Life Insurance – Term Insurance, Coverage, Premiums, Riders & FAQs
Life Insurance – Complete Guide to Term Insurance, Coverage & Premiums
Understand life insurance in simple language, including term insurance, premiums, policy terms, nominees, riders, exclusions and claims.
What Is Life Insurance?
Life insurance is a type of insurance designed to provide financial protection to the policyholder's beneficiaries or other eligible recipients according to the terms of the policy.
Depending on the type of policy, life insurance may provide a death benefit and, in some products, other benefits according to the policy conditions.
Life insurance products can be structured in different ways. Therefore, it is important to understand the policy term, premium, benefits, exclusions, conditions and other features before purchasing a policy.
How Does Life Insurance Work?
In a typical life insurance arrangement, the policyholder pays premiums according to the policy schedule. In return, the insurer provides the benefits specified in the policy, subject to its terms and conditions.
If an insured event occurs during the applicable policy period, the beneficiary or nominee can submit a claim to the insurer. The insurer evaluates the claim according to the policy documents and applicable requirements.
Types of Life Insurance
Life insurance products can have different structures and purposes. Common categories include term insurance and policies that combine insurance with other features.
Term Insurance
Term insurance provides life cover for a specified policy term. If the insured event covered by the policy occurs during the applicable term, the policy may provide the specified benefit to the eligible beneficiary, subject to the policy conditions.
Term insurance is generally structured primarily around life protection rather than investment features.
Other Life Insurance Products
Some life insurance products may combine life protection with additional features or benefits. The structure, premium, maturity benefits and other conditions vary according to the product.
When comparing such products, carefully examine the policy documents, benefit structure, charges, exclusions and applicable conditions.
Term Insurance vs Life Insurance
Term insurance is itself a form of life insurance. The term "life insurance" can also be used more broadly to describe several types of life insurance products.
| Feature | Term Insurance | Other Life Insurance Products |
|---|---|---|
| Main purpose | Primarily life protection | May combine protection with additional features |
| Policy structure | Coverage for a specified term | Depends on the product |
| Benefits | Governed by policy terms | Can include additional benefits depending on the policy |
What Is Sum Assured?
Sum assured refers to the amount of insurance benefit specified under the applicable life insurance policy, subject to its terms and conditions.
The appropriate amount of life cover depends on an individual's financial circumstances, responsibilities, liabilities and protection requirements.
Rather than choosing a policy based only on premium, consider whether the coverage amount is appropriate for the financial responsibilities that need to be protected.
What Is a Life Insurance Premium?
A premium is the amount paid to the insurer for maintaining the policy according to its terms.
Premiums can depend on several factors, including the insured person's age, coverage amount, policy term, product type and other factors used by the insurer during underwriting.
What Is a Policy Term?
The policy term is the period for which the insurance policy remains in force, subject to payment of premiums and other applicable conditions.
The available policy terms depend on the product and insurer.
What Is a Nominee in Life Insurance?
A nominee is a person designated in a life insurance policy to receive the policy benefit according to the applicable policy terms and legal requirements.
It is important to keep nominee information updated and to understand the applicable rules governing nomination and claim settlement.
What Are Life Insurance Riders?
Riders are optional benefits that can be added to certain life insurance policies, usually for an additional premium.
Available riders differ between products and insurers.
Common Types of Riders
- Accidental death benefit rider
- Critical illness rider
- Disability-related rider
- Waiver of premium rider
- Other product-specific riders
Always check the eligibility requirements, exclusions, benefit amount and conditions of a rider before adding it to a policy.
Life Insurance Exclusions
Insurance policies contain exclusions and conditions that determine when benefits are payable.
The exact exclusions depend on the policy and product. They may relate to specific circumstances, disclosures, policy conditions or other matters described in the policy documents.
Do not rely only on a summary or advertisement. Read the policy wording and applicable terms carefully.
How to Make a Life Insurance Claim
When a claim needs to be made, the nominee or eligible claimant should contact the insurer and follow the prescribed claim procedure.
Basic Claim Process
- Contact the insurer or its authorised claim channel.
- Provide the policy details.
- Submit the required claim form.
- Provide the requested identity and supporting documents.
- Submit additional documents where required.
- Allow the insurer to evaluate the claim.
- Follow the insurer's instructions until the claim is completed.
The documents and procedures required can vary depending on the type of claim and the insurer.
Documents That May Be Required
- Policy documents
- Claim form
- Identity and address documents
- Death certificate, where applicable
- Bank account details
- Nominee or beneficiary information
- Other documents requested by the insurer
Why Accurate Information Matters
When applying for life insurance, applicants should provide accurate and complete information requested by the insurer.
Information provided during the application and underwriting process can be relevant to the policy and future claims. Read the application form carefully and disclose information as required.
How to Compare Life Insurance Policies
Comparing life insurance policies involves more than looking at the premium. Consider the overall coverage and policy conditions.
- Coverage amount
- Policy term
- Premium
- Policy benefits
- Exclusions
- Riders
- Claim process
- Eligibility requirements
- Policy conditions
- Renewal or continuation conditions, where applicable
Questions to Ask Before Buying Life Insurance
- How much life cover is required?
- What is the policy term?
- What premium will be payable?
- What benefits are included?
- What exclusions apply?
- Are riders available?
- What happens if a premium is missed?
- How does the claim process work?
- Who is listed as the nominee?
- What documents should be retained?
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Life Insurance FAQs
1. What is life insurance?
Life insurance is insurance designed to provide specified financial protection according to the terms and conditions of the policy.
2. What is term insurance?
Term insurance provides life cover for a specified period, subject to the policy's terms and conditions.
3. What is the difference between term insurance and life insurance?
Term insurance is a type of life insurance. The term "life insurance" can refer broadly to different types of life insurance products, while term insurance generally focuses on providing life protection for a specified period.
4. What is sum assured?
Sum assured refers to the specified insurance benefit under an applicable life insurance policy, subject to its terms and conditions.
5. What is a life insurance premium?
A premium is the amount paid to the insurer according to the policy schedule to maintain the insurance coverage and applicable benefits.
6. What is a nominee in life insurance?
A nominee is a person designated in a policy to receive the policy benefit according to the applicable policy terms and legal requirements.
7. What are life insurance riders?
Riders are optional benefits that can be added to certain insurance policies, usually for an additional premium and subject to specific conditions.
8. How does a life insurance claim work?
The nominee or eligible claimant submits the required claim documents to the insurer. The insurer then evaluates the claim according to the policy terms and applicable requirements.
9. What should I check before buying life insurance?
Check the coverage amount, policy term, premium, benefits, exclusions, riders, claim process and other policy conditions before purchasing.
Important Information
This article is provided for general educational and informational purposes. It is not insurance, financial, legal or professional advice and does not constitute a recommendation to purchase any particular insurance product.
Life insurance products, premiums, eligibility requirements, benefits, exclusions, policy terms, riders and claim procedures can vary between insurers and products and may change over time.
Always read the latest policy documents and obtain information directly from the relevant insurer or authorised insurance professional before purchasing or making an important insurance decision.
Last reviewed: October 2026
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