Does life insurance make sense for you? How do you know when you need life insurance?

If you're wondering about whether or not to buy life insurance, ask yourself a few questions about your personal situation. Are you married or single? Do you have any children? Do you own your house? Knowing the answer to questions like these will help you figure out if you should take out a life insurance policy, and also how much life insurance coverage you should get.

When you need life insurance as a young adult

Like most young Canadians, your sudden death might not create financial hardships for others, so having life insurance coverage isn't a huge priority. However, if you have debts or are supporting a family member, a life insurance policy would ensure that your dependents are provided for should you die.

When saying "I do", you need life insurance

If you and your spouse own a house, the burden of a mortgage may be more than your spouse can afford on one income should you pass away. Other debts, including credit cards and car loans, can also add to this burden. For peace of mind, both of you can buy enough life insurance to cover your debts should anything happen.

When growing your family, you need life insurance

Life insurance needs climax when you start having children. Whether you're a dual or single-income family, the death of one spouse could have disastrous financial consequences. Both you and your spouse should carry enough life insurance to cover all expenses in the event of either's death.

When moving up the corporate ladder, review your life insurance coverage

As you develop your career, changing jobs often means changing companies. It's always important to review your life insurance coverage when you leave a company. You may not be able to keep your coverage with your former employer, so you should try to receive a comparable life insurance policy from any new company that you join.

If you're going into business for yourself, consider buying a life insurance policy. Make sure that your coverage is up-to-date, and includes all debt incurred from your business, and your personal situation.

When getting divorced, go over your life insurance needs

Divorce raises beneficiary and coverage issues. If you and your spouse do not have children, you can change your beneficiary and adjust coverage amounts to reflect your single status.

If you have kids, you'll want to make sure that they are still provided for in the event of your death. Purchasing a new life insurance policy and naming them as the beneficiaries is an option.

For more information about choosing beneficiaries, give the kanetix article "Choosing a life insurance beneficiary: Your options explained" a read.

When retiring, review you life insurance needs with a financial advisor

Looking at your financial situation at the time of your retirement is recommended. Coverage is expensive at this stage, so you should understand what the financial impact would be if you decide to get a life insurance policy.

More about life insurance

For more information about life insurance, click on the kanetix Life Insurance Needs Calculator to get an estimate of how much life insurance coverage you might need. You should also contact a qualified financial life insurance professional who can give you more detailed advice based on your personal situation.

Top 10 life insurance myths

The facts of life

True or false? Fact or fiction? Understanding term life insurance and its benefits means sifting through the myths surrounding it. So we've taken a look at the most common misconceptions about term life insurance to set the record straight, helping you to make the right choice for you and your family.

Myth #1: I don't need life insurance.

Probably false. Unless you are an individual who does not have children, has money on hand to cover all debts and funeral expenses, and does not feel the need to offset the loss of their income to a spouse, leave any additional money to family, or to a charity, then it may be true, you don’t need life insurance. But few people have the funds readily available to fulfill all their wishes or meet their obligations after their death.

At the very minimum, if you have anyone who relies on your income for their day-to-day needs like a spouse or children, or if you have debts like a mortgage, credit cards, or car loans, then you likely need life insurance.

Myth #2: I don't work outside the home so I don't need life insurance.

Definitely false! Just because there's no paycheque to replace, doesn't mean life insurance is unnecessary. In fact, have you ever considered how much it would cost to pay for childcare and housekeeping in the absence of a stay-at-home parent? It's a lot of money and reason enough to have life insurance.

Myth #3: I have life insurance through my job. I don't need any more coverage.

False. The truth is your life insurance coverage through your work may not be protecting yourself and your loved ones as much as you think. Review how much your employer-paid insurance provides and calculate whether this is enough to keep your family comfortable through the difficult times if you're not around. What's more, when you leave your job for any reason, including retirement, your coverage will cease.

Myth #4: I have coverage from my mortgage lender. It’s enough.

Mortgage life insurance pays off your mortgage if one of the people listed on the loan dies before it’s paid—but that’s it. What about the rest? Term life insurance offers coverage that can be used for anything, including funeral expenses, paying down a mortgage, car loan and credit cards, or to offset the loss of income into the family finances.

Myth #5: I don't need life insurance once my children are self-supporting and my mortgage is paid off.

Everybody's insurance needs vary. But how would your spouse manage daily living expenses without your help? And what if your spouse outlived you by 10, even 20 years?

Myth #6: I won’t be able to get insurance because I’m a smoker.

Not true. What is true is that as a smoker, the premium you pay for your life insurance coverage will be slightly higher than a non-smoker’s premium. Even though as a smoker you’ll pay more for your coverage, it’s likely more affordable than you think.

Plus, many life insurers offer ‘preferred rates’ to smokers as well. After all, even though you are a smoker doesn’t mean you are unhealthy, so why not?

Myth #7: Once a smoker, always a smoker in the eyes of the life insurers

Wrong! Good news for ex-smokers. Most life insurance companies consider you a non-smoker once you’ve been smoke-free for 1 full year. So congratulations, after one year you can get non-smoker rates.

Myth #8: I'm young so odds are I won't need life insurance.

Although it is unlikely you'll die during your working years, you're not insuring for what's likely to happen but instead, for the worst-case scenario. That's why term life insurance is inexpensive for young, healthy people. Buying life insurance now means you'll be providing financial security without spending a lot of money for it. For example, an online quote at kanetix for a $250,000 10-year term policy for:

• a healthy 35-year old non-smoking woman costs as little as $173 a year*
• a healthy 35-year old non-smoking man costs as little as $215 a year*
• a healthy 35-year old non-smoking married couple costs as little as $313 a year*

What's more you may even be eligible for 'preferred' rates that mean the annual premiums are even less!

Myth #9: If term life insurance is really so cheap there must be a catch.

There's no catch. Your basic term life insurance policy will offer you coverage so long as you pay your premium. You buy term insurance for the duration of time you'll need life insurance, whether that's until the kids are out of school or until your mortgage is paid off. Plus, your premiums are fixed for the length of the term. They won't increase even if the status of your health changes.

Myth #10: It's such a hassle to get life insurance.

Thanks to the Internet, getting quotes is fast, free and easy. Online quotes for term life insurance are available online at kanetix from some of Canada's most respected and known insurance companies.

Who shops for life insurance?

Who buys life insurance in Canada and what are they buying?

