Providing for one's family is both rewarding and challenging. Even the best salary is vulnerable to the varying tides of inflation and financial crises. There are numerous ways to hedge against these changes in fortune, many of which are susceptible to devaluation themselves.
While investing in stock shares, money markets, properties, or trust funds are generally safe avenues for safeguarding and growing assets, a life assurance policy can also provide some of the same investment benefits while at the same time guaranteeing support for loved ones in the future.
There are two basic types of policies offered by assurance companies both large and small. They are the permanent policy and the temporary policy, and both have their applications and benefits depending on the goal of the policy purchaser.
Permanent life assurance policies are the type that one who is primarily interested in a long-term arrangement would purchase. Although it may also be seen as an investment, the main purpose of this type of policy is to actually ensure against one's eventual passing in the distant future, or in the event of serious illness along the way.
Both the policy provider and the policy holder benefit financially from this type of policy. The assurance company will most likely not have to pay out for quite a long time and therefore may use the funds for investment, and the policy holder benefits from the accrued increase in cash value of the policy for a significantly modest monthly payment.
The temporary policy can be seen more as an investment tool than an interest in life assurance, although one's life is nonetheless covered in the policy. These policies are short-term arrangements and most often require a smaller monthly payment than do the permanent policies. These types are the foundation of the life assurance industry, as the funds are rarely required to be paid out to the policy holder.
quinta-feira, 4 de fevereiro de 2010
quarta-feira, 3 de fevereiro de 2010
Life Assurance Policies
Definition: Life assurance can provide you with one of two main benefits: it can either provide your successors with money when you die or it can be used as a money saving plan to provide you with a lump sum (or income) on a fixed date. In recent years, however, both types of scheme have become more flexible and many policies allow you to incorporate features of the other. This can have great advantages but the result is that some of the definitions appear somewhat contradictory. There are three basic types of life assurance: whole life policies, term policies and endowment policies.
Whole life policies are designed to pay out on your death. In its most straightforward form, the scheme works as follows: you pay a premium every year and, when you die, your beneficiaries receive the money. As with an ordinary household policy, the insurance only holds good if you continue the payments. If one year you did not pay and were to die, the policy could be void and your successors would receive nothing.
Term policies involve a definite commitment. As opposed to paying premiums every year, you elect to make a regular payment for an agreed period: for example, until such time as your children have completed their education, say eight years. If you die during this period, your family will be paid the agreed sum in full. If you die after the end of the term (when you have stopped making payments), your family will normally receive nothing.
Endowment policies are essentially savings plans. You sign a contract to pay regular premiums over a number of years and in exchange receive a lump sum on a specific date. Most endowment policies are written for periods varying from 10 to 25 years. Once you have committed yourself, you have to go on paying every year (as with term assurance). There are heavy penalties if, after having paid for a number of years, you decide that you no longer wish to continue.
An important feature of endowment policies is that they are linked in with death cover. If you die before the policy matures, the remaining payments are excused and your successors will be paid a lump sum on your death. The amount of money you stand to receive, however, can vary hugely, depending on the charges and how generous a bonus the insurance company feels it can afford on the policy's maturity. Over the past few years, pay-outs have been considerably lower than their earlier projections might have suggested.
Options. Both whole life policies and endowment policies offer two basic options: with profits or without profits. Very briefly the difference is as follows.
Without profits. This is sometimes known as 'guaranteed sum assured'. What it means is that the insurance company guarantees you a specific fixed sum (provided of course you meet the various terms and conditions). You know the amount in advance and this is the sum you - or your successor - will be paid.
With profits. You are paid a guaranteed fixed sum plus an addition, based on the profits that the insurance company has made by investing your annual or monthly payments. The basic premiums are higher and, by definition, the profits element is not known in advance. If the insurance company has invested your money wisely, a 'with profits' policy provides a useful hedge against inflation. If its investment policy is mediocre, you could have paid higher premiums for very little extra return. The lack of money saving in this scenario could be depressing.
