Exclusions in Life Insurance

Life insurance policies also contain certain exclusions or restrictions. The main exclusions are:

• Suicide Exclusion. Initially, life insurance contracts excluded suicide entirely. But this exclusion left dependents without protection, which defeated the purpose of purchasing the coverage. Also, it was incorrect to exclude suicide completely, because death by suicide is included in the mortality tables upon which premiums are based. So, the majority of life insurance policies issued today contain a time provision (usually two years) that restricts liability in the event of suicide. Although, occasionally, it is only one year or less. A typical provision is that in the event of suicide within this period, the liability of the company shall be restricted to an amount equal to the total of premiums paid, without interest, less any indebtedness.
• Aviation Exclusion. Aviation exclusions are rarely found in life insurance policies, but among the types of aviation restrictions still in existence are: 1) exclusion of all aviationcaused or -related deaths, except those of fare-paying passengers on regularly scheduled airlines; 2) exclusion of deaths in military aircraft only or death while on military
  maneuvers; and 3) exclusion of pilots, crew members, student pilots and (sometimes) anyone with duties in flight or while descending from an aircraft (for example, parachuting). Companies that use these restrictions will usually cover you in the event of a civil aviation death for an extra premium. The exclusions or restrictions apply only to those
  unwilling to pay the extra premium.
• War and Military Service Exclusion. In wartime, it’s common for companies to limit the death benefit paid to a refund of premium, plus interest—or possibly an amount equal to the policy’s cash value. Also, the policy’s benefits often are suspended during a war or an act of war. There are two types of restrictions or clauses that may be used: 1) the status clause, which excludes the payment of the death benefit while you are serving in the military; and 2) the results clause, which excludes the payment of the death benefit if you are killed as a result of war.
• Hazardous Occupations and Avocations Exclusion. By today’s underwriting standards, few applicants are declined life insurance because of their occupations. Much of the underwriting attention in this area focuses on avocations or hobbies. If you participate in a hazardous hobby— such as auto racing, sky diving, scuba diving, etc.—then the amount of insurance you can get may be limited, or you may have to pay an extra premium. And the death benefit may be excluded if your death is a result of the hazardous avocation.

What Do Flying Risks Mean? (part 2)

When losses occur in airline travel, they tend to be catastrophic. Even if the loss results from pilot error or mechanical failure (instead of terrorist attack), the end is usually the same: few, if any, survive. In these cases, health insurance or disability insurance—both worthwhile concerns when it comes to car risks—aren’t important.

There are many formulas for calculating how much life insurance a person needs. But, from the income-replacement perspective, there are two calculations that work for most people:

• replace five years of the insured person’s earned income; or
• pay off mortgages, car loans, consumer debt and other debtsrelated to daily living.

Basic term life insurance will usually cover these needs. Term is the least expensive form of life insurance in most situations.

Some people are tempted to increase their life insurance coverage or buy special insurance if they know they are going to be flying a lot—for business or pleasure—during a given period of time. However, travel life insurance (often marketed through airport kiosks or some on-line travel services) is usually not a very good bargain.

Travel life insurance is different than trip insurance (sometimes called “travel insurance”) offered by some travel agents. Trip insurance protects the cost of your travel and accommodations against illness, disability, mechanical problems or other interferences. If you are mugged in a foreign country while on vacation, travel insurance will help cover your loss.

Also read: What Do Flying Risks Mean? (part 1)

What Do Flying Risks Mean? (part 1)

Nervous airline passengers don’t understand that all travel is risky and safety is a matter of relative risk. In other words, an activity is usually considered safe only as contrasted with some other activity. Absolute standards of safety are hard to establish…and are often more
arbitrary than most people realize.

A few basic measures can improve your odds of surviving an airplane flight. These include:

• stick with commercial airlines;
• make your trips long ones;
• don’t fly in bad weather;
• avoid high-traffic or high-risk airports; and
• pay attention to instructions you get on the plane.

Of course, none of these guarantees you a perfectly safe flight; and it’s hard to follow a set of “basic measures” when you plan a trip and have to rely on others to get you there.

When you have to get from Point A to Point B, you rarely set out to do so with a set of precautionary guidelines. You simply try to get to point B the quickest and cheapest easiest way you can. Think about driving to work; if you have to be there by 9 A.M., you drive during the riskiest time of the day—when everyone else is commuting to work.

So, flying on commercial airlines—and even on commuter airlines— is safer than most people think. And it’s safer in many cases than driving the same distance. But how do you protect yourself against even this relatively reasonable risk?

The aswer is Life insurance. This is because Life insurance can serve many purposes; the simplest is to replace the earning power that you offer your family or other interested parties (business partners, etc.). In this context, life insurance protects against precisely the sort of catastrophic loss that an airplane wreck poses.

