The life insurance model is about providing protection against risk. While buying life insurance, keep in mind that the policy will provide financial security to your family in case of the buyer’s unfortunate accidental death. In other words, people have this thought in their mind that after their death, their family will not have any kind of financial support. For this, they pay a premium. Similarly, the insurance company also protects itself from the risks associated with its day-to-day operations of issuing policies to customers. Just as a life insurance company acts as a financial risk manager for you, similarly a reinsurance company protects the financial risks of insurance companies. These reinsurance companies set some guidelines for life insurance companies. Life insurance companies have to follow these guidelines while issuing policies to customers.