People face risks like premature death, disability or severe illness, often with serious financial consequences. Life Insurance makes it possible to cushion their financial impacts.
Policies (insurance agreements) are designed such that when the unexpected strikes, the insurance company provides financial assistance to lessen the impact of the event.
Hence, we can think of Life Insurance as a form of financial risk management.
Life insurance does not cover all events.
The main difference between saving & investment lies in the degree of risk involved.
Savings tend to be associated with lower risk (and potentially lower return), whereas investments tend to have higher risk (and potentially higher return).
Next... We learn about TYPES OF COVER