Home
Term Life Insurance | Ultimate Guide to Retirement
Home Print

What is Term Life Insurance?

what is term life insurance

Term insurance

Term insurance covers you against death for a limited time, the term. For example, the term might be until your children are grown, or until college is paid for, or until retirement. You pay for the coverage period and at the end of the term the contract, or policy, expires. If no claims are made against the policy during the term, you don't receive any benefits after the policy expires, just like auto or homeowners insurance.


Whole life insurance

Whole life insurance is permanent and does not expire until you die (assuming you continue to pay the premiums). It provides coverage similar to term, but it also provides an investment vehicle. A portion of the premium goes toward insuring against death while the other goes toward an investment account. This investment account can be either an interest bearing account or a stocks and bonds investment account.


Which is better (our opinion)? Young families with large financial obligations are usually better off with term insurance. The substantially lower premiums enable them to purchase sufficient coverage to protect against loss of income. Any discretionary investment funds can be placed in other vehicles (mutual funds, money market accounts, etc.) that are likely to generate returns similar to or better than life insurance contracts. Whole life is sometimes purchased by people for tax and estate planning purposes. You should consult with your financial advisory.

Insurance provides financial securities for
business affairs.

Insurance in today’s global economy, guarantees your investment.

 

insurance policy- Insurance Benefits
- Financial planning
- Risk reduction
- Minimize taxes
- Family protection
- Protection of assets
- Automobile
- Health
- Home
- Business
- Commercial
- Life
- Workers' Compensation

 

Lloyds of London


During the early 17th century, English coffee houses played a significant role in English life and were regularly visited by intellectuals, businessmen, and brokers who exchanged daily hot news and discussed socio-economic issues over cups of coffee. In the meantime, Lloyds Insurance people carried out their operations in the western corner of the second story of the London Stock Exchange building.
Today, Lloyd s Insurance Corporation comprises of three structurally distinct bodies:
The Information Body
Lloyd s Underwriters
Lloyd s Representatives
Members carry out insurance transactions independently of each other with Lloyds acting as an intermediary. They also contribute a percentage of their net profits as reserves capital to the Committee Fund, which can be used to salvage and pay off the loans of a member company that faces bankruptcy.
The first and foremost vivid economic fortress of insurance activity involves safeguarding individual and government property. All insurance policies require that the insured pay their premium when a policy contract is signed, allowing the insurance companies to receive their premiums before they may have to pay out the insured and cover their loss.

Reinsurance


Reinsurance is the universal distribution of risk. In this kind of mechanism an insurer agrees to take on a certain amount of risk that it can accommodate considering its financial capacity. Therefore, all underwriters either turn down overwhelming policies or cede them, in part or in full, to another insurance company, i.e. re insure. In such a case, it is natural to assume a percentage of the original premium corresponding to the ceded value, must also be paid to the insurer.


An insurance policy is made with good will and mutual confidence between the insured and the insurer. Therefore, the binding of temporary insurance policy, i.e. binder, is synonymous with immediate liability of the insurer until a final insurance policy is made out.  It is, however, possible that some insurance policies do not become effective once they are bound, though it is basically assumed that allocation of credit and binding of an insurance policy must concur.


An insurance policy must be eligible and in writing. Risk is central to the existence of insurance without which the latter becomes irrelevant. In a zero-risk society there is little need to establish insurance. As to how to handle risk, individuals adopt their own method. For instance, death can be a terrifying risk to most people. It is however inevitable and will eventually happen, though the timing cannot be pinpointed.
The youth would usually accept the risk of death and treat it as if it would never befall them.
Let's review different risks:

•    Inevitable risks which are relatively terrifying.
•    Terrifying risks, which are not essentially inevitable.
•    Exciting risks, which are thoroughly avoidable.

Risks can be managed in at least five ways:

Maintenance: when an individual does not transfer the risk to another.
Evasion: is not a recognized risk management technique.
Avoidance: when an individual or a corporate quits activities involving risk.
Reduction
Prevention:when adequate safety measures are adopted to minimize risk- Protection and
maintenance:immediate recovery measures taken following the infliction of damage/loss
Transfer: transfer of risk is done to relieve anxiety against possible risks whereby loss is transferred to another, either in part or in full.