Life insurance is an insurance policy that provides for the insured at the time of death. It really ought to be called “Death Insurance,” but that name doesn’t like people. But it ensures an individual’s death. In fact, the financial loss that will arise at the death of the insured person is what is insured. Get more info about Hanover Insurance Company Association.
Those financial losses take many different types, such as:
– the loss of services to the stay-at-home-mom family
– final expenditure on the death of a child
– an individual’s final expenses following an illness and medical care
– Keyman compensation, which insures the owner or valued employee of an organization against the economic loss suffered by the enterprise at the time of its demise.
– estate planning insurance, where a person is covered at death to pay property taxes
-“Buy and Sell Agreements,” where life insurance is acquired for the purpose of funding a commercial transaction after the untimely death of the parties to the transaction.
– Accidental death insurance, in which a person purchases a policy that covers in case they suffer from an accident.
– Life insurance for mortgages under which the creditor purchases a policy paying off the mortgage at death, and many more.
For hundreds of years, life insurance has been around and, in some situations, has been a much better product. Insurance firms have been able to establish mortality tables, which are analyses of human death statistical rates over time… typically over a 100-year lifetime. These mortality tables are remarkably precise and allow insurance companies to closely predict how many people will die each year at any given age. The insurance companies derive the cost of the insurance policy from these tables and other statistics.
The cost per thousand of coverage is usually calculated in an annual cost. For instance, if you were to obtain coverage for $10,000, and the cost per thousand was $10.00, your annual premium would be $100.00.
The life expectancy of most individuals has been improved by modern medicine and better nutrition. A rapid drop in life insurance premiums has been facilitated by increased life expectancy. In certain ways, insurance premiums are just pennies per thousand.
There is just one kind of life insurance, generally, and that is term insurance. That implies that for a certain period of time, or a term, an individual is insured. As their primary ingredient, all of the other life insurance plans have term insurance. They can’t use any other ingredients. Yet also, many other life products have been invented by insurance companies that appear to hide the reasons for life insurance. They also enrich the insurance firms tremendously.