Life Insurance - Getting It Right For The Future

By:Shaun Parker

Life Insurance or Life Assurance is a form of insurance that provides a payment of a sum of money to a named beneficiary upon the death of the policyholder or to the policyholder if still living after reaching a specified age. The terms 'insurance' and 'assurance' are often interchanged but there meanings are different.

Insurance is when cover is provided for an event that might happen while assurance is the provision of cover for an event that is certain to happen. Life assurance typically covers the insured in the event of natural death whereas life Insurance covers accidental death.

Who can take out a Life Insurance policy?
It is possible to take Life Insurance out on your own life or another. It is therefore possible for the person that is insured to be a participant in a contract but not necessarily a party to it. Insurance companies have sought to prevent people taking out speculative policies on people they expect to die.

Cestui qui vit refers to when the policy owner is not the insured. CQV usually requires those purchasing a policy to have an 'insurable interest' in the insured. This is designed to prevent people with no interest murdering the insured to receive the payout. 'Insurable interest' usually includes family members and business partners.

History
The first form of Insurance reputedly took place 5000 years ago in China. To spread the risk of having their cargo pirated merchants would share their cargo with another boat so that if captured the entire shipment would not be lost.

Life Insurance began around 450 A.D. in ancient Rome where burial clubs were formed to cover the funeral expenses. Life Insurance appealed to the gambling instincts of people in Victorian England. People would speculate on the date at which they expected prominent people to die. Such wagers were made illegal in 1774.

Why take out life insurance?
Nowadays people take out Life Insurance to make sure loved ones are cared for after death. Policies are arranged to cover Mortgage repayments so that in the event of death a mortgage is paid off. Life Insurance can replace the primary earner's salary. This ensures that the family does not fall on hard times after your death.

Some people take out a policy to ensure that there is adequate childcare after the death of the primary child carer. Another reason to take out Life Insurance would be to cover education expenses so that school/University fees are covered after the death of the primary earner.

Types
There are two major categories of Life Insurance: Protection policies and Investment policies. Protection policies typically provide a lump sum payment on the death of the insured. It pays out if you die within the dates of your policy but otherwise you get nothing.

It is the cheapest way to provide financial protection for your family. The main objective of Investment policies is to facilitate the growth of capital by regular or single premiums. Alongside paying out in the event of your death it is also possible to build up an investment value that can be cashed in during your lifetime. There are many types of cover available under these broad categories.

Factors that influence policy
Insurance is based on probability and the Insurance Company is likely to assess you against certain criteria.

The three main variables in a mortality table have been age, gender, and use of tobacco. People that are considered of greater risk to insurance companies include; High-risk occupations such as the oil and gas industry, the Armed Forces, pilots and fishermen; Dangerous sports/hobbies such as aviation, climbing, motor sports, parachuting and skiing; poor medical history- especially smokers; and over 60s.

Digg del.icio.us Blink Stumble Spurl Reddit Netscape Furl

Article keywords: life, insurance, assurance, quote, quotes

Article Source: http://www.articles2k.com

Shaun Parker has been dealing with life insurance for several years now. For more information visit The Idol for details on Life Insurance, and how it can benefit you.

