Insurance Policy

WHAT IS INSURANCE?

There are so many web definition of insurance but, here are a few:
A legal agreement with an insurance company that provides for reimbursement in the case of damage or theft to collateral. Promise of reimbursement in the case of loss; paid to people or companies so concerned about hazards that they have made prepayments to an individual or corporate body. Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. A system of protection against loss under which a party agrees to pay a certain sum (premiums) for a guarantee that they will be compensated under certain conditions for loss or damage. A contract providing for financial protection against a loss. For example, a homeowner’s insurance policy provides for reimbursement if the owner suffers a loss due to fire or a number of other causes.

Types of insurance quotes are:
-Annuity Rates
-Auto Insurance Quotes
-Business Insurance
-Health Insurance
-Homeowners Insurance
-Life Insurance Quotes
-Long Term Care
-Renters Insurance
And so on... We are going to be talking about the Life Insurance Quote

Need for Life Insurance
Today, there is no shortage of investment options for a person to choose from. Modern day investments include gold, property, fixed income instruments, mutual funds and of course, life insurance. Given the plethora of choices, it becomes imperative to make the right choice when investing your hard-earned money. Life insurance is a unique investment that helps you to meet your dual needs - saving for life's important goals, and protecting your assets.

Let us look at these unique benefits of life insurance in detail.

--Asset Protection:
From an investor's point of view, an investment can play two roles - asset appreciation or asset protection. While most financial instruments have the underlying benefit of asset appreciation, life insurance is unique in that it gives the customer the reassurance of asset protection, along with a strong element of asset appreciation.

The core benefit of life insurance is that the financial interests of one’s family remain protected from circumstances such as loss of income due to critical illness or death of the policyholder. Simultaneously, insurance products also have a strong inbuilt wealth creation proposition. The customer therefore benefits on two counts and life insurance occupies a unique space in the landscape of investment options available to a customer.


--Goal based savings:
Each of us has some goals in life for which we need to save. For a young, newly married couple, it could be buying a house. Once, they decide to start a family, the goal changes to planning for the education or marriage of their children. As one grows older, planning for one's retirement will begin to take precedence.

Clearly, as your life stage and therefore your financial goals change, the instrument in which you invest should offer corresponding benefits pertinent to the new life stage.

Life insurance is the only investment option that offers specific products tailormade for different life stages. It thus ensures that the benefits offered to the customer reflect the needs of the customer at that particular life stage, and hence ensures that the financial goals of that life stage are met.


Things to Consider Before Taking Out Life Insurance:
The type, if any, of life insurance that you need depends on the individual circumstances for each person. Before making any decisions on a life insurance policy, it is important you understand exactly what is covered by the policy, and that you seek financial advice to ensure that you and your family are adequately covered.

The first thing you need to decide is what type of policy you want to take out. Life insurance falls into two main categories – Permanent Life Insurance and Term Life Insurance.

A Permanent Life Insurance policy runs from the time you take it out until the time of your death. The premiums remain the same for the life of the policy, and the premium amount is based on many things, including the amount the policy is for, age when you take out the policy, the type of work you do and any health conditions you may have.

A Term Life Insurance policy is in effect for a set period of time. Most insurance companies offer 5, 10, 20 and 30 year terms, depending on your needs. This type of policy is especially useful if you take on a large debt, such as a mortgage, or have children, as you can cover a specific period of time. Most term life insurance policies are renewable, so if you feel that you still never cover after the set period of time, you can renew the policy, though likely at a higher premium.

Often, a combination of both types of insurance are needed to make sure that your family is covered in the event of your death. However, if you have no dependents, a term life insurance policy may be sufficient if you only have a single debt, such as a mortgage.

Once you have decided on the policy or policies that will be suit your situation, you need to decide how much you need to be covered for. This is when the advice of an financial planner or advisor is most helpful. They can help you to determine exactly how much money your family would require to live without financial difficulties in the event of your death.

Things that need to be considered are the amount of debt you have, your children’s education and basic necessity needs, and what sort of impact the loss of your regular income would mean to your family. Once all of these things are considered, you need to decide on an amount that would cover both the debt and future expenses your family would incur after your death.

Also, make sure that if you do take out a policy, it is with an established, reputable insurance company. You do not want to pay out hundreds or even thousands of dollars in premiums only to have the insurance company go bankrupt.

Before taking out any policy, make sure you understand what the policy covers, and that you meet all the guidelines and requirements. And never lie on the application form. If you don’t meet the guidelines, or have provided false information, the insurance company will not have to pay the policy out to your beneficiary.

Benefits of Insuring:
The existence of a common pool, operated by insurance companies, brings with it many advantages including the following:

It relieves those insuring from the worry and anxiety they may have about how they would meet the cost of risk. In the case of businesses, this is a positive stimulus to their activities and allows them to get on with their own business in the knowledge that they are financially protected against many forms of risk.

Business people will be more inclined to risk their money by building factories, making goods, sailing ships, flying planes, with the knowledge that they will not lose everything should they fall victim of some risk. This is an extremely important benefit which insurance brings – not only to the individual insuring but to the whole country – as stimulating businesses makes for a healthy economy.

Insurance also can help in actually reducing losses. Insurance companies have a great deal of experience in risks of all kinds and, over many years, they have found ways in which certain risks can be reduced. They employ surveyors who go out and look at premises which people may want to insure. They can, from that experience, often suggest ways in which the likelihood of some risk occurring may be reduced. They might see some hazard which could injure employees, or a host of other problems. The advice and the recommendations they make on behalf of insurance companies cannot help but reduce the likelihood of many of the risks occurring.

One further benefit derived from the transaction of insurance is the use to which the insurance company puts the money it holds in the common pool. It does not use immediately all the money it collects as premiums. It holds it until one of the members of the pool suffers a loss. The money it holds is invested in a wide range of investments which all go towards aiding government, industry, commerce and consequently the whole country. A visible symbol of one of the uses to which insurance funds are directed is the building work being carried out in many of our cities. Look a little closer at the large signs surrounding these building sites and notice how many are being funded by insurance companies.


Taking the long view: consumers need to consider their insurance purchases as part of their lifelong risk and asset management.(Property/Casualty)
It is just as important that you consider your insurance needs when taking out a mortgage as it is to consider the mortgage itself. Far too often people disregard the financial problems that a short term loss of income can cause, let alone the impact of a critical illness or even death. We all have a tendency to put ourselves in the "it will never happen to me" category but if this is true who is it happening to?

Below are examples/types of some insurances polices:

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