Finance Blog – Loans, Mortages, Insurance

Importance of life insurance cover – Do not underestimate it

Posted by luqman - 27/01/10 at 07:01:03 pm

Many of us are of the opinion that we would require life insurance only when we start getting older.  There are many advantages of buying life insurance early in your life or even when you are working.  Irrespective of whether you have a family dependant on you or an inadequate life insurance policy, you need to buy life insurance.

Even if the employer provides a life insurance, do not be dependant on it completely.  Many employers offer life insurance as an incentive.  However, it may not necessarily benefit your family.   There are many firms which offer life insurance which provides coverage up to ten times the annual salary of the individual.

Many amongst us just blindly purchase life insurance without even understanding the true meaning.  Life insurance secures your immediate family members financially even when you are not alive.  As far as possible, estimating the value of your life is important.  This is referred to as Human Life Value.  The right way of calculation of human value is to add up all expenses in addition to the future liabilities which a family may have to incur in case of an unforeseen event like death or medical illness.

Every consumer needs to have an awareness of the different forms of life insurance.  There are basically two forms of life insurance.  They are investment type insurance and term insurance.  Term insurance is advantageous to your family and your dependants in the event of your death.  Investment type of life insurance is also referred to as permanent insurance and they comprise of whole of life policy as well as endowment policy.  This form of life insurance is applicable as long as the premium payment is effected.  Hence, it should be noted that one needs to buy life insurance early in life, as the premium amount would be comparatively lower.  The earlier you purchase, the greater would be the investment value that would get accrued in your lifetime and you could also get back the amount when you get older.

There are many insurance providers who offer life insurance.  Hence you need to check out the various options and the benefits provided, so that you are able to identify the best one which suits you and your family in the long run.  Do your research and homework perfectly before signing on the dotted line.  The internet offers a plethora of sites offering online life insurance policies.  Moreover, many online companies also offer discounts.  Understanding what you require and what you are going to benefit from the life insurance cover is important.  There are a number of comparison sites which offer this valuable service.  By utilising these services, you could get valuable consumer information and be fully armed to take the right decision when it comes to purchasing life insurance.

After having understood the importance of life insurance cover, you should not waste further time in buying it.  The proverb “Better late than never” is so apt here.  You never know when you would need the life cover.

Life Insurance for Future

Posted by luqman - 24/10/09 at 06:10:48 pm

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.

Insurance as a financial security

Posted by luqman - 12/10/09 at 11:10:56 pm

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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