Life Insurance
Life Insurance
Life ???
What is life insurance &Why go for life insurance ? Death comes to all sooner or later.
Protection against pre mature death
Preparing for unexpected
Financial protection for dependants
History of Life Insurance
The first historical record
ancient Romans ( 100 BC )
Burial Clubs -to avoid being a tortured ghost
Burial ceremonies.
Modern life insurance
17th century England.
1706 (London)
First company to offer life insurance
Amicable Society for a Perpetual Assurance Office
18th century
Modern life insurance policies
Life insurance policy
Life insurance policy is a contract
Contract parties
Insurance company
Insured
Owner of policy
If A buys policy on his own life he is owner & insured
If A buys policy on Bs life A is owner & B is insured
Must have insurable interest
Client pays premiums
Quarterly
Monthly
Yearly
Company pays claim (death benefit)
To beneficiaries ( Nominee )
Types of life insurance policies
Term Life Insurance:
Coverage for specified period ( 5-30 years )
Fixed premiums - cheaper - increase when renewed ( risk increases with age )
Death benefit if death during term
No cash value
Types
Renewable Term Insurance.
Convertible Term Insurance.
Level Term Insurance.
Decreasing Term Insurance. (Same premiums . Coverage decrease)
Increasing Term Insurance.(premiums and coverage both increase)
Permanent Life Insurance:
Level premiums
Death benefit
Cash value
Coverage for life
Types Whole , Universal , Variable
Life Insurance
Term life Insurance
Permanent Life Insurance
Cash value ???
portion of premium, is allocated towards the cash value.
investment
The cash value grows over time through
Premiums
Interest
Cash accumulations can be accessed
withdrawals
Collateral for policy loans
partial or full surrender of the policy
Dividend payments
portion
premium
Cash accumulation account
Investment
Profit
premium