As with most insurance policies, life insurance is a contract between the insurer and the policy owner (policyholder) whereby a benefit is paid to the designated Beneficiary (or Beneficiaries) if an insured event occurs which is covered by the policy. To be a life policy the insured event must be based upon life (or lives) of the people named in the policy.
Insured events that may be covered include:
-accidental death
-sickness
- Investment policies - where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms (in the US anyway) are whole life, universal life and variable life policies.
Parties to contract
There is a difference between the insured and the policy owner (policy holder), although the owner and the insured are often the same person. For example, if Joe buys a policy on his own life, he is both the owner and the insured. But if Jane, his wife, buys a policy on Joe's life, she is the owner and he is the insured. The policy owner is the guarantee and he or she will be the person who will pay for the policy. The insured is a participant in the contract, but not necessarily a party to it.
The beneficiary receives policy proceeds upon the insured's death. The owner designates the beneficiary, but the beneficiary is not a party to the policy. The owner may change the beneficiary unless the policy has an irrevocable beneficiary designation. With an irrevocable beneficiary, that beneficiary must agree to any beneficiary changes, policy assignments, or cash value borrowing.
In cases where the policy owner is not the insured (also referred to as the cestui qui vit or CQV), insurance companies have sought to limit policy purchases to those with an "insurable interest" in the CQV. For life insurance policies, close family members and business partners will usually be found to have an insurable interest. The "insurable interest" requirement usually demonstrates that the purchaser will actually suffer some kind of loss if the CQV dies. Such a requirement prevents people from benefiting from the purchase of purely speculative policies on people they expect to die. With no insurable interest requirement, the risk that a purchaser would murder the CQV for insurance proceeds would be great. In at least one case, an insurance company which sold a policy to a purchaser with no insurable interest (who later murdered the CQV for the proceeds), was found liable in court for contributing to the wrongful death of the victim (Liberty National Life v. Weldon, 267 Ala.171 (1957)).
Contract terms
Special provisions may apply, such as suicide clauses wherein the policy becomes null if the insured commits suicide within a specified time (usually two years after the purchase date; some states provide a statutory one-year suicide clause). Any misrepresentations by the insured on the application is also grounds for nullification. Most US states specify that the contestability period cannot be longer than two years; only if the insured dies within this period will the insurer have a legal right to contest the claim on the basis of misrepresentation and request additional information before deciding to pay or deny the claim.
The face amount on the policy is the initial amount that the policy will pay at the death of the insured or when the policy matures, although the actual death benefit can provide for greater or lesser than the face amount. The policy matures when the insured dies or reaches a specified age (such as 100 years old).
Types of life insurance
Life insurance may be divided into two basic classes – temporary and permanent or following subclasses - term, universal, whole life, variable, variable universal and endowment life insurance.
Temporary (Term)
Term life insurance (term assurance in British English) provides for life insurance coverage for a specified term of years for a specified premium. The policy does not accumulate cash value. Term is generally considered "pure" insurance, where the premium buys protection in the event of death and nothing else. (See Theory of Decreasing Responsibility and buy term and invest the difference.) Term insurance premiums are typically low because both the insurer and the policy owner agree that the death of the insured is unlikely during the term of coverage.
The three key factors to be considered in term insurance are: face amount (protection or death benefit), premium to be paid (cost to the insured), and length of coverage (term).
Various (U.S.) insurance companies sell term insurance with many different combinations of these three parameters. The face amount can remain constant or decline. The term can be for one or more years. The premium can remain level or increase. A common type of term is called annual renewable term. It is a one year policy but the insurance company guarantees it will issue a policy of equal or lesser amount without regard to the insurability of the insured and with a premium set for the insured's age at that time. Another common type of term insurance is mortgage insurance, which is usually a level premium, declining face value policy. The face amount is intended to equal the amount of the mortgage on the policy owner’s residence so the mortgage will be paid if the insured dies.
A policy holder insures his life for a specified term. If he dies before that specified term is up, his estate or named beneficiary(ies) receive(s) a payout. If he does not die before the term is up, he receives nothing. In the past these policies would almost always exclude suicide. However, after a number of court judgments against the industry, payouts do occur on death by suicide (presumably except for in the unlikely case that it can be shown that the suicide was just to benefit from the policy). Generally, if an insured person commits suicide within the first two policy years, the insurer will return the premiums paid. However, a death benefit will usually be paid if the suicide occurs after the two year period.
Permanent
Permanent life insurance is life insurance that remains in force (in-line) until the policy matures (pays out), unless the owner fails to pay the premium when due (the policy expires). The policy cannot be canceled by the insurer for any reason except fraud in the application, and that cancellation must occur within a period of time defined by law (usually two years). Permanent insurance builds a cash value that reduces the amount at risk to the insurance company and thus the insurance expense over time. This means that a policy with a million dollars face value can be relatively inexpensive to a 70 year old because the actual amount of insurance purchased is much less than one million dollars. The owner can access the money in the cash value by withdrawing money, borrowing the cash value, or surrendering the policy and receiving the surrender value.
