Definitions Of Term Insurance
Term life insurance or term assurance is life insurance which provides coverage at a fixed rate of payments for a limited period of time, the relevant term. After that period expires coverage at the previous rate of premiums is no longer guaranteed and the client must either forgo coverage or potentially obtain further coverage with different payments and/or conditions. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.
Term life insurance is the original form of life insurance[citation needed] and can be contrasted to permanent life insurance such as whole life, universal life, and variable universal life, which guarantee coverage at fixed premiums for the lifetime of the covered individual[dubious – discuss]. Term insurance is not generally used for estate planning needs or charitable giving strategies but for pure income replacement needs for an individual. Many permanent life insurance products also build a predetermined cash value over the life of the contract, available for later withdrawal by the client under specific conditions. However, on most cash value policies like Whole Life insurance, the only way to receive the cash value is to cash out the policy. The beneficiaries receive the face value of the insurance but NEVER the cash value with Whole Life policies. Financial advisers generally advise buying term life insurance and investing the difference elsewhere to those who still qualify to contribute to other tax-deferred investment growth such as IRA's or 401k's.
Term insurance functions in a manner similar to most other types of insurance in that it satisfies claims against what is insured if the premiums are up to date and the contract has not expired, and does not expect a return of Premium dollars if no claims are filed. As an example, auto insurance will satisfy claims against the insured in the event of an accident and a home owner policy will satisfy claims against the home if it is damaged or destroyed by, for example, a fire. Whether or not these events will occur is uncertain, and if the policy holder discontinues coverage because he has sold the insured car or home the insurance company will not refund the premium. This is purely risk protection.
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5 Factors to Determine your Car Insurance
Here are the top 5 factors that affect car insurance premiums: 5 Factors to Determine your Car Insurance
Gender like age, there is really nothing you can do about this. Men are generally perceived to be the potential dangerous drivers and not the females. hence, females get lower rates.
Age younger drivers, particularly teenagers, receive higher premiums for nothing else but age. Inexperienced drivers also receive this because their not yet considered mature with their driving. There is really nothing that can be done about this: you get older, you get better at driving and your rates will eventually go down.Type of Vehicle we would all love to cruise around on a Pontiac Solstice or Porsche Boxter but you wont believe the kind of rates these kinds of cars get. If you want lower premiums, get a car with a lower price.
Auto Insurance Companies now this is something you can control. Despite the determining factors, some companies just offer lower rates than others. Its up to you to choose.
Driving Violations � this is another thing you can certainly control. While it may be so tempting to race around town upon getting your license, a police ticket is not worth it. It may be a single ticket, but it can do wonders to your insurance premiums as insurance companies keep track of your driving record.
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AUTO INSURANCE IN AUSTRALIA
AUTO INSURANCE IN AUSTRALIA Several overseas companies have been circling the Australian market, but Progessive's entry represents by far the biggest headache for the local companies.Separately, insurance underwriters cited climate change as the most important issue confronting the industry.In South Australia, Third Party Personal insurance from the Motor Accident Commission is included in the licence registration fee for people over 16. A similar scheme applies in Western Australia.In Victoria, Third Party Personal insurance from the Transport Accident Commission is similarly included, through a levy, in the vehicle registration fee.In New South Wales, Compulsory Third Party Insurance (commonly known as CTP Insurance) is a mandatory requirement and each individual car must be insured or the vehicle will not be considered legal. Therefore, a motorist cannot drive the vehicle until it is insured. A 'Green Slip' another name CTP Insurance is commonly known by due to the colour of the pages the form is printed on, must be obtained through one of the seven main insurers in New South Wales.
Profitability collapsed last year after companies such as Suncorp-Metway and Insurance Australia Group had large payouts for a string of natural disasters, including bushfires and heavy storms.
At the same time, the global financial crisis caused earnings from insurers' investment portfolios to collapse, causing a drain on capital reserves.
Home insurance premiums are under the most pressure to rise, with rates projected to jump by about 9 per cent over the next year, according to the latest JPMorgan Deloitte general insurance industry survey.
