Types of Insurance Under Insurance Law:
Life, Marine, and Fire Insurance
Life Insurance Under Insurance Law
Definition:
Life insurance is a contract where an insurer agrees to pay a sum of money to a designated
beneficiary upon the insured person's death or after a specified period. The contract is based
on the principle of utmost good faith, meaning full disclosure of health and financial details
is required.
Legal Aspects of Life Insurance:
Governed by insurance contract laws and national regulations like the Insurance
Act in various countries.
Subject to insurable interest, meaning the policyholder must have a financial or
emotional interest in the insured’s life.
Requires adherence to the principle of indemnity and utmost good faith to prevent
fraudulent claims.
Claims may be rejected due to material misrepresentation or breach of contract.
Types of Life Insurance:
1. Term Life Insurance
oProvides coverage for a fixed period (e.g., 10, 20, or 30 years).
oIf the insured dies during the term, the death benefit is paid; otherwise, the
policy expires without payout.
oGoverned by contract law principles, ensuring fair disclosure of health
conditions.
2. Whole Life Insurance
oProvides lifetime coverage, with a savings component (cash value).
oPremiums are generally higher but remain constant over time.
oLegally classified as a long-term investment product.
3. Endowment Insurance
oA combination of life insurance and savings.
oProvides a lump sum either upon death or at policy maturity.
oSubject to contract law principles, including policyholder rights and insurer
obligations.
4. Unit-Linked Insurance Plan (ULIP)
oCombines life coverage with investments in stocks and bonds.
oGoverned by securities and insurance laws, ensuring policyholder
protection.
5. Annuity and Pension Plans
