Life insurance is a useful investment to have in your portfolio. It can give you peace of mind, with the knowledge that your family have been provided for in the event of your death. Alternatively it may provide you with a nest egg if you have chosen an endowment mortgage and then lived through to the end of the term.
How much thought have you given to it in recent years? Did the events of September 11th 2001 tend to focus your attention on your own mortality? They certainly had that effect on a number of people as there was a small rise in the number of new policies taken out in the following year.
In the UK the tube and bus bombs of 7th July 2005 had a more marked effect. People living in or commuting to London were suddenly made aware of the dangers around them and this would be reinforced by travel in a crowded tube train or even on a bus. Then there were the details and photographs of some of the victims in the papers, with the possibility of a name or a face being recognised as a neighbour, a work colleague or just a fellow traveller.
Mortality became a fact instead of a distant and little regarded enemy, and suddenly protection of family was thrust into the forefront of conscious thought. The inevitable result was for insurance to assume a greater importance, and the Association of British Insurers (ABI) reported a trend for increasing numbers to be taking out life insurance. The increase in value of life insurance to £1 billion in 2005 is judged by the ABI to be a likely result of the terrorist’s actions. A similar increase in interest was recorded in the USA following the September 11th terrorist attacks.
It is unfortunate that it takes a terrorist attack to bring home to us the need to protect our families against the unexpected loss of a parent or any other family member who helps to provide our financial stability. However, that is the way of the world and these things are easily overlooked in the daily work, eat, sleep cycle. The old saying that ‘it’s an old wind which blows nobody any good’ is tested in this case, and there can be few winds more ill than those which blow in on the back of terrorist violence.
Fortunately life insurance is still applicable in the event of deaths caused by terrorism; those victims of the London tube and bus bombings who had life cover would at least have provided some financial security for those they left behind. The ABI warn however that careful examination of the terms of any life policy is advisable because there can be variations. They quote group life insurance policies as an example, because the accumulated risks which can occur in a single incident may be specifically excluded.
As mentioned at the beginning of this article, it is worth considering endowment policies as these will pay out, not only in the event of the death of the insured during the years of its currency , but also if the insured person survives to the end of the agreed term. In the latter case the total paid on a unit linked endowment would be the total contributions paid plus the value of the investment interest earned over the period of the policy. If the policy was taken out as ‘with profits’, the payout would be the sum insured plus the total of bonuses issued during its term, plus a terminal bonus. Historically terminal bonuses have proved to be very valuable, but there can be no guarantee of the level of investment interest or bonuses, depending as they do on the success of the company’s investment or business endeavours.
If you intend to follow the path of life cover, contact a broker and discuss your needs. You should however enter into the agreement with the intention of following it through to completion. Although life policies tend to have a value after the initial years, they should at that point be entering into their period of best growth. This may look tempting as an option to surrender, but a little patience will produce a markedly better return for yourself or for your family.
Interested In getting a quote on a Personal loan? Please Visit Borrow now for more information and other resources. Our sister site Brokers Online offers cutting edge articles and information about Loans..
Filed under Finances by on Dec 3rd, 2008. Comment. 
When the London bombings occurred on July 7th in 2005, many people felt a sense of unease and concern about living in Great Britain’s capital. There were reports that people were too frightened to use the underground train network and then of course there were many of those who knew the victims of the tragedy.
So it is no surprise that after the event has occurred, more people have chosen to take out life insurance policies. While insurance firms say that the number of people taking out Payment Protection Policies has been on the general decline over the years, the Association of British Insurers recently reported that the number buying life insurance products rose slightly last year.
In fact, life insurance was worth £1 billion for the insurance industry in 2005. When asked the question whether the rise is due to an anxiety about terror threats, the ABI says that it could be the case.
Afterall, when the US terror attacks happened on 9/11/2001, the number of people taking out life insurance rose slightly the following year, reflecting the mood of the nation.
Unlike travel insurance policies, life insurance does not contain terrorism exclusions and so if you die as a result of a terror attack, the insurance firm will pay out on the claim. This would have most certainly been the case with respect to the victims of 7/7 in London.
However, the ABI says that group life insurance policies may contain these types of exclusions because of the accumulated risks that are possible in one location. What this means is that you need to read the terms and conditions of your policy because they can vary.
Even if more people do not take out life insurance as a direct result of terrorism, perhaps the threat makes them value their life more or think about what would happen to their family should they do become a victim of another sort of tragedy.
