A life insurance (or life policy) is a contract stipulated between a private subject (the policyholder) and an insurance company; through this contract, after the payment of a premium (which can be paid in instalments) the insurance company guarantees, in the event of certain events occurring in the life of the policyholder, the payment of a certain amount or of an annuity inclusive of interest accrued from the date of stipulation until the moment in which said events occurred.
There are four figures involved in the stipulation of a life insurance contract: the policyholder (the person who stipulates the policy and who is generally the person who pays the premium), the insurance partner, the insured (the person to whom the event relates) and the beneficiary (the person who will withdraw the sum or collect the annuity after the death of the policyholder).
If the premium is paid in a single payment, it is called a single premium; if the payment is made in instalments, it is called a recurrent premium, while if the payment of a fixed amount is made on set dates (for example, once a year), it is called a recurrent single premium.
Basically, there are three types of life insurance: life policy, death policy, mixed life policy.
In the case of a life insurance policy, the insurance company undertakes to pay a certain capital or a life annuity in the event that, at maturity, the policyholder is still alive. This type of life insurance can have an immediate annuity (the company pays the annuity from the date on which the contract was stipulated) or a deferred annuity (the payment of the annuity is effective from a later date (usually several years) than the date on which the insurance was stipulated).
In the case of a death policy, the company will pay a certain lump sum to the beneficiary who will have been previously indicated in the insurance policy. Death insurance can be either temporary or whole life; in the first case, payment will be made if the death of the policyholder occurs during the policy term; in the second case, payment will be made on the death of the policyholder regardless of the time of death.
A blended life policy provides for the payment of a lump sum (or life annuity) if the policyholder is still alive when the policy expires, or for the payment of an indemnity if the death of the policyholder occurs during the policy term.
The primary purpose of a life insurance policy is to protect the beneficiaries from the financial problems that may arise if the policyholder dies prematurely.
Life insurance policies are not part of the estate*, so the beneficiary can be freely chosen by the policyholder.
The beneficiary (or beneficiaries) can be chosen at the time of the stipulation of the contract or later by written request to the insurance company; beneficiaries can also be chosen by will.
The policyholder has the right to change the beneficiary at will, but the request to the insurance company must be made in writing and not verbally.
The beneficiaries of a life insurance policy may be natural persons, legal persons, associations, etc..
Depending on the case, life insurance policies can be stipulated in which the insured, policyholder and beneficiary coincide.