Unit Plus II Pention

Pure Pension

Generic Benefit Illustration of Unit Plus II Pension Single Premium

Generic Benefit Illustration of Unit Plus II Pension Regular Premium

Pension cum Life Cover

Generic Benefit Illustration of Unit Plus II Pension Regular Premium

Generic Benefit Illustration of Unit Plus II Pension Single Premium

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER
Introduction:
We at SBI Life understand the basic needs for pension plan and give you financial strength to maintain your life style even after the retirement. Unit Plus II Pension plan makes sure that you have regular income after you retire and also helps you to maintain your standard of living.

This is a unit linked pension plan wherein the policyholder chooses an investment period from 5 to 52 years for a vesting age between 50 to 70 years. You can choose to pay either single premium or pay regular premium for the entire policy term. Your contributions are invested into 4 fund options as per your choice.

Key Features:
Choice to invest & control five different funds as per your risk appetite.
Flexibility to choose between two options
Pure Pension
Pension cum Life Cover No medical required for Pure Pension, automatic acceptance facility. Flexibility to increase regular contribution.
Top up payments: any amount, anytime. Customize your plan by adding riders. 15 days free look period.

Product type: This is a non participating Unit Linked Pension product.
How does it work?
Choose your vesting age: Any age between 50 years - 70 years.
Choose premium frequency and premium amount Premium Frequency Minimum frequency Maximum Frequency Single 25,000(in multiples of 1000) No Limit Yearly 24,000(in multiples of 100) No Limit Half Yearly 12,000(in multiples of 100) No Limit Quarterly 6,000(in multiples of 100) No Limit Monthly 2,000(in multiples of 100) No Limit

Choose plan option Option I Pure Pension Plan (For age group 18-65) Option II Pension Plan with life cover (For age group 18-60) In case you have opted for option II, your sum assured will be as mentioned below For single premium mode Age at entry Sum Assured 18-35 125 % of single premium subject to maximum SA of Rs. 10 lacs 36-45 125 % of single premium subject to maximum SA of Rs. 5lacs 46-60 125 % of single premium subject to maximum SA of Rs. 1.2 lacs
For regular premium mode Age at entry Sum Assured 18-35 5 or 10 times first annualised premium subject to maximum SA of Rs. 10 Lacs 36-45 5 or 10 times first annualised premium subject to maximum SA of Rs. 5 Lacs 46-60 1.2 lacs Choose your investment funds: You can invest in 4 investment funds viz. Equity Pension Fund, Bond Pension Fund, Growth Pension Fund, Balanced Pension Fund. Benefits Death Benefit:During accumulation phase
If you opt for option I : Pure Pension Plan

Fund value will be paid in lumpsum to nominee. If you opt for option I : Pure Pension Plan with life cover
The higher of fund value or sum assured will be paid in lumpsum to nominee. Guaranteed additions by way of free allocation of units to increase your retirement kitty. On Vesting: It's your income; you decide how it works for you. You have choice and flexibility.You can take upto one third of the fund value in lumpsum. tax-free as per current tax law.

The tax free limit applicable for the commutated value may change as per change in Income Tax rules During Annuity Phase: Balance amount has to be used to purchase annuity. The rate at which the amount at vesting date will be converted to an annuity is not guaranteed and will be based on the prevailing immediate anniuty rates under the relevant annuity option at the vesting date. Currently SBI Life Insurance offers the following annuity options.

Life annuity at constant rate. Annuity payable at constant rate throughout the life of Annuitant with facility of receiving on death of Annuitant refund of purchase price less the sum total of annuity already paid till date of death.

Annuity payable at constant rate throughout the life of Annuitant with facility of receiving on death of Annuitant 100% refund of purchase price. Annuity increasing at the simple rate of 1%, 2% or 3% per annum as the case may be and payable during the life of the Annuitant. Annuity certain for 5/10/15 years as the case may be and for life thereafter. Last survivor annuity, whereby upon the death of Annuitant his / her spouse will receive a life annuity, which will be either 50% or 100% of the last annuity amount paid to the Annuitant, as selected. This annuity option will not be available if the difference in the age of annuitant and spouse is more than 10 years. Tax Benefits Save tax u/s 80 CCC (1) of IT Act.

What is the policy term? Term = Vesting Age - Age at Entry Minimum Years Maximum Years 5 Years 52 Years Who can buy this product? If you are in the age group of 18 to 65 you can opt for Unit Plus II pension plan without life cover. For Unit Plus II pension plan with life cover it should be between 18-60 years. Riders available Accidental Death and total permanent disability rider Critical Illness Rider

Five Funds for investments Equity Pension Fund: Assets Min Max Risk Equity & Equity related instruments 80% 100% High Debt & Money market instruments Nil 20% Bond Pension Fund: Assets Min Max Risk Debt instruments 80% 100% Low to medium Money market instruments Nil 20% Growth Pension Fund: Assets Min Max Risk Equity and Equity related instruments 40% 100% Medium to High Debt & Money Market instruments Nil 60% Balanced Pension Fund Assets Min Max Risk Equity and Equity related instruments 40% 60% Medium Debt & Money Market instruments 40% 60% Equity Optimiser Fund Assets Min Max Risk Equity and Equity related instruments 60% 100% High Debt & Money Market instruments Nil 40%

Guaranteed additions by way of free allocation of units: The bonus units are rewarded for the policy term of 20 years and above, when no premiums are due and the policy is in full force. For Regular Premium Mode End of Policy Year Free allocation of unit as a % of annualized average Regular Premium 10 10 % of annualized average Regular Premium for the first 10 policy years 15 20 % of annualized average Regular Premium for the first 15 policy years 20 30 % of annualized average Regular Premium for the first 20 policy years For Single Premium Mode End of Policy Year Free allocation of unit as a % of Single Premium 10 1 % of single premium 15 2 % of single premium 20 3 % of single premium For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.

Horizone II Pention

Pure Pension: Generic Benefit Illustration of Horizon II Pure Pension

Pension cum Life Cover: Generic Benefit Illustration of Horizon II Pension cum life cover

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

Introduction: A unique Unit Linked Pension Plan that will enable you to build a kitty good enough to enable you to spend a peaceful and financially sound Retired life!

Horizon II Pension is a safe and a hassle free way to get high returns! Horizon II Pension comes with the unique feature of Automatic Asset Allocation by means of which you truly, don’t need to be an expert to grow your money!

Key Features: Horizon II Pension is the most simple unit linked pension plan; all you need to do is: Choose your retirement date, the plan option and the regular premium amount.

Based on the plan option and the term opted, SBI Life will invest your money in three different funds viz., Equity Pension Fund, Bond Pension Fund and Money Market Pension Fund.

The funds are invested keeping in mind the term opted for and your money is invested in safer funds as your policy approaches maturity.

Available with two options:

Pure Pension Pension cum Life Cover No medical required to enroll for Pure Pension

No premium allocation charges from year 11 onwards. Save tax u/s 80 CCC (1) of IT Act. 15 days free look period from the date on which you receive the policy document.

Product type: This is a Unit Linked Pension product.

Investment Plans available

Plan A - Dynamic Plan: Here a higher proportion of your money is invested in equity.

