Introduction to Life Insurance
Life insurance provides financial protection to the policyholder's family in the event of death or disability. In Sri Lanka, life insurance is regulated by the Insurance Regulatory Commission of Sri Lanka (IRCSL).
Types of Life Insurance
- Term Life Insurance – Provides coverage for a specific period. If the insured dies during the term, the beneficiary receives the sum assured. No maturity benefit.
- Whole Life Insurance – Provides coverage for the entire lifetime of the insured. Includes a savings component.
- Endowment Plans – Combines life insurance with savings. Pays out on death or at maturity, whichever comes first.
- Unit-Linked Insurance Plans (ULIP) – Part of the premium is invested in market-linked funds.
Key Terms
| Term | Meaning |
|---|---|
| Premium | The amount paid periodically to keep the policy active |
| Sum Assured | The guaranteed amount payable on death or maturity |
| Beneficiary | The person who receives the payout |
| Rider | An add-on benefit attached to the main policy |
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