Never Bought Life Insurance Before?
October 21, 2009 by admin · Leave a Comment
Summary
A extensive and succinct initial introduction to life insurance. It explains all the important termsand what type of cover various insurance plans provide.
Life insurance helps your dependants to be financially secure after you die. When you aquire stipulate the figure you want the plan to pay out when you pass away – this money is called ”the insured sum”. The premium you pay is based on this sum insured, and on your age and gender.
Your premiums will also be based on the style of insurance cover you need. There are two basic types of life insurance: level term insurance and decreasing term insurance plus many variation s within these categories.
Term assurance is frequently bought at the same time as a mortgage and should cover the same period of time as the mortage. If you haven’t died at the end of the insured term, you don’t get any money returned. It’s a basic insurance with no investmet element. It can protect your wife and family by paying out a cash sum should you pass away within a specific time period.
There are two basic types of term policy. Level term gives a fixed level of payout during the entire life of the policy which means that you beneficiaries would receive the same amount whether you died right at the end of the term or on day one of the policy. It is usually bought with an interest-only mortgage, where the entire amount borrowed has to be repaid in full on the final day of the mortgage.
Decreasing term cover is where the policy payout reduces by a fixed amount each year, finishing at zero at the end of the term. Since the level of insurance falls during the term, premiums on this kind of insurance are cheaper than for level termplans. This cover is usually only taken out with repayment mortgages, where the value of the outstanding mortgage reduces during the term of the mortage.
There is also a type known as increasing term assurance. It is also known as index linked insurance. This means that the potential payout rises by a small amount annually in line with inflation. Index linked insurance is a good way of protecting the buying power of the payout you have insured for.
With convertible term cover, the policyholder has the option of moving to another type of life policy – for instance a “whole of life”. If a person does take up this option, they do not have to undergo any extra medical investigations.
If you chose a type of insurance called family income benefit your family would receive a tax free monthly income if you were to die and this income would continue until the policy reached its termination date. This gives your dependents regular payments from the date the policyholder died to the end of the policy’s term.
Life insurance can be purchased on-line or from the high street through banks, insurance companies, friendly societies and brokers. Some sell directly to the public. Other outlets selling insurance include websites and mortgage brokers.
Factors affecting premiums include the whether or not you smoke, your age, sex and the insured sum. Some insurers insist on a medical before offering cover, but this is less common as in the past. The prices for cheap life assurance cover alter over time and if you already have a plan it can be well worth shopping around to find out if you can get a more cost-effective deal. You can always cancel your existing policy without penalty – but make sure you have another one in place before you cancel your existing plan.
Basic Information About Life Insurance.
September 28, 2009 by admin · Leave a Comment
Summary
A thorough and succinct guide to life insurance plans. It explains all the important technical terms and what type of cover various plans provide.
Life insurance helps your dependants to be financially secure in the event of your death.
When you life insurance you decide the cash value you want the underwriters to pay out when you pass away – this money is called the sum insured”. The monthly premium you pay is based on this sum assured, and on your sex and age.
Your monthly premiums will also be based on the style of insurance cover you need. There are two basic types of life insurance: level term insurance and decreasing term insurance plus many variation s within these categories.
Term assurance is frequently aquired at the same time as a mortgage and should cover the same time period as the mortage. If you haven’t died at the end of the insured term, you won’t get anything back. It is a simple insurance with no investmet element. It protects your wife and family by paying out a lump sum should you pass away within the time covered by your insurance policy.
There are two basic types of critical illness insurance. Level term gives a constanly maintained level of payout during the entire life of the policy which means that you beneficiaries would receive the same amount whether you died right at the end of the term or on day one of the policy. It is usually bought with an interest-only mortgage, where the fullamount borrowed has to be repaid on the final day of the mortgage’s term.
Decreasing term policies are where the policy payout reduces by a preset amount each year, finishing at nothing at the end of the term. Since the amount of life insurance cover reduces during the term, premiums on this kind of insurance are cheaper than for level plans. This insurance cover is usually only taken out with repayment mortgages, where the value of the outstanding mortgage reduces during the period of the mortgage.
