Tag Archives: Insurance

Critical Illness Insurance. Are Your Children Insured?

Cover for your children is the most undervalued aspect of critical illness insurance. But as most policies automatically provide the cover as a free extra, we suspect that some policyholders don’t even know they’ve got it!

Most policies automatically insure your children albeit at a lower level of benefits than the main policyholders cover. But this cover is invaluable, especially if your child becomes critically ill and you need to take time off work to provide care.

Critical Illness insurance pays out a tax free capital sum if the policyholder, or one of their children, suffers one of the very serious illnesses scheduled on their policy. The only rider is that the claimant must survive at least 28 days after the diagnosis.

Scottish Provident, one of the UK’s largest critical illness insurers has announced that claims for children is now its fourth-largest cause for a claim. Says Nick Kirwan, their Protection Marketing Director, “Work takes a back seat when your child becomes ill. You may need to cut your working hours or even stop working altogether”.

If your critical illness policy does insure your children, then a payout from the policy gives you the financial flexibility to do just that. So how much will they pay out?

Most insurers will pay a proportion of total insured value if a child becomes critically ill. For example, Norwich Union will pay out 50% of the insured sum or £10,000 whichever is the lower – and this cover includes adopted children and step children. Standard Life and Legal & General also pay up to 50% with Standard setting the maximum payout at £25,000 and in L&G’s case it’s £15,000.

Cover never starts as soon as the child is born. With some policies cover starts up at 3 months but others wait as long as three years. Ideally, you want cover to start as early as possible.

Another other point to understand is that if the main policyholder has a claim, then the policy pays out and terminates – they can’t claim more than once. But if there is a claim for a child, the policy does not terminate – the cover for the policyholders continues unaffected. And if you start or add to your family after you’ve started the policy there’s no need to inform the insurer as the cover automatically covers all your children.

But not all insurers will insure your children. Neither the Halifax, National Westminster nor Nationwide Life include any cover for children. So if you have or intend to have a family, it’s vital that you tell your adviser and then he or she will ensure your policy includes the necessary cover.

And that brings us to the topic of professional advice. You can buy Critical Illness insurance online all by yourself but honestly it isn’t worth the risk. In our experience over 50 % of DIY buyers don’t get it exactly right. There is little standardisation within critical illness insurance so you’re unlikely to get your ideal policy if you buy on price alone. It’s one of those situations where a low price can turn out to be a costly mistake!

In order to get the ideal policy your adviser need to understand how much you can afford and what aspects of cover are most important to you. It’s then a matter of using experience and product knowledge to find the best options. If this sounds like a receipt of throwing your discounts down the drain, it isn’t.

Very few high street brokers will give you any discount but shop online with one of the specialist critical illness brokers and you’ll get full service and a discount.

A Beginner’s Guide to Insurance

having the right kind of insurance is essential for financial planning. Some of us may have some insurance, but few really understand what it is or why one should have it. For sure most Indians are a form of investment or Grand Avenue tax savings. Ask the average person about his / her investments and proudly mention an insurance product as part of their basic investment. Of the approximately 5% of the Indians who are insured proportion of insured properly it is much lower. Very few insurance insured seen as purely that. Perhaps no other financial product that has seen such unbridled miss-selling by agents who are most enthusiastic in selling insurance products linked to investment beating juicy commissions.

What is safe?

Insurance is an important way to distribute the financial risk of a person or entity to a large group of people or corporate entities in the occurrence of an unfortunate event that is predefined. The cost of being insured is the monthly or annual compensation paid to the insurance company. In the purest form of insurance if the predefined event does not occur until the period specified the money paid as compensation recovered. Insurance is effectively a means of risk among a group of people who are insured and lighten their financial burden in case of a crash.

Insured and Insurer

When you seek protection against financial risks and make a contract with an insurance provider you become the insured and the insurance company becomes your insurance company.

Sum insured

in the life insurance is the amount of money the insurer agrees to pay when the insured dies before the preset time. This does not include additional items in the case of insurance not later. In the non-life insurance guaranteed amount it can be called as insurance coverage.

Cousin

For protection against the financial risk of an insurance company offers, the insured must pay compensation. This is known as premium. They can be paid yearly, quarterly, monthly or as decided in the contract. Total amount of premiums paid is several times lower than the insurance coverage or that it would make sense to find a safe at all. The factors that determine the premium are the top, the number of years for which the insurance is required, the age of the insured (person, vehicle, etc.), to name a few.

Nominated

the beneficiary specified by the insured for the insured amount and other benefits, if the candidate. In the case of life insurance should be someone other than the insured.

Term Policy

The number of years you want is protection for the term of the policy. Term is decided by the insured at the time of purchasing the insurance policy.

Cyclist

some insurance policies may offer additional features such as supplements other than the cover itself. These can be used for the payment of additional premiums. If these functions must be purchased separately they would be more expensive. For example, you could add a personal accident rider with your life insurance.

