured is paid to him/her.
  • This is regarded as a form of investment.
  • The policy may or may not yield profits for the assured.

Retirement annuity assurance

  • Provides regular payments to the assured:
  • from a fixed future date usually retirement time until one dies.
  • Premiums are paid up to the retirement date.

To access more topics go to the Commerce Notes page.


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