Unit linked. This is a refinement of the 'with profits' policy, in that the investment element of the policy is linked in with a unit trust.
Other basics. Premiums can normally be paid monthly or annually, as you prefer. Size of premium varies enormously, depending on the type of policy you choose and the amount of cover you want. Also, of course, some insurance companies are more competitive than others. As very general guidance, £50-£70 a month would probably be a normal starting figure. Again as a generalisation, higher premiums tend to give better value as relatively less of your contribution is swallowed up in administrative costs.
As a condition of insuring you, some policies require that you have a medical check. This is more likely to apply if very large sums are involved. More usually, all that is required is that you fill in and sign a declaration of health. It is very important that this should be completed honestly: if you make a claim on your policy and it is subsequently discovered that you gave misleading information, your policy could be declared void and the insurance company could refuse to pay.
Whole life policies are designed to pay out on your death. In its most straightforward form, the scheme works as follows: you pay a premium every year and, when you die, your beneficiaries receive the money. As with an ordinary household policy, the insurance only holds good if you continue the payments. If one year you did not pay and were to die, the policy could be void and your successors would receive nothing.
Term policies involve a definite commitment. As opposed to paying premiums every year, you elect to make a regular payment for an agreed period: for example, until such time as your children have completed their education, say eight years. If you die during this period, your family will be paid the agreed sum in full. If you die after the end of the term (when you have stopped making payments), your family will normally receive nothing.
Endowment policies are essentially savings plans. You sign a contract to pay regular premiums over a number of years and in exchange receive a lump sum on a specific date. Most endowment policies are written for periods varying from 10 to 25 years. Once you have committed yourself, you have to go on paying every year (as with term assurance). There are heavy penalties if, after having paid for a number of years, you decide that you no longer wish to continue.
An important feature of endowment policies is that they are linked in with death cover. If you die before the policy matures, the remaining payments are excused and your successors will be paid a lump sum on your death. The amount of money you stand to receive, however, can vary hugely, depending on the charges and how generous a bonus the insurance company feels it can afford on the policy's maturity. Over the past few years, pay-outs have been considerably lower than their earlier projections might have suggested.
Options. Both whole life policies and endowment policies offer two basic options: with profits or without profits. Very briefly the difference is as follows.
Without profits. This is sometimes known as 'guaranteed sum assured'. What it means is that the insurance company guarantees you a specific fixed sum (provided of course you meet the various terms and conditions). You know the amount in advance and this is the sum you - or your successor - will be paid.
With profits. You are paid a guaranteed fixed sum plus an addition, based on the profits that the insurance company has made by investing your annual or monthly payments. The basic premiums are higher and, by definition, the profits element is not known in advance. If the insurance company has invested your money wisely, a 'with profits' policy provides a useful hedge against inflation. If its investment policy is mediocre, you could have paid higher premiums for very little extra return. The lack of money saving in this scenario could be depressing.
Unit linked. This is a refinement of the 'with profits' policy, in that the investment element of the policy is linked in with a unit trust.
Other basics. Premiums can normally be paid monthly or annually, as you prefer. Size of premium varies enormously, depending on the type of policy you choose and the amount of cover you want. Also, of course, some insurance companies are more competitive than others. As very general guidance, £50-£70 a month would probably be a normal starting figure. Again as a generalisation, higher premiums tend to give better value as relatively less of your contribution is swallowed up in administrative costs.
As a condition of insuring you, some policies require that you have a medical check. This is more likely to apply if very large sums are involved. More usually, all that is required is that you fill in and sign a declaration of health. It is very important that this should be completed honestly: if you make a claim on your policy and it is subsequently discovered that you gave misleading information, your policy could be declared void and the insurance company could refuse to pay.
terça-feira, 2 de fevereiro de 2010
5 Reasons Why Life Insurance Is Important To You
Life Insurance. Doesn't it just conjure up some insurance salesman knocking on your door trying to sell you a policy that covers you for accidents only, for a small amount and costs you the earth? No? It doesn't too me either because those days are long gone!