It is ideal for longer period of terms.

Plan B - Growth Plan:

Here, the investment in equity automatically decreases more as the funds are put into less risky options. This leads to more balanced approach, lower volatility coupled with good returns in long run Benefits

Retirement Benefit: At vesting age you get a choice to withdraw upto one third of the fund value in lumpsum-tax free as per the current tax law.The remaining amount has to be used to buy Annuity from either SBI life or from any other Annuity provider.

Death Benefit: Death during the term of policy Option I Pure Pension - Fund value is payable to nominee. Option II Pension with Life Cover - Fund value plus sum assured after deducting any mortality charges due but not paid during policy year in which death occurs Death after Vesting age: Death Benefit depends upon the annuity option chosen.

What is the policy term? Term = Vesting age - Age at entry Min Max 10 Years 52 Years Note: Vesting Age = 50 years to 70 years (age as on last birthday)

Who can buy this product? If you are in the age group of 18 to 60(age as on last birthday) you can opt for Horizon II pension plan.

What is the sum assured? For Pure Pension Plan - Nil Pension cum Life Cover Plan Age Group 18-35 Age Group 36-45 Age Group 46-60 Min 5 times annualised premium 5 times annualised premium 1.2 Lakhs Max 10 Lakhs 5 Lakhs

Riders Available No Riders are available.

Three Funds for investments Equity Pension Fund: Assets Min Max Risk Equity & Equity related instruments 80% 100% High Debt & Money market instruments Nil 20%

Bond Pension Fund: Assets Min Max Risk Debt instruments 80% 100% Low to medium Money market instruments Nil 20% Money Market Pension Fund: Assets Min Max Risk Debt instruments Nil 20% Low Money Market instruments 80% 100% For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.

Unit Plus Child Plan & Unit Plus Elite Plan

IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER
Introduction:

Life begins afresh when you become a parent and when the child takes that first step towards you, the moment is filled with cheer, enthusiasm never felt before. This moment marks a new beginning in the child’s life and there’s no looking back after that. The child keeps growing and so are his dreams, aspirations which always aim to reach horizon and you want your child achieve his/her dreams. But at the same time as a proud parent you also want to secure their future against rising cost of education and other necessities. We at SBI LIFE understand you better and hence have developed UNIT PLUS CHILD PLAN to suit you and your needs best. This Plan is meant for parents in the age group of 18-57 having a child between the age group of 0-15 years. Key Features: Market related returns to match increasing cost of education Peace of Mind by giving you triple benefits. Loyalty units to celebrate your child reaching 18 years. New Investment Fund (Equity Optimiser Fund) in addition to existing funds. Pay Premium for a limited period and reap benefits over a long time. Flexible plan which adapts to your changing needs as and when you want. IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER

Your Investment moves are already in your control ….and now even …..

Unit PLUS Elite :

………Your Protection needs are in your control Introduction: You set the ball rolling and have been the catalyst for transformation of the society and your decisions have generated maximum benefits both at personal as well as society level.

Young generation aspires to be you and they get inspiration to emulate you to achieve success.
Your leadership does not settle with the normal, it deserves privileged facilities.
A plan which provides Value for “Your” money ……….Our Preferred Customer

With your rich experience in every vertical of life you have achieved the best ….to add another feather in your cap..... We at SBI Life propose to you: To have the freedom to choose the type of Cover you want

Gold Cover: Provides you with benefits comparable to the name itself.
Higher of Sum Assured* or Fund Value Platinum Cover: Greater benefits since it is “Platinum” Sum Assured* Plus Fund Value Choice of Fund Options : 4 Fund Options

New Fund : Equity Elite Fund.- which matches your investment strategies .
Existing Funds : Growth Fund, Balanced Fund & Bond Fund. You can decide the term you want to pay premiums for

Limited Premium Payment Term Option available Conditions apply For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.

Money matters

INSURANCE
Amar Pandit / Mumbai April 27, 2008

If you have done proper planning and have little liability, there is no need to go for an insurance policy after 50.

Amit Saxena, 55, a human resource person wants to keep himself well insured. This, in spite of the fact, that he has discharged most of his obligations like sponsoring his son's US education or paying off his home loan.

Besides, he has done well by accumulating a sizeable corpus for his retirement and other contingencies. At present, he is paying a considerable premium of close to Rs 2 lakh a year for his life insurance policies.

When asked about the sizeable insurance, he replied that his bank, where he is a priority banking customer, had suggested these policies as they would provide good cover, return 25 per cent and also, give tax benefits.

What is surprising, that even though he has amassed sizeable wealth, he continues to play a high amount of money on insurance premiums.

There are a lot of cases like this where after crossing the age of 50 years, people tend to buy expensive insurance because there is that fear there would be a drain on the financial resources and stress on remaining members, if you were to fall ill or die.

But most people tend to forget that the expense on buying insurance is by itself a financial drain, especially at an old age.

However, before going into a buying spree, you need to ask yourself a basic question - Do I need this insurance policy? Answering this question correctly is really important.

While there is no silver bullet or a general answer here, but the key point is it's important that you look at your overall financial position first.

And when you do so, take a careful look at the responsibilities that you have to discharge like education of children, any loans that need to be paid or any such pending expenditure that you have to make.

It's important to remember that as you grow older, your need for life insurance goes down if you have saved well.

Here are some basic questions you need to answer

What are my liabilities?
What funds do I have for dependents?
What is my corpus and liquidity?
Once you answer these simple questions, evaluate your responses and check whether you come under any of these situations

I. No liabilities. Enough assets for contingencies and your dependent.
II. No liabilities, but not enough assets.
III. Have liabilities. Also, not enough assets for self and dependents.
IV. Have liabilities, but have assets as well for self and dependents.

Situation I - Congratulations There is no need for any life insurance for you.
Situation II - It's better that you buy life insurance, but do a complete analysis before you do so. Calculate the shortfall in terms of accumulated assets and buy a pure term plan accordingly.
Situation III - You certainly need life insurance. Get one ASAP.
Situation IV - Do a detailed analysis of your situation to check whether liabilities are minimal or significant.

If liabilities are minimal and cannot jeopardise your family's financial health, then you might not need life insurance. However if liabilities are sizeable, you should opt for life insurance.


Now that you are aware of what needs to be done, take a call on the cover that you should purchase. Make sure that you buy a sizeable cover to take care of your liabilities and family's income needs. Finally remember to separate investments and insurance and just opt for a simple term plan.

READ THE FINEPRINT of Money Back Policies

Before buying a money back plan, insurance advisors recommend that you should carefully check out the actual amount allocated towards the premium, how much of it is going to be accumulated and how much is the insurance company’s charges.

The most crucial aspect, they believe , is reading the terms and conditions thoroughly and understanding each clause well.

“Also, you should make sure that the periodic payouts are sound enough to meet your anticipated needs. It is also beneficial to analyse the past performance in terms of declared bonuses. Though the past is not necessarily an indication of future performance, it gives a fair idea of the insurance company’s commitment to its policy holders,” says Sanjay Tripathy, head, marketing, HDFC Standard Life Insurance.

HDFC Standard Life’s money back policy provides additional optional benefits such as critical illness benefits, additional term benefit, accidental death benefit and waiver of premium benefit.

