Life Insurance Policies for Protection

Whether they are simple or complex, all insurance policies target the beneficiary’s protection. By definition, these policies are contracts which ensure the beneficiary’s financial protection in case an event which is stipulated in the contract occurs.

Being a means which ensures the beneficiary’s protection, these contracts offer them a supplementary source of income for a certain period of their life when an event which is stipulated in the contract occurs, but also in less fortunate situations such as death or invalidity. The life insurance policy intends to help the beneficiary when they need protection in case an unhappy event takes place and they need protection and all the financial help they can get.

The insurance policy offers the family a compensatory income in case the one who takes care of them dies, so that the family members are not so affected from a financial point of view after such a terrible moment. Another side of the policies is that they can be assigned. This way, if the family members have any credits they have to return to different banks, they are spared, all their debts being paid.

Another advantage of these policies is that they also protect the beneficiary if the inflation rate is very high in their country of origin. Therefore, analyzing the situations in which a life insurance policy ensures the beneficiary’s protection, we reach the conclusion that anyone can close a life insurance because, no matter of our age, gender or race, we all have to pay attention to the same dangerous occurrences, but these policies protect us.

Whether it is all about an elderly person who wants to ensure a calm and relaxed retirement for them or about a person who wants to make some savings and to get the best from their money, a life insurance is the proper answer. Of course, we don’t have to refer again to those persons who suffer death or are left invalid after some unhappy events and whose families then need all the protection they can get. All of us need to be protected either for supplementing an income or for annulling the expenses caused by an unfortunate event. We need protection to ensure our children’s education or for ensuring the safety of our business.

Nowadays, it is very important to be protected because of the advanced technology which ahs brought along a lot more risks and dangerous possibilities. Therefore, the best solution you could choose in order to protect your family is to go to an insurance company and get a life insurance, so that you can add some stability to your family, to yourself and to your own business, too. You can never know when something very bad is about to happen and you need to be prepared in all situations and for all situations. Unfortunately, we can’t always control the amount of money we have or we are about to get and therefore, it is much better to have a second plan to rely on in case something happens.


Insurance Policy-Taking

Insurance can be regarded as an arrangement between an individual or group of persons or a company with a particular kind of company called an insurance company in which the insurance company gives financial protection against loss or harm such as illness or theft.

This service is not free but is given at a cost. A form of payment known as premium is paid by whoever is taking the insurance policy to the insurance company. A premium is the payment made to the insurance company in other to obtain the insurance coverage bought.

Insurance provides financial protection against a loss arising out of happening of uncertain event. Insurance works on the basic principle of risk-sharing. A great advantage of insurance is that it spreads the risk of a few people over a large group of people exposed to risk of similar type.

All insurance policies cost money and there are so many of them to choose from. It is very advisable to read a policy carefully and make sure that the terms and conditions are well understood as well as the coverage and costs before buying it. Until you are sure and comfortable with the coverage and until you are also sure that you need it, do not sign on the dotted line.

The uncertainty of what will happen tomorrow is one of the few certainties of life. To guard against this, we have to consider what could happen tomorrow and the subsequent consequences. As a result of this, the need for insurance is very critical to each and every one of us.


Who Can Be a Beneficiary on Your Life Insurance Policy?

It’s true. When you apply for a life insurance policy you must choose a primary beneficiary with an insurable interest in you if you want to get your life insurance policy approved by the underwriters. Insurable interest is generally broken down into two types of loss-emotional and financial. In order to have an insurable interest in your life, your beneficiary must fall into one of these categories.

Insurable Interest: Financial Loss

There are many individuals and businesses that could suffer a financial loss if you were to die. Your lenders many not get loans repaid in the event of your death, your spouse might not be able to support him or herself without the assistance of your income, your children may not be able to go to college. In addition, your parents, spouse, or siblings might not be able to afford your funeral expenses. Your business partner or boss may no longer be able to run the business properly and could suffer financially without your knowledge, image or experience.

When naming a primary beneficiary that will experience a financial loss at your death, no justification is required when that beneficiary is an immediate family member. If the beneficiary is a lender, business partner or boss, then additional documentation and letters of explanation may be necessary.

Insurable Interest: Emotional Loss

There is an undeniable group of people who would suffer an emotional loss upon your death. Your immediate family-parents, spouse, children and siblings would certainly feel a tremendous emotional void if you were no longer around. While this emotional loss does not necessarily result in a financial need, it does set up an acceptable environment for the issuance of a death benefit.

Unless you are naming a far removed family member as your primary beneficiary, there should be no need for a justification of the choice that you make. Be sure to be very clear about the amount that you want each beneficiary to receive if you are naming multiple beneficiaries. If you are leaving the benefit to a minor, consider setting up a trust in the event that he or she should receive the benefit before reaching a financially mature stage in life.

Exceptions to the Rules

There are always exceptions to the rules. If you want to leave your death benefit to a funeral home, although they would gain financially from your death, you can do so. This is acceptable because it simply avoids awarding funds to a middle man (such as a parent or spouse) who will only turn the funds over to the funeral home anyway. However, it is important to note that they will receive the entire death benefit when you do so.

If you have no family and no creditors, you may decide to leave your death benefit to a friend. In this event, it is generally preferred that you leave the funds to your estate and simply leave a will with instructions for the distribution of your estate assets. While this will result in your life insurance proceeds going through probate, it is a faster way to get your death benefit approved.

Once your policy is issued, the question of insurable interest no longer has any bearing and you can change your beneficiary to anyone that you would like. Just contact your insurance company and find out how you need to submit the beneficiary change information. Some insurers might have a form you need to complete while others might just request a letter. If you are not the owner of your own insurance policy, remember that it is the owner who must sign off on any beneficiary changes. Once your change is complete, let your beneficiaries know and keep a copy of the submitted change request with your policy to help avoid any confusion after you are gone.