Other life insurance

8. Holders of other life insurance policies are exclusively households, resident or non-resident. The policy holder makes regular payments to an insurer in return for which the insurer guarantees to provide a benefit at a given date or earlier if the policy holder dies beforehand. If the policy holder cancels the policy before the agreed expiration date, the policy holder is entitled to a partial benefit from the insurer. A benefit is thus always paid to the policy holder or his survivors. Policies that provide a benefit in the case of death within a given period but in no other circumstances, usually called term insurance, are not regarded as other life insurance, but as other non-life insurance. In practice, because of the way in which insurance corporations keep their accounts, it may not always be possible to separate term insurance from other life insurance. In these circumstances, term insurance may have to be treated in the same way as life insurance for purely practical reasons.

A life insurance claim may be paid as a lump sum or as an annuity. The claim may be fixed or may vary to reflect the income earned from the investment of premiums during the period for which the policy operates ('with-profit' policies). A special kind of with-profit policy is a unit-linked policy, where the claim varies according to the value of a segregated fund.