Singh points out that an enquiry on the minimum number of years for which the premium is to be paid to keep the policy alive, is also a mustcheck .

“The tax benefits on the survival benefits may not be available under certain circumstances for example where the premium in any year exceeds 20% of the sum assured. You should watch out for these pitfalls since tax benefits are key to the attractiveness of this policy,” he says.

THE FLIPSIDE One of the primary disadvantages, insurance advisors feel, with money back policies is its low rate of return, when compared to market-linked insurance-cum-investment products. Also, while on the one hand, payout intervals are fixed and helpful for crucial lifestage planning, on the other, you don’t have the flexibility to increase or decrease premiums and have a choice of sum assured to suit growing incomes and lifestyle

You don’t have the freedom to change the payout intervals. In case of surrender as well, it offers low paid-up value.

For those who like to ascertain the charges of their investment products, it may not be the right choice as it is not disclosed to the policyholder,” says Saxena. MONEY, MONEY PROTECTED SAVINGS: As the premiums paid are not linked to the capital market Guaranteed returns. LIQUIDITY: Meet intermittent liquidity requirements at important stages of lifestage.

LIFE INSURANCE: In case of an eventuality to the insured person.

Benefits of money back life insurance policy

By Aman Dhall & Dheeraj Tiwari, TNN

Money back life insurance policies rank high on the popularity chart. And for good reason: they offer dual benefits of insurance and redemption of money at regular intervals.

But little do people realise that they pay more towards premium amount in comparison to a term policy . Here’s a lowdown on what it takes to buy a money back policy and the issues involved.

FIRST THINGS FIRST

According to life insurers, money back policies fit perfectly in the scheme of things of traditional investors who seek financial instruments that provide insurance and investment, with a low risk element and guaranteed returns.

In other words, the plan is meant for individuals who require money at certain intervals in their lifetime to meet fixed long and short-term financial needs (buying a house or car, vacations abroad).

Benefits of money back life insurance policy

Unlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, it provides for periodic payments of partial survival benefits during the term of the policy, of course as long as the policy holder is alive,” explains Shyamal Saxena , chief distribution and marketing officer, Bharti AXA Life Insurance.

What makes these products even more attractive , says Saxena, is that in the event of death of the policyholder at any time during the policy term, the death benefit is the full sum assured without deducting any of the survival benefit amounts, which may have already been paid as money back components.

“Similarly, the bonus is also calculated on the full sum assured,” he adds. Amitabh Singh, partner, global tax advisory services, Ernst & Young India believes it is a good safety net for individuals who are in their late 30s or early 40s and are looking at significant payouts after 10-15 years to fund their children’s higher education, marriage and other expenses.

“It creates a long-term savings opportunity with a reasonable rate of return, especially since the payout is considered exempt from tax except under specified situations,” he says.

Life Insurance can be Financial Tool

The hardest part about buying life insurance is trying to find good -- and objective -- advice on whether it makes sense in your planning, how to best use it, how much is enough, and what type to buy.

You may have had the experience of the insurance adviser who says: "I understand that you want to think about this insurance purchase. So, sleep on it. And if you happen to wake up in the morning, give me a call."

There are many very good insurance advisers who have the best interests of their clients in mind.

Insurance is a great tool for five key reasons.

First, life insurance is the only investment that is guaranteed to pay the most when it's needed the most.
Second, the death benefit is tax-free. Tax-free is always good.
Third, certain policies allow you to accumulate investments on a tax-sheltered basis. The policy can act similar to, but not identical to, a registered retirement savings plan (RRSP) -- and the investments are paid out tax-free along with the death benefit when the insured dies. As a result, life insurance is an amazing tax and estate planning tool.
Fourth, life insurance can offer protection from creditors. Accumulation inside the policy may be beyond the reach of creditors when certain beneficiaries are named.
Finally, the full amount of the insurance proceeds paid on death (net of the adjusted cost basis of the policy) will be added to the "capital dividend account" (CDA) of a corporation, if the corporation is the named beneficiary. The CDA is very valuable because a positive CDA balance can be paid out by the corporation as tax-free dividends to shareholders.
If you own a corporation, you'll often have the choice to own the policy personally, or in your corporation. In many cases it makes sense to have your company own and pay for the policy. Why pay the premiums from your higher-taxed personal dollars? But if you don't do this right, you could end up paying tax unnecessarily. You see, if your corporation is going to own the policy and pay the premiums, then it must be the named beneficiary and receive the death benefit to retain the tax-free status of the payout. If Mr. Too-Smart-For-His-Own-Good has named his wife as beneficiary, but has his corporation paying premiums, guess what? That's right -- the insurance proceeds will be fully taxable in Mrs. Too-Smart-For-His-Own-Good's hands.
Furthermore, life insurance premiums are typically not tax deductible. Those who deduct the cost of premiums for tax purposes do so at their own peril. The Canada Revenue Agency (CRA) disallows deductions unless the subject policy is pledged as collateral on a loan and a few other tests are met, including that the loan for which the policy is pledged must be a loan from a Scheduled Chartered Bank. This prevents one from making premiums deductible for collateralized policies given as security for payment of their kids weekly allowance.
If premium costs are deducted without proper justification, all proceeds paid out will be fully taxable in the hands of the beneficiary.

Generally, the corporation should be named the owner and beneficiary of the policy. The company will not be able to deduct the premiums (unless the above tests are met), but there would be no taxable benefit when the proceeds are paid out. Upon death of the life insured, the corporation will receive the insurance proceeds tax free and can then use its Capital Dividend Account to pay some or all of the proceeds out to one's spouse or other heirs,

tax free.
n Joel Attis is a Financial Advisor with AttisCorp Financial Group, Inc. in Moncton. Comments or questions may be submitted to joel@attiscorp.com, or he may be reached at 855-1155.

Tips on Buying Life Insurance

Mike Kreidler
Washington Insurance Commissioner

FACT SHEET:

Here are tips for consumers who are in the market for life insurance or an annuity:

Know what you need: The classic and best reason for an individual to buy life insurance is for protection against dying too soon. The person buying life insurance should be primarily concerned with seeing that his or her survivors do not face a financial handicap. There may be other reasons that apply: Life insurance is also purchased to pay estate taxes. Business relationships often require life insurance or can benefit from it, for example. Annuities offer a secure way for consumers to make sure they don't outlive their money. Beware of anyone who tries to sell you life insurance as an "investment." Life insurance should be purchased for the protection it will give you.

Term life insurance: Most consumer advocates feel that term insurance is the best life insurance buy. Term is different from "whole life" or "ordinary life" in that you build up no equity, or cash value. In term, you pay each year for the cost of insurance, which typically increases annually as your chances of being alive the next year decline. Most term policies are renewable on an annual basis, and some have level premiums or a decreasing death benefit for a stated period -- one, five or ten years, or even to a specified age.

Whole life insurance: Whole, or "ordinary," life insurance is usually sold with a level premium. In the early years of the policy, the annual premium will be higher than comparable term insurance. (But because its premiums are level, whole life's annual premiums may eventually be less than term.) Whole life policies build up a cash value that consumers can withdraw or borrow against. There are many variations of whole life. Premiums may be payable for a specified number of years on a limited-payment basis. Consumers also may have the option of a single premium — paying all of the premiums at once with a single lump sum.

