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For example, if you buy a policy for yourself, you are both the owner and the insured.

However, if you buy a policy for your spouse, you are the policy owner while your spouse is the insured person.

Governments around the world encourage people to go for insurance.

Many countries give incentives in different forms to encourage this practice.

One is for the sole purpose of protection so that the dependents of a person can be supported after the demise of the insured person.

Such policies are known as term insurance policies.

The objective of this limitation is to prevent misuse of the policy and give insurance cover only to the deserving parties.

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The insurance company may demand more documents to ascertain the identity of the beneficiary or the cause of death of the insured.

He or she knows that his family or dependents won’t have to bear any hardships even if he dies.

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