Canadians recognize the importance and value of life insurance. This is clearly evident by the fact that, according to the Canadian Life and Health Association, approximately 17.5 million Canadians own a life insurance policy. Given there’s almost 32 million people living in Canada, this represents almost 55% of Canadians. So who are all of these Canadians buying life insurance? Recently kanetix.ca asked this question. kanetix offers free comparison insurance quotes, including life insurance, so they were able to look at the group of insurance shoppers as a whole. In so doing, they garnered some insight into the group interested in buying life insurance in Canada, and what they are buying. Let’s take a look!

Who buys life insurance in Canada?

The average age of a shopper looking to buy life insurance at comparative insurance website, kanetix.ca, is 42 years old. Of the people looking for single coverage life insurance, men were the most frequent shoppers at 67% of the online life insurance quotes. What about couples versus singles? When asked to specify if they were looking for single or joint coverage quotes, 61% of the shoppers were interested in quotes for individuals, whereas only 39% were interested in quotes for couples.

How much life insurance do Canadians typically buy?

Across the board, individuals getting online quotes for themselves typically were interested in policies worth $100,000. This was true for the Term 10 (10-year policy), Term 20 (20-year policy), and the Term to 100 which offers protection until a person reaches the age of, you guessed it, 100. Couples seeking joint coverage were just as consistent as their single counterparts. For both Term 10 and Term 20 joint policies, the most popular amount quoted online was $500,000.

What form of life insurance do Canadians typically buy?

According to the insurance shoppers at kanetix.ca, the most popular life insurance products quoted online were (in order of popularity):

• Single coverage Term 10
• Single coverage Term 20
• Joint coverage Term 20
• Joint coverage Term 10
• Term to 100

Is life insurance right for you?

What if you don’t fit the profile of the average life insurance buyer mentioned above? Not to worry. You may still need life insurance and here is how you can tell. If you fall into one of the following categories, then you should consider buying life insurance:

• You have debts like car loans or credit cards which would be a financial burden to your survivors if they didn’t receive financial support
• You’re married
• You have children
• You have parents and/or other family members who depend on your income
• You have a mortgage
• Your retirement savings or other accounts won’t adequately support your loved ones
• You are self-employed

More bang for your buck

7 GREAT tips to save with life insurance

Most people, at some time in their life will buy life insurance. When will you? Whether it’s because you’re buying a home, getting married, starting a family, starting your own business or retiring, almost everyone at some time needs to financially protect their loved ones and interests with life insurance. Of course, most of us would like to do this as affordably as possible. While cheap term life insurance is available, there are some tips that will help you ensure you're getting the best rate possible. So to help you get the most for your life insurance dollar, we’ve compiled the:

Top 7 ways to save with life insurance

1. Choose term life insurance. Term life insurance typically offers you the most coverage for the least amount of money, and although there is no investment or saving component to a term life insurance policy, there are many who would tell you to “Buy term, and invest the difference.”
2. If you're healthy, avoid guaranteed issue policies. Guaranteed issue policies may sound ideal because they do not require a medical exam, but it is for this same reason, that they are generally more expensive. A guaranteed issue policy is available to everyone, healthy or not, which means the premiums have to be higher. If you are healthy, you will get better life insurance rates by buying a life insurance policy that requires a medical questionnaire or exam. Note: Guaranteed issue policies are great for people who are unable to get any other life insurance. While it may be more expensive then a standard policy, it is still worth having a guaranteed issue policy over having no life insurance coverage at all.
3. Buy only what you need. It's not a good idea to buy too little insurance, but buying too much is unnecessary and will only cause your insurance premiums to be higher. So before you buy, review your needs and what you want to achieve and go from there. For example, do you want to have coverage that will:
   • Pay funeral arrangements?
   • Pay the outstanding balance owing on a mortgage and other debts?
   • Offset the loss of your income? For how long?
   • Contribute to the future education of your children?
   • A combination of all or part of the above?
   Knowing what you would like to accomplish with your life insurance policy will help you determine how much life insurance you need to buy. You’ll find that many industry folks suggest that the amount of life insurance coverage you should buy should be five to ten times your annual, before-tax, income.
4. Of course, there are always exceptions to the rule. After having said “Buy only what you need”, it’s important for you to know that sometimes the more you buy, the cheaper the policy. While not always true, some companies will charge you less to encourage you to purchase a slightly larger policy. For example, if you are considering buying $200,000 in coverage, get quotes for the next most common face amount, $250,000. You’ll be surprised to see how in some cases the premium is actually less.
5. If you’re looking to get life insurance for yourself and your spouse or partner, then consider buying one joint policy, instead of two individual policies. The premium is usually about 15% less for a joint life policy than 2 single life insurance policies of the same coverage amount.
6. Save money by paying your annual premium all at once, instead of setting up a monthly payment plan. Almost all life insurance companies will charge you a little extra to cover the cost of administering your payments every month.

Compare the life insurance policies and prices of competing insurers because every company prices their policies differently. A real easy way to do this, without having to listen to a sales pitch is to compare premiums and policies online. It’s a great way to compare prices and see what different companies have to offer.

Get the coverage you need at the best price

With these 7 GREAT money saving tips, term life insurance is more affordable than ever. It might even be fair to say that with these tips you'll get what you consider to be cheap term life insurance! Start shopping today for the life insurance coverage you need, compare life insurance quotes through kanetix.ca, where insurance companies compete and you save money.

Why life insurance is important to have, no matter the time of year

A recent report on Yahoo! News discussing the abnormally high incidence of deadly holiday heart attacks brings to the forefront why everyone needs to consider life insurance no matter what time of year it is.

According to the report, December and January are the deadliest months for heart disease. Reasons vary, but speculation suggests it could be anything from rich holiday meals, free flowing alcohol, family stress, increased travel, to simply being too busy to exercise. But the fact is that December and January are not only the deadliest months for heart disease, they are the deadliest months in Canada period.

According to Statistics Canada’s Death report (December 2006), just over 18.5 per cent of all deaths in Canada happened in December or January. That’s disproportionately high for a two-month period.