Know the company you are buying from: You can check the financial stability of any life insurance company through several reputable national rating companies. Some ratings are available at public libraries. The Commissioner's staff can verify that a company is authorized to do business in Washington state, and you can also check here to see what kind of complaints have been filed by other consumers against a company. Information on ratings, complaints and licensing is available from Commissioner Kreidler's toll-free Hot Line at 1-800-562-6900.
Accelerated benefits: Under rules adopted by Insurance Commissioner in 1994, authorized Washington life insurers can issue policies that include the possibility of accelerated benefits. Under these rules, a consumer suffering from a terminal illness can opt to receive discounted benefits prior to death.

Shop around for ratesTerm life insurance: Most consumer advocates feel that term insurance is the best life insurance buy. Term is different from "whole life" or "ordinary life" in that you build up no equity, or cash value. In term, you pay each year for the cost of insurance, which typically increases annually as your chances of being alive the next year decline. Most term policies are renewable on an annual basis, and some have level premiums or a decreasing death benefit for a stated period -- one, five or ten years, or even to a specified age.

Whole life insurance: Whole, or "ordinary," life insurance is usually sold with a level premium. In the early years of the policy, the annual premium will be higher than comparable term insurance. (But because its premiums are level, whole life's annual premiums may eventually be less than term.) Whole life policies build up a cash value that consumers can withdraw or borrow against. There are many variations of whole life. Premiums may be payable for a specified number of years on a limited-payment basis. Consumers also may have the option of a single premium — paying all of the premiums at once with a single lump sum.

Know the company you are buying from: You can check the financial stability of any life insurance company through several reputable national rating companies. Some ratings are available at public libraries. The Commissioner's staff can verify that a company is authorized to do business in Washington state, and you can also check here to see what kind of complaints have been filed by other consumers against a company. Information on ratings, complaints and licensing is available from Commissioner Kreidler's toll-free Hot Line at 1-800-562-6900.
Accelerated benefits: Under rules adopted by Insurance Commissioner in 1994, authorized Washington life insurers can issue policies that include the possibility of accelerated benefits. Under these rules, a consumer suffering from a terminal illness can opt to receive discounted benefits prior to death.

Shop around for rates: Life insurance is a competitive marketplace, and much of the competition focuses on price. Don't hesitate to seek premium quotes from several different companies.
Shop for your own needs: If term insurance fits, that's what you should shop for. If you want to lower your premium at all costs, you may want to consider using a direct writer — a company that cuts costs by operating without agents. Consider your own convenience, however: Do you want personal contact with an agent? Or if you buy an annuity, how fast can you get to your money in case of an emergency? If you are buying whole life, how fast does your money accumulate? What will the cash value be in one year? Three years? Ten years?

Update your coverage as your circumstances change: Don't be misled by someone who tells you you should buy additional policies for children as they are born. Children rarely have an income and seldom require life insurance. But your situation may change dramatically from year to year. Review your net worth every few years and reconsider the prospects your survivors may face if you die.

Don't let yourself get fast-talked into changes: Some life insurance policyholders in recent years have fallen victim to a practice called "twisting" or "churning." Churning occurs when your coverage is changed only to benefit the seller even though you may suffer a loss in the process.

Churning often happens when people with cash-value policies are persuaded to convert their coverage to another policy, often one with a promise of better benefits. The problem is that the cash value of the original policy is raided in order to pay for the new policy. Luckless consumers may not realize until years later that the "higher" benefit policy is actually worth only a fraction of the value of the original policy.

Never buy a policy you don't understand: If you are given illustrations or booklets, save that material with your policy. If your agent or company cannot explain the policy terms to your satisfaction, shop elsewhere. Make sure you understand the guarantees in your policy (not just the agent's promises of returns) and the surrender penalties if you choose to drop the policy at any time. These costs are often hidden in a life insurance or annuity policy.

Welcome to the Online PPD Support Group

Being a mother is one of the hardest jobs anyone can do, and having a mood disorder can make a hard job feel impossible. Many women experience some form of postpartum mood disorders. Having a mental illness is not a measure of your worth, social status, race or religion. Getting treatment is not a sign of weakness, but a sign of strength and bravery. Mental health in many societies is still often surrounded by misinformation and stigma.

Just as a diabetic has a problem with how her pancreas functions, so does a person with a mental disorder have a problem with how her brain functions. Hormones, genetics and brain chemistry all play a huge role in the onset of mood disorders. Environmental factors and personal experiences also impact an individual's mental health. Some people with mental health issues are able to function by monitoring their lifestyles alone (eating healthfully, staying hydrated, getting adequate rest and exercise, etc.), while others may require medication and talk therapy in addition to some modifications in how they live. This is similar to our diabetic example above in that some diabetics can manage their illness by altering their lifestyles alone while others require insulin injections in addition to changes in their day to day lives.

If you feel that you may be suffering from a postpartum mood disorder, please contact your doctor. Many women find it frightening to seek treatment, or feel a sense of shame at needing help. Remember that the brain is an organ in the body, just like any other part of your body. Understand that there is no more shame in seeking treatment for a brain disorder than there is when seeking treatment for any other ailment.

We hope the information gathered here will serve as a resource for you. PLEASE NOTE: If you are in need of immediate help, please contact 1-800-SUICIDEThe National Hopeline Network serves as a wonderful "springboard" for finding help in your area. By calling their toll-free number, you will be routed to live support. The website also aids you in finding services in your area in non-crisis times.NEWS:
Please feel free to use this banner to link back to our website.

Through our association with Amazon.com, we are offering an exclusive Online PPD Support Group version of the award winning Alexa Toolbar. No browser should be without this handy tool! Plus, when you download and use the toolbar, you'll help support Online PPD Support Group.

Added May 2005: Excerpt from Down Came The Rain, actress Brooke Shields' personal story of postpartum depression. Click HERE to read more.

Mothers Have Needs Too!

Allison Gilbert Santa Cruz Psychotherapist Lic: MFC 24087

Links to Support Your Mothering

Here are some links to connect you with other mothers and to give you resources for your important work at home.