Top Insurance Articles
1). Growing Old By : Joseph Kenny There are a couple of things in life that we know, at some stage, we will be worried about. Growing old certainly seems to be one of them. More and more, our culture is becoming obsessed by the cult of youth. Not only are film stars and musicians young and beautiful, but increasingly, politicians and newsreaders are getting younger also. Add to this.
2). Health Care Eligibility For Unauthorized Migrants - Moral & Practical Implications By : Erin Shaughnessy Various organizations and government officials have cited estimates for the number of illegal immigrants at between eight and twenty million. With rising health care costs as a major issue for most Americans, this article considers the moral and practical issues of providing medical care for uninsured immigrants. According to a research report entitled “The Size and Characteristics of the Unauthorized Migrant Population in the U.
3). Determining How Much Life Insurance You Need By : Stephen L. Nelson, CPA When considering life insurance, you’re planning and preparing for an event most of us would rather not think about. But life insurance represents a critical step in managing your personal finances and ensuring your family’s well-being. The Two Approaches to Life Insurance You can use one of two approaches to estimate how much life insurance you should buy: the needs approach or the replacement-income approach.
4). Can Car Insurance Be Affected By Your Bad Credit History? By : Joseph Kenny If you have bad credit you can be denied car insurance! The protections afforded to the consumer since the Depression of 1929 no longer exist. The Financial Laws passed through Congress in 1992 allowed banks, insurance companies, investment firms to handle banking, insurance and investment operations. Laws passed after 1929 had prevented banks from.
5). How to Get Cheap Auto Insurance on the Internet By : Heather Colman If you have a connection to the Internet and a computer you can easily find cheap auto insurance. With more and more businesses turning to the Internet to service their customers and increase sales, it's no wonder you see an insurance man on every virtual corner. Not only are most of the major companies online today they now provide insurance quotes and the ability to buy your policy right from their websites.
6). Gap Insurance: A Financial Safety Belt By : Peter Garant Why is gap insurance considered as a financial safety belt? Simply put, it keeps you from being financially ruined when disaster hits your car. For example you are in this situation, you bought a late-model car three months ago using a car loan with a regular car insurance. The car costs $30,000 and you have already made three payments of $900 each month.
7). Eight Rules for Saving Money When You Buy Insurance By : Stephen L. Nelson, CPA By following the eight rules explained here, you can save money, and just as important, you can save yourself from making serious mistakes when you shop for and acquire insurance policies. Rule 1: Buy Insurance Only for Financial Risks You Can’t Afford to Bear on Your Own The purpose of insurance is to cover catastrophes that would devastate you or your family.
8). Critical Illness Insurance The Non-Disclosure Problem By : Michael Challiner If you're in the unfortunate position of having to make a claim on your critical illness insurance policy, the last thing you want is insensitive hassle or apparent non co-operation from your insurer. But according to numerous newspaper articles, that's precisely what's happening. The core problem is that before they'll pay out, the insurer will always want to make exhaustive enquiries about your past health record.
9). Pssst - Want To Know A Secret That Banks & Car Insurance Companies Don't Share With You By : Tom OLeary Every single driver in the U.S. is required to have Car Insurance. And most of drive around confident that we have adequate coverage to protect us should we ever be involved in an accident. Yet, almost 97% of all drivers are not adequately protected...and don't even know it. Here's what I mean. Let's say you're involved in an accident and it's serious enough that the car is considered a "total loss" by your Insurance Company.
10). Life Insurance & Why It’s Important For Your Family By : Daphne Succes It’s sad to think about, but life insurance is something that everyone needs to consider. In the event of an unfortunate loss, an individual often wants to have the peace of mind in knowing that his/her family will be financially secure. Life insurance can be obtained in a number of ways, including from a national insurance provider, various credit cards and/or certain employers.

New Insurance Articles
1). The Facts About Life Insurance Quotes Online By : Michael Connelly A discussion on the topic getting life insurance quotes online.
2). How Students And Teen Driver Get A Cheaper Auto Insurance By : Grace Navas This article offer the tips on how to find lower insurance rate for young drivers.
3). Protecting The Largest Purchase Of Your Life By : John Layton How to protect your most valuable investment. Basic information on home insurance to protect the largest investment the majority of people will ever make.
4). Term Life Insurance for Smokers - 7 Critical Facts By : Tim C. Smith If you are a smoker the first consequence is higher rates than a non-smoker. The rates can be up to three times as high as a non-smoker policy so the cost difference can be considerable.
5). Dental Insurance For Family - What Family Dental Plan Should I Enroll In? By : Mike Singh Having the right family dental insurance is extremely important for maintaining your health. Find out which plans fit in with your family needs.
6). When To Consider Selling Your Life Insurance Policy? By : Paul Sherman A Life Insurance Policy is a personal property, like a house, car, antiques, old painting or stocks and bonds. You can sell your life insurance policy like you sell your other personal property items. Life insurance may now be viewed as a traditional asset that can be purchased or sold. Sale of Life insurance policy is called as Life insurance settlement, Life settlement or Senior settlement.
7). Life Insurance, A Great Investment Opportunity By : Mika Hamilton Insurance is often the safe and most risk free approach to investment. Most people think they are sufficiently insured when they are not. Hardworking people spend a lifetime earning what they have. Our personal wealth is a coupling of family and our income early potential.
8). All About Home Insurance Leads By : Oliver Turner After loads of man-made and natural calamities in USA the Home Insurance market has come much into prominence. And at present the competition is at its peak. Homeowners Insurance is a guarantee, which pays the cost of your house if it gets damaged in some natural or manmade disasters like fire, floods, storms etc. To get a good home insurance quote we often turn to agents.
9). Health insurance plans By : Janani Health Insurance: Health insurance, which is coverage for individuals to protect them against medical costs and give them a surity to a secured life in this unsecured world with day to day accidents, enormous infections and diseases which may be highly fatal such as Tuberculosis and other viral infections, Genetic disorders that requires relatively high costs for treatment and diagnosis.
10). Life Insurance Online By : Robert Lawrence There are many types of life insurance policies. Before you venture out for one, learn about them and see which one is applicable to your needs best. The following are the most common ones: 1. Term life insurance: This type of insurance is the most basic of all. Its one and only function is to cover your life with an amount of cash which on even of your death will be given to your nominee.