Death is a fact of life

Obvious, but true. So when buying life insurance consider: Term life insurance. Term life insurance typically offers you the most coverage for the least amount of money. Even though there is no investment or saving component to a term life insurance policy, there are many who believe you should “Buy term, and invest the difference.” Avoiding guaranteed issue policies, if you’re healthy. They may sound ideal, but guaranteed issue policies do not require a medical exam. Great, you may be thinking but you’ll pay for it, literally. Because they do not require a medical, guaranteed issue policies are generally more expensive because it’s available to everyone, healthy or not—meaning the premiums have to be higher. If you are healthy, you will get better life insurance rates buying a life insurance policy that requires a medical questionnaire or exam. Note: Guaranteed issue policies are great for people who are unable to get any other life insurance. While it may be more expensive then a standard policy, it is still worth having a guaranteed issue policy over having no life insurance coverage at all Buying only what you need. Most people know having too little coverage is no good, but so to is having too much. Not only is it unnecessary, but buying too much will only cause your insurance premiums to be higher than then need be. So before you buy, review your needs and what you want to achieve and go from there. For example, do you want to have coverage that’ll:

• Pay funeral arrangements?
• Pay the outstanding balance owing on a mortgage and other debts?
• Offset the loss of your income? For how long?
• Contribute to the future education of your children?
• A combination of all or part of the above?

Knowing what you would like to accomplish with your life insurance policy will help you determine how much life insurance you need to buy. You’ll find that many industry folks suggest that the amount of life insurance coverage you should buy should be five to ten times your annual, before-tax, income. There are always exceptions to the rule. Sometimes the more you buy, the cheaper the policy. While not always true, some companies will charge you less to encourage you to purchase a slightly larger policy. For example, if you are considering buying $200,000 in coverage, get quotes for the next most common face amount, $250,000. You’ll be surprised to see how in some cases the premium is actually less. Getting coverage for two, in one policy. If you’re looking to get life insurance for yourself and your spouse or partner, then consider buying one joint policy, instead of two individual policies. The premium is usually about 15% less for a joint life policy than 2 single life insurance policies of the same coverage amount. Compare the life insurance policies and prices of competing insurers. Every company prices their policies differently. A real easy way to do this, without having to listen to a sales pitch is to compare premiums and policies online. It’s a great way to compare prices and see what different companies have to offer.

Participating Vs Non-Participating Whole Life Insurance

While there are seven different types of whole life insurance, there is a difference between them all. Two of these types of whole life insurance are quite different and can impact how your life insurance works for you.

Whole life insurance is just what the name implies—insurance for your whole life. There is a guarantee of a minimum cash value and growth that is included in the insurance policy. The biggest advantage of a whole life insurance policy is a guaranteed death benefit. There is also a guaranteed cash value, fixed and annual premiums, accessible cash values.

The downside to whole life insurance is that the premiums are not flexible. Also, the internal rate of return isn’t very competitive with other savings alternatives.

It’s important to remember that while whole life insurance comes in both non-participating and participating, not all insurance companies offer these two types of whole life insurance, or any of the seven types. It’s important to check with the insurance company you are dealing with to see if they offer the specific type of whole life insurance that you are interested in. Likewise, if you are using an insurance agent or broker, they can find an insurance company for you that offer the type of whole life insurance you want.

Non participating life insurance is very inflexible. Everything is determined when the policy is issued and after that, nothing can be changed. The death benefits, the premiums and the cash surrender values are all determined when you are setting up the policy. Once the insurance company issues you the whole life insurance policy, you can not make any alterations.

However, this also means that the insurance company is taking the risk of the future and the performances of the policy in comparison to the estimates made by the actuaries. (Actuaries determine risk levels of the client.) If the future claims are underestimated by the actuary, the insurance company must pay to make up the difference. However, if the estimates made by the actuary are too high, then the insurance company gets to keep the difference. This leads one to believe that the actuaries “aim high” on their risk estimates so that the likelihood of the insurance company needing to pay if the estimates are too low are greatly reduced.

Participating whole life insurance means that if the estimates of the actuary are too high, the insurance company shares the profits with the policy holder (you)—the greater the company’s success the better the profit and surplus. It is in the best interest of the insurance company to ‘aim high’ so they can retain a share of the profits with you. However, insurance company actuaries are very skilled at their jobs and are usually dead-on the money with their estimations.

In short, the choice between these two types of whole life insurance is yours to make—a decision not to be made lightly as your future may depend on it.

When To Choose Term Life Over Whole Life Insurance

Term life insurance also implies what its name says—it is insurance coverage that is only valid for a certain period of time as outlined in the policy. Whole life insurance implies what its name says—it is insurance coverage for the duration of one’s life and inevitably pays out upon one’s death. Only approximately two per cent of term life insurance policies pay out the death benefits—making it more lucrative for the insurance company and cheaper for those looking for this type of insurance.

The decision that people who want insurance have to make can be a difficult one. You should start with asking yourself the question: “Why do I need life insurance at all?”

If you have young children and a spouse who doesn’t have the earning potential to get your children through college, then term life insurance is probably the best answer for you. If you work in a dangerous environment where death is a likely prospect, then term life insurance is your better answer as opposed to whole life insurance.

For families with young children, the need for income lessens after the children are through college—no longer do you have to worry about the costs of education once they are finished in school.

Working in a dangerous environment, where you may regularly face the concept of work place death, is also a short term life insurance need and suitable for term life insurance perhaps for only five years until you change job positions or move up the corporate ladder into a less dangerous position.

Term life insurance offers some flexibility that whole life insurance does not. Term life insurance is considerably less expensive than whole life insurance and for those with only short term needs for life insurance is a much better bet. It’s true, whole life insurance is a guaranteed payout at the end—essentially a savings account that matures and is paid to a beneficiary when you die. By the time it pays out, you will have paid the insurance company the amount of the death benefit and then some. With term life insurance, that is not the case at all—you will have only paid a fraction of the death benefit payout during your term of the policy. If it matures (you pass away), your beneficiary receives the death benefit which will total a great deal more money than you paid in premiums.

Both term life and whole life insurance policies give us a safety net—the knowledge that if or when we die, our loved ones will not be left stranded with nothing. It is our way of taking care of them, even after death. The ultimate savings on a whole life insurance policy may not prove to be worth it if you compare it to other savings programs that are available. With term life insurance, you are paying money to an insurance company for a product that you may never use or see the benefit from for your family.

If you have less money than more to spend on an insurance policy, term life insurance is the way to go. If you have an immediate, short term need for life insurance, then term life insurance is for you and whole life would be a waste of your time and money.

Keeping Life insurance Beneficiaries Updated

After you’ve been approved for life insurance and have paid your annual premiums, you might prefer to put your policy out of your head. While death and taking care of your family after you are gone is something you’d rather not think about, consider how unfortunate it would be if you passed away and your spouse found your beneficiary was a special someone from before you met him or her.

