A life insurance policy is a contract between the insurance company and the insured in which the insurer agrees to pay a pre-defined amount—sum assured or the insurance money—upon the death of the insured during the policy term. This insurance money is given to the nominee of the policy. If you are working and have people who depend on your income, a life insurance policy is a must.
The most cost efficient way to get life insurance is to buy a term plan, as others have an element of investment, making them a tad expensive. Term plans only include the cost of insurance so they are the cheapest kind of life insurance product. If you die during the term, your nominee gets the sum assured, but if you survive the term, you get nothing back.
