Life Insurance
Insurance may be described as a hedge against life??¦s uncertainties. To that end, it can never be taken too seriously. Every year, the person insuring himself bets that he will not be living another year and the insurer is betting that he will. If the person lives, and loses the bet, he pays the insurer a small premium; if he dies, the insurer pays the lump sum ??jackpot??¦ to the person??¦s nominee.
While the person taking up the policy has only one life to bet on, his insurer is playing the same game with millions of other people like him. Since the insurer??¦s risk is spread, he can offer huge odds. Moreover, the insurer invests the premium he receives each year, and has employees (called Actuaries or Actuarial Officers) who calculate the odds on each policy based on mortality rates, the mortality experience of the insurer, and the return on investment which the insurer is likely to get. These in essence, form the framework of determining the premia paid by policy holders, and the returns expected from the policies.
It is the Life Advisors of each company who are responsible for creating the relation between the insurer and the policy holder. He
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