When choosing different types of life insurance there are two main categories to consider:
1. Term life insurance. This type of life insurance covers the insured person against death during a specified period (or term). The policy will only pay out for death (or for some policies terminal illness) within the insured term.
2. Whole of life (whole life) insurance. This type of insurance is intended to pay the insured amount whenever you die (be that 1 year after the policy was take out or at the ripe old age of 101!). This type of insurance policy is therefore a hybrid insurance/investment vehicle. The policy will build up an investment value in its later years to provide for the final death payment.
Looking at the differences between the above it is easy to see why term life insurance is so much cheaper (which is its main advantage over whole life insurance). In the case of term life insurance the insurance company is taking a gamble on whether you will die during the insured term. A lot of term life insurance policies will not pay out anything to the policy holder. In the case of whole if policies it is a case of when the insurance company is going to have to pay out the insured amount – they will have to pay it whenever you die.
Term life insurance can be very useful for younger people that want to arrange substantial life insurance cover for a specific period (e.g. the time when they are responsible for children in education). This is because the premiums can be 10% or less of the equivalent whole life policy premium.
Tags: Life Insurance, life insurance comparison, Term Life, Whole Life
If you are looking after the affairs (the estate) of a deceased relative you may not know whether they had any life insurance. Unfortunately there is no central place that holds details of all life insurance policies, so finding out whether there was a life insurance policy is going to take a bit of detective work. These are some ideas of where to start:
Find all the areas in the deceased persons home where paperwork was stored. Go through all of this paperwork in a very detailed way looking for:
1. Insurance policy documents or evidence of contact with insurance companies (not just life insurance). If you find details of home or health insurance for the deceased it is possible that they bought life insurance from the same company.
2. Bank and credit card statements and cheque books - sort these into different accounts and scan them for policy premium payments.
3. Letters or business cards from insurance agents. Again, if the deceased had contact with an insurance agent it is possible that they bought life insurance from them.
Follow up with all of the insurance companies/agents located above to find out whether the deceased had arranged life insurance with them. In letters, specify the deceased full name, date of birth, and last known address (if they moved frequently it might be worth including recent addresses as well).
If the above doesn’t work then there are a few other places to try.
1. Did your deceased relative have a safety deposit box that they kept documents in? Try to find any likely looking keys, scan credit and bank statements for payments to companies offering this service and approach local companies with the deceased full name and address.
2. Check the deceased medical records to find out whether they had had a medical exam for insurance purposes. The records should show which company requested the medical.
Tags: find life insurance, Life Insurance, locate life insurance
Whole life insurance premiums are always much higher than those for term life insurance. Why is this? Read on to get whole life insurance explained….
When the life insurance industry started out all policies were on the term life basis (the insurance only pays out if the insured dies whin the agreed term). This led to compaints that you could pay premiums for many years and no receive anything. Also, if you died in old age (after the term of your life insurance had expired) then you might leave your family with nothing. One anser to this would be to have separate investment plans and term life insurance arrangements. Whole life insurance policies combine the life insurance and investment plans into one.