I prefer to call it "Life Assurance" anyway, because it is assuring you that your life is convered in the event of death and that what your life is insured for, will be paid out to your estate or policy owner.
But how many of you actually have this cover in place? I know of lots of my friends, who are in their 20's who don't have the cover because 1) they don't know anything about (lack of education) and 2) they don't think they need it and see it as an extra cost. How little they know... like anything, the earlier you start, the cheaper it is...
Following are 10 important reasons why YOU should have life assurance and why those around you too should invest in this:
Reason 1
Hello? Do you have any bills, like maybe a mortgage?? This alone is a pertinent reason to have life assurance... it means that should you die, this major bill will be paid off and not left to your survivors to deal with!
Reason 2
Young, fit and healthy? No ailments? Then this is the best time to get life assurance! Your premium will be small and if you take out a policy that allows you to keep the same premium until the age of 65, you will have considerable savings... the earlier you start, the better. And then if you develop any health issues throughout your life, it doesn't matter, because you already have the cover in place!
Reason 3
Are you married? Do you care about your spouse? Then is it not thoughtful to make sure that your spouse does not have to worry about money should you pass before they do and vice versa? I know a couple who cancelled their life insurance and then 6 months later he was diagnosed as having stomach cancer, and died 18 months later... leaving behind a wife and two children still at home and a mortgage... and no monetry relief for his family. Is this what you want to put your partner through?
Reason 4
Want to leave a legacy for your future grand children? What better way then ensuring your estate will actually have some legacy to pass on! You can elect in your will to have the proceeds of your life assurance paid directly to your estate and then as per your will, divy up the proceeds.
Reason 5
Peace of mind... yours that is. If you can't afford health insurance or any other insurance, you can afford life insurance... and should you develop a terminal disease... your life insurance will pay out a lump sum upon confirmation of this, allowing you to fulfil any dreams you have not achieved or to get your affairs in order.
There are many more reasons I could go into here, but you get the gist... just like you wouldn't risk not having your car insured or your house or contents... how can you not insure your number one asset... yourself?
There are plenty of fantastic financial advisers out there. If you don't have one, a great place to start is your bank, they have trained staff that can guide you... just make sure you read through any quotes you receive etc and make sure you understand just what you are being covered for.
I prefer to call it "Life Assurance" anyway, because it is assuring you that your life is convered in the event of death and that what your life is insured for, will be paid out to your estate or policy owner.
But how many of you actually have this cover in place? I know of lots of my friends, who are in their 20's who don't have the cover because 1) they don't know anything about (lack of education) and 2) they don't think they need it and see it as an extra cost. How little they know... like anything, the earlier you start, the cheaper it is...
Following are 10 important reasons why YOU should have life assurance and why those around you too should invest in this:
Reason 1
Hello? Do you have any bills, like maybe a mortgage?? This alone is a pertinent reason to have life assurance... it means that should you die, this major bill will be paid off and not left to your survivors to deal with!
Reason 2
Young, fit and healthy? No ailments? Then this is the best time to get life assurance! Your premium will be small and if you take out a policy that allows you to keep the same premium until the age of 65, you will have considerable savings... the earlier you start, the better. And then if you develop any health issues throughout your life, it doesn't matter, because you already have the cover in place!
Reason 3
Are you married? Do you care about your spouse? Then is it not thoughtful to make sure that your spouse does not have to worry about money should you pass before they do and vice versa? I know a couple who cancelled their life insurance and then 6 months later he was diagnosed as having stomach cancer, and died 18 months later... leaving behind a wife and two children still at home and a mortgage... and no monetry relief for his family. Is this what you want to put your partner through?
Reason 4
Want to leave a legacy for your future grand children? What better way then ensuring your estate will actually have some legacy to pass on! You can elect in your will to have the proceeds of your life assurance paid directly to your estate and then as per your will, divy up the proceeds.
Reason 5
Peace of mind... yours that is. If you can't afford health insurance or any other insurance, you can afford life insurance... and should you develop a terminal disease... your life insurance will pay out a lump sum upon confirmation of this, allowing you to fulfil any dreams you have not achieved or to get your affairs in order.