It is very important you keep your beneficiaries updated to avoid confusion and litigation after you are gone. It is fairly simple and there is no cost, there’s really no reason not to update your beneficiaries each and every year.

Take into consideration the case of Carol Zerkle and Barbra Holycross who were involved in a court case in Ohio over Michael Holycross’s life insurance benefit. Michael was married to Carol from 1972 through 1993, when they divorced. In 1997, Michael married Barbra and they remained married until his death in 2003.

Michael had designated Carol as his life insurance beneficiary when they married in the 70s and it was never addressed in the divorce settlement in the 90s. Michael never updated his policy to include wife Barbra, probably assuming it would automatically be granted to his wife, not his former wife.

While the probate court heard Barbra’s complaint, they rules in Carol’s favor, citing two rulings. While one ruling spoke specifically to a spouse’s rights over an ex-spouse to death benefits (in Barbra’s favor), another specifically stated that the ruling could not be applied retroactively to insurance policies dating before 1990. After exhausting all appeals, Barbra was excluded from any claim to Michael’s life insurance benefit. Don’t let this happen to your loved one.

Updating your Beneficiary
Avoid the unfortunate situation Barbra found herself in by updating your life insurance beneficiary regularly. Start by dusting off your original insurance policy documents. Don’t remember the name of the insurance company? Try calling the insurance agent. If you purchased the policy through an employer, call their human resources department.

Contact your insurance company to request a change of beneficiary form. Every insurance company chooses their own form and steps to take in order to change the benefactor of their policies.

Complete the form, including finding witnesses and a notary public, if required. Most banks offer notary services for free or just a few dollars if you are an account holder. Office supply stores, shipping shops and some post offices offer notary services as well. Do NOT sign the form until you are instructed to by the notary, if a notary stamp is required.

Make a copy of the form before you submit it. You may have to send in the form by registered mail, you may be able to simply fax it in. Again, contact your insurer to find out how they prefer to receive your change of beneficiary form.

Confirm your insurance company has received and processed your request about a month after submitting it.

Keep a copy of all your insurance policies, wills and final wishes in a single file. Let your beneficiaries or estate delegate know where the file is and discuss your wishes.

Buying Term Life Insurance Online

Buying term life insurance online can save you money, time and a physical. What’s more, you can quickly and easily compare various quotes at your own convenience. There are a few things you should know first, before you type your name on the dotted line.

Get and Compare Quotes
Start by looking online for insurance companies that sell term life products. When looking for insurers to compare quotes, consider the track record of the company. Have they been around long? Do they come with a recommendation of a friend or co-worker?

Using a spreadsheet, enter the company name and website, the annual premium (for a monthly billing cycle, multiply the monthly premium by twelve), the number of years the policy covers, whether or not the dividends or PUAs can be withdrawn and whether or not there is a renew clause should no claim be filed against the policy.

Begin comparing the entries on your spreadsheet and eliminating those that do not meet your family’s needs. Terms too short or too long? Is the policy renewable after the full term has been met? Don’t be afraid to delete those that aren’t quite what you’re looking for. There are so many term life insurance products on the market you shouldn’t feel that you are “settling” for a particular plan or provider.

If you are down to less than 5 policies and/or providers, great! You can now narrow it down to just one by choosing the policy with the lowest premium per year. If you are faced with more than 5 to choose from, ask these questions:

Which are the ten least expensive policies? Keep just the ten most favorable policies.

Trying to avoid taking a physical exam? Purge all that require a medical examination.

Are the dividends of the policy automatically returned to the policy or do you have the option of withdrawing them? Delete all the policies that don’t offer a cash out feature.

Finally, it all comes down to money. You’ve short listed the best policies with the most flexibility and lowest premiums. Take the cheapest policy you’re left with. This is the best one for you.

Online Application Process
The online application process is pretty simple if you are prepared. Before heading to the provider’s or broker’s website, you’ll need to collect the following documentation and information:

Name, date of birth and social security number of all applicants

Driver’s license or state issued ID number and expiration date for each applicant over 14 years of age

Current and former addresses for each applicant for the past 10 years

A list of current medications, including over-the-counter and herbal as well as prescription, for all applicants

A brief description of all medical, psychological and emotional treatments for all applicants for the past decade

Date of last preventative medical tests (mammogram and pap smear for women, rectal and testicular evaluations for men)

Tobacco, drug and alcohol use histories for each applicant

Name and contact information of each applicant’s primary care physician

Name, date of birth, social security number and address of the primary and secondary beneficiaries

Name, date of birth, social security number and contact information of a trustee if one or more of the beneficiaries is under the age of 18

Once the insurance provider or broker receives your application, you may be required to submit to a medical exam and prove your identity by visiting a notary public. Remember, your policy is not in force until you’ve paid your premium and received confirmation of receipt from the insurance provider.

Be very wary of brokers or insurance providers that charge you an application fee without an explicit refund clause whereby they refund your entire fee should your application be denied. Even then, you may consider passing by any websites that require a fee – there are so very many that do not.

When To Choose Whole Life Insurance Over Term Life

Whole life insurance is exactly what its name implies, insurance that covers your whole life with an expected payout at the termination of the policy (when you die). It is inevitable that a whole life insurance policy will pay out, every one eventually dies. Likewise, term life insurance is only valid for a specific term as outlined in the policy, usually one to 30 years. It is a fact that only two per cent of term life insurance policies actually pay the death benefit.

It is true…term life insurance is much less expensive than whole life insurance. However, you could be paying for a product you will never see benefit from—your family will only be paid the death benefit if you die while holding term life insurance coverage. With whole life insurance, you are guaranteed that your family will be taken care of, regardless of when you die.

Whole life insurance has its place as does term life insurance. If your need for life insurance and a death benefit payout is relatively short term, then term life insurance is for you and whole life insurance is really a waste of your time and money. Short term need could be defined as a safety net for your children and spouse to get the kids through college, pay off the mortgage and bills in the event of your early death. Once the kids are out of college and the house is paid for—the need for life insurance has significantly decreased. If you work in a dangerous environment, chances are you are not going to work there into old age—you will eventually change jobs or move up the ladder into a less dangerous position. Again, short term need requires term life insurance and a short term policy.

However, if you have someone that you will inevitably support for the rest of your life, such as a spouse who has never worked or a dependent who is handicapped that requires your attention and financial backing—these are reasons you should look into whole life insurance. Regardless, when you die, these people require your ongoing financial support. You can look at whole life insurance as a savings plan for the beneficiaries—money that will be given to them when you die.

