What is the main characteristic of life assurance?

The primary characteristic of life assurance is that a lump sum is paid to beneficiaries upon the policyholder's death. This means that when an individual with a life assurance policy passes away, their designated beneficiaries receive a predetermined amount of money, which can be used for various purposes such as covering living expenses, paying off debts, or funding future needs like education. This financial protection is designed to provide support to the family or dependents left behind, ensuring that they are not financially burdened by the loss of their loved one.

In contrast, other options do not accurately embody the main characteristic of life assurance. For example, compulsory payments suggest that life assurance is mandatory for everyone, which is not the case; individuals can choose whether or not to purchase a policy. Coverage against all types of risks does not precisely define life assurance, as life assurance specifically covers the risk of death rather than all potential risks. Lastly, while some policies may have provisions for no payment to keep them active under certain conditions, life assurance typically requires ongoing premium payments to remain valid and effective.