Becoming a new dad and recent homeowner were two events that influenced my decision to get life insurance at a young age. Buying life insurance in my mid-20s also saved me money because it allowed me to lock in a tremendous rate. For many people, life insurance doesn't cross their radar until they've reached their 30s. But I bought my life insurance policy four years ago - at the ripe old age of 25. And I've never regretted the decision. In fact, if I had it to do over again I would have taken out my policy sooner. Here are the factors that led me to take out a life insurance policy at age 25 and why I'm glad I did. 1. I had just become a dad When my wife gave birth to our first son in...
Continue reading...
The fundamentals of life insurance Indeed, in 2016 more than EUR 695.55 billion in gross premiums were collected in the European Economic Area. Discover how this popular policy works. History and origins of insurance Insurance originated and was developed during Middle Age, when 14 century merchants traveled from one place of business to another. The first insurance policies concerned the maritime sector. Life insurance as we know it today has developed more recently, on the basis of marine insurance and fire insurance, and took off in European countries only in the 19 century under the pressure of industrialization, socialization and the desire to improve society. In this first chapter...
Continue reading...
In my ongoing effort to educate people on how life insurance works, I seek out new analogies and examples on a regular basis. Along with others, I’ve written exhaustively about underperformance and management of life insurance. Charlie Ratner is fond of saying it isn’t underperforming, it’s under-explained. I completely agree. If your car runs out of gas and stops along the side of the road, is it really underperforming? Life insurance policies need gas, and if they don’t get it, they stop too. Fortunately, no one at the dealership needs to explain this to society because a critical mass of people understand this and help educate others as they come along. Most of us...
Continue reading...
Term life and whole life are two popular variations of life insurance policies. While the basic idea of providing much-needed cash in the event of your death is the same, there are some big differences between the costs and benefits of each one. Here's a rundown of both varieties, so you can make the best decision for your family. Term life insurance is the lower-cost option Term life insurance is perhaps the purest way to protect your loved ones in the event that you die prematurely. In a nutshell, when you buy a term life insurance policy, the period of protection is temporary (10, 20, and 30 years are most common). After the initial term runs out, policyholders have the option to renew,...
Continue reading...
When you buy life insurance, you enter into a contract with an insurance company that promises to provide your beneficiaries with a certain amount of money upon your death. In return, you make periodic payments, called premiums. The premium amount is based on factors such as your age, gender, medical history, and the dollar amount of life insurance you purchase. In the event of your passing, life insurance provides money directly to your beneficiaries. They can use the money for: Making up for your lost income Funding a child’s education Paying off household debt Paying for your funeral and other related expenses Certain types of life insurance may provide benefits for you and your family...
Continue reading...
26 U.S. Code § 7702 - Life insurance contract defined 2017—Subsec. (c)(3)(B)(i). Pub. L. 115–97, § 13517(a)(4)(A), added cl. (i) and struck out former cl. (i) which read as follows: “reasonable mortality charges which meet the requirements (if any) prescribed in regulations and which (except as provided in regulations) do not exceed the mortality charges specified in the prevailing commissioners’ standard tables (as defined in section 807(d)(5)) as of the time the contract is issued,”. 1988—Subsec. (c)(3)(B)(i), (ii). Pub. L. 100–647, § 5011(a), added cls. (i) and (ii) and struck out former cls. (i) and (ii) which read as follows: “(i) the mortality charges specified in the contract (or, if...
Continue reading...
The main difference between term life insurance and whole life insurance is that term life insurance serves as insurance only, whereas whole life insurance is actually insurance plus investment. A term life insurance policy has 3 main components - face amount (protection or death benefit), premium to be paid (cost to the insured), and length of coverage (term). The policy expires at the end of the term. If the insured person dies during the term of the policy, the beneficiary is paid the benefit (face) amount. If the insured person is alive after the term (duration) of the policy, no benefit is paid and the policy expires. So in a sense, it is like car insurance, where if you have a six-...
Continue reading...
Disability insurance protects individuals and their families from financial hardship when illness or injury prevents them from earning a living. Many employers offer some form of disability coverage to employees, or you can buy an individual disability insurance policy. Types of Disability Policies There are two types of disability policies: Short-term disability policies have a maximum benefit of two years. Long-term disability policies have benefits that can last the rest of your life. Employers may offer short-term disability coverage, long-term disability coverage, or integrate both of these as part of a competitive employee benefits package. When purchasing individual disability...
Continue reading...
To help you understand your life insurance policy better, we have summarised some of the common terms and provisions that you will come across. Help us build this page by sending us any terms you have come across in life insurance and or pensions and we will be happy to include it here. E-mail info@akinsure.com Premium -This is the money you pay to the life insurance company to purchase the life cover. The cover commences upon first premium payment. Sum assured- this is the amount the policy holder will receive from an insurance company if the insured event occurs or when the policy matures. In other words, this is the total amount for which an individual is insured. This amount does not...
Continue reading...
Term life insurance is a policy that offers coverage for a specified period of time. So, should the insured pass away while the policy is in effect, the beneficiary (often the spouse or child of the insured) would receive a payout. How Does Term Life Insurance Work? Term life insurance policies can be purchased to cover nearly any period of time, and will stay in effect for the entire period as long as you continue to pay the premiums ( the cost of the policy, which can be paid on a monthly or annual basis). While term life insurance doesn’t accrue a cash value over time, meaning you can’t borrow against it, a term policy has a low cost by comparison and is still customizable to an...
Continue reading...