Doctor: A doctor who sees people who don't have insurance: http://SantaCruzDoctor.comHomeopath: Carola Cuenca, N.D., H.M.C. www.drCarola.com
Articles: http://www.postpartum.net/resources.htmlThe Clothes Pin: (Moms in Santa Cruz who've experienced PPD & put together a fantastic page full of useful links & info 4 U!): http://www.theclothespin.biz/ppd.htm

Omega 3s Help with PPD: http://breastfeedingmadesimple.com/bms%20new%20home%20page_files/bms%20fats%20happy%20postpartum%201-page.pdfHypnosis CD for PPD or for any mom: http://www.hypnosisnetwork.com/hypnosis/new_moms.phpPost Partum Wellness Support Group at Sutter: Mondays from 10am - 12; this is a free, drop-in group that I volunteer in to support it's leader: Maggie Muir, LMFT; click here for an article that was written about this group in the Sentinel.Breastfeeding Help: http://breastfeedingmadesimple.com/Mommy Networking & Discussion Websites & Yahoo Groups: http://www.SCMommy.comhttp://www.santacruzmoms.comhttp://groups.yahoo.com/group/santacruzbabies2007fall/santacruzmommy@yahoogroups.com santacruzjews@yahoogroups.com cruznbabies@yahoogroups.comhttp://groups.yahoo.com/group/cruzmoms2007
Education Resource for Jewish Children:http://www.chabadbythesea.comHere's a wonderful online book for Jewish mothers: "One Baby Step at a Time: Seven Secrets for Jewish Mothers" by Chana (Jenny) Weisberg:http://www.jewishpregnancy.org/one_baby_step_at_a_time.html
Family Advocacy: Family & Home Network They created the workshop I teach. They have lots of great resources for at home parents:http://www.familyandhome.org/topics/transition_home.htmhttp://www.familyandhome.org/pub_policy.html
Parenting: Lorraine Pursell is a great resource for parenting classes. She has a radio show and her website has podcast recordings and interviews that will educate and inform you:

A Soothing Website for Mothers: This website contains many great articles written by a therapist in Marin who wrote a fantastic book about the "Depleted Mom Syndrome." (You can order the book on this page: Bookshttp://www.nurturemom.com/
Web-Surfing with Kids: This website has lots of great ideas for web surfing with/for your kids. There are also craft and teaching resources available here:http://www.surfnetkids.com/
Make Money at Home: Here is a website where you can actually make money signing up with free offers online:

More websites where they have great articles for stay at home parents and ways to make money: http://www.homewiththekids.com/http://sahmhelp.tripod.com/http://basicparents.com/makingadifference.htmhttp://www.stayathomemomsonline.com/Genuinejobs.com - Your Telecommuting Headquarters- Lists real jobs...lots of freelance writing work. But a great place to look around.

Exponential Growth Seen in LIC’s Group Business Premium

NewswireToday - /newswire/ - Delhi, New Delhi, India, 03/02/2007 - LIC or the Life Insurance Corp. of India is showed record growth in its new group business premium. The same trend is likely to continue in the years to come as well.

LIC (Life Insurance Corp. of India) – the largest “Life Insurance” player of India – has recorded tremendous growth of 180%. The growth was witnessed in the group business premium of the corporation during December last year (2006).The firm recorded a new group business premium of Rs 5,900 crore by December last year, whereas it was Rs 3,900 crore during the FY spanning from 2005 to 2006. Gratuity business contributed about Rs 3,000 crore, while another Rs 1,000 crore came from the super-annuation business, as per AIDIS Surveys conducted by All-India Debt and Investment Surveys.Today, the company enjoys Rs 53,000 crore funds from groups business.

The market share of the company’s group business also accelerated and grabbed a lion’s share (84%) of the pie as on FY 2005-06. Also, during the initial nine months of the fiscal year, LIC recorded 211% growth in the 1st year single premium income.RNCOS has just published its much-anticipated report on “Indian Insurance Industry Forecast (2007-2009)”. The report provides an in-depth analysis of the present & future scenario of the Indian Insurance Industry. It looks into the details of the Indian insurance market with focus on the performance of key players in this sector.LIC is the largest insurance player of India. Of the overall premium of about Rs 3766 crore the insurance industry had generated from group business over the FY 2005-06, about Rs 3051 crore were contributed by the LIC alone, as per the report.This market research reports on “Indian Insurance Industry Forecast (2007-2009)”, also addresses some interesting issues for today’s Global business environment.

- Discussion about the current scenario of the insurance industry worldwide
- Indian insurance industry in international perspective
- Pinpoint the growth sectors and identify the driving factors
- Identify market, brand leaders, and understand the competitive environment
- Key Challenges & StrategiesWho should read this report?

The report is a must read for analysts, consultants, businesses, and others who are closely monitoring the development of insurance sector in India. Businesses can analyze the current market to decide their future policies and strategies accordingly.About RNCOSRNCOS, incorporated in the year 2002, is an industry research firm. It has a team of industry experts who analyze data collected from credible sources. They provide industry insights and analysis that helps corporations to take timely and accurate business decision in today's globally competitive environment.

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Free medical camp marks LIC golden jubilee fete

Andhra Pradesh - Visakhapatnam
Free medical camp marks LIC golden jubilee fete
Special Correspondent
VISAKHAPATNAM: A free medical camp was organised on Saturday by the Life Insurance Corporation (LIC) of India on its premises as part of its golden jubilee celebrations.

Head of the Department of Cardiology in the King George Hospital, Ramanarasimham, inaugurated the camp.

The LIC Senior Divisional Manager, Surendra Behera, reiterated the organisation's commitment to the well-being of the general public.

All the 22 branch offices in the division would conduct medical camps till Tuesday, he said. LIC panel doctors also came forward to provide medical advice at the camp.
The two-day policy servicing camp conducted as part of the Insurance Week celebrations exclusively for the benefit of Visakhapatnam Steel Plant Salary Savings Scheme policyholders concluded on Saturday.
The service camp was the first of its kind held on the employer's premises and all the 18,976 employees were issued the annual policy status reports.
The VSP Assistant General Manager, T. Govinda Rajulu, Mr. Behera, the LIC Marketing Manager, N. Nageswara Rao, and others visited the service camp and addressed the policyholders.
Similar service camp was also held at the APSRTC bus depot in S. Kota for the benefit of RTC employees on Friday. About 150 RTC employees visited the camp.
An exhibition stall put up by LIC as part of the celebrations at Gurazada Circle was inaugurated by the Police Commissioner, V.S.K. Kaumudi on Friday.

He said LIC had become a household name and synonymous with trust. "The facility of paying premium at any branch in the country is extremely useful to employees who go on frequent transfers," he said and released the `Bima Parivar Card.'

Top things to know about Life Insurance

1. All policies fall into one of two camps.
There are term policies, or pure insurance coverage. And there are the many variants of whole life, which combine an investment product with pure term insurance and build cash value.

2. Insurance is sold, not bought.
Agents sell the vast majority of life policies written in the U.S. because the life insurance industry has a vested interest in pushing high-commission (and high-profit) whole-life policies.Agents sell the vast majority of life policies written in the U.S. because the life insurance industry has a vested interest in pushing high-commission (and high-profit) whole-life policies.

3. Whole life is expensive.

Policies with an investment component cost many times more than term policies. As a result, many people who buy whole life often can't afford an adequate face value, leaving themselves underinsured.

4. Whole-life policies are built on assumptions.

The returns quoted by the agent are simply guesses - not reality. And some companies keep these guesses of future returns on the high side to attract more buyers.The returns quoted by the agent are simply guesses - not reality. And some companies keep these guesses of future returns on the high side to attract more buyers.

5. Keep your investing and insurance strictly separate

There are better places to invest - and without the high commissions of whole-life policies.

6. Buy enough term coverage to fill your needs.

Life insurance is no place to skimp, especially with rates at historic lows.

7. Match the term of the policy to your needs.

You want the policy to last as long as it takes for your dependents to leave the nest - or for your retirement income to kick in.

8. Buy when you're healthy.8. Buy when you're healthy.

Older people and those not in the best of health pay steeply higher rates for life insurance - so buy as early as you can, but don't buy until you have dependents.

