| Description |
History description 2014-03-26: Lock all vaue sets untouched since 2014-03-26 to trackingId 2014T1_2014_03_26
description:
Definition: A policy under which the insurer agrees to pay a sum of money upon the occurrence
of the covered partys death. In return, the policyholder agrees to pay a stipulated
amount called a premium at regular intervals. Life insurance indemnifies the beneficiary
for the loss of the insurable interest that a beneficiary has in the life of a covered
party. For persons related by blood, a substantial interest established through love
and affection, and for all other persons, a lawful and substantial economic interest
in having the life of the insured continue. An
insurable interest is required when purchasing life insurance on another person. Specific
exclusions are often written into the contract to limit the liability of the insurer;
for example claims resulting from suicide or relating to war, riot and civil commotion.
Discussion: A life insurance policy may be used by the covered party as a source of health care
coverage in the case of a viatical settlement, which is the sale of a life insurance
policy by the policy owner, before the policy matures. Such a sale, at a price discounted
from the face amount of the policy but usually in excess of the premiums paid or current
cash surrender value, provides the seller an immediate cash settlement. Generally,
viatical settlements involve insured individuals with a life expectancy of less than
two years. In countries without
state-subsidized healthcare and high healthcare costs (e.g. United States), this is
a practical way to pay extremely high health insurance premiums that severely ill
people face. Some people are also familiar with life settlements, which are similar
transactions but involve insureds with longer life expectancies (two to fifteen years).
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Value Set LifeInsurancePolicy 2014‑03‑26
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