What is a life insurance policy?

A life insurance policy provides financial protection to your family in the unfortunate event of your death. It involves paying small amount each month or quarterly or half yearly or yearly (called premiums) to cover the risk of your untimely demise during the tenure of the policy. In such an event, your family (or the nominees you have named in the policy) will receive a lump sum amount. In case you live till the maturity of the policy, depending on the type of life insurance policy you have opted for, you will receive returns the policy may have earned over the years.