Monday, November 7, 2011

Life Insurance: Information for the Less Informed

In today's modern time, we are now allowed to get our life insured. First things first, life insurance is a contractual agreement where if the agreed upon terms are met, the beneficiary will receive a certain sum of money. The conditions may be when the insured person is terminally ill, but the agreement is usually when the insured person, unfortunately, dies.

There are also special provisions sometimes, such as the suicidal clause. In such a case, the beneficiaries do not receive the sum of money if the insured person were to commit suicide in a specified time.

In order for the beneficiaries to receive payment, they must provide an acceptable proof of the death of the insured. These matters must be carefully handled, as these may lead to insurance fraud. Especially when the agreed sum of money is large, some people do attempt to claim the money even if the event of death of the insured did not occur.

There is also the difference between the policy owner and the insured. The policy owner would be the one paying for the insurance where in the latter would receive the benefits of being insured. Although the benefits I am speaking of is not the sum of money for the sum of money would be given to the family of the insured person. Being the person insured also has its benefits, especially for giving you the peace of mind for the financial security and protection of your loved ones.

The cost to insure a life is dependant on the person to be insured. Whether he lives a healthful lifestyle (smoker or non-smoker, drinker or non-drinker, etc.) or is prone to diseases, heart-attacks, strokes, accidents, etc. These are calculated by actuaries, basically what they calculate are the mortality rate and probability of the person to be insured and determine the price based off their conclusion.

There have been criticisms about life insurance, some say that most of it leads to fraud or doesn't profit you in any way. Such as the insurers hired people to kill the newly insured people. Although with enough care and attention, I believe you can avoid such inhumane acts. There are also some types of insurance that is deducted by tax, but also some that are not deductible like the premium paid insurance. The increase of cash value that is within the policy is also not included, unless certain events were to happen. This may also act as a legal way to save money, in a way it's investing in your protection.

In the end, getting your life insured is not difficult nor is it a waste. Although the paperwork would be a bit difficult, as well as the terminologies that will be useful for you when getting life insurance. But in due time, you'll probably, like most insured people, get the hang of it. Ask a friend who has experience about these matters or find a professional to assist you in getting your life insured. You can't put a price on life people but you sure can insure it.

By: John Edwards
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