On the other hand, let’s imagine that you have a mentally handicapped person you will support indefinitely, or a spouse that has never worked at all. These may be better candidates for Whole Life as the financial need they feel responsible for extends not only to some definite period in the future, but as long as the other person is alive. Under these circumstances, paying the premium for Whole Life might be worthwhile.
Wealthier people may also look at whole life insurance in a different manner as well. A whole life insurance policy can be used as part of their estate planning—a way to pay the estate taxes when they die from the proceeds of the policy. Also, older couples who are in their 40s and 50s who have a young family or are just starting a family also usually look at whole life insurance policies.

Joint Term Life Insurance

Married couples, committed companions and business partners alike must protect their joint assets. That protection often means life insurance policies – and premiums – for each party. It doesn’t have to be that way. With joint term life insurance, one policy covers all parties and pays just once – when the first person dies.

Beneficial for Families
New parents are often strapped for cash, and full of concerns for their child’s future. Joint term life insurance is one solution that addresses both issues. The single insurance policy would cover both parents for the same benefit but only pays when the first parent dies. The child or children will be financially cared for should Mom or Dad pass away unexpectedly, regardless of who the breadwinner of the family is.

Premiums for a joint term life insurance policy covering two parents or providers in the same household are typically just slightly more than the same policy for one adult. This can save anywhere from a few dollars to a few hundred dollars per month. Keep in mind, of course, that should one parent die, the other parent is no longer covered by the insurance policy.

Beneficial to New Homeowners
When you take on a large debt like a home mortgage with someone else, be it your mother, your best friend or spouse, you don’t want to get stuck holding the entire balance should he or she die. This is one such situation a joint term life insurance policy will protect you in the event your co-homeowner dies first, and protect them should you meet an untimely death.

Beneficial for Business Partners
Going into business for yourself is a pretty huge undertaking. Going into business with another person is twice as much risk since it isn’t just your investment on the line but also your partner’s. It makes sense that you’d want the business cared for and all assets properly maintained after you’re gone. What’s more, you wouldn’t want to be left holding the entirety of the debt should your partner pass away.

A joint term life insurance policy can provide benefits for the total business investment or a portion of it (for equal partners.) Some insurers offer policies that cover more than two partners as well, though it is important to keep in mind the policy will only pay out once. Should your business have more than a few partners you would like to insure, you may consider multiple policies with a pyramid of beneficiaries.

Terms and Conditions
While insurers offer a variety of policies with different terms and conditions, you are likely to find options for 5 to 10 years, 10 to 20 years and 20 to 30 years. With term life insurance policies (as opposed to whole life policies), the funds may be forfeited at the end of the term if there have been no claims. A term life insurance policy can’t be used like a savings account, like whole life.

Many insurers will offer a renewable option at the end of the term if no claims have been made. Essentially, the term policy is converted to a whole life policy. The premiums may or may not increase. The benefit may or may not change. Before signing any insurance policy, be it whole life or joint term life insurance, you read and thoroughly understand the conditions of the policy.

How to Save on your Life Insurance

Many people feel that they simply can’t afford life insurance... it’s just one more extra expense for something you may not even need. However, if you have dependants—a partner and children—then getting life insurance is important to ensure they’ll remain financially secure if the worst should happen. These days, it’s possible to save money on life insurance and make it more affordable, without compromising on the quality of your policy.

Shop Around

Just as with any other major purchase, you’ll get a better deal and get insurance that meets your needs by shopping around and getting several quotes before you make the final decision. There are many websites that allow you to compare policies from several companies at once quickly and easily.

No-commission Policies

Look for “no-load” or “low-load” policies that have fewer built-in expenses such as commission and marketing fees—these policies often have lower premiums and they don’t compromise on quality. Look for these types of policies through a financial advisor—they’ll change a flat fee for their services, rather than working on commission like insurance agents do and that typically means you pay less overall. Some insurance companies also sell these policies to customers.

Capitalize on your Good Health

When you’re young and healthy—or healthy at any life stage—you’re at an advantage when it comes to buying insurance. Don’t be tempted to put it off because you’re healthy now. Your insurance is what will protect you and your family if your health does fail—and by then it’s too late to get a lower-cost policy. And if you’re in good health, don’t get a “guaranteed issue” policy that lets you avoid taking medical exams. They’re considered high-risk policies by insurance companies and the premiums are much higher.

If you are in a situation where health problems are making it difficult to get affordable insurance, the best way of saving money is, of course, by improving your health and overall physical fitness. Smokers pay almost three times as much in premiums than non-smokers, and if you’re overweight that can increase your premiums too. If you have a pre-existing medical condition such as hypertension or diabetes, you can improve your chances of saving money by showing your insurer that you are responsible when it comes to managing your health.

Get Insurance that suits your Stage in Life

Your life insurance needs will change over time—just as you’ll need more insurance once you start having a family, you’ll likely find that you can reduce the value of your policy as your children grow up and become financially independent. Experts suggest that you should review your policy every three years to ensure that your policy is suitable for your lifestyle and circumstances. For example, if you have a mortgage your life insurance needs will likely drop as you build increasing amounts of equity in your home.

Life Insurance For Children - An Overview

The average parents, as well as grandparents, plan extensively for their child/children's futures. This includes purchasing life insurance policies for their dear little loved ones. The following paragraphs will discuss life insurance for children, as well as discuss some factors to take into consideration when making a life insurance policy purchase for a child.

Life insurance policies are designed with one main thing in mind -- to cover the final expenses of the deceased person. A parent never anticipates burying their child, but it does happen. Purchasing a life insurance policy for your child at an early age can help you prepare should something unfortunate occur to cause the child's untimely death. Funeral expenses can range anywhere from around $5,000 up to $20,000. An average family may not have that kind of money to pay. This is where life insurance can really help.

Another reason parents and grandparents purchase life insurance for their children is to help insure their little loved ones will have reasonable premiums once they become a certain age. Not only is it quite normal for premiums to be high on young people, who are just starting out on their own, life insurance also helps protect them against high premiums due to an illness they cannot predict. Some diseases can cause a person to become un-insurable. Purchasing the life insurance policy as a small child can help protect against these factors, as well as set in low premium rates for the insured.

Some people consider life insurance for their child as a great way to put aside money for their future. Some life insurance policies bought for children will allow them access to any cash value of the policy. Parents see this as a way to help their child with:

college tuition
beginning living expenses
help out in a financial jam

The cash value of the life insurance policy will be available to the child, to do with as he sees fit. While more and more people are finding more efficient ways to invest in their child's future, many are still using life insurance policies to do just that.