Also read: What Do Flying Risks Mean? (part 2)

Why Singles Need Term Life Insurance?

Should singles consider getting term life insurance quotes? Contrary to what many believe, it makes sense for all adults, regardless of marital status, to have life insurance.

And since life insurance premiums increase with age, getting a term life insurance quote while you're young, single and healthy makes good financial sense. If you're single and think you don't need life insurance, consider the following reasons why it might make sense for you.

Do you have dependents?

Being single does not necessarily mean you have no dependents. You may have children from a previous marriage or you might have parents or grandparents who depend on you for financial support. In either case, these people will be impacted should you die prematurely. They'll lose you as well as a source of income.

A life insurance policy naming your children, parents and/or your grandparents as beneficiaries will ensure you're able to help out financially even after you're gone. Get a term life insurance quote and you'll see that the price you'll pay is worth the peace of mind you'll get in return.

Do you have loan obligations?

Life insurance is something you should definitely consider if you have a loan that is in your name and that of a cosigner. A cosigner doesn't have to be a spouse. It can be a friend, relative, co-worker, even a roommate. If you die unexpectedly and your name is listed on a loan, your cosigner becomes 100% responsible for repaying that loan.

You might want to consider getting a term life insurance quote for at least the amount that will cover your loan obligation and make the cosigner your beneficiary. Even if a loan is in your name solely, creditors can go after your assets later on in an attempt to settle your loan obligation.

Do certain medical conditions run in your family?

Here's something that often comes as a surprise to many single people. Your family history may make it difficult for you to obtain a reasonable term life insurance quote later on when you really do need life insurance. Certain medical conditions are genetic and even if you do not have any symptoms now, they may appear years from now.

While you're young and your health is good is the time to take advantage of the relative ease you'll have in obtaining life insurance. If you wait until symptoms develop, you may find you're uninsurable. When you're getting your term life insurance quote, ask about a guaranteed insurability rider. This rider will enable you to purchase additional life insurance without having to prove you are insurable.

Do you want a proper burial?

There is one more good reason why single people should get a term life insurance quote. If you died suddenly, someone would be responsible for the expenses involved in your funeral and burial. A nominal life insurance policy could relieve others of this type of financial burden.

Hints to Assist You Get Life Insurance Quote Online

Like most other industries, life insurance companies have created a major presence online. You can now do most of the "ground work" online when you are looking for life insurance quotes.

The first thing you need to do is to decide what type of life insurance you are looking for. Then you need to seek no-obligation quotes from several companies that offer what you are looking for. The premiums will often vary significantly from one company to another, so little research can end up saving you a lot of money,

Here are a few helpful hints to assist you with your online research:

- Make sure that you get the right information about various life insurance categories. For example, whether it is temporary or permanent, either short term or long term, and is clear about it. Do they have comparable features and rates which will help you determine the right life insurance that is compatible with your needs.

- Are they helpful in guiding you towards finding what you need? This is when you need to assesss their customer ervice standards. Are they industry accredited? How long have they been in business?

- They should provide "plain language" explanations of their products to assist your decision, and not hide the details in a long and confusing document full of fine print.

- All reputable companies have permanently available internet information services, toll free numbers to call, and preferably sign up services available online as well. The best ones even have goog old fashion humans to speak to when you call!

- They should ensure that all the information you have given are safely protected. Using it only for providing your quote and should never be shared to a third party.

Life insurance can be a confusing subject for most people, so here are a few tips to help ensure that you end up with the policy that fits in with you particular circumstances.

- You should have a thorough review of your life insurance policy regularly, especially if you have sudden changes in ersonal conditions, health and your financial matters.

- Joint policies can be tricky, and need special attention. What happens in the event of a claim? Is the joint policy holder left uninsured, and liable to steep premium increases? Often it's better to keep policies seperate in order to avoid these possibilities.

- Check into the usefulness of a critical illness policy as well. It is usually much cheaper to combine critical illness with your life policy, than adding it on later. Illness can often be more financially debilitating than a death.

- Be aware of the tax relief incentives, but don't let the tax benefits blind you to the reason for actually having a life policy. First and foremost the policy is to protect your family in a time of need, and any tax benefits should be treated purely as a secondary bonus.

- Always ensure that you policy is worded so that the benefits go directly to the beneficiaries and not to your estate. The tax benefits are significant, no to mention avoiding the delays that could occur. Your insurance company should either write this into the policy or have the necessary documentation for you to do so.

- It is highly recommended that you talk to an independent adviser, to ensure you get the peace of mind from knowing that you are purchasing the right policy at the right price to adequately protection for your family.

These are some of the things you should know if you are applying for insurance online. Always remember that not all insurance companies online are legitimate, and to be very wary of any offer that looks too good to be true. Some simple research will soon tell you whether you are dealing with a reputable company or not. If you are still in doubt, take your business elsewhere.

