Slide MGT305 Slide03

(1)

Insurance Companies and

(2)

• _In_{life insurance}_{contracts, the payments to the}

policyholder depend-at least to some extent-on when the policyholder dies.

• Life insurance is a contract where the event being insured may never happen.

• _{Life assurance}_{is a contract where the event}

(3)

•_Term(temporary) life insurance lasts a predetermined number of years.

•Insurance company makes a payment

equal to the face amount of the policy to the specified beneficiaries if the

(4)

•If the policyholder doesn’t die during the life of the policy, no payments are made.

•The policyholder is required to make regular monthly or annual premium

(5)

•The face amount typically stays the same or declines with the passage of time.

•The premium payments typically stay or increase with the passage of time.

•_{A common reason for term life insurance}

(6)

•_Whole (permanent) life insurance provides

protection over the whole life of the policyholder.

• The policyholder is required to make regular monthly or annual premium payments until death.

(7)

• It covers many people under a single policy.

• Usually this type of insurance is purchased by a company for its employees.

• It could be contributory where premiums are shared by the employer and employee, or noncontributory where the employer