India, Dec. 8 -- Life insurance is a contract where you pay regular premiums to an insurer. In return, the insurer promises to pay a lump sum (sum assured) to your nominee if you pass away during the policy term or on maturity in certain plans.

Think of it as buying a financial guarantee for your family. Instead of your income, the insurance payout steps in and takes care of important expenses like EMIs, rent, school fees and day-to-day living costs. In India, a life insurance policy can also often combine protection with savings or investment, depending on the type of plan you choose.

How Life Insurance Works

When you look at the details of, say, a postal life insurance plan, or any other life cover, you usually choose three basic thi...