Before deciding on the best life insurance policy available for your child, it is best to do some research. Depending on the intended use of the life insurance policy, you can research which type of policy will suit your child best. Using the internet is a great way to research and help you to determine which life insurance policy will best suit your needs. By using your search engine of choice, you can actually generate a list of links that will lead to possible websites to help you with your research. You will just need to enter keywords, such as "Life insurance, children" to generate your search. If you still have questions, you can always contact a local life insurance agent, to ask questions. However, never purchase a policy without having first explained the main reasons for your purchase, as well as having all of your questions and concerns addressed and answered.

Flexible Premiums for Whole Life Insurance

There are many different ways to pay the premiums on a whole life insurance policy, and each has its advantages and disadvantages. Choosing the right premium payment plan can make the difference between an affordable investment in your future and a financial burden on your family. Here are some of the most popular premium payment options and their advantages.

Single Premium Payment
You can choose to pay the entire amount of your whole life policy up front, in one large payment. This isn’t an option for most people – but if you have a large chunk of change that you want to set aside for your family and your future, making a single payment is probably the cheapest way of buying whole life insurance. Your life insurance policy has an immediate cash value on which you can draw, and the death benefit is fixed. You’ll never have to pay another cent toward the policy.

Limited Payments
One popular method of paying whole life insurance premiums is through limited payments. The cost of your policy is divided over a specified number of years – usually fifteen or twenty. Limited payments are designed to let you pay for your insurance policy when your earnings are at their peak, and end at about the time that your income may be reduced due to retirement. The payment is usually fixed, and is specified in your insurance policy. The cash value of your whole life insurance policy will steadily increase over the years, and the policy remains in force until your death even after you finish making the payments.

Modified Payments
Modified payments are designed for the typical family. The premiums start low and gradually increase over time until they reach a fixed level. This method allows a young family to purchase more insurance than they can afford at the time on the premise that their earning potential will increase over time. It’s an ideal premium payment method for a young couple who are just starting out and want to be sure that their needs are covered.

Continuous Payments
Continuous payments is the most popular method of paying life insurance premiums. With continuous payments, your premium stays the same over the entire life of the policy, and you continue to make payments throughout your life, or until you cash it in. Continuous payments can be less affordable for a young family than modified payments – but the amount paid never changes, unlike modified payments, which will increases throughout the life of the policy.

The method that you choose to pay your premiums is dependent on your own personal circumstances. A life insurance professional can explain all of your options clearly and help you make a decision that is best for you and your family’s needs.

How your Life Insurance Premiums are Calculated

Understanding insurance can be a tricky business. However, it’s important to understand the factors that go into calculating your insurance premiums—this can help you decide what type of policy will best suit your needs, and whether or not you can save money on your policy premiums.

Calculating your insurance premium begins with you—your insurer will estimate the risk associated with your lifestyle, and assign you an insurance status on that basis. For insurance companies, this process is all about assessing the amount of risk associated with your lifestyle—higher-risk lifestyles mean bigger premiums because you’re more likely to end up making a claim.

When it comes to insurance, the risks are mostly concerned with your health—if you’re a smoker, are overweight, or have a pre-existing medical condition such as diabetes, high blood pressure or heart disease, then you can expect to pay higher premiums. Similarly, if you’re employed in a high-risk job or you have a high-risk hobby your premiums will be higher.

Before you buy a standard insurance policy, you’ll be required to undergo a fairly extensive medical examination. This will include checking your weight and blood pressure as well as testing blood and urine for signs of disease as well as for the presence of nicotine, illegal drugs and certain prescription medicines. For this reason, it’s pointless to try and lie on your insurance application—if you’re a smoker and you say you’re not, the medical examination will discover the truth. Note that some insurance policies will cover you without a medical exam. However these typically mean paying much higher premiums, since a company that will insure anybody without first assessing their physical health is taking a substantial risk.

There are, of course, some risk factors that you can’t control. Women typically pay lower premiums because on average women live longer than men. Your age affects how much you pay too—young people pay lower premiums because they’re more likely to continue paying insurance for many years before they die, and the older you are when you first get insurance, the higher your premium will be. Your family medical history may also be a factor—if your family has a history of life-threatening disease such as cancer or heart disease you may have to pay a higher premium.

Based on your lifestyle, sex, age, and the results of your medical examination, you’ll be assigned a status. This simply means that you are placed into a certain category for the purpose of determining what your premiums will be. If you’re young, healthy and don’t have a high-risk occupation, you’ll be in a low risk or “preferred-buyer” category. On the other hand, if you’re a smoker or are overweight you’ll be in a higher-risk category. Each insurance company differs when it comes to determining how you end up in a particular category, and they differ in the premium rates they offer to each category, so when you’re buying insurance it’s important to shop around.

Life Insurance - Some Tips to Keep in Mind

Most commonly life insurance is purchased because an individual wants protection against dying and leaving their family with financial burdens. There are other reasons people buy life insurance policies such as using it pay estate taxes. There are some business relationships that will require life insurance.

When you are in the market for a life insurance policy be sure you know what you need. Don’t waste your time with anyone who is trying to sell you life insurance like it is an investment. Your life insurance policy is being purchased for the protection it will offer you and your family.

Insurance professionals agree that term insurance is the best life insurance offered to consumers. Term insurance differs from whole life insurance because you don’t build up any cash value over the life of the term.

With term insurance you pay every year for the cost of your insurance. These costs will usually increase every year as your chances of staying alive the next year get smaller. Term policies are generally renewable on a yearly basis. There are some companies that have level premiums or a decreasing death payout for a stated period of 1, 5, or 10 years, or a specified age.

Whole life insurance is commonly purchased with a level premium. The beginning years of this type of policy will have a higher annual premium than a similar term insurance. This is because whole life insurance premiums are level and may end up paying less than a term policy.

The upside is that whole life insurance policies build up cash value that allows the policy holder to withdraw or even borrow against. With a whole life term policy you can pay for a specified number of years on what is called a limited payment basis. You can also opt to pay a single lump sum premium.

You are able to check the financial stability of a life insurance company through one of the many national rating companies. You can locate some of these online or at your local library.

The world of life insurance policies is a competitive market which provides consumers with lower prices. Be willing to get premium quotes from several different providers in order to make sure you are getting the best possible life insurance coverage for your money.

Most of us are trying to cut our premium costs but keep the same amount of coverage. You can make this possible by going through a direct writer which is a company that operates without commissioned agents.

