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Life insurance simplified.

Life insurance, is a contract between an insurance policy holder and an insurer (carrier). The insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death (or other designated event) of an insured person (often the policy holder). The policy holder typically pays a premium, either regularly (monthly/annually) or as one lump sum. Depending on the contract, other events such as terminal illness or critical illness can also trigger payment.  Other expenses (such as funeral expenses) can also be included in the benefits.

Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; common examples are claims relating to suicide, fraud, war, riot, and civil commotion.

Life-based contracts tend to fall into two major categories:

  • Protection policies – designed to provide a benefit, typically a lump sum payment, in the event of specified event. A common form of a protection policy design is term insurance.
  • Investment policies – where the main objective is to facilitate the growth of capital by regular or single premiums.  Common forms in the USA, are, Whole life, Universal life, and Variable life policies.

Typically, life insurance is chosen based on the needs and goals of the insured. Term life insurance generally provides protection for a set period of time, while permanent life insurance, such as whole and universal life, provides lifetime coverage. It’s important to note that death benefits from all types of life insurance are generally income tax-free.

Costs

Insurance companies base their policy price (the premium) for each individual on actuarial tables which show the annual mortality rates for people at different ages.  Put simply, we are all likely to die as we get older!  Mortality tables enable Insurers to assess the likelihood of the ‘event’ occurring during the term of the insurance.  The baseline for the ‘cost’ of life insurance is the ‘mortality tables’.

Of course, there are other factors to be taken into account such a health, family history and lifestyle, which includes tobacco usage.

Specific factors which may be taken into account are

  • Personal medical history
  • Family medical history
  • Driving record
  • Height and weight, commonly known as ‘Body mass index’ (BMI)

GROUP LIFE INSURANCE PLANS

Most companies enroll their employees in a group scheme (mandatory for companies with 51+employees) as part of their benefits package.  Possibly you are a member of anther group e.g. a Union or professional Association.  As a member of a group you will almost certainly benefit from lower premiums and generally not need to provide proof of individual insurability e.g. age or health.

The disadvantage of relying on a group policy is that you do not have choice of insurer and are subject to the terms of the group policy. You should consider any supplements or enhancements you might need with the insurer or for a wider range of options contact …  

NOTE:  If you leave the group e.g. by changing jobs, you need to inform your insurer.  Most insurers allow you to transfer the policy to your own name.

Choosing the life insurance that is right for you.

You should take into account your current assets, on-going family income, number of dependents, retirement benefits etc. when choosing a life insurance plan. Life insurance whether TERM or PERMANENT it is your commitment to help your family cope with the financial exposure caused by a sudden loss of income in the case of an untimely death. When designing your life insurance plans consider all the factors related your family expenditure.

Above all, make sure that the policy matches your expectations.

 Always read the fine print before deciding on a policy as this could affect your choosing a pricing and benefits.

Where Can I buy life insurance?

There are many insurance companies that offer life insurance coverage. You can of course deal directly with the insurer or their agents but an independent Insurance portal such as TrueCoverage offers unbiased advice and matches your profile to the plans on offer from hundreds of Insurance companies.

TrueCoverage offers customer support, quick processing, and trustworthy advice. We understand that consumers prefer to make to make informed choices through reputed insurance portals like TrueCoverage.

You will be given a free of charge ‘best value’ quotation, AND an easy-to-compare policy benefits summary and free customer support and guidance by licensed insurance agents.  We offer free reviews of your insurance needs at any stage during the lifetime of your policy.  We encourage you to use this service, especially if your circumstances change.

A change of employment, marital status, even retirement would be appropriate points at which to review your insurance portfolio.

When should I buy life insurance?

The straightforward answer is that if you have dependents (generally family) you should seek to minimize the effect that an un-anticipated loss of income would have on them as soon as possible. Any change in your personal circumstances should trigger a review of your insurance portfolio.  TrueCoverage offers these reviews free of charge.

The golden rule is that the sooner you take out a life or heath related insurance policy the premiums will be lower!  When calculating monthly premiums insurers will take age, health condition and related risk factors into account.

Experts advise that people in their 30s or earlier should plan their life insurance portfolio options with a 15- or 20-year outlook.

 Most importantly you should   protect your investment by selecting policies which are ‘convertible, e.g. from term to life on favorable terms.

TrueCoverage can help you turn Protection into Investment

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