Life Insurances
General information
Life Insurances help to protect you and your family, ensure that your financial needs will be satisfied, even after youre gone. Life Insurances can help to provide financial support for your family in the event of your death.
 |
|
 |
|
 |
When to buy it?
- if there are people who depend on your income, rely on you financially, life insurances can replace that income for them if you die;
- if you want to pay final expenses after your death such as funeral and burial costs, administration costs, debts and medical expenses;
- if you want to create an inheritance for your heirs who are beneficiaries;
- if you are willing to create a source of savings;
- if you want to get financial support after an accident, after being ill or retired.
The main goals of Life Insurances are: protection and savings.
Three main groups of Life Insurances are: insurances that protect you, insurances that help you save money and insurances that protect you and at the same time create a source of savings. Depending on what kind of needs you want to satisfy, you can put emphasis on the protective (to secure you or your family) or savings element (to gather the capital for the future). If you want to satisfy both needs an appealing solution may be a mix of both options.
Premium - the price of insurance
Your insurance premium depends on your age, sex, profession, health, lifestyle or even your hobby. These factors influence the cost of risk. The earlier you insure yourself, the more you benefit. If the insurance company states, that your life is too risky or the probability of falling ill is too high, it can even refuse to sign an agreement with you.
No wonder that the older you are, the higher premium you have to pay - your protection is more expensive as the probability of your death or illness increases.
The premium is paid once as a lump sum or yearly.
We have two basic types of Life Insurances:
- Term Life Insurances - it is the simplest form of Life Insurances, reached for the specific period of time (usually for 1 to 5 years). If you are dead, your closest get the benefits. It will pay off only if death occurs during the term of the policy. It gives financial protection to your beneficiary in case of your death during the insurance period. You don't gather any capital.
- Permanent Life Insurances - this type of policy is a lifetime protection, it never expires, as long as premiums are paid. The benefits go to people indicated in the policy.
As both types of policies offer many advantages to explore, you can choose the mix of both, which may cover your short and long-term needs in a cost-effective way.
Underwriting
The department called underwriting is responsible for the premium calculation. People working there decide about the conditions of life your insurance, to which group of risk you belong. It may also happen that they refuse to grant you the insurance.
The premium depends on the kind of insurance. The short term one is the cheapest. To each kind of life insurances you can usually buy some additional agreements which widen the responsibility of the insurance company.
If you are interested in the topic, we selected some useful links for you (check if you are the resident of the country from the bracket):
- Assurland (France)
- InsureMe.com (USA)
- 2Insure4Less (USA)
- Kanetix (Canada)