Life Insurance

There is no time limit during which a life insurance beneficiary must step forward to collect the money, according to a spokesman for the American Council of Life Insurers. "If a person shows up 30 years after the insured's death, the company still makes good on it."

What happens if no one ever reports the death? If the insured dies and the life insurance company does not learn of the death, the policy lapses. Insurance companies will take steps to find out why a life insurance policyholder stopped making payments.

Many people are superstitious and find it extremely uncomfortable to talk about buying life insurance for children. They feel that by doing so they may be considered to be having one foot in the grave, or they may be having some illness, which may result in an early death. However, buying insurance is a necessity, a must item on everyone’s agenda.

Life insurance is a contract between the insurer and the policy owner. The insurer promises to pay a lump sum of money on the death of the insured person or persons. Or pay him the amount in case of critical or terminal illness. In return the policy owner pays a premium at regular intervals, such as monthly, quarterly, half yearly or annually. This premium is different with different insurance companies and the period of payment of the premiums may vary and this is decided at the time of buying the insurance. Some countries include even bills and funeral expenses in the agreement.

A friend of mine recently discovered that his life insurance policy, which actually turned out to be a mortgage endowment, was almost worthless. He has a wife and child and he was worried what would happen to them if he died. All he wants is simple life insurance to cover him and his wife until he retires at age 65, or until his daughter is old enough to fend for herself financially. Here are the three pieces of advice that I gave him:

1. Shop around for lower premiums

Rule No. 1 with life insurance is to shop around. Another smart move is to buy separate 'his' and 'hers' policies, instead of a 'joint life, first death policy', which pays out once and ceases after the first death, leaving the survivor uninsured. By buying two individual policies, you can get two payouts - potentially twice as much cover - for just a few pounds a month more. Also, individual policies make life easier when it comes to inheritance tax, and if you separate or divorce.

The offer doesn’t usually happen on a dingy street corner, it’s more likely to be a phone call with a phony introduction speech. “Remember when you took that cruise a few years ago? You filled out this form and it went into a draw? Well, you won a prize and we’re calling to invite you to visit our offices and collect it.” Of course you fall for this hook, line and sinker. You rush to tell your wife. You, Jimmy are 78 and she, Annie, is 75. You are both bored and a prize out of the blue is just what you need. Perhaps you have won another cruise…

The life settlement industry is a relatively new one and there are many people out there eyeing the market and looking to see how they can profit from it while it is still untested. The potential buyers target seniors who may be in financial straits or in poor health and prone to aggressive sales tactics and abuse.

In your quest for life insurance coverage adequate information on what is available out there is important. There are two main types of life insurance on offer today, term life and whole life or “permanent insurance”. We will be looking at whole life insurance and where it falls in life insurance planning.

When you are considering estate planning it is also good to have term life insurance policies as an integral part of the whole package. This becomes true whenever you are using life insurance policies as part of your overall estate planning. The term life insurance policy will serve as an option to cover additional needs that may arise as an estate appreciated or increases from inflation.

The first and overriding principle is to stay healthy. This may mean a refrain from smoking. Smokers are always on the record as high risk customers to the insurance industry. This is because your life lies open to terminal illnesses such as cancer. Refrain from smoking does not only mean you will not be classified as a high risk consumer, but you end up saving money that can be used to subsidize the whole life insurance premium. In addition to quitting smoking, try as best as possible to stay healthy. Do a lot of exercises to loose more weight.