Cheap Life Insurance for Children

Cheap life insurance is practically guaranteed if the insured is a child. Yes, as terrible as it may sound, even a child can get a policy in his or her name. Many people are taken aback by the thought of purchasing life insurance for their children or their grandchildren.

After all, life insurance benefits are not paid out until a person dies, and no one likes to consider the very real truth that children can die too. Death is not something that is reserved for the elderly. Life insurance for a child is cheap, and if you are purchasing it for yourself, you should expect that your insurance agent will at least mention this opportunity.

No one likes to think about it

Unfortunately, children are not immune to death. It can happen to any child, at any time. It can happen in an automobile accident or while walking to the bus. It can happen tragically, at the hands of another. It can happen as a result of a previously undetected condition such as leukemia.

While your life insurance agent won't dwell on the ways your child might die, the agent will certainly remind you that such an occurrence will result in unexpected funeral and burial expenses. Your agent will continue by reminding you that these costs will be considerable, and possibly even more so because the occasion is for a child.

Expect the agent to proceed with extreme caution because parents just don't like to think about the possibility that their children might die before they reach adulthood. The agent will subtly mention how cheap life insurance is for a child and how this insurance can be easily bundled in with your other policies.

Your agent may offer other reasons why you should consider purchasing cheap life insurance for your children. One high-pressure method is to suggest that purchasing a policy right now is an opportunity that may not happen again or that won't be available again for a number of years. This sometimes pressures parents into purchasing before the agent walks out their door. Don't allow this to happen because it's just not true.

Here's something to consider

There is one good reason why it makes sense to purchase cheap life insurance for your child now. Doing so can protect your child in the event he or she develops an illness later on in life which an insurance company might consider uninsurable or that may be insurable but will be so at a high price.

While such a situation is impossible to predict, purchasing cheap life insurance for your child now guarantees that your child will have the protection that life insurance offers. When your child reaches adulthood, he or she should be able to renew a policy at the rates given originally.

If you decide it makes sense to purchase cheap life insurance for your child, be sure you understand the rights the insurance company guarantees your child when he or she turns 18 years of age.

How To Select The Right Type Of Life Insurance

Life insurance is a means for providing financial protection for your family in the event of your death. A life insurance contract is relatively straightforward; you agree to pay a premium at regular intervals, and the insurance company agrees to pay a certain sum of money to your beneficiary upon your death.

There are three parties to a life insurance contract. First, there is the insured. This is the person whose life is being insured under the policy. Next, there is the insurer. The insurer is the insurance company who underwrites the risk. And third, there is the owner. The owner and insured are not necessarily one and the same. Someone can buy a life insurance policy to insure the life of someone else, such as their spouse.

The person who buys the policy is the owner, and the person whose life the policy is based on is the insured. When the owner and the insured are different people, premium payments are the responsibility of the owner.

Every life insurance contract also has a beneficiary. This is the person who receives the proceeds from the policy in the event of the death of the insured, and is assigned by the owner. There are two types. An irrevocable beneficiary can not be changed unless the beneficiary gives his or her permission; if it is revocable, the owner can change it at any time.

The policy is subject to certain terms and conditions. There are usually certain exclusions that apply, depending on the person being insured. But with almost every policy, death as the result of suicide during the first two years of the policy term is excluded from coverage.

Also, during the first two years of the policy, often referred to as the contestable period, the insurance company retains the right to not immediately pay out, even if the death is caused by a condition that is covered in the policy. The company can order an investigation into the death of the insured, to make sure that the death was not deliberate or the result of homicide.

The amount paid to the beneficiary is called the face amount. The maturity date is reached upon either the date when the insured deceases or reaches a certain age. Life insurance is most often used to provide income protection to the spouse of the deceased.

Regardless of the reason for buying the insurance, the owner (if not the same person as the insured), must have an insurable interest. In other words, the owner of the contract must have a reason for wanting to insure the life of that person, otherwise the contract is void.

When the person covered by the policy dies, the insurance company requires proof of death before paying the claim. A notarized death certificate is the most commonly accepted form of proof. The benefit is paid out either as a lump sum or as an annuity that is paid out over time.

Any annuity can be a good way to receive the benefits. It is possible for the beneficiary to set up a lifetime annuity, which would guarantee that person a certain amount of monthly income for the rest of his or her life.

There are two basic types of life insurance, temporary and permanent. Temporary insurance is known as term life. An example of a term policy would be a 20-year term life, which means that the policy will pay a death benefit if the person dies within the next twenty years.

Permanent insurance includes whole life and universal life. Whole life provides for a payout no matter when the person dies, but premiums have to continue to be paid, usually right up until the insured reaches the age of 100. Universal policies are somewhat similar, but they allow for greater premium flexibility. Universal insurance is somewhat complicated; you should talk to an agent before buying it.