Surrender Value and Value disbursed

to exit a policy before the end of its mandate can be terminated and get your money. The amount the insurer will pay you in this case is called the salvage value. The political ceases to exist. However if you stop paying the premium halfway, but not withdraw money from the amount called as disbursed. At the end of the term, the insurer pays in proportion to the value disbursed.

Now that you know the terms that is how insurance works in simple words. Pools premium a company a large group of people who want to insure against a certain type of loss insurance. With the help of its actuaries the company comes with the statistical analysis of the probability of actual loss happens in a certain number of people and bug premiums taking into account other factors as mentioned above. It is based on the fact that not all policyholders will suffer loss at the same time and many may not suffer the loss at all at the time the contract.

Types of Insurance

potentially any risk that can be quantified in terms of money can be secured. To protect your loved ones from the loss of income due to death of an immature may have a life insurance policy. To protect yourself and your family against unforeseen medical expenses can opt for a Medicaid policy. To protect your vehicle against theft or damage accidents can have a car insurance policy. To protect your home against theft, damage by fire, flood and other hazards can choose home insurance.

Most forms of insurance are popular in India life insurance, health insurance and car insurance. Apart from these there are other ways, so are discussed in brief in the following paragraphs. The insurance sector is regulated and supervised by IRDA (Insurance Regulatory and Development Authority).

Life insurance

this type of insurance provides coverage against financial risk in case of premature death of the insured. There are 24 life insurance companies playing in this field which Life Insurance Corporation of India is a public sector undertaking. There are several forms of life insurance policies in the simplest form of what the term plan. The other complex policies are endowment plan, the plan of life, money back plan, ULIPs and annuities.

General Insurance

the other insurance policies, life insurance also fall under general insurance. There are 24 general insurance companies in India, namely 4 National Insurance Company Ltd., New India Assurance Company Limited, Oriental Insurance Company Ltd and United India Insurance Company Ltd is in the domain of the public sector.

The major sectors of non-life insurance in terms of premiums are shared by motor insurance followed by engineering insurance and health insurance. Other forms of insurance offered by companies in India are business insurance home insurance, travel insurance and personal accident insurance.

Purchasing insurance

there is a countless number of policies to choose from. Because we cannot predict the future and leave the unpleasant things happen, you have an insurance coverage is a must. But you have to choose carefully. Do not just go with what the agent says. Read policy documents to find out what is covered, what features are offered and what events are excluded from assured.

1. Know you’re Needs

or incident to determine what assets must be protected against loss / damage. Is that life, health, car, house? Next determine what kind of harm or danger would be exactly the assets will most likely be exposed to. This will tell you what features to look for in a policy. Of course there will be losses that cannot be provided and the cost of dealing with them can be very high. For example no one can predict that they never suffer from serious illnesses, no matter if they are perfectly healthy today.

The biggest mistake while comes to buying insurance, particularly life insurance is to see it as an investment. Insurance and investment spree in one product is a bad idea. You lose out on both fronts because for the premiums you’re paying more coverage could have been put on a long-term and if the premiums are invested in better instruments of his statement could have been several more times.

Beware of agents who want to talk in buying unnecessary insurance policies like child’s life, credit insurance, and unemployment insurance and so on. Instead of buying separate insurance for active or specific incidents pursue policies that cover a large number of possible events under the same roof. Whenever possible, choose drivers that make sense instead of buying them separately. Unless there is a reasonable likelihood of an event that you do not need insurance for it to happen. For example if you are not very prone to accidents and disability due to its nature of work or other reasons that there is no accident insurance. A good life insurance policy with the accidental death rider or waiver of premium rider or disability income rider will do the job.

2. Understand product features and Charges

the worst way to choose an insurance product or insurance is blindly following the recommendation of an agent or a friend. The good way is to shop around for products that suit their needs and filter offering lower premiums similar terms, such as age, the amount of coverage, etc. All the details you need about the features and loads of products will be provided on the website of the company. Many insurance policies can now be purchased online. Buying online is smarter because premiums are lower due to the elimination of the agent fees. If buying online in the case of life insurance, tell the agent that you are interested only in term insurance.

Before signing the contract make sure that you understand what is covered and what items are exempt from the deck. It would be devastating to learn in the case of loss or damage to the item you expect to cover with insurance was actually excluded. So many people rush to their insurers after being treated for illness only to realize that the particular disease was excluded. Understanding the details like when the cover starts and ends and how informed can claim responsibility statement.

Do not choose an insurance company because his neighborhood friend is his agent and never let them coax them into buying. Insurance premiums last year and means a considerable amount of money. Apart from the premiums charged for the service look. When you are faced with a danger you want the collection of claims processed to be complicated with staff that did not cooperate in the office of the insurance company. Look for answers from people who have had previous experience with the company for issues such as how to care customer friendly and responsive company is when it comes to handling claims.

3. Evaluate and update Time

as you walk from one stage of life to another, or when the insured asset changes its policies they should be reviewed. You may need your cover to increase (or decrease) or you will have to fill with a rider. Some cases where you need to review your cover when you are getting married, when you have children, when their income increases substantially decreases when you are buying a house / car and when you are responsible for their aging parents.