If tomorrow ever comes
Some
people go about life giving barely a thought to the future.
There
are even some who enjoy life like there’s
no tomorrow. While such a carefree attitude would be considered
good, especially if you’re born into great wealth,
it doesn’t augur well for common folk who have to earn
bread by the sweat of their brow. Whether earning your bread
involves slaving in a hot-as-hell bakery or clinching million
pound business
deals aboard a private jet, thousands of feet
above the ground, we all need to think about tomorrow.
Everyone,
including those born into great wealth, needs to insure
their life, health, property, vehicles,
etc., against
a number of hazards that can cause a loss of the very things
we hold dear. Insurance is for everyone.
The
main purpose of life insurance is to financially protect
one’s
dependents if he/she dies or is incapacitated by some accident
and rendered incapable of earning money for the family.
While you cannot protect yourself or family against all
the hazards that may come up in life, you can still relatively
protect them against the common hazards for which insurance
companies provide a wide range of insurance products.
If you are one of those who accept that they do need insurance
but find it such a morbid subject that they prefer to avoid
it altogether, you should make an effort to read about it.
Think of it as a way to protect the people you love in the
event anything happens to you.
There can also be an investment element to policies, which,
if surrendered, could help you out as well. The main objective
of insurance however is to cover your family, dependants
or your business should anything happen to you. And this
doesn't mean just death. There are new policies which include
cover for critical illnesses, which can affect your dependants,
as not only do they lose the income you would have been bringing
in, but your care will also cost them money.
It would be wise to spend some time (an hour or so would
be enough) trying to understand insurance and which area
of your life you need to cover. These days, the process has
become simpler than you can imagine. This is because insurance
companies now depute agents who come across to meet you and
explain about the various products. The technical jargon
may seem confusing at first, but the basic principles are
the same and quite simple to understand.
Then
there’s
also the Internet helping you avoid the leg-work altogether.
Just log on, post a routine inquiry,
and soon you will have an insurance salesperson at your door-step.
The purpose of this article is to share with you, information
that can help you decide when and what type of insurance
product you can and should opt for.
The
article provides a sweeping over-view of insurance as well
as advice about all types of covers, e.g. travel insurance,
home and life insurance, vehicle insurance, health insurance,
etc.
There
are three basic areas of insurance: (i) general insurance,
covering a range of areas that pose a potential threat to
individuals and businesses; (ii) life and pensions – which
allow people to save and plan for the future, and offer financial
protection to the family of the policy holders in the event
of his/her death; and (iii) Health and protection, which
provides financial assistance when you require medical care
as well as income during times of hospitalization and convalescence
(a period of unemployment).
Let’s begin with a short explanation about the business
of insurance. It’s basically simple: when you apply
for insurance, the insurance provider assesses the likelihood
of your making a claim, and calculates its premiums based
on this assessment. A variety of factors would be used to
determine the level of risk that you pose, including experience
of current and past policy holders with a profile similar
to yours. Whether you’re insuring a person, some property or an animal, the process is the same.
After
you agree to the terms and conditions of the policy, the
insurance company is legally obliged to honour any claim
that you make subject to any contracted excesses or limits,
as long as it doesn’t violate any rule or regulation
of the agreement.
Life
insurance would fall into two broad categories – term
insurance and investment type life insurance (in which case
insurance is used as an investment vehicle).
TERM INSURANCE
In such a policy the insurance company pays out only if the
policy holder dies during the term of the policy. If he/she
survives the term period he/she receives nothing. Such
term insurance products include those which cover the policy
holders as long as their children are financially dependent
upon them. They also include those which people have taken
for the same term as their mortgage, in an effort to prevent
the burden of the mortgage being passed on to their dependents.
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