How to Choosing The Best Life Insurance Company

As you age, you may start thinking about your financial future and about life insurance and the life insurance company you will need. This type of insurance will protect your family from having to pay expenses including funeral and burial costs, outstanding bills you may have, and medical bills that may have accrued if you are sick and had to stay in the hospital.

These costs can be high depending on your financial situation and could be a huge burden on your family. Finding the best life insurance company so you can buy a policy that will put your mind at ease and will allow you to live the rest of your life without having to worry about the future.

Life insurance policies come in many different forms and are available from different companies. You will be able to find out more information about a life insurance company by researching them online and by calling a representative from the company. You should ask important questions about premiums, coverage, and how to qualify for a policy. Depending on your age, you may have to pass a medical exam in order to take out a policy. The amount of your premium will also depend on the amount of coverage you will need. Some policies will only pay for medical bills and funeral expenses, while other bills will pay for much more.

When looking for a policy, you should also ask how long the policy will be in effect. After a certain age, the policy will no longer cover as much as it once did. If your employer offers life insurance, you should take it. This will cost less each month and you may be able to take the policy with you when you retire. The benefits may not be as extensive as if you went through a private insurer, but you will be able to help your family pay for certain costs in the event of your death. If you travel often for business, then you should consider getting the best life insurance.

Applying for a policy will not take too much of your time and the policy will go into affect after you sign the paperwork. As long as you maintain the policy by making monthly payments, you will be covered in case of an accident or illness. While no one wants to think about their own death, it is important to consider the lives of others you will leave behind.

If you have children or if you have other relatives that will be responsible for your bills after your death, you should be able to pay for most of it through a life insurance policy. The best life insurance company you choose will be able to explain pay outs and other information when you sign the paperwork.

Life Insurance vs Life Assurance

Anyone reading about insurance can be forgiven for thinking that the terms ‘life insurance’ and ‘life assurance’ are interchangeable, but are there any differences between the two terms and if not, why are there two different words for the same thing?

Put simply “insurance” is provided against an event that might happen whereas “assurance” applies to an event that will happen. So, insurance is a policy taken out against a risk, whereas assurance is one that is taken out against a definite event. The confusion about the seemingly interchangeable use of the two phrases occurs mainly because companies in North America refer to both assurance and insurance simply as insurance, and that habit has crossed the Atlantic.

For example, Whole of Life ‘assurance’ policies are taken out by people based on the fact that death is certain. They pay premiums to maintain the policy safe in the knowledge that their estate or dependents will receive an assured sum upon their death, whenever this happens. As it is certain (or assured) that the policy will have to pay out at some point, because it provides cover for the whole of someone’s life, it is known as life assurance. However, a life ‘insurance’ policy will only pay out providing all premiums have been maintained and that death occurs within a specified number of years, known as the policy term. As it is quite possible that the insured will not die during the policy term, this is known as life insurance

Another example of ‘insurance’ as opposed to ‘assurance’ is critical illness cover. Because the insured is obtaining cover against the possibility of contracting and being diagnosed with a critical illness, it is classed as ‘insurance’. Hopefully, when taking out such insurance it will not be required, but should such a situation arise then the insured will be paid a lump sum to help them provide for themselves and their family throughout their illness. Of course it is quite possible that the insured will not suffer a critical illness, and therefore this is known as insurance – something that might happen, as opposed to something that will.

There are many types of life insurance and life assurance policies available in the UK, and depending upon the term required and the age of the insured person some will be better to take out than others. Not everyone is in the same position nor requires the same type of cover and because life insurance and life assurance can be quite complicated anyone thinking of taking out a policy should consider seeking professional advice.

Term Life Insurance Quote Online

Life insurance is important because it saves your family from total loss when your time to live is up. This is true if your family is totally depending on your income. This is even truer if your children are still young. You never know when life will take its toll. With life insurance, at least you have reserved a fund that will sustain your dependents when you are not able to do so anymore. Besides, while you are still earning, it is best to set aside some amount for cases that are certain to come even though the time is not that certain. That’s when you need to get term life insurance.

Comparing Term Life and Whole Life Insurance

Term life insurance is so far the most popular and the cheapest life insurance in the market. It only has life coverage, contrary to the whole life insurance which has cash value. In Whole life insurance, you pay for the life insurance coverage plus a saving feature where your premium accumulates to a certain level which you can use in the future for whatever purpose. Term life insurance on the other hand, is about life insurance coverage only. You are protected within a certain term. When you do not die after the term ends, you gain nothing. However, if you do die within the term and the life insurance is in force, your beneficiaries will receive the face amount or the value of the life insurance. Term life insurance is generally cheap because it does not have a saving feature unlike that of whole life insurance.