What Life Insurance does, is offer financial protection in the event of an early death if you have a family dependent on your earnings. But as well as this, it can also be a means of saving.
You can get endowment policies which you can pay premiums for an agreed number of years, say 15, then at the end of this time you can receive a lump sum. This is the sum insured together with bonuses. That is, if you take out a ‘with-profits’ policy. If you take out a policy called a Unit-Linked Endowment, the lump sum is the return of all money invested together with the investment growth. Even if you die before the maturity date, the insurance company will pay the sum insured or the value of the policy at the time, if it is greater.
Most policies have optional extras, such as the waiver of premiums if you are unable to pay them at such stage, or critical illness insurance. But what you need to remember is that a life insurance policy is a long term commitment so if an incident, such as a terror attack, does occur, your family is protected. It is not designed for you to cash in early. Brokers and financial advisers can off help deciding what policy you should take out. But never surrender a life insurance policy without taking out expert advice.
Brokers Online offers cutting edge articles and information about Life Insurance, Secured Loans, Mortgages and much much more.
Filed under Finances by on Dec 3rd, 2008. Comment.
Equally important in providing life insurance to working people at low cost has been the increasing trend to write ordinary instead of industrial insurance on their lives. An important step in this direction was taken by the Metropolitan Life Insurance Company in 1925 when it began to issue monthly premium ordinary insurance at practically the same rates as for its corresponding quarterly premium policies.
The holders of these monthly ordinary life insurance policies (http://www.equote.com/li/life-insurance.html) receive the same broad agency service that is rendered the weekly industrial policyholders. Thus, ordinary insurance especially adapted to their circumstances was placed within the reach of many wage earners. Moreover, industrial policyholders have a privilege of converting their insurance into ordinary when circumstances warrant the conversion.
As a result of the revisions in underwriting practices and the emphasis on lower cost forms of insurance, the composition of the company’s business has undergone a marked change in recent years. At the end of 1930 there was $6,400,000,000 of weekly premium business in force in the Metropolitan. By the end of 1942 this total had increased only slightly to $6,500,000,000. At the same time the monthly industrial business much more than tripled, increasing from $396,000,000 to nearly $1,400,000,000.
Similarly, in that time monthly ordinary insurance rose from $986,000,000 to $3,250,000,000. Group insurance increased from $2,703,000,000 to $5,350,000,000. Thus, of the insurance particularly designed for wage earners and their families, 61% was on the weekly premium plan at the end of 1930, as compared with less than 40% at the end of 1941.
In addition to the insurance companies, other socially minded organizations endeavored to furnish lower cost life insurance. But weekly premium and monthly premium industrial insurance continue to be the types that best meet the circumstances of large numbers of wage earners. Perhaps the best known of these outside efforts was the plan of Savings Bank Life insurance in operation in three states.
This insurance was on sale in a number of banks at the request of qualified purchasers. However, the total amount of such insurance was extremely small in comparison with the industrial insurance issued by the life insurance companies. It is, moreover, doubtful that a large proportion of the insurance issued by the banks was on the lives of persons for whom industrial insurance was designed.
These efforts have not resulted in the supplanting of industrial insurance, because cheaper insurance can only be furnished by eliminating the broad services of the agent—services which experience has indicated are necessary for the majority of working men’s families.
One of the valuable services rendered by the agent is to revise the family insurance program as circumstances require. Families frequently begin their program with industrial, and as their economic conditions change they are able to purchase ordinary or even no exam term life insurance (http://www.equote.com/li/termlifeinsurance.html). Sometimes it is to their interest to convert the industrial to ordinary insurance; but if the industrial insurance has been outstanding for a number of years it is often desirable to retain this form because of advantages accruing through the age of the policies.
Thus, as time goes on, many families own both types of policies. Industrial insurance is the educator, which gives their children, as they grow up, a sense of insurance values. This development of the family program and the graduation of individuals from one type of insurance to another are reflected in the fact that almost one fourth of Metropolitan ordinary policyholders also carried Metropolitan industrial insurance and about one in every five of group policyholders also owned Metropolitan ordinary or industrial policies. In many families the breadwinner owned ordinary or group insurance, while smaller amounts of industrial insurance are maintained on the dependent members.
Sarah Martin is a freelance marketing writer based out of San Diego, CA. She specializes in finance, business, and life insurance policies. For no exam term life insurance quotes, please visit http://www.equote.com/.
Filed under Finances by on Nov 25th, 2008. Comment.
Recent Comments