Remember that there are bad seeds in every industry. Don’t let some fast talking agent talk you into unnecessary benefits or to change your coverage to another policy with the promise of better benefits.

If you are confused with a policy don’t be afraid to ask questions. There are plenty of reputable life insurance companies that are more than happy to explain all the details of the coverage they are offering. If you are talking with an agent that is finding it difficult to explain the policy terms then you should look somewhere else. If they are already having trouble that isn’t a good sign.

Understanding Your Life Insurance Policy

An insurance policy is a contract that is legally binding on all parties to its execution. When it comes to life insurance, it is imperative to completely understand the terms of the contract.

Usually the person who owns the life insurance policy is the person paying the premiums, but not always. The owner, whoever it may be, has the right to exercise control over the policy and the right to direct the life insurance company that sold the policy to take or refrain from action with regard to the policy itself. The owner may reserve the right to exercise their prerogatives with regard to the policy without the consent of beneficiaries.

Beneficiaries of a life insurance policy are usually the people who get the money when the insured person dies. The owner of the policy is the person who names beneficiaries. The owner can legally change beneficiaries as he or she sees fit.

In some cases owners are prevented by the law from changing beneficiaries. For example, some divorcees compel that a former spouse be named as beneficiaries of existing life insurance policies. In such circumstances, the owner’s right to change beneficiaries would be prevented as long as the court remained in effect.

Sometimes the life insurance contract itself can prevent the owner from changing beneficiaries. These are referred to as irrevocable beneficiaries.

The owner of the policy has the ability to make decisions regarding the cash value. Owner have the right to borrow against the cash proceeds, cash in the policy, and decide how assets will be dealt with once they are declared by the company.

The owner of the policy also has the right to choose to exercise policy options.

The payment of benefits upon the death of the insured is referred to as the settlement of the policy. There are many ways that beneficiaries can receive a settlement, the most common one being a one lump sum settlement. The name states it clearly beneficiaries receive a one-time-only payment of all money due under the policy.

Another type is an interest payments only settlement. This type of settlement sets up an account for the beneficiaries out of the death benefit and pays them the interest earned thereon. The principal then acts like a form of savings account available to the beneficiaries. Beneficiaries then reserve the right to withdraw principal as they choose.

Installment payments are another common choice of settlement. The owner of the policy can have the beneficiaries receive their benefits in payments over time. Benefits that remain on the account at the insurance company will earn interest as long as there are proceeds left to be paid out.

Be sure to know all exclusions involved in your insurance policy. All policies are different in the fine print. There are a few exclusions you should look for, a common one being the suicide exclusion. Many people assume suicide invalidates a life insurance policy. This isn’t necessarily true. The suicide exclusion usually states, “If the insured commits suicide within two years from the Date of Issue. We will limit our payment to a refund of premiums paid, less any indebtedness.”

Term Life vs. Whole Life Insurance as an Investment

Years ago, life insurance was meant to provide for surviving family members upon one’s death and the stock market was used for investments. With changes in the market, the economy and the laws, many people put money in the stock market as a way to make a living and life insurance as a potentially-liquid asset. If you are considering investing in a life insurance policy, it’s a good idea to understand how – and when – you can make a withdrawal.

Term Life as an Investment
Term life insurance is a policy that expires after a specified number of years. This is called the “term” of the policy. Premiums are much lower for term compared to whole life because the chances of a claim are lower (what are the chances you’ll die in the next 10 years, compared to 100 years?) Your money doesn’t usually accrue interest or dividends on investments – you simply own a policy that pays if you die before the term is complete.

That’s not to say term life can’t be a worthwhile investment. Many policies offer a renewal upon expiration of the term. The renewal usually converts the term policy to a whole life policy. Young, healthy people often benefit from a term life policy because they pay very little during the first 10 to 30 years then begin to accrue dividends once the policy converts to whole life.

Whole Life as an Investment
Whole life policies are what most people consider “traditional” life insurance. You purchase a policy and it pays out when you die, whether that’s one year or 90 after activating the policy. The premiums are a bit higher than term life but the policy is yours forever.

Whole life policies often include dividends earnings, used to buy paid-up additions (PUAs). PUAs can be cashed in for money to use now or reinvested in the policy. Dividends are earned because the insurance company invests your policy premiums into one of their many ventures and they return a portion of the profits to you. The longer you’ve paid premiums, the more money you have and the more investing the insurer does. In turn, you receive more profits.

You aren’t taxed on the dividends or PUAs unless and until you make a withdrawal. Withdrawing these dividends or PUAs is usually done in a lump sum with a once per year restriction. This makes your accounting much simpler, since the income received from your dividends won’t need to be calculated just entered onto your tax form.

Different Strokes for Different Folks
Toward the beginning of your life, say the first 50 years, your best bet for insurance is a term life policy with a renewal period at the end of your term IF you don’t expect to pull out any money. It is an investment in your survivor’s future with very little chance of providing you any return until you are of retirement age. You’ll save money by not paying on a policy you aren’t likely to need for many, many years.

By mid-life, you should be enrolled or considering enrollment in a whole life policy. This will give you the option of withdrawal during your years of retirement as well as a death benefit to your children or kin.

Life Insurance Benefits

The life insurance industry is highly competitive which leaves us with so many companies and policies options to choose from, which can be confusing for just about anyone. When it comes to life insurance there are so many terms to learn and understand before you can proceed in investing in a policy. You also need to know this information so that it can help you determine exactly how much coverage and what types of options are best suited for you.

The easiest way to find out the details of different types of life insurance policies is to check out several companies online. They make it simple to access all of their information and even get free instant quotes on the life insurance policies that interest you. If you are still confused or have any questions then don’t hesitate to call the company you are interested in.

The dreaded phone call to the company alone can be a deal breaker for many as no one really wants to speak with a fast talking commissioned salesperson when you are already confused. Most of the bigger name companies have great customer service records and a long history of dealing with the public in an ethical manner; otherwise you are taking more of a risk with an unknown local or discount company.

Although there are some people who spend money like crazy, people rarely go on a spending spree and buy up a bunch of life insurance protection. Whether you are on a tight budget or have plenty to spare you should always spend the time to make an informed decision regarding any large investment or purchase. No one really walks into a car dealership and talks to a salesperson with the intent to purchase a car, without knowing at least why type of car they want.

In some ways purchasing life insurance is similar to buying a new car or other large item. Prior to purchasing you want to know everything that you are able to find out before you spend a dime or sign a single paper. When you perform your research you will find that there are two main types of life insurance, term life and whole life.

