A term life insurance policy is a policy that is valid for a limited period of time, for example, 15, 20, or even 30 years. Parents can purchase a policy that covers the period until the child becomes financially independent.
Four following legal entities become parties to the agreement:
- The policyholder, an adult individual;
- The insurer, insurance company’s (IC) representative;
- The insured person, an adult citizen with the right to life and health insurance;
- The beneficiary, an individual specified in the contract to get the funds upon the insurance event occurrence.
Often different people, spouses or relatives, become the insured person and policyholder. The citizenship of participants in the insurance agreement does not affect the possibility of concluding it.
When purchasing a term insurance policy, parents need to carefully consider who to nominate the beneficiary. Usually the insured's spouse becomes the beneficiary, but it is possible to create a trust and choose its manager.
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