ZIMSEC O Level Commerce Notes: Insurance: Life Insurance
- 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.
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