How to Choose a Term Life Insurance Company by Sharon Taylor
In general, choosing term life insurance coverage for any purpose can be frightening and a little overwhelming. It would be tragic to have to receive a check from your term life insurance company because a loved one has passed away. Because of events like this, a lot of people tend to put off the act of choosing the term life insurance company that will offer them the security they need. This may also occur because people are unsure of how to choose a company, which can make matters even worse, or at least more trying.
In reality, choosing a term life insurance company is actually really simple and painless if you know what to do. There are really only a couple of things that you need to know when it comes to looking at and comparing term life insurance rates. Keep these things in mind when you finally put your search into motion, because finding the right company to protect your family and your assets is absolutely necessary.
First, you should absolutely stop procrastinating starting right now. Get over any fears you have of finding the right term life insurance rates, and start looking for a term life insurance company that will meet your needs and the needs of your family.
Next, you’ll need to do some research. The first thing to figure out before you start to browse term life insurance rates is to figure out what you need in a life insurance policy. It's like going to the grocery store prepared by creating a shopping list. You need a working list of your current and future needs; otherwise you will be lost when weeding through term life insurance rates and quotes.
How much coverage is your family going to require in the event of an emergency, or in the event of your death? How can you best protect them? You have to be prepared for this line of thinking if you want to choose the right term life insurance policy. This way you can protect your family if you pass away unexpectedly or if another dire emergency comes up over time.
Your next step is to research a variety of different term life insurance companies and what types of policies they are offering. Be as thorough as you possibly can when researching each term life insurance company, because no two companies are created equally and each company may or may not offer policies from the same companies. As you are shopping around from insurance broker to insurance broker, you should begin to narrow down your search to work with companies that have achieved higher financial ratings. You should also keep your budget in mind on a consistent basis because the right term life insurance company will meet both your family's needs and your budget's capabilities.
One final note is life insurance companies are in direct competition with one another. Figure out the coverage that you need and how long you will need the coverage, then figure out what your budget is. There will be little difficulty finding the right term life insurance company once you know what your needs and limits are, as most companies will be competing fiercely for your business.
About the Author
Sharon Taylor writes life insurance articles for eQUOTE Life Insurance, offering low rates, no-obligation quotes, and term life insurance information. Providing financial security for American families online since 1999.
Business and Corporate Life Insurance by Sharon Taylor
Various forms of life insurance, including but not limited to no medical life insurance, can serve as a means of indemnification or protection against loss through death of employees and other valuable officials within a business. In other words, corporate and business life insurance are becoming popular concepts as more and more high profile companies accept the effectiveness of no medical term life insurance and other forms of life insurance as a valuable form of asset protection.
There are many businesses that rely heavily upon their top officials, including managers, CEOs and other individuals who are at the top of the company and who much of the company's success can be attributed to. These key members of the company's staff can be considered to be truly vital to the operations of the company, and without them, the company may falter or fail all together. This is especially true, of course, for businesses that are individually owned and operated by the key staff member in question. Business and corporate no medical term life insurance policies are gaining rapidly in popularity as more companies realize how truly vital it is that they protect their greatest assets: their people. Successful businesses require heavily upon the personal equation in order to see success.
Corporations and firms will then be interested in protecting their most important officers using the protection afforded by business and corporate no medical term life insurance plans. For example, manufacturing and mining enterprises could be dependent upon someone with the engineering or chemical knowledge to run the business successfully. A publishing house may have engaged the author of a proposed work that they want to protect while that work is being written. A large retail business may have a sales manager that has made him or her self completely indispensable through organization and ability. Each of these key personnel members are so absolutely vital to the company that the company is obligated to insure them in order to assure the success of the company even beyond their death.
Some officers, while not even actively engaged in the daily operations of a business, may still prove to be wholly indispensable simply because they are a principal owner, or because their experience and business connections within the industry have made him or her a principal owner and chief advisor within the company. Human life can easily be considered to be a most vital and indispensable asset to the successful operation of a business. Now why would a business not want to insure one of its most important assets, especially when it could so easily be done?
The extinction of a valuable life such as these can prove to be an even more significantly serious loss than a loss by fire, or by any of the other ways that a business can lose that no medical life insurance would traditionally be acquired to protect. Because the death of a human asset such as this can lead to the loss of other assets, in lost sales, lost trade secrets or vital information, protecting this human life is just as absolutely vital as protecting any other asset that the company may hold. Acquiring the proper business or corporate no medical term life insurance is the best way to create this protection - And one such option is no medical life insurance, which allows human assets to be insured in business settings without requiring that they obtain medical clearance beforehand.
