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Term Insurance

Aug 23, 2019

Life insurance is a financial contract that protect an individuals’s dependents in the case of his or her death.

  1. Aditya pays the first month’s premium and gets hit by car walking our of the insurers office. Aditya’s family receives Rs.3.50cr for the Rs.3500 Aditya paid. This a comfortable to his wife and kids but the insurer has lost money
  2. Aditya could live out the length of policy paying 4,20,000 over 10years.

Pure profits!!

For the insurer betting on the lifespan of one person is very risky instead insurers group people together to lower the financial loss of anyone dying early there will ideally be enough. People in the group who outlived the policy offsetting those who don’t.