Understand the Legal Side to Life Insurance

by Luke Ashworth

There are many aspects to life insurance that can be confusing like figuring out what the documents are saying that you are about to sign. When you apply for life insurance you have to be accepted before you can even start the insurance policy. Once the company has considered you and accepted the application they are going to give you an offer. At this time it may be best to seek out a solicitor or other advice regarding the legal documents to make sure you understand the contract.
The contract is the legal document you will sign that allows payout at your death. Certain life insurance policies have clauses regarding the manner of death and how they will payout for certain circumstances.

It is important that you understand all of these terms before signing the contract and returning it. You also need to understand the insurable interest you will pay. Life insurance is for surviving family members to live on after you have deterioration in health or death, so it is very important to make sure all aspects are covered before anything untold happens. Also make sure that the insurer you have the contract with is authorized by the Financial Services and Markets Act of 2000.

About the Author
Luke Ashworth writes for Protected.co.uk, offering views on life insurance in the UK, visit www.protected.co.uk today and compare life insurance plans in minutes.

A Simple Guide To Life Insurance

by Terry Edwards

In this article we will look at an overall view of life insurance. Life insurance is basically a contract between an insurer and the owner of the life insurance policy. The insurer's obligation in the contract is to pay a sum of money upon the policy owner's death. The policy owner's obligation in the contract is to pay a certain premium at a regular interval or a lump sum or sums at specifieds times.

In the case of the death of the insured the insurer pays a sum of money to the beneficiary named in the contract. Typically, the different insured events, as they are related to life insurance, deal with the area of death, accidental deaths and sickness. Within each contract, specific exclusions and inclusions will be written as to the liability of the insurer.

One such exclusion to many life insurance policies would be suicide - in this case if the insured died because of suicide within the first 2 years, the beneficiary would not collect a sum of money.

There are two different basic life insurance policies. The first is a term protection policy where a benefit is to be provided to the beneficiary on the occurrence of a specified event.

The second type of life insurance policy is in investment policy. Here, the aim of the policy owner is to invest in the policy to get a return on their capital. The most common types of these policies are whole life, universal life in variable life policies.

In most cases, the policy owner and the person insured by the contract are the same. Usually, the person who takes out the policy will do so in their own name. So they will be both the owner of the policy and the insured. However, it is possible to buy a policy on somebody else. For example, if you purchase one for your spouse you would be the owner and your spouse would be the insured.

In most cases, the owner will be allowed to change who the beneficiary of the life insurance policy is unless otherwise stated within the contract. This is typically referred to as an irrevocable beneficiary designation. In this case, the beneficiary would first have to agree to any beneficiary changes.

In conclusion, I have given you some of the basics as to what life insurance is to help you get a better understanding of this type of insurance.

About the Author
You can find out more about Life Insurance as well as much more information on everything to do with life insurance at http://www.LifeInsuranceHelp.net

Life Insurance Policy For Child – Why Buy Life Insurance For A Child?

by Gavin Bloom

There are a few of pro’s and cons’ about purchasing life insurance on children. Life insurance must have an insurable interest. There has to be good reasoning behind the purchase of life insurance on children. The first priority is to first make sure that the income producers in the household have an adequate amount of life insurance. Large amounts of life insurance on children with little or no life insurance on the bread winners will make little sense to an insurance company underwriter. Life insurance underwriting departments will often require a certain ratio of life insurance on parents to children. There are advantages in purchasing life insurance on children after the parents are insured properly.

Most companies have children term riders that a very inexpensive. Children term riders will protect the insurability of the child. These term riders can be converted to permanent forms of life insurance when the child reaches the ages of 18-21. This is a valuable feature if the child is uninsurable because of health reasons.

Permanent Life Insurance on Children – Some parents have purchased permanent life insurance policies on children so that they can use the cash value accumulation later in life. Permanent life insurance is relatively inexpensive and should be considered on a child once the parents have taken care of their own life insurance needs.

Why Buy Life Insurance on a Child?

1.Protect Insurability – Purchasing life insurance on a child will protect the Childs insurability.

2.Cash Value Accumulation – Purchasing permanent life insurance and funding it with adequate enough premium to produce cash for college education or future needs. Universal Life policies are excellent policies for this purpose.

3.Final Expense – This is the basic purpose for all life insurance.