Searching for Cheap Term Life Insurance

Some people find it more practical to buy term life insurance because it only requires paying the premium for a specific term. It is also a lot cheaper than whole life insurance. However, it is even cheaper if you get life quotes from where you can compare different term life insurance prices in your area. Anyway, it is not hard to get term life insurance quote because you can simply get it from online quotes company such as Best Insurance Quote Services.

With life quotes, you can choose among life insurance providers which of them offer cheap term life insurance. The term life insurance quote will give you idea how much to pay in premiums. Likewise, it will give you picture of how long you will be paying such premium and how long you should keep the insurance in force.

How to Get Life Quotes

Obtaining life quotes are easy. You just have to fill up the online form from Best Insurance Quotes Services. The form will be the guide of the online company to determine what term life insurance quote is best suited for you. This is important because the term life insurance quote is determined by your age and health. Once you have filled in relevant data, you will be lead to a buyer’s guide so that you would understand what you will be looking into when the life quotes are made available online. The guide will serve as information for you because this is good as No Visit Life Quotes. Meaning, there is no appointment or agent intervening for more details. It will be up to you to learn all about the term life insurance quote that you get online.

What are Some of the Advantages of Whole Life Insurance?

Although there is a big push towards buying Term Life recebtly, Whole Life insurance does still have a few advantages that you should consider before you jump on the "Term bandwagon". What are some of the advantages of whole life insurance, you ask? Let's take a quick look at a few of these.

1. Whole Life insurance is "permanent" insurance coverage that is designed to provide protectionfor you for as long as you live, up until the age of 100. This is unlike most Term Life policies which are only designed to provide coverage for a specific period of time, such as a "10 Year Term" or "20 Year Term" policy.
2. It provides a cash value that you can borrow against later in life. Many states require that the cash value exists within a short period of time, such as three years from the time you purchase the policy.
3. There are many critics of Whole Life insurance because you are paying more than you would for Term Life and part of the premiums are being placed into a savings account. However, if you look at the two good reasons above you may change your opinion. Think about this for a moment. Do you already have a savings account? If so, are you putting money into it on a regular basis? Do you consider your savings account to be an asset that you can use anytime in the near future if needed?
   

These are all things that you should consider before turning your back on a Whole Life insurance policy. Many Americans find it almost impossible to save and when they do, they usually end up dipping into it before it can accumulate into anything substantial. This is one of the big advantages of Whole Life insurance. You pay into it just like any other bill and later in life you'll actually have something to show for it.

Summary - These are just a few of the advantages of Whole Life insurance. For many people they're not adavantages at all because they have no trouble saving money and would rather buy Term Life instead and invest their money elsewhere. However, for those peopleple that want something more permanent and would like something that they know they can rely on in their future, the advantages of Whole Life insurance cannot be ignored.

What is Universal Life Insurance?

Another common form of life insurance is universal life. With this kind of policy:

• You may pay premiums at any time, of virtually any amount, subject to minimums.
• The amount of cash value the policy builds is based both on the premiums paid and on the interest earned.
• The insurance company subtracts money from the fund each month to cover the cost of the insurance and expenses.
• They offer standard rates that can be substantially cheaper—as much as 30 percent or more—than standard rates charged by insurance companies for comparable term coverage.

Some universal life policies feature progressive underwriting (which means it’s easier to get coverage). These policies usually are structured so that if you pay the minimum annual premiums, coverage won’t lapse for 15 or 20 years.

Another form of this insurance is variable universal life. It provides death benefits and cash values that vary according to the investment returns of stock and bond funds managed by the life insurance company. The premiums that you have to pay can also change a lot.

Target premiums are fixed in the first year—but policyholders, because of the flexible nature of the products, are not contractually entitled to those fixed payments afterward. The cost of variable universal life is too uncertain for some people because of the open-ended method of premium payment.

Question You Should Ask About Your Child Life Insurance

Getting child life insurance quotes on the net can be convenient, but are you sure that you are seeing the big picture?

Is child life insurance really worth the premiums? Many question the importance of child life insurance. After all, if anyone needs to get insured, shouldn't it be the working parents? While this is indeed a valid argument, there are advantages to getting child life insurance.

It's not so much the benefits as it is about future eligibility. Child life insurance is especially important if your family has a history of medical illness. You see, if you get child life insurance, your child can automatically get any type of life insurance later on.

Most types of child life insurance are actually term life insurance. Child life insurance often does not build cash value and has small premiums. In order to be competitive, some life insurance agencies are providing child life insurance some features similar to whole life insurance. However, child life insurance ends when your child matures, so the cash value benefits are very minimal.

As a general rule, parents should first get themselves insurance, before their children. Because the main purpose of child life insurance is future eligibility, parents will do well to just get the cheapest child life insurance package.

