Posts Tagged ‘Life Insurance’

Annual Renewable Term Life Insurance

Tuesday, May 12th, 2009

The word annual means one year, thus explains the meaning of the policy. The term of an annual renewable term life insurance is one year, the death benefit is payable to the beneficiary if the insured dies within the one year period, there will be no compensation if the insured dies even one day after the expiration of the policy.

There are very few people bought this policy because a person who purchased the policy will die in the period of one year is rare case. When a person contracts a terminal illness during the term but survives until the end of the expiration, he will receive no compensation, but because of the illness he will be considered as uninsurable and unable to renew the policy.

So term life insurance policies has solution for this problem, they have included a condition called re-insurability, which means that if this feature is included in the buyer’s term life policy, the buyer will be able to renew his insurance for as long as he wishes, without the necessity of providing proof of insurability.

Therefore if the buyer contracted a critical illness he is considered uninsurable, but if he has bought Annual Renewable Term he is able to continue the policy. Annual Renewable Term has the similarity as the one year term life insurance, and the policy will be able to continue each year for a given period of time, from 10 years to 30 years or more. A person who purchased this type of policy can renew the policy but at a higher premium, as long as he keeps on paying premiums, the death benefit would still remain.

Life Insurance

Wednesday, April 8th, 2009

Life insurance is a big part of financial planning for the future in the event of your death. It pays for the funeral expenses and all other debt left by the deceased. It is important to remember that not only should the bread winner be covered, but the spouse should be covered too. How will the remaining spouse cope with the added expense of child care etc. Select the best policy that fits your need and your budget. Decide how much you need to cover mortgage, car loans, credit card debt and add three times your yearly wage to calculate your minimum life insurance needs.

Simply put, you pay premiums, usually monthly, and if you die during the term of the policy, the insurance company will pay the sum assured. There are many factors taken into the account when getting quoted for your life insurance. One is your age. Generally the younger you take out life insurance the cheaper it will be. Another is the state of your health. If, for example, you have a bad heart or any other physical problems, your premiums will reflect this. Another issue considered is if you smoke or not. Life insurance is very much a personalised thing and the cost can vary between companies, so it makes sense to shop around

Who needs life insurance? Mortgage lenders advise all borrowers to take out life insurance, to ensure that your dependents or next of kin are not left with the mortgage debt should you die. Another consideration is critical illness insurance to help cover your mortgage in the event of being diagnosed with a critical illness. However if you are single with no dependants, income protection may be an alternative to critical illness. Find out more about income protection here.

Where to get life insurance? The main rule for life insurance is to shop around. Different companies have different rules and rates. That’s why you are better to contact an independent financial adviser who can shop around for you. Make a life insurance cover enquiry here and one of our advisers will help source a competitive quote for you from the whole market, with no obligation. Another thing to consider is that if you have a partner, perhaps buying two separate policies, so in the event of divorce this is one less thing to worry about.

How much cover is needed? The first thing you need to do is cover your mortgage and some of your debts. Then you need to have enough to cover your income, realistically ten times of your gross income should be covered. For your life insurance cover you should aim to have a sum assured to cover your mortgage, other debts, and leave your family with something to live on. Your financial adviser can help with this. Alternatively it is important that you do not over-insure yourself, paying unnecessarily high premiums.