There is the added benefit of teaching the child about life insurance. Parents that show their children the benefits of life insurance prepare the child to take responsibility for their own financial future.

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Should Your Life Insurance Policy Be Written In Trust?

by Michael Challiner

According to one of the largest UK life insurance companies, just 1% of life policies are written in trust. That is disgraceful and reflects poorly on the financial industry.

Let's explain.

If your life insurance policy is “Written in Trust” then, in the event of a claim, the insurance company pays out directly to the beneficiaries you name on the policy. The significance of this is easily missed.

It means that if the policy is “Written in Trust”, the proceeds from the policy never form part of your legal estate and are not subject to Inheritance Tax. The importance of this is illustrated by the following figures:

Take Mr A. He's a widower and wants to leave everything equally to his two sons. He owns his home which is currently worth £245,000 with a £10,000 outstanding mortgage. His investments are valued at £52,000 and his car and other chattels are worth £18,000. He also owns a life insurance policy for £100,000 which is not written in trust. We assume that the costs of administering his estate and obtaining probate would be £5,000.

If Mr A were to die now, his estate would be worth £400,000 less Inheritance Tax. Inheritance Tax is currently levied at 40% on the value of his estate over and above £275,000 – that means that the taxman will walk off with £50,000 and his sons would each receive £175,000.

Now lets assume exactly the same figures except that in this case the life insurance policy is “Written in Trust” with Mr A's sons as equal beneficiaries. Because the life insurance company pays out directly to his sons, they each receive £50,000 straight away and non of the money is included in Mr A's estate. This means that his estate is now worth £300,000 and the taxman can only walk away with £10,000. Each of his sons receives £20,000 more and tax-free!

So simply by signing a few forms, Mr A saves £40,000 tax!

Is there a catch? No – all the documentation is standard and is provided totally free of charge by the life insurance company. Your broker through whom you buy the policy, should complete the documentation for you, again free of charge. All you have to do is give the details of the beneficiaries to the broker and sign the form. Solicitors are not required. In the event of a claim, the life insurance company then has to pay out directly to the beneficiaries. Job done! Poor Mr Taxman!

Even if your policy is designed to repay a mortgage, it should be “Written in Trust” for your partner. Then, rather than your estate receiving the money and using it pay off the mortgage, the money can be paid directly to your partner. This saves legal delays, solicitor's and probate fees and loads of hassle. Your partner can then use the money to personally pay off the mortgage. Whether this also saves you Inheritance tax will depend on the value of your estate and how you have structured your Will.

So we believe that a life insurance policy “Written I Trust” is a win win situation. And there aren't many of those around these days! We can't see any drawbacks.

Bye the way, no matter what you decide to do, always ensure that you have an up-to-date Will.

About the Author:
Express Life Insurance specialise in life insurance quotes uk but also offer both critical illness cover and life assurance policies.

Whole Life Insurance Advice – Important Whole Life Insurance Components

by Jessica Farrell

Not one of us is going to live forever. It’s a fact that many of us don’t want to think about; however, not thinking about it isn’t going to make it any less painful when the day does come that we leave our family members and loved ones behind. Not only are we going to leave them with sadness, but we may also leave them with accumulated bills, including medical bills, as well as funeral costs.

Purchasing a life insurance policy will help ensure that our families and loved ones won’t have to worry about any of the financial difficulties or strains that almost always arise in the even of death. Purchasing a whole life insurance policy will take care of three important concerns: costs, coverage duration, and cash value. Below you’ll find information and advice about these three whole life insurance components.

Most whole life insurance policies have permanent, level premiums, so the earlier you purchase your whole life insurance policy the better. Your rates won’t skyrocket as you get older.

Unlike term life insurance policies, whole life insurance policies cover you for life. Although term life insurance policies are ideal for people who only want coverage for a certain amount of time, with a whole life insurance policy you won’t need to worry about your coverage coming to an end.

Also unlike term life insurance policies, whole life insurance policies accumulate cash value. You can receive these cash values if you ever decide to surrender your policy. You may also take a policy loan against these cash values at your insurance’s current policy loan rate. It is important to remember that if you should surrender your policy or die while a loan is taken out, your cash value or death benefits will be decreased. The cash value accumulation component of whole life insurance policies might be the most popular feature as it acts as an investment component and can even provide you with financial security should you encounter an emergency.

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