Beyond everything else, they must make sure that the child life insurance will allow their children to have immediate access to life insurance later on.

What is Whole Life Insurance?

A whole life policy, sometimes called straight life or permanent life, is protection that can be kept as long as you live. It enables you to pay the same premium over the years—averaging the cost of the policy over your lifetime. Some characteristics of a whole life policy include the following:

• Whole life insurance builds a cash value—a sum that grows over the years, tax-deferred.
• If you cancel the policy, you receive a lump sum equal to this amount (and you pay taxes on it if the cash value plus any dividends exceeds the sum of the premiums you paid).
• If you need to stop paying premiums due to a temporary financial crisis, you can use the cash value in the policy to pay those premiums for a period of time.
• You also can withdraw part of the cash value in the form of a policy loan. (If you die before repaying it, the loan and any interest due is repaid from the death benefit amount.)
• The face amount in a whole life policy is constant, and this amount is paid if you die at any time while the policy is in effect.
• The policy is designed to mature when you reach 100. If you live to be 100, you won’t have to pay any more premiums, and the policy’s cash value will be equal to the face amount. So, the insurance company usually will pay you the face amount—even though you’re still alive.

Most people do not plan on paying premiums until age 100. More commonly, whole life insurance is used as a form of level protection during the income-producing years. At retirement, many people then start to use the accumulated cash value to supplement their retirement income.

Whole life plays an important role in financial planning for many families. In addition to the death benefit or eventual return of cash value, a whole life policy has some other significant features. For example, it may pay dividends. Whether or not it does is the primary difference between:

• a participating (par) policy, issued by a mutual life insurance company, is one in which the policyholders receive dividends (if a dividend is declared); and
• a nonparticipating (non-par) policy, issued by a stock life insurance company.

Many people use the dividends in a participating policy to buy additional amounts of insurance, instead of taking the cash. This is really no different than taking a few extra dollars out of your pocket and making a separate purchase. Still, dividends are often a successful sales tool because some people like the idea of getting something extra back—even though they’ve paid more initially.

Another significant feature of the whole life policy is that it guarantees the interest rate on any loans you take out against the cash value of the policy. (You also can get a bank loan using the cash value of the policy as collateral, but the guaranteed interest rate in the policy may be much lower than that available from a bank.)

Why We Need Life Insurance?

Life insurance plays an important role in securing the finances of many families. In the purest sense, life insurance is something that protects against the risk of you dying too soon. It pays a death benefit to someone when you die. Your premature death would expose your family or business to certain financial risks, such as:

• burial expenses;
• paying off debts;
• loss of family income;
• loss of business profits;
• paying estate taxes; and
• a lack of or a limited college fund for your children.

If you don’t have dependents, you probably don’t need life insurance. But if you have a spouse, children or elderly parents who rely on your income, you’ll want life insurance to pay expenses for them in the event of your premature death. You also may even want to consider insuring the life of your spouse if he or she is not earning money—particularly if he or she cares for your children. (If your spouse were to die unexpectedly, not only would you have funeral expenses, but you’d have to start paying for child care).

Life insurance guarantees a specific sum of money will be available at exactly the time it is needed. Savings accounts, mutual funds, stocks, bonds and other investments do not offer such protection—and, in fact, they can be tied up in probate at the time of your death. Life insurance, however, will be available immediately—and it creates, in essence, an estate that did not previously exist.

With life insurance, you get what you pay for. You pay the policy’s face amount—the amount the life insurance company will pay when you die.

Since this amount is payable upon the death of the insured, the element of risk to the insurance company is much different than it is for an automobile or homeowners policy.

When an insurance company issues an auto policy, for example, it hopes you will be a safe driver, never have an accident and never file a claim. When an insurance company issues a life policy, it knows it will be called upon to pay a claim someday—because everyone dies. The only unknown is whether the claim will be made in one year or in 50.

This is why, not surprisingly, life insurance costs vary based on your age, health and the amount of insurance you buy.

History of Life Insurance

The history of Life Insurance is not a very hard one to understand. Today, Life insurance is simply the contract between a single individual and an insurance company dictating that the company is to pay the policy holder's beneficiary if the insured dies. But where did the idea of being insured at death come from? Who were the first people that implemented this idea? What did they do when the amounts of money were not as high as those of the companies in the life insurance industry today? When did the actual life insurance industry started? All these are pretty interesting questions and the fact of the matter is that some of them cannot be answered to a high extent; however we do know a lot about the history of this wonderful thing that today covers people from all around the globe.

The First Few Signs in Life Insurance History

Historians have been searching for the true start of life insurance as we know it, but they have first deciphered the baby steps that finally ended in the actual death benefit payment. According to the Financial Shopper Network in Ancient China sailors would prevent pirates from stealing all their goods by carrying portions of other ships cargos, this way if a pirate stole the cargo of one ship, the entire load would not be lost. A little bit later in Babylon traders simply gave loans that had to be repaid when the contents of the trade were delivered safely.