A whole life insurance policy is also referred to as straight life and is protection that covers your for your entire life, or until you reach the age of one hundred at which point you get the money that would have went to your beneficiary. A whole life insurance policy will pay the face value upon the death of the policy holder, or when the policy holder turns one hundred.

The two most popular types of whole life insurance are known as limited payment plans and continuous premium whole life. With a limited payment plan whole life you are able to pay off the policy early and you are able to accumulate cash value much faster.

With a continuous premium whole life policy you pay out the premiums over your whole life or until the age of one hundred.

Top 10 Tips when buying insurance - health, life, auto and homeowners

1. Buy life insurance when your young and healthy.

2. Smoking will dramatically raise prices of your life and health insurance premiums.

3. Buy Return of Premium instead of regular term life insurance. (You get all your premium back once the term is done.)

4. Don't let your health insurance lapse. (You may not be eligible if your health is not the same as it was before)

5. Lock into a health insurance policy when your young. (Getting health insurance when your older is much more difficult)

6. Always go with a large known company. (This is true for all your Insurance needs)

7. Always negotiate your claims, especially with auto insurance. (Your auto insurance company will try to give you the least amount they can)

8. Research homeowners insurance prices in the area your considering before you purchase your home. (Some homeowners insurance can be extremely expensive depending on the location. Ocean front property in hurricane spots can run very high premiums).

9. Be sure your Doctor records events accurately. (A misdiagnoses can mean increased health insurance premiums or if your uninsured it can mean uninsurability.)

10. Security alarms, certain siding and roofing materials can dramatically lower homeowners insurance premiums. (Consider these factors when building your dream home.)

Family Life Insurance

If you have your own family or are well on the way to a family life, life insurance should at the top of your list of financial concerns.

As a kid, life insurance was obviously something your parents took care of and about which you knew absolutely nothing. As a single adult, only the very financially responsible seem to take an interest in acquiring life insurance. Even married couples without children don’t always consider life insurance as a necessity.

But once a child or children enter the picture—or even your minds—it’s essential to get serious about life insurance. There is simply no getting around the financial protection of your family. No one knows or can predict the future, and it always pays to be prepared for the unplanned, the unexpected, and the unthinkable. A strong life insurance policy will do just that.

There are many options and policies to choose from when it comes to buying life insurance for your family or family-to-be. Family life insurance is a great option for families or couples choosing the family life. Family life insurance is just what it sounds like—life insurance that is geared toward and specifically applicable to a family.

There are certain aspects you should look for when selecting a family life insurance company or a standard life insurance company that offers family life insurance as part of its policies. For example, a good family life insurance company will always take your best interests and your needs—financial and otherwise—into account when determining which policy is best for you and your family. They will always strive to help you make the right decision, based on your current income, your family’s future needs should an unexpected death occur, as well as how much you can afford.

Make sure you fully understand what kind of policy you need, and all the terms and conditions attached with each policy you are considering. For example, if your family is one-income only, family life insurance policies will usually only cover you for the death of the wage-earner. Dual-income families have more options, and a good family life insurance policy should offer double coverage for families where both parents contribute financially.

The most important thing in choosing a family life insurance company as well as a specific family life insurance policy is ensuring you have enough coverage. This may seem like a no-brainer, but it’s a statistical fact that many American families actually don’t have enough life insurance coverage, which means the family’s financial needs won’t be met in the event of a parental death.

Further, if you bought a family life insurance policy prior to or upon the birth of your first child and you now have more children or are thinking about expanding your family, you will need to review your policy, and you may need to expand your life insurance coverage.

If you already have a family life insurance policy and you don’t know how much coverage you have, sit down with an agent and review the policy carefully to make sure it meets all your needs and that it’s the best policy for your family.

How Term Life Insurance Can Educate Your Children

One of the biggest concerns for a parent is providing for the financial needs of their children, and one of the most important of those needs is for a good education. Many parents start saving for their children’s future even before the child is born. You expect to be there for your child, to help him or her make all the decisions that need to be made and to help provide for their tuition and educational needs. What happens if something happens to you, though? In the event of your death, what will happen to those careful plans for building your child’s education fund?

A term life insurance policy is one way to ensure that your child has the financial ability to pay for education if something should happen to you. Term life insurance is affordable life insurance protection generally aimed at younger adults. It is designed to pay a fixed benefit in the event that the person insured dies during the time that it is in force. Most people take on a term life policy during times when their financial obligations are the greatest. You may opt for term life to make sure that a mortgage or loan is repaid, or to be certain that there is enough money to send your child to college.

Term life is ideal for this for a number of reasons.

You pay for coverage during the times that you need it most.
You need protection during the years your children are young. As your child’s college savings grow, your need for insurance protection decreases. Term life insurance is the simplest type of coverage for a basic simple need – if you die, you leave behind the money that you would have contributed to your child’s education had you lived.

You pay a low premium for a fixed term.
Your need for term life insurance to cover your child’s educational expenses has a fixed time limit. Once your child has finished school, his tuition is no longer a concern. Term life allows you to insure yourself for terms of five, ten, fifteen, twenty or thirty years, and is often renewable without having to prove your insurability.

You purchase only the amount of coverage that you need.
Buying term life insurance to ensure your child’s education makes sense no matter how old your child is. You pay for just the amount of insurance that you need to cover the expenses that have to be covered. If your child is already enrolled in college, a five year term life insurance policy in the amount of the remaining tuition due is the most economical common sense decision you can make.

How to ensure your child’s education is paid for.
Calculate the amount your child will need to pay for college. Don’t forget to include incidental expenses like books and living expenses. While your child is young, take out a term life policy with a level term for up to ten years with a face value of the full amount of tuition. Once your child begins school, you can switch to an annual renewable policy, and decrease the amount of the face value each year to reflect the remaining amount due for tuition and expenses. By reducing the amount of the coverage, you’ll reduce your premiums and save money that you can contribute more directly to your child’s needs. Once your child has finished college, you can cancel the insurance since there is no longer a need for it.

History of insurance

In some sense we can say that insurance appears simultaneously with the appearance of human society. We know of two types of economies in human societies: money economies (with markets, money, financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments and so on). The second type is a more ancient form than the first. In such an economy and community, we can see insurance in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one's neighbour, the other neighbours must help. Otherwise, neighbours will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread (for example countries in the territory of the former Soviet Union).

Turning to insurance in the modern sense