is a contract between the policy owner and the insurer, where the
insurer agrees to pay a designated beneficiary a sum of money upon the
occurrence of the insured individual's or individuals' death or other
event, such as terminal illness or critical illness. In return, the
policy owner agrees to pay a stipulated amount (at regular intervals or
in lump sums). There may be designs in some countries where bills and
death expenses plus catering for after funeral expenses should be
included in Policy Premium. In the United States, the predominant form
simply specifies a lump sum to be paid on the insured's demise.
The value for the policyholder is derived, not from an
actual claim event, rather it is the value derived from the 'peace of
mind' experienced by the policyholder, due to the negating of adverse
financial consequences caused by the death of the Life Assured.