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Life insurance

Life insurance is used to hedge various financial risks in relation to human life, and is offered in a range of different forms. Depending on the form of the product, the emphasis of the product is on provision based on a certain type of risk, the saving of capital or the goal of old-age provision or for the purpose of hedging of loans. The policyholder’s benefits arise from the payment of insurance premiums. The premiums may be paid on an ongoing (e.g. monthly) basis or as a one-off premium. Conversely the insurance undertaking provides insurance protection and in the event of the insurance event occurring that is being insured against (e.g. death during the duration of the insurance contract, reaching retirement age etc.) then the contractually agreed insurance benefit as well as any participation in profits is made available. The policyholder is able to participate to a large extent in the earnings of the funds that are invested by the insurance undertaking through participation in profits or surpluses. Life insurance policies may also be supplemented in many ways using ancillary insurance policies. Such ancillary insurance policies include e.g. occupational invalidity insurance, where in the event of occupational invalidity occurring either a pension is paid out or within an ancillary insurance policy no further insurance premiums are required to be paid.