There is also a type known as increasing term assurance. Sometimes it is known as index linked insurance. This means that the payout sumincreases by a small amount annually in line with inflation. Increasing term insurance is a good way of protecting the buying power of the capitalcash you have insured for.
With convertible term plans, the policyholder has the possibility of changing to another type of life plan – for instance a “whole of life”. If a person does take up this option, they do not have to undergo any more medical investigations.
If you want your family to receive a monthly tax free income in the event of your death, you need a type of insurance called family income benefit. This gives the insured person’s dependents monthly payments from the date the policyholder passed away to the end of the policy’s term.
Cheap life insurance can be purchased on the internet or from the high street through brokers, banks, insurance companies, from some friendly societies. Many sell directly to the public. Other outlets selling insurance include websites and mortgage brokers.
Factors affecting premiums include the whether or not you smoke, your age, sex and the insured sum. Some insurance companies insist on a medical before offering cover, but this is not so common as in the past.
Life insurance quotations change over time and if you do have a policy it can be well worth shopping around to find out if you can get a cheaper deal. You can usually cancel your existing plan without penalty – but make sureyou have another policy in place before you do so.
Which Insurance Is best For Protecting Your Family? Part 2
September 17, 2009 by admin · Leave a Comment
Summary
It is always wise to know exactly what you want in the way of cover as only you understand your own situation. We clarify what you need to know and how to carry on it once you have it.
Ian Marsh, a Director of investments at Cambridge based financial adviser Jobson Janes Financial Services, warns that it is very irresponsible of people not to have Life Assurance and/or Critical Illness Cover as he insists that life has 2 main threats – either being alive too long and dying too soon. “Its very important to have some insurance cover in place – particularly if you have got small childern,” he states. “In these uncertain times you need to asemble your own little stronghold because nobody else is can do it for you.”
Greg Suttcliffe at Direct Line says now is the right time to invest in such insurances as there are some very reasonable premiums about owing to the intense vying for business within the insurance market. “The price of life cover has come down – reduced by about 42% in 4 years. It has never been as cheap,” he adds. “The critical illness market paid out on 83 per cent of claims in 2004 – up from 81 per cent the during the last year.”
Check what insurance cover you have before you take out more. Do already own any investment plans or does your company pension fund give you any cover?
The simplest way to assess how much cover you need is to work out how much you would want to provide the same level of living over a year and then multiply it by twenty years. The minimum amount needed should clear all outstanding debts and and leave a decent amount for your dependants.
Obtaining the best deal
When deciding on your insurance policy it is very necessary to read the guide that most a lot of insurance companies have of the conditions and illnesses that they deal with. It will catalog everything and should be strsightforward and simple to understand. You will also want to look at the documentation of the crutial features of the policy which will incorporate all benefits and exclusions.
When people take on the responsibility of a home loan they are usually counselled to take out critical illness insurance cover but should research the market and not just take the first policy suggested.
If you start paying these premiums when you are young they are noticeably cheaper, very different to leaving it until you are older, when cover increases quite markedly.
Insurance payments can also be reduced by quitting smoking cigarettes. Fiona Jackson, manager of protection insurance at Co-operative Insurance says “Giving up smoking can save people a significant amount of money as well as hopefully bringing a longer and better quality of life.”
If you stop smoking you can knock as much as a 1 3rd off life, critical illness cover and income protection insurance payments because the evidence that we now have shows that smoking can trigger serious illness and aggravates any other existing health conditions.
You may have to change your policy if your circumstances alter.
Under no circumstances feel that once you have purchased your insurance policy that you can just keep on with your life and dismiss it. At all times be very mindful of the insurance cover you have and be sure that, if for any reason your circumstances change, or, is going to alter your insurance must have capacity for these amendments. Possible examples are changing your job, or do you intend to have more children; on a regular basis consider anything that may increase your costs to live and will need to to be covered if you cannot work.
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