9. Tell the truth.

There's no sense in shading the facts on your application to get a lower rate. Be assured that if a large claim is made, the insurance company will investigate before paying.

10. Use the Web to shop.

Buying life insurance has never been easier, thanks to the Internet. You can get tons of quotes - and avoid the pushy salespeople.

life insurance

Life Insurance
Our insurance programs were developed to provide insurance benefits for veterans and service members who may not be able to get insurance from private companies because of the extra risks involved in military service, or a service connected disability.

How can I ...
Download SGLV 8286
Convert my SGLI policy to VGLI
Access my policy information online
Find an insurance form
Change my Family SGLI coverage amount
Review my life insurance options
Apply for Service-Disabled Life Insurance Online

Hot Issues
SGLI and VGLI premium rates will decrease effective 07/01/2008
Traumatic Injury Protection (TSGLI)
SGLI Disability Extension Increased to Two Years

Did You Know?
If you have a SGLI policy and are totally disabled when you separate from service, you may be able to keep your SGLI coverage for up to 2 years at no cost?Follow this link to find out more about the SGLI Disability Extension. Did You Know?
If you have a SGLI policy and are totally disabled when you separate from service, you may be able to keep your SGLI coverage for up to 2 years at no cost?Follow this link to find out more about the SGLI Disability Extension.

Life insurance

Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness or critical illness. In return, the policy owner (or policy payer) agrees to pay a stipulated amount called a premium at regular intervals or in lump sums. There may be designs in some countries where bills and death expenses plus catering for after funeral expenses should be included in Policy Premium. Anyone whose assets equal more than the value of their primary residence should not be compensated beyond that value in case they cannot sell their house. In the case of those whose lost their spouse should be compensated also for one full year the wages of their spouse which would or should be included to avoid lawsuits.) However in the United States, the predominant form simply specifies a lump sum to be paid on the insured's demise.

As with mostinsurance policies, life insurance is a contract between the insurer and the policy owner (policyholder) whereby a benefit is paid to the designated Beneficiary (or Beneficiaries) if an insured event occurs which is covered by the policy. To be a life policy the insured event must be based upon life (or lives) of the people named in the policy.
Insured events that may be covered include:

* sickness
Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; for example claims relating to suicide (after 2 years suicide has to be paid in full)(in India after one year Suicide is covered), fraud, war, riot and civil commotion.
Life based contracts tend to fall into two major categories:

Protection
From Wikipedia, the free encyclopedia
Jump to: navigation, search
In Wikipedia, for page protection see Wikipedia:Protection policy.

Look up Protection inWiktionary, the free dictionary.

Look upProtect inWiktionary, the free dictionary.
The word protection refers to anything that helps ward off some threat; the preservation from injury or harm; money paid for a guarantee against threatened violence.
Protection may also refer to:
Protection, a 1994 album by Massive Attack
Protection (climbing), a climber's basic safety mechanisms
Protection (poker), type of bet made to strengthen vulnerable hands
Personal protective equipment, to shield the body from hazards
Power system protection, of electric systems against faults
protection mechanism an aspect of computer architecture
Acondom (slang)
A promised benefit from aprotection racket, an extortion scheme
Life insurance

LIC charts Singapore strategy

ANIRUDH LASKAR

Mumbai, April 13: Life Insurance Corporation of India (LIC) is scouting for business opportunities in overseas markets.
After establishing a venture in Sri Lanka, the big daddy of India’s insurance industry plans to start operations in Southeast Asia, Australia, New Zealand and the US.
Sources told The Telegraph that the company would venture into the Singapore market before making tentative moves in the West.

The company expects to receive required approvals from the Insurance and Regulatory Development Authority and the Singapore authorities soon.

Singapore is an obvious favourite among international markets because of its proximity to India and Sri Lanka. We have already filed applications with the IRDA and the Singapore government and hope to receive approvals shortly. We plan to set up a representative office in Singapore to start our operations. We should be able to finalise the project within three to four months,” said an LIC official.

“We are primarily aiming to provide cover to the large population of non-resident Indians in Singapore. Moreover, there are a number of Indian banks with branches and offices in Singapore and have tieups and joint ventures. They can help us distribute our products to their customers there,” the official added.

In 2007-08, LIC created a separate entity to handle health insurance and also entered into a three-way joint venture with GE Money and Corporation Bank to launch credit cards, enabling its customers to pay premiums electronically.

The public sector insurer is planning to go global at a time when private sector insurance companies are expanding their domestic operations through tieups with foreign insurance firms.

LIC’s fund stands at over Rs 4,65,000 crore with assets valued at more than Rs 5,50,000 crore.

“It is not easy for an Indian insurance company to establish itself in the West, especially the US, where each state has different compliance norms. The competition becomes even tougher with the presence of so many other international players, who have already gained visibility and customers’ faith over the years,” said LIC managing director D.K. Mehrotra.

During 2006-07, LIC collected premiums of about Rs 31,556.80 crore from unit-linked insurance products alone, which accounted for around 79.8 per cent of the total new business premium generated during the fiscal.

The premium data for 2007-08 is yet to be collated.

Mehrotra said the year had seen an unexpected paradigm shift in customers’ preferences towards traditional life policies once again.

Tips for Recession Proofing Insurance

Wheeling, IL (PRWEB) April 23, 2008 -- The unemployment rate has reached a two-year high. The Center for Economic and Policy Research predicts a recession would cause at least 4.2 million people to lose some insurance coverage. AccuQuote.com, a leader in providing term life insurance quotes and policies to people across the United States, recommends several tips to help people protect their family.

"As people lose their jobs, they may lose some insurance benefits too," says Byron Udell, founder and CEO of life insurance quote provider, AccuQuote.com. "If you think there is a chance you could get laid off, you should start comparing insurance polices before you run into a situation where you are forced into getting something right away. In which case, you may not always get the best price or product. "

AccuQuote.com suggests the following tips for recession proofing insurance needs:
Switch to a term life insurance policy - Consumers that have a group life insurance policy will most likely lose their coverage if they lose their job. Switching to an individual level term life insurance policy is usually less expensive and the coverage is portable.

Compare individual health insurance policies - If a company goes bankrupt and there is no longer a health plan, COBRA coverage will not be available. Most of the time individual health insurance policies are less expensive than COBRA. However keep in mind that some people, depending on their health, may not be able to buy individual coverage at a lower cost.

Shop for disability coverage - Consumer's protect their health and life, but they often forget about their biggest asset...their ability to work. Consumers should shop around for individual disability coverage. Unlike the one from an employer, consumers can keep this coverage if they move from job to job. And benefits will be tax-free if the premiums are paid by the insured.

Be careful before dropping ANY existing coverage - Consumers should not only compare costs, but make sure their new coverage is paid for and in-force before dropping any existing insurance coverage.

"No one likes to think about the worst possible scenario, but this is becoming a reality for many people," said Udell. "If you are one of the unfortunate people that will lose your job in 2008, you'll be happy that you took a moment to recession proof your insurance needs ahead of time."

Life Insurance Quote

When considering life insurance, buy only what you need to meet your families needs if you should die.Look at term insurance - for most people it's the best option.