There are many more reasons I could go into here, but you get the gist... just like you wouldn't risk not having your car insured or your house or contents... how can you not insure your number one asset... yourself?
There are plenty of fantastic financial advisers out there. If you don't have one, a great place to start is your bank, they have trained staff that can guide you... just make sure you read through any quotes you receive etc and make sure you understand just what you are being covered for.
segunda-feira, 1 de fevereiro de 2010
Compare Life Insurance to Get the Best Deals
The easiest and cheapest means to purchase your life insurance is to buy online, not simply do you get access to a lot of online insurance companies, but you can also check them out and obtain quotes online to compare for the best contract. However in order to be able to compare quotes you should understand what you are seeking.
The advent of Insurance comparison sites on the web has made life a lot easier for most of us because they let us to quite simply play the part of insurance broker in getting the best and most competitive contracts online. If you now in the process of seeking term policies you can simply compare life insurance for online deals at several sites.
The price of the premiums can seem quite inhibiting and a lot of factors that give contribution to their cost. You can keep the amount to be insured and the period of insurance cover, to the bare minimum in order to get a cheaper policy. Whether you smoke can really influence the price, as smokers are assumed to be more of an insurance risk.
Additionally, certain occupations are deemed more of a risk to insure. You can expect to disburse higher premiums if you are a person who works as a fire fighter rather than somebody who is a bank clerk. All these fine points need to be taken into account when you compare life insurance. A specialist broker can do this and give you with a summary and choose the best value for money policy for you.
By giving your personal information and the sum of cover that you would like, a specialist broker can seek out the market to get what you need. It simply takes them a couple of minutes to search through a lot of companies. Thus it makes sense to compare life insurance this way than it does to expend hours doing it yourself. You also, certainly, get the capability of the broker, who will intuitively know which life assurance provider would best meet your necessities.
Customers seeking the best deals ought to compare life insurance quotes from the foremost providers. That way they can compare a variety of deals and get the one that suits them the most. Think about the long term when searching for your policy and take instruction from individuals who offer it as it may be priceless.
In addition, by comparing various life insurance quotes you can get the cheapest policy to suit you. You clearly want to disburse as little as possible each month and a broker will assist you to find a cheap plan to go with your necessities. You can potentially save hundreds of pounds a year only by comparing the different policies available.
The advent of Insurance comparison sites on the web has made life a lot easier for most of us because they let us to quite simply play the part of insurance broker in getting the best and most competitive contracts online. If you now in the process of seeking term policies you can simply compare life insurance for online deals at several sites.
The price of the premiums can seem quite inhibiting and a lot of factors that give contribution to their cost. You can keep the amount to be insured and the period of insurance cover, to the bare minimum in order to get a cheaper policy. Whether you smoke can really influence the price, as smokers are assumed to be more of an insurance risk.
Additionally, certain occupations are deemed more of a risk to insure. You can expect to disburse higher premiums if you are a person who works as a fire fighter rather than somebody who is a bank clerk. All these fine points need to be taken into account when you compare life insurance. A specialist broker can do this and give you with a summary and choose the best value for money policy for you.
By giving your personal information and the sum of cover that you would like, a specialist broker can seek out the market to get what you need. It simply takes them a couple of minutes to search through a lot of companies. Thus it makes sense to compare life insurance this way than it does to expend hours doing it yourself. You also, certainly, get the capability of the broker, who will intuitively know which life assurance provider would best meet your necessities.
Customers seeking the best deals ought to compare life insurance quotes from the foremost providers. That way they can compare a variety of deals and get the one that suits them the most. Think about the long term when searching for your policy and take instruction from individuals who offer it as it may be priceless.
In addition, by comparing various life insurance quotes you can get the cheapest policy to suit you. You clearly want to disburse as little as possible each month and a broker will assist you to find a cheap plan to go with your necessities. You can potentially save hundreds of pounds a year only by comparing the different policies available.
Subscrever:
Mensagens (Atom)