So what does this have to do with life insurance? Well both of those civilizations were preventing losing it all. They were doing little baby steps that would help in the long run. Life insurance as we know it however; started in the city of Rome. The people of this highly advanced civilization decided to form what they called "burial clubs". These clubs were designed with one sole purpose, in case of an unexpected death of a club member; everyone else would be willing to pay for their funerary expenses and help the family of the survivor with some money. The concept of life insurance as they knew it ended dramatically in the year 450 A.D. when the Roman Empire fell and its practices were abandoned for a long period of time. It is also important to highlight that many historians agree that about at the same time of Rome, the Indian Empire and its citizens also formed "burial clubs" in order to pay for funerals and help people with expenses. A clue of this according to the Financial Shopper Network is that the "yogakshema, the name of Life Insurance Corporation of Indian's Corporate Headquarters" refers to the Vedas.

Britain and It's Footstep in Life Insurance History

Modern life insurance however did not start until the British decided to try and make it work. The practice of life insurance was banded in the entire continent of Europe except for England and it was exactly the British that started the most prominent life insurance companies known to the European countries today. It was in the middle of the 17th century that in the streets of London, England a group of people met together at Lloyd's Coffee house and decided to come about with life insurance ideas. The coffee house was a famous place for merchants, ship owners and traders and therefore it would be the perfect place to discuss life insurance knowing that most of those people had money.

Life Insurance History in the United States

With the British knowing the basics of life insurance and the things that could help people like the life insurance industry, they decided to give it a try in the United States of America. After talking about how they would decide on coming about with the first life insurance company, they decided to base it on the well known British model at the time. The first life insurance company in American soil was founded in the Southern Colony of Charleston, South Carolina in the year 1735.

About 20 years later the entire colonies saw that this was a good idea, so the Presbyterian Synod of Philadelphia decided to sponsor the first life insurance corporation in the United States, which wrote its first policy in the year 1761. The bad thing about life insurance at that time was that many religious groups opposed it because it would be like anticipating one's own death and with the religious fervor in the North American Colonies at the time; it proved to be quite a challenge to get the whole thing started.

The actual life insurance industry as we know it really took off in the year 1840 because those religious groups calmed down and didn't interfere with governmental affairs anymore. Another big reason that life insurance companies came about proved to be the New York and Chicago Fire's that killed a whole bunch of people in each of the two cities. After this more and more life insurance companies started coming about and in the 1900's business really grew. People wanted to be protected in case of an accidental death.

The 1900's proved to be an era of growth for the life insurance industry. Two wars went on and many people decided to insure themselves to establish a secure monetary future for their families. It is also said that after an attack on the country more people buy life insurance policies. Nobody can contest that simply because after Pearl Harbor a bunch of people panicked and decided to open policies in fear for their lives. The same is true after the turn of this century when the attacks on the World Trade Center took place. People decided that not having protection was not worth it and that a little premium each month was better than leaving their families in economic burden.

Life Insurance Today

As you can see life insurance has moved quite a lot from when it first started in Rome and India. Major corporations with great world interaction and power have surfaced. Companies that have a lot to say in both the economic and political world have come to exist. As you can see the market right now is in a boom and there are many life insurance companies coming to life. Who knows what will happen in the future, but as of now customer should be happy with their options and the thousands of companies that they can choose from!

Purchasing Life Insurance Online

These days, you can buy virtually any product or service online. Now, the life insurance industry has entered the fast lane. Potential buyers are encouraged to visit websites and apply for policies online. It takes only a few minutes to choose a policy, enter your personal details and get a quote. No longer must potential customers spend time shuffling paperwork with insurance sellers.

Purchasing insurance online is not only convenient, but simple too. More and more people, once put off by the life insurance purchase, are choosing to apply and buy policies over the Internet. Busy young families, business professionals and single men and women are buying online to save time and reduce hassle.

The first company to bring about the wave of change by setting up a do-it-yourself site was the Liberty Life Insurance Company, a subsidiary of RBC Insurance. Users are able to visit the site to get life insurance quotes, and to purchase their new policies. Online applications are processed instantly and if found acceptable, a policy will be issued within fifteen minutes. This quick turnaround is possible because application information is forwarded for automated underwriting, and reviewed in a secure electronic environment. There is no passing of files, and no human interaction at play.

As soon as the applicant is issued a policy, he or she will receive a secure ‘i-folder’ containing file details, documents and correspondence. Policyholders can perform a wide range of functions online using this folder, including changing nominees and updating payment methods. There is no insurance office to visit, no officer to meet and no paperwork to clear.