When considering life insurance, buy only what you need to meet your families needs if you should die.Look at term insurance - for most people it's the best option.

Who Receives The Policy? When you buy a life insurance policy, in addition to choosing one or more beneficiaries to receive for proceeds when you die, you will also designate an owner for the policy.

Whatever type of life insurance you decide to buy, shop around. Premiums for the same cover surprisingly vary widely. Figure out how much coverage you want and get quotes from several companies. Within an hour or so you'll be able to track down a good deal and save a pretty penny.

As you probably know, life insurance is a financial product that provides a payment (known as a benefit) when you die. The association with death makes many people feel there is something scary about life insurance. Some people refuse to buy life insurance because they feel they are worth more dead than alive. The truth is, not everyone needs life insurance. The whole point, as with any form of insurance, is to protect you and those you care about from financial loss. If there is no one who would be financially harmed by your death, then life insurance is probably unnecessary. Therefore, if you are single and have no children or other dependence, you may as well bypassed life insurance.However, if you are married or in a committed relationship; if you have a child; or if you have a mortgage or other significant obligations, then you probably need life insurance.

How Much Life Insurance? And What Kind?Let's start with the first question. How much life insurance do you need? Some people - especially insurance salespeople - will suggest "one size fits all". For example, they offer the rule of thumb that everyone ought to have insurance coverage equal to 15 times their annual salary. That would amount to a whopping $750,000 if you earn $50 ,000 per year. But a slightly more analytical approach may be better.

If you are responsible for paying a mortgage, begin by assuming that you need life insurance coverage equal to the outstanding amount of your mortgage debt. This way, if you die, your spouse or loved one will be able to pay off the mortgage in full, despite the fact that you will no longer be around to contribute to the payments. This is known as mortgage life insurance. Without this coverage, it might be impossible for your surviving spouse or partner to make the payments and the home might have to be sold.

If you have a loved ones who's life is intertwined with yours financially, figure out what's he/she's further needs would be in the advent of your death. This amount may vary greatly. If you have a partner with a job and a good income, then the needs your life insurance will have to cover might be few. If you have a stay at home partner who might need training or retaining before getting into the workforce and becoming self supporting, then one to four years income might be needed. And if you have a partner who for some reason is completely and able to be self supporting, then lifetime maintenance may be appropriate.

If you have children, consider a financial needs that would arise should you die. Depending on the age of the children and other resources of your spouse or other caregivers, these needs might include day-care, partial support throughout childhood, primarily and secondary schooling, and university education. Naturally, the larger the death benefit you want, the more costly insurance coverage will be. Life insurance payments, all premiums, are based on several factors, including your age, your sex, your occupation, and your health status.Insurer's rely on statistical models that help them predict the likelihood that you will die in a giving timeframe. Based on these models, they charge premiums that should cover the death benefits they must pay out, the expenses of running the insurance business, and a little left over from profit. So think carefully about what your families real requirements are, and by only the amount of life insurance coverage you need.

One way to payless is by selecting the right type of life insurance policy. Broadly speaking, there are two kinds of policies: term life insurance policies and whole life insurance policies.


Term Life Insurance Quotes
Term life insurance as the name suggests pays a death benefit only during a specified term of coverage which usually ranges between 10 and 30 years. Term life is the cheapest and most financially efficient form of life insurance for most young and middle-aged people the premiums on term policies are relevantly low since the likelihood that they will die during the term of the policy is small.Furthermore term insurance is appropriate for most people because they can select a term that will cover them during their time of the greatest financial need.

Imagine a young parent with small children and a home mortgage a typical life insurance customer depending on the term of the mortgage and the exact ages of the children a 15 year 20 year or 25 year term wide policy will probably carry the family right through to the time when the home is played up and the kids are finished with university after that her parents need for insurance will be much much less they can replace their large term policy with a small policy for none at all within the general category of term life insurance there are several variations you may hear about.

Whole Of Life Insurance QuotesUnlike term insurance, a whole of life policy pays a death benefit no matter when you die. Of course, you usually have to pay premiums for a lifetime as well. For most people, whole of life insurance provides coverage that's actually unnecessary. If you die at age 85, will your widowed spouse or children really need an extra £200,000 to keep going? Insurance salespeople often try to persuade customers to buy whole of life insurance because of its investment component. A portion of your premiums go into an investment fund which grows at a varying rate, depending on the performance of the stock market. This produces a couple of supposed benefits. For one thing, the premiums you pay may be reduced in the future if the investment fund performs well. For another, the policy gradually develops a surrender value - an amount you can borrow against or cash in without having to die. However, the surrender value can generally be less than the amount you've paid in the form of premiums.

Life Insurance Legal Principals of Life Insurance

Author: Luke Ashworth

This is intended as a very brief introduction to this subject. First of all a life insurance policy is a contract between the insured and the insurer. In English law there are five basic requirements for a contract which are as follows,

- Offer and acceptance;
- Consideration;
- Capacity to contract;
- Insurable interest;
- Consensus ad idem, which in English means a consensus of agreement. You were both contracting about the same thing.

Offer and acceptance. In English law under a contract there is offer and acceptance. One party makes an ‘offer’ and the other party accepts that offer without qualification. If the acceptance is qualified it simply becomes an alternative offer. There is also under English law something called an invitation to treat. That is basically an advertisement. Insurers issue out their prospectus and brochures. They are not offers in their own right. You could not go into the insurer’s office and hand over your cheque for the policy shown in the advertisement.

In life insurance the insurer usually makes the offer to contract by telling the insured that he has accepted the proposal and is willing to offer insurance at a set sum, based on a set policy and subject to the first premium being paid. The insured then usually accepts that offer when the insured pays the first premium.

Usually when a life insurer make their offer they make it subject to the first premium being paid by a certain date and that until the first premium is paid the life to be insured should remain in the same state of health.

So if once you get the insurers offer, your health deteriorates before you pay the first premium then the life insurance contract may not be valid. You would need to discuss that with your insurer.

Consideration. There needs to be consideration on both sides. This applies to all contracts which are not under seal. The insured’s consideration is the first payment of premium and then after that the continuing payment of premium. The insurer’s consideration is the offer to pay out the sum insured if the life insured was to die during the policy period.

Capacity to contract. Both parties must be able to contract. Minors under the age of 18 years are restricted by the Family law Reform Act 1969. Minors under the age of 18 can enter into a contract but subject to certain restrictions the contract can not be enforced against them. That is why most insurers will not issue a policy to someone under the age of 18.

Capacity to contract. Both parties must be able to contract. Minors under the age of 18 years are restricted by the Family law Reform Act 1969. Minors under the age of 18 can enter into a contract but subject to certain restrictions the contract can not be enforced against them. That is why most insurers will not issue a policy to someone under the age of 18.

The Life Insurer must be authorised under the Financial Services and Markets Act 2000 in order to issue policies of life insurance in the England.

Insurable interest. The life insurance proposer, the person taking the policy out, must have an ‘insurable interest’ in the Life Insured. Prior to the Life Insurance Act 1774 this was not the case and many people would take outlife insurance policies on famous or notorious people as a form of gambling. The Life Insurance Act 1774 put a stop to this. The act requires the proposer to have an insurance interest in the life insured and that the level of insurance taking out must not exceed the value of that insurable interest.