House insurance premiums increased 10 per cent last year as insurers sought to reverse years of heavy discounting.
Car insurance premium rises are expected to match last year's 5 per cent increase.
The large number of payouts in recent years, including the more than $1 billion paid out in the wake of the Victorian bushfires, had insurers rethinking the cost of cover, said JPMorgan insurance research analyst Siddharth Parameswaran.
''The rate increases that have been pushed through are largely a reflection of re-estimation of how much these events cost and how frequently they are likely to occur,'' said Mr Parameswaran, one of the co-authors of the report.
Natural disaster payouts since 2007 of nearly $4.3 billion are more than twice the 20-year average.
Mr Parameswaran said the price increases marked ''a real turn'' in the insurance cycle after underwriters were locked in a discounting war for most of the past 10 years.
Elsewhere, compulsory third-party car insurance premiums in NSW are expected to increase by 10 per cent, rounding off the second year of double-digit gains, while Queensland motorists will be hardest hit with prices expected to soar by as much as 15 per cent, mostly due to more generous benefits.
While prices are tipped to run up, gains are likely to be tempered by competition in personal insurance, particularly among internet-based companies.
US company Progressive Direct has recently entered the Australian market, looking to snare a slice of the nation's $9 billion car insurance market with internet-only selling.
In Queensland, CTP is a mandatory part of registration for a vehicle. There is choice of insurer but price is government controlled in a tight band.
These state based third party insurance schemes usually cover only personal injury liability. Comprehensive vehicle insurance is sold separately to cover property damage and cover can be for events such as fire, theft, collision and other property damage.
Progressive Direct Insurance Co. [00649] believes there is an opening in Australia's sophisticated insurance landscape for it to explore the online-service motor insurance segment.
Progressive Direct, a unit of U.S.-based Progressive Corp. [58454], opts not to compete directly with established players in the traditional market but to gain a position among proliferating online businesses, said Simon Lindsay, country manager of Progressive Direct in Australia.
This market segment offers room to evolve in Australia, where a high number consumers enjoy the online experience for personal finance, given the country's high broadband penetration, said Lindsay in an interview.
In Australia, two major players -- Insurance Australia Group Ltd. [86837] and Suncorp Metway Insurance Ltd. [77922] -- have 75% of the market share for motor insurance. Nevertheless, Lindsay said smaller players can pursue "small yet compelling" market segments in the country.
A sound regulatory environment and stable market conditions contributed to Progressive Direct's choice of Australia as the first Asia-Pacific country in which to advance its online motor insurance business, said Lindsay. The market dynamic is suitable for international market exploration and for employing the insurer's Internet-based insurance know-how and online segmentation skills.
Progressive Direct Australia's online technology structure is being built up from scratch in Australia, based on skills acquired from parent company in the United States, said Lindsay. The model is designed to attract a growing alternative online market segment, rather than the general mass segment.
Web site technology is important to deliver quality and customer service. Lindsay said online functionality is a driver to attract customers who have not been offered the experience before.
A recent survey of Google found the proportion of people applying for car insurance online has been on the rise in Australia, with 68% applying online and three-quarters using the Internet at the initial research stage. Currently, Lindsay said the trend is to apply online for car insurance quote rather than buying the product or managing the policy online.
In the next five years, Lindsay said the trend for buying and managing online motor insurance will become more popular. Online claims management is still new in the market, according to Lindsay. The aim is to promote effective and efficient applications of the online platform as "A to Z" functions of motor insurance.
In Australia, Lindsay noted traditional motor insurers remain strong in the market, and this is not going to be changed in the short term. These traditional players launched their own online brands to attract new customer segments.
Progressive Direct's market position is "more independent" with online insurance, said Lindsay. The company recognizes a trend of rising online consumerism, hence its move to explore the segment.
In recent years, Australia's nonlife insurance sector has seen new players such as Australia Post and Virgin Money, an affiliate of U.K.-based conglomerate Virgin and supermarket Coles for the launch of car, home and content insurance
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