Q.Classify life insurance policies by the number of lives covered, explaining single-life, joint-life and group policies.

This classification looks at how many people one policy protects rather than how long it runs.

Classified by the number of lives covered, life policies are:

• Single-life policy — the policy covers one life only. This is the ordinary and most common form, where one person insures his own (or another single) life.

• Joint-life policy — two or more lives are covered under one policy, typically husband and wife or business partners. The sum assured is generally paid on the first death among the lives covered, giving immediate protection to the survivors; premiums cease thereafter. This is convenient and cheaper than taking separate policies.

• Group policy — a large number of persons — such as all the employees of one employer or members of one association — are covered under a single master policy at a low premium per head, because administration and risk are pooled. A last-survivor variant of a joint policy instead pays the sum only on the death of the last of the lives covered (useful, for instance, where income is needed only after both spouses have died). …

Students sometimes say a joint-life policy pays on every death — normally it pays on the first death and then ends. Do not confuse a group policy (many unrelated persons und …