Life Insurance:
Life Insurance is a financial cover for a contingency or risk linked with human life such as loss of life by death, disability, accident etc. The risk to human life is due to natural factors or causes related to various types of accidents. When human life is lost or a person is disabled permanently or temporarily there is a loss of income to the entire household.
It is not possible to value human life. Rather it would be more appropriate to say that human life is beyond any value. However it would also be inappropriate to say that loss of human life or a disability does not result into any financial loss. Such loss would be primarily due to loss of income that could have been earned by the effected person. Hence the most appropriate method to determine such loss would be to assess the same on the basis of loss of income in the future years, also known as human life value.
Life Insurance policies provide compensation for such loss by providing for payment of a definite amount of money to be paid by the Insurer in the event the Insured dies or is disabled permanently/temporarily during the term of the policy.
