Life Insurance for Future

Financial problems can strike anyone because of any event which may or may not occur in the life. The right method to deal with such problems is to get financial cover against such incidents which cripple our lives and make us feel helpless. Many people think they do not need insurance plans because they are earning well. Future is uncertain in all the cases and by the time you realize that you need Life insurance coverage, it becomes too late. Or due to unfortunate accident if your earning stops, you find your self caught in the financial problems. It all can be avoided with the little planning and making the right choices while you are young.

Your current earning potential will go down with each year and during your old age, you and your family needs more money to survive because inflation rate keep the prices high and value of the currency goes down with each year. Look for the other aspects as well. Almost all of us have been living in the home which has loans on it. Mortgage Protection is the right choice to make because you would be able to retain your home even if the worst happens. Your family can feel financial secure with these plans and right planning to secure your loved ones and their financial requirements to be met.

Mortgages for first time buyers

The UK government runs various affordable housing schemes for first time buyers including the Key Worker Living programme, and the shared ownership, aimed for key workers. However, for people who cannot get onto the home ownership ladder this way, mortgages is a viable solution to apply for. Most building societies and banks offer this type of loan that you can take out to buy your desired property. Mortgages are also available through specialist lending companies or by using a mortgage broker. Although, you can always get a mortgage directly with the mentioned institutions there are other convenient ways to buy mortgages based on information or advice that you may receive.

The Internet is one of those sources that you can look at toward broadening your knowledge on mortgages. Government offices can also assist you to find the best deals through established organizations and there are a number of advisors that can point you to the lender that can provide a mortgage suiting your particular needs. However, the first golden rule when buying mortgages for the first time is checking the firm you plan to go with as mean of preventing frauds.

The Financial Services Authority is one of the best resources that you can find online to guide you in this first experience. In fact, there is a small free booklet (Choosing a mortgage – taking the right steps) that you can download at this address: www.fsa.gov.uk/pubs/public/mortgage_steps.pdf In this publication, you will find all the basics that will help you to differentiate the different types of mortgages available on the market, as well as the pros and cons of buying any of them, including the estimate of both costs and risks involved in each case. Due to such risks, not only the Financial Services Authority but also many lenders advice is to take insurance along with your mortgage so you can cover any eventuality repaying your debt.

Some lending companies can also provide you with a free impartial service with no obligation to buy after choosing from about 7,000 different mortgages available in the British Property Market. However, study all the terms carefully before buying any mortgage, because the market is moving very fast, leading to significant increases in home prices. Before buying a mortgage get as much information as you can, whether from mortgage brokers or lenders you are about to deal with. Without knowing “who is who” in the property market, you can be at risk when shopping around trying to find the best mortgage deal. Another fact to take into consideration is how you are going to pay off your debt. There are two basic repayment options attached to your mortgage’s terms: “interest only” or “repayment”.

Interest only allows you repay monthly repayments during a specific period of time, but you are only paying the accrued interests, not the mortgage, which should be paid when the term agreed between lender and borrower ends. With the repayment option, however, you make monthly payments during a period of time as well, but repaying both part of the money borrowed and the interest. Choosing one or another depends on whatever is easier for you, but it is always wise to get advice from a financial expert before buying a mortgage for the first time.

Mortages

A mortgage is a method where people can use their property as security for the payment of a debt. There are two main participants in this process – the creditor and the debtor.

The creditor is the one who holds the legal rights to the debt secured by the mortgage. This debt is often the obligation made by the creditor to repay the loan. The creditor is the one who purchased the property mortgaged. Creditors are usually banks, insurers, or other financial institutions that provide loans for the purpose of real estate. Creditors are sometimes referred to as lenders or as mortgagees.

The debtor is the one who owes the obligation secured by the process. Debtors can be multiple entities at times. The debtor has to fulfill the conditions of the obligation and other specified conditions of the mortgage. If the debtor fails to do that, there will be a foreclosure of the mortgage by the creditor to recover the debt. Usually, the debtors are individual home owners, landlords, or businesses who purchase their property using a loan. A debtor is sometimes known as a borrower, obligor, or the mortgagor.

There are two main types of mortgage – mortgage by demise and mortgage by legal charge. In the former, the creditor owns the mortgaged property till the loan is repaid in full. In the latter, the debtor continues to be the legal owner of the property. However, the creditor gains enough rights over it, like the right to take possession of the property or sell it. To ensure the protection of the lender, it is usually recorded in a public register.

This kind of debt is usually the largest debt owed by the debtor, banks, and other lenders. Hence, creditors investigate the history of real property to check if there are other mortgages already registered on the debtor’s property that might have a higher priority.

Selection
When you select a mortgage, ensure that you select the right one. You should consider factors like your future plans, your financial status, etc., before deciding. It is a personal guarantee that you offer to repay the money you have borrowed to buy your home. Hence, consider all its advantages and disadvantages before you make a decision.

Foreclosure
Typically, a lender may foreclose the mortgaged property if certain conditions are met, and as per local legal requirements, the property may then be sold. Any amount of money received through the sale is then applied to the original debt. The laws on foreclosure vary according to different jurisdictions.

Insurance as a financial security

Insurance is a financial provision that helps you cope with an unexpected adversity. It provides you financial security, a guarantee that ensures you will not face a financial crisis in case something unavoidable happens. The basic principle governing the concept of insurance is that the insured will pay a certain sum of money to the insurer, who assures a reimbursement whenever the insured seeks protection for losses. The insurer undertakes the risk of ensuring complete protection to the insured through a policy that entails payment of a fixed amount of money in distributed installments, periodically, and the fulfillment of certain stipulations.

Insurance as a concept was noticed among certain sections of society in the past. History has evidence of instances where Romans practiced certain forms of insurance. These practices were similar to the benefit societies of today. For example, the Roman Collegia offered provisions for burial and also for promotions among soldiers. The similarity is basically in the process of accepting a stipulated sum of money from members to perform certain services. Instances of marine loans made to ancient Greeks have also been recorded by Demosthenes. Chinese, apparently, have records of insurance practices that existed 2500 years ago. However, in all these cases, insurance was not practiced on a large-scale. Gradually, the concept waned, and we witnessed a revival of insurance only a few centuries ago.

The insurance practice of today includes four main branches – marine insurance, fire insurance, life insurance, and casualty insurance. The first three forms of insurance provide an indemnity in case of disasters. The fourth, previously known as accident insurance, incorporates all aspects that are not covered by the other three branches.

The oldest of all the modern insurance forms is marine insurance. It dates back over seven centuries. Apparently, it was practiced in the Mediterranean and has been an established practice for centuries, which continues till today. Fire insurance is the second oldest form of insurance that has been permanently established. It dates back to the great London fire of 1666. Life insurance followed fire insurance a little later. However, it has been an established practice only since 1760, when a company was founded to administer life insurance policies. The origin of casualty insurance is owed to the insurance offered to people for accidents during a railway journey. It has been in practice since the first half of the nineteenth century, when it originated in England.

Insurance as a concept has evolved radically over the years. Insurance practices of today include many different sub-categories and contain a lot more clauses than before.

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