Who are the parties to a life insurance policy?
MoraBanking | 09.07.2016
Life insurance is a contract by which an insurance company undertakes to pay out a lump sum, income or other agreed benefit in the event of occurrence of the insured risk in return for charging the price of the insurance (known as “premium”).
Before we discuss who the parties to a life insurance policy are, we need to make sure you understand the following concepts:
- Insurance policy: This is a document that formalises the insurance contract. It contains a policy number and sets out the terms and conditions that govern the contract, including general conditions, particular conditions and special conditions, where appropriate.
- Insured sum: This is the sum insured for each cover under the policy. The insured sum is the maximum amount paid out by the insurance company if the insured event occurs (called claim or contingency), subject to compliance with the conditions set out in the contract.
- Insurance premium: This is the price paid by the insurance holder, which normally depends on the insured sum, the age and sex of the insured, and the cover provided by the insurance.
- Claim or contingency: This relates to the event or events specified in the policy (survival, death, accident, illness, etc.), which gives rise to the payment of the agreed benefit subject to compliance with the terms of the contract.
The following parties are involved in a life insurance contract:
- The insurer. This is the insurance company that pays out a lump sum to the insured person in return for a premium if the risk covered by the contract occurs.
- The holder. This is the individual or legal entity that takes out the insurance and pays the premium.
- The insured. This is the person whose risk is covered by the insurance contract. The insured is usually the same person as the holder in the case of an individual. In a company, the holder is usually the employer and the insured is the employee.
- The beneficiary. This is the individual or company that is entitled to receive the lump sum, income or benefit under the contract. The beneficiary may be the same person as the insured or their partner, children or any other person appointed by the holder or the insured.
At MoraBanc we offer Life, a flexible life insurance policy that can be tailored to meet all your needs in terms of life, disability, accident, death, serious illness or health cover, with a wide range of CASS complementary cover and sick leave cover, so you can maintain the level of protection you want for you and your loved ones.
MoraBanc provides you with tailored solutions and full cover. For more information contact your account manager and request a quote with no obligation.
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