"Life insurance, also referred to as life assurance—especially in the Commonwealth of Nations—is a contractual agreement between an insurance policyholder and an insurer or assurer. In this arrangement, the insurer commits to providing a specified sum of money to a designated beneficiary upon the death of the insured individual (often the policyholder). Depending on the terms of the policy, other critical events such as terminal illness or severe health conditions might also trigger a payout.
The policyholder typically pays a premium, either regularly or as a single lump sum. The coverage benefits may extend to cover additional expenses, such as funeral costs.
These life insurance policies are bound by legal contracts that outline the scope and limitations of the insured events. Specific exclusions outlined within these contracts serve to limit the insurer's liability. Common examples of exclusions encompass claims related to suicide, fraudulent actions, war, riot, and civil commotion. Challenges may arise in cases where an event is not explicitly defined, such as when the insured knowingly undertakes a high-risk activity, consents to an experimental medical procedure, or experiences adverse effects due to specific medications leading to injury or death."
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