About the Author
Sharon Taylor is an expert life insurance writer and frequent contributor to eQUOTE Life Insurance. eQUOTE is a leading Internet resource for life insurance prices, quotes and comprehensive life insurance resource information.
Seniors Healthcare Is A Personal Choice by Raymond Angus
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Seniors Healthcare Is A Personal Choice!
By Raymond Angus
© Raymond Angus - All Rights reserved
Your personal seniors health care should be a hand tooled program created by a single individual.
You!
Before you dash into the next room screaming you have no idea how to do it. Remember, we're talking about your physical well being...even your very life!
You don't have to become a doctor, or an accountant, to decide the best senior healthcare program available. Specifically, we're talking about a program that with some fine tuning will fit both your needs and your pocket book.
Health care for seniors is a broad field. It's peopled by many insurance companies that come in countless sizes and shapes.
But keep in mind that each senior healthcare insurance provider has a fundamental motivation. Their goal is to sign you up and bring you into the fold.
But to arrive at the best possible decision for you and yours, you have to take charge of your own personal senior health care!
How? Understand three simple tenets of action in the matter.
* Understand what your physician means when he/she explains what your diagnosis is, the good, the bad and the ugly.
* Understand thoroughly any ongoing medication that will be required in your treatment. Know what each prescription will do when you take it regularly. Ask about any generic duplicates that are possible, instead of the usually more expensive name brands.
* Understand what the benefits to you will be by taking full advantage of Medicare. Determine the amount of monthly expenses for senior healthcare you can comfortably afford. Can all of this be done without detracting from your other needs.
Medicare should, and must, factor into your decision to join any senior healthcare insurance provider.
Notice that the word understand is splashed around here. This is important and it should be the operative word of choice.
You must take control of your medical situation and thoroughly grasp the minuses and pluses of any treatment. Physicians are pleased by any questions you ask. Don't hesitate to actively participate in a conversation with them.
Take notes of what you are told and search out the answers to them if you don't understand the medical language. Search the internet for a medical dictionary and don't stop until you find one.
The internet is primarily an information super highway. Plug any medical terms into your computer browser and stand back as the screen fills with responses.
You feel you don't have any time to do this kind of research?
How many hours do you spend watching television each day. Why don't you take an hour or two from a favorite program every other day and delve into your medical future.
Not only will you learn what's going on in your body and how you can improve its care. You will also benefit by conserving your money. You'll learn about which senior healthcare provider is more closely tailored to your personal needs.
Perhaps you're spending cash on a senior healthcare insurance company that doesn't furnish you with a program that fits your physical and financial needs.
Gain an understanding of your physical condition and the treatment required to provide for it. Then you can compare the programs offered by senior health care companies with what services you want.
With this information in hand, you can negotiate with any senior health care provider for good rates and provisions. You will be surprised at the variety, and cost differences, that are available in the medical market.
Take charge of your life and health. The world will step aside for a senior who knows what they want...and is determined to have it!
About the Author
Raymond Angus is a widely read author of articles and books. He writes about fellow seniors and their world. To read more of his writing visit: HTTP://www.theseniorslife.com
Life Insurance UK: A Must For Every Family by Allan Elvin
One of the troubles with modern times is that it has made life very uncertain. The furious pace at which life is being lived today is, to a large extent, responsible for it. People in their eagerness to reach their destinations quickly often overlook the traffic signals with disastrous consequences. If the concerned person happens to be the only earning member of his family then the plight of such a family can easily be understood. Needless to say that with the only earning member of the family gone whole family would be drawn to the brink of disaster. Particularly if the family happens to live in UK for the cost of living is simply too high there.
Such a service as the one mentioned above goes a long way in providing a cushion for the family who has lost its only earning member and ensures that they do not struggle on financial front at least. However, people would do well to ensure that they do a proper research before opting for such a service. They should make it a point to carefully go through each and every points in the contract carefully before opting for it. Advent of Internet has further allowed people to scan through all the offers available in the market before zeroing in on any one.
People would also do well to know that to gain completely from life insurance UK they would do well to take care of a few points. Firstly they must ensure that the policy comes to life as soon as it is signed. Then people should ensure that they do not provide any wrong information to the insurance company as well as the fact that there is no default on monthly premiums.
There can be no denying the fact that slight adherence to these points would go a long way in ensuring that life insurance UK provides a perfect cushion to families who have lost their only earning member and ensures that such unfortunate families do not suffer on financial grounds at least.
About the Author
Allan Elvin is an MBA in Finance and has a rich experience of writing on topics related to finance. He professes special interest and expertise in life insurance, Insurance services and life insurance UK and in guiding you on its various details.
