Understanding Life Insurance

Unless you’re in the insurance business, knowing what all the different insurance policies can cover can be quite complicated. One that people often are confused about is the difference between life insurance and life assurance. There are so many different policies on the market, and you might be drawn to cheaper premiums, you have to check out all the details so that you know what you’d qualify and when regarding payouts from the insurance company.One of the best ways to do this is to talk about your financial situation with a financial adviser. Many insurance companies offer this advisory service as well as selling insurance policies.One thing to understand is the fundamental difference between life insurance and life assurance.

Life insurance will ensure you for a set length of time. If you were to pass away during the policy period, the insurance company pays the claim to your partner or children. But if you outlive the policy period you will not receive anything. Like home insurance, the life insurance policy will only have a value attached to it if you make it a claim (through your death).

Life Insurance debts or costs

It’s useful to have life insurance in place if you have debts or costs that would need to be paid after your death – for example, a mortgage that runs for 25 years should be matched with a life insurance policy for the same time. That way, should you die, your family would not have to pay off the mortgage; the insurance company would.Life assurance works differently.

There is an investment element attached to it. Life assurance puts a guaranteed insured sum together with a non-guaranteed investment, and the investment value relates to the size of the guaranteed amount in your policy, as well as the time you have the policy in force and how the investment performs. If you die during the term of the policy, the payout equals the value of the guaranteed amount or is the same with the value of the annual investment bonuses up to that date, whichever is the greater.

If you survive the policy, the value is increased as you get a terminal bonus on top of the annual bonuses.For most people, life insurance will be more appropriate than life assurance. As with all insurance, policies prices vary enormously, as do the conditions attached to them.

 

STEADY AS SHE GOES – FED TAKES NO ACTION ON RATES

Courtesy of AskTraders

Like a proud parent watching its child take its first steps, the Fed sat on its hands on Wednesday as the US economy demonstrated that it can indeed walk unaided. The notes from the last Federal Open Market Committee (FOMC) meeting of 2019 record the economy posting historically low unemployment and moderate GDP growth. Despite the distractions of a US-China trade war, tensions in the Gulf, and the impeachment of the president, the jobs and growth numbers suggest that the US may be robust enough to carry on into 2020 without any hand-holding from Jerome Powell.

The rate announcement was widely expected. In the run-up to Wednesday, the CME FedWatch tool calculated with over a 99% degree of confidence that rates would remain as they are. It’s early days, but the early positioning points towards a 91.1% chance of the Fed leaving rates unchanged at the next meeting on 29th January next year.

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Tips to Follow

Simply follow these straightforward tips and you’ll be on the road to financial freedom as the winter months progress before you know it. Firstly, if you’re looking for both buildings and contents insurance, make sure you buy them as a joint policy from the same company. You’re likely to make significant savings this way. Secondly, think outside the box regarding saving money on your premium. Make your home as secure as possible, join a Neighbourhood Watch scheme, or Install a visible burglar alarm. You can also consider fitting bars on your windows if you live on the ground floor of a flat in a slightly dodgy area, and fitfully approved locks.

insurance by planning for futureFire risk can also be reduced significantly by fitting smoke alarms and testing the batteries regularly. Thirdly, always shop around before making a purchase, but ensure you’re comparing like for like policies as this isn’t always immediately apparent. Check what deals specific companies are offering as many will offer significant discounts for purchasing online or for buying buildings and home contents insurance together at the same time.Lastly, remember that the fewer claims you make, the lower your future premium, so think twice before making a claim when you don’t have to.