These laws help to fix the premium. Suppose a plane costs a million dollars, and the number of planes all over the world is 10,000. If a plane crashes, each plane owner has to pay 100 dollars. Thus the loss of the plane is covered.

In the life insurance the mechanism is different. The death risk of a 70-80 years age group is far higher than the 20-30 years age group. Both are not equal from the risk point of view. So, why should a younger share the same amount of premium with the aged? This is against justice, so the premium is calculated on the basis of the age. Closer the death age, higher will be the premium and vice versa.