Life Assured

What is a Life Assured?

In the context of life insurance, the "life assured" is the person whose life is insured under the policy. It is the life assured's death or survival (depending on the type of life insurance policy) that triggers the payment of the policy benefits. The life assured could be the same person as the policyholder (the one who pays the premiums) or it could be someone else, such as a family member, whom the policyholder wants to insure.

Why is the Concept of Life Assured Important?

The concept of a life assured is essential for several reasons:

• Policy Benefits

  : The event that triggers the payment of the policy benefits is based on the life assured. For example, in a term life insurance policy, the death benefit is paid if the life assured dies within the policy term.

• Risk Assessment

  : The premiums for the policy are determined based on the life assured's age, health, lifestyle, occupation, and other factors. The insurer assesses the risk associated with insuring the life assured's life to calculate the premium.

• Insurable Interest

  : In cases where the policyholder and the life assured are different individuals, there must be an insurable interest between them. This means that the policyholder would suffer a financial loss or other kinds of loss from the death of the life assured.

When Does a Person Become a Life Assured?

A person becomes a life assured when a life insurance policy is issued on their life. This happens after the proposer submits a proposal for insurance, the insurer assesses the risk based on the information provided and decides to accept the proposal. The issuance of the policy signifies the start of the insurance contract, and the person whose life is insured under the policy becomes the life assured.

What are the Responsibilities of a Life Assured?

While the life assured's main role in a life insurance policy is to be the subject of the insurance contract, they also have certain responsibilities:

• Providing Accurate Information

  : If the life assured is also the proposer, they are responsible for providing accurate and complete information about their health, lifestyle, and other factors that affect the risk assessment.

• Maintaining Health and Lifestyle

  : The life assured is expected to maintain their health and lifestyle as described in the proposal. Significant changes, such as a serious illness or a high-risk occupation change, should be reported to the insurer, as they may affect the terms of the policy.