Online sites make the entire process of purchasing life insurance simple, safe and appealing to potential buyers. Since the process is virtually instant and very transparent, the customer feels in control of the situation.

There is a limit to the amount of life insurance that can be purchased online. Generally the available range is between $50,000 to $1,500,000. Policies are available in ten, fifteen or twenty year options at competitive rates.

If you’re still a little hesitant about buying life insurance online, it’s important to know that purchasers have the option of returning their policies within 31 days to receive a full refund if they are not satisfied.

Life insurance is an important part of planning for the future. If you’ve been putting off the task because of bureaucracy and paperwork, consider purchasing your life insurance online. It’s quick and easy to review insurance company information, compare quotes and get the information you need to make a smart decision.

When Is The Right Time To Get Life Insurance?

Life insurance is one of the most important types of insurance you can get, although many people don’t get it early enough or have inadequate cover. If you don’t have life insurance yet or you are not sure if your policy is good enough, then there useful tips will help you to decide when and what type of life insurance to get:

Get insurance now

Right now life insurance is at an all time low, so whatever age you are the time to get insurance is now. In fact, the younger you are then the cheaper the insurance is likely to be, because you are less of a risk to the lender. By getting insurance now you will have the peace of mind that should the worst happen, you will be covered.

How much insurance?

Although life insurance is relatively cheap, most people don’t have an adequate level of cover. You might think that £100,000 of cover for a few pounds a month seems good, but £100,000 is not that much. Although a payout of £100,000 might seem like a lot of money, that money might have to support your family for the next 15 or 20 years. Many people simply do not have an adequate level of cover to support their families after their death.

Working out how much you need

If you are looking for life insurance, then the best way to work out how much cover you need is to work out the amount your family needs to support them each year, and then multiply this by 25 to allow for tax over 15 or 20 years. This is the amount of cover your family would need to support their current lifestyle for a significant period of time. Obviously, the amount you need also depends on how much you can afford. Generally, the more you can pay the better.

Term insurance

The most common form of life insurance is term life insurance. This form of life insurance is cheap, and you pay a set amount each month for the term of the agreement. You work out how much you want your family to receive in the event of your death. If you stop paying the monthly payments you lose all the money you have put in, and if you are still alive at the end of the term then there is no payout. This form of life insurance is cheap but does not guarantee payout.

Whole life insurance

The other most common form of life insurance is whole life insurance. Basically, you are insured for your entire life. The amount you pay is put into an investment fund, with your premiums usually remaining the same for the first few years before going up. This type of insurance is more expensive but has the advantage that payout is guaranteed.

Other factors

Before you get life insurance, make sure that you work out exactly what sort of cover you need, and look at any other factors that will affect the price. If you smoke or have poor health then some insurance policies will charge more. Whatever type of life insurance you get, it pays to get insurance as soon as you can and for as much as you can afford.

Term Life vs Whole Life

The two most common forms of life insurance policies are term life and whole life. The names are remarkably apt, in that:

• A term life policy lasts for a set period, say 10 years. If you die during that 10-year term, the policy will pay. If you don’t, it expires and that’s that; and
• A whole life policy lasts for your whole life. You absolutely will die during the policy period for a whole life insurance policy (although most will pay you the benefit before you die, if you live to be 100).

Typically, a term life policy provides protection for a period of one to 20 years. The best way to think of term life is as temporary insurance. A whole life policy, on the other hand, is permanent insurance. Term policies usually are used when you have a temporary need, such as:

• a mortgage;
• business obligations; or
• a particular need for income when your children are young.

Whole life products are effective when you have a permanent need, such as to:

• supplement your surviving spouse’s income;
• cover funeral costs, pay capital gains taxes;
• make charitable donations; or
• pass a family business from one generation to the next.

A term policy does not build any cash, loan or surrender values. It essentially provides a death benefit only. For this reason, it is usually the least expensive form of life insurance. Its low cost allows you to buy higher levels of coverage at a younger age, when your need for protection is often greatest. Of course, it would be simple if there were only one kind of term life policy to consider. Instead, there are three:
1) Level term. Provides a consistent amount of insurance throughout the policy period.
2) Decreasing term. Good for shrinking debt obligations (such as a mortgage), and starts with a specified face amount, which decreases annually until it reaches zero when the policy expires.
3) Increasing term. Provides a growing amount of insurance,but the need for this type of protection is rare.

Many term policies are also convertible, which means they may be exchanged for another type of life insurance. Choosing a convertible term life policy is one way to make sure you will be able to get permanent coverage at a later time, without having to prove that you are still insurable.

You won’t want to stick with term life insurance for your entire life (assuming that you live a long time). By the time you reach 70 or 80 years of age, the premiums for a term policy usually approach the face amount of the insurance, because the insurance company figures you’re going to die soon.