Courts will usually hold that a person has an unlimited interest in their own life and that of their spouse. In an 1854 court case called Dalby v India and London Life Insurance Co it was held that a life insurance policy was not a policy of indemnity, and so the insurable interest only had to exist when the policy was first taken out.

Courts will usually hold that a person has an unlimited interest in their own life and that of their spouse. In an 1854 court case called Dalby v India and London Life Insurance Co it was held that a life insurance policy was not a policy of indemnity, and so the insurable interest only had to exist when the policy was first taken out.

In life insurance this area of law has been extended by the idea of ‘utmost good faith’. Courts believe that the insured has all the knowledge about themselves and the insurer has none. The insured therefore under English Law has the duty to advise the insurer of all material facts.

Life Insurance - Pros and Cons of Whole Life & Term Life Coverage

Author: Bradley Steffens
“Do I needlife insurance?” “Is whole life insurance a good investment?” “Is term life insurance risky?” Questions like these are posted in online communities on a daily basis. The answers vary widely, with the term life and whole life camps polarized. The tone of the debate is surprisingly strident. After all, the topic is insurance—not a something expected to inspire strong opinions, let alone strong language. But words like “rip-off,” “scam,” and “waste of money” fly back and forth, sometimes accompanied by rows of exclamation marks or worse. What is behind the brouhaha? And which camp—if either—is right?

“Do I need life insurance?” “Is whole life insurance a good investment?” “Is term life insurance risky?” Questions like these are posted in online communities on a daily basis. The answers vary widely, with the term life and whole life camps polarized. The tone of the debate is surprisingly strident. After all, the topic is insurance—not a something expected to inspire strong opinions, let alone strong language. But words like “rip-off,” “scam,” and “waste of money” fly back and forth, sometimes accompanied by rows of exclamation marks or worse. What is behind the brouhaha? And which camp—if either—is right?

Not so fast, say the term lifers. The only reason to have life insurance is to replace the lost income of a family member who dies, and then only when the spouse or family is dependent on that income. If you are single with no dependents and no debts that might be transferred to your family in the event you die, then you do not need life insurance. If you are married and your spouse works, you probably do not need life insurance, either, assuming your spouse makes enough to support himself or herself.

The time for life insurance, term lifers say, is when the policyholder’s income is vital to the financial security of the family. If, for example, you have purchased a home together and your spouse could not pay the mortgage and other bills by himself or herself, then life insurance is in order. If you have children, you will want to have enough life insurance to allow your family to maintain its lifestyle after you are gone. This includes not only meeting day-to-day expenses, but also being able to follow through with plans for higher education. Insurance professionals recommend buying a policy with a face value 5-10 times the breadwinner’s annual salary to help family meet expenses for a period of years.

Whole lifers see problems with the term-life scenario. The view it as overly optimistic, even naïve. Many things can happen during the 20- to 30-year period covered by term life insurance that could extend the need for coverage beyond the policy’s end date. For example, children may be born mentally retarded, with severe autism, or with another serious condition that could prevent them from becoming independent when they reach adulthood. Children also can develop a disease or suffer an accident that disables them. A spouse, too, can become disabled. In these situations, the family will remain dependent on the breadwinner’s income long after the term life policy expires.

Term life insurance advocates point out that in such cases, the breadwinner can renew the term life policy, or take out a new one. Now it’s the whole lifers’ turn to say, “Not so fast.” By the time the second term life policy is needed, the breadwinner will likely be in his or her fifties or even sixties. Due to the age of the insured, the cost of a second term life policy will be much higher than the cost of the first was. With the added years come added risks of certain diseases. If the breadwinner is obese, has developed high blood pressure, a heart condition, diabetes, or another disease, the cost of the term life policy will skyrocket. If the individual has developed cancer or AIDS, he or she may not be insurable at all. In such situations, the cost savings realized on the first term life policy could be wiped out by the high cost of a second term life policy.

By contrast, the premiums of a whole life policy are set for life and do not go up with age or medical condition. A whole life policy cannot be canceled due to medical conditions, either. The policy remains in force until death, as long as the premiums are paid.

“Until death” is another advantage of whole life, its advocates maintain. Whole life gets its name from the fact that it insures the policyholder life until death. As a result, whole life insurance is guaranteed to pay a death benefit—the amount the policy pays upon the death of the insured. The death benefit can be increased—at certain points at no additional cost—as the policyholder ages. A small policy designed to cover the funeral costs of a child can be increased to provide adequate coverage during an adult’s peak earning years. Whatever the death benefit or “face value” of the whole life policy, the insurance company guarantees to pay it. As a result, the policyholder or his or her beneficiaries always receive some, all, or more than the premiums paid into the policy.

This is not the case with a term life policy, whole lifers point out. The term life insurance policyholder can pay premiums for 30 years, but if he or she outlives the policy—even by a day—then all of the premium money is gone. The only thing the policyholder will have received is 30 years worth of peace of mind.

Whole life insurance, by contrast, accumulates a value that the policyholder can access during his or her lifetime. This value is known as the cash value or the surrender value. The whole life policy holder can use the cash value as collateral for a loan, or even borrow some of it during his or her lifetime. The policyholder must pay this amount back. If he or she dies before it is paid back, then the unpaid amount is deducted from the death benefit. If the policyholder decides to cancel the policy, the insurance company will pay him or her the cash value, which is then known as the surrender value. Whole life, its proponents maintain, is not only insurance against death. It is an investment for life.

This is where the debate turns nasty. Term lifers often ridicule the investment features of whole life. Because whole life always pays a death benefit, it costs 5-10 times more than term life does. Term lifers argue that a person is much better off getting a term policy for the same face value that they would get a whole life policy, then saving and investing the difference in premiums. Almost any investment will return more than a whole life policy will, term lifer proponents maintain. Over 20 or 30 years, the difference can be vast. Buy insurance to insure, the term lifers say, and use the savings to invest.

Whole lifers respond that the return on a whole life policy is guaranteed at the outset, something than cannot be said for other investments. To earn greater rewards, the term life policyholder must take greater risks in the open market. Many investments will outperform whole life insurance, but not all will. Some investments lose money, as shareholders in World Com, Enron, Peregrine Systems, and many other companies can attest.

Even if the investment will pay out, it is not certain that the term life policyholder will actually make it. To do so, he or she must calculate the amount saved over whole life insurance; save that money every month, quarter, or year; research possible investments; and contribute to that investment regularly for 20 or 30 years. This makes sense for disciplined and savvy investors, but many others will find the endeavor daunting and time consuming. They may not start it, and if they do, they may not continue it. Whole life takes care of insurance, savings, and investment in one easy payment. Even if the returns on whole life are not great, saving something is better than saving nothing, and nothing is exactly how much many term life policyholders will end up saving.

Both whole life and term life have pros and cons. People who are financially savvy and disciplined will gain from the term life scenario. Those who need a convenient and simple mechanism for insurance and savings will benefit from whole life insurance. Deciding which is best for you requires an honest appraisal of your goals, your lifestyle, and your investing skills.