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