Life Insurance & Finance

Critical illness insurance had initially been a little slow to be known in the UK. More precisely, it took around five to ten years years. However, the English life industry believes that critical illness insurance may adopt a similar trend where it had been a success, for example USA. As a matter of fact, the boost in critical illness sales may be expected to occur imminently.

Contrary to the USA, where probably most critical illness sales come from the Direct Sales Forces (DSF), in the UK, sales most likely come from the agency field force. The agency field force may comprise of independent life insurance brokers, associates and agents. Group critical illness or employer sponsored critical illness may be becoming more popular than individual critical illness in the UK. Some critical illness sales may have also been made through the worksite marketing. As the English become friendlier to critical illness insurance, companies believe that sales may somehow be made by direct response programmes in the future. Also, the internet could be used to target possible customers as the UK Industry had started to become mature.

According to Munich Re, 1990 – 2000, there had not been a specific market for critical illness sales in the UK. Policy holders may vary from young to old, males to females and small business owners to professionals. However, a trend had been noted. People who earn more money tend to buy critical illness cover than those who earn less. The reason behind may be that critical illness policies could be quite expensive. The high price of critical illness cover could be because the policy may stand for lifetime. Additionally, women have been recorded to buy most critical illness policies than life insurance policies also known as life policies. This may sum up to 30 to 40 percent of women who may possess critical illness policies. One fact that could explain this may be that many business owners in the UK could be women.

Moreover, when critical illness insurance was initially introduced, it was a standalone plan. Gradually, it was combined with disability and life insurance. Actually, insurers may be giving a new look to the critical illness cover policy design. This may aim at giving more benefits to potential customers. They had chosen to accelerate the death benefit of a life policy upon diagnosis of a critical illness. Other companies might also be choosing to give limited critical illness coverage on a guaranteed issue basis. Furthermore, Return of Premium (ROP) was another tactic used by insurers in the UK. Having this on a critical illness policy meant competition with other companies as it probably represented an advantage.

Some companies had the ROP automatically integrated in their policies as a rider benefit. On the other hand, other companies refunded the premiums if the policyholder stayed in good health until the end of the policy. Other firms provided their customers with the ROP on lapse benefit which refunded the premiums upon ceasing the critical illness policy. Some people view this option as misleading as companies may be in fact encouraging their policyholders to terminate their policy prematurely.

The adoption of critical illness insurance may have been slow to be adopted in the UK. But as awareness increases among people, it could end up becoming as popular as in the USA.

A relative has just died. He had a life insurance policy with you listed as the beneficiary. There’s just one problem: the life insurance policy is missing. You have no idea which insurance company wrote it.If you find the missing life insurance policy in the future, are you still eligible to receive the death benefit?

Hope they paid their insurance bills.
If you’re a beneficiary and you find the lost life insurance policy shortly after the insured dies (within six months to a year, for example), claiming the death benefit should be trouble-free.

First, determine if the insured had term or permanent life insurance. If the insured held a term policy, you’ll receive the death benefit if he died before the end of the policy term. If he died after the policy expiration date, you would get nothing.

If the insured had a permanent life policy, you’ll receive the money if the death occurred while the policy was “in force,” meaning all premium payments were made up until the time of death. If the death was a while ago, you’ll receive the benefit with interest from the date of death.

If the life insurance policy lapsed — meaning the insured stopped making premium payments before he died — there’s a chance you might get nothing. When a permanent life insurance policy lapses, most insurance companies switch its status from permanent insurance to one of two options:

“Extended term” — The insurance company uses the cash value of the policy to buy a term life insurance policy for the same death benefit using the cash value of the policy. The death benefit will continue for the longest period the cash value will purchase.

“Reduced paid up” — The insurance company will keep the policy in force permanently, but will reduce the death benefit.

Gerry Brogla, an actuary for State Farm, says in the majority of the cases at his company, the permanent policy continues as extended term if it lapses. At State Farm, extended term is the default option for most permanent policies.

If the policy lapses, and the extended-term period expires before the insured dies, the policy is worthless and the life insurance beneficiary will get nothing. If the insured dies before the extended-term period is up, the beneficiary will receive the death benefit. If the policy lapsed because the insured died (thus ending premium payments and causing the insurance to be placed in extended-term status), the beneficiary will still collect the full death benefit, regardless of when the extended term was up. The beneficiary always needs to supply the insurance company with a death certificate to verify the date of death.

There is no time limit during which a life insurance beneficiary must step forward to collect the money, according to Jack Dolan, spokesman for the American Council of Life Insurers. “If a person shows up 30 years after [the insured's] death, the company still makes good on it,” Dolan assures.

What happens if no one ever reports the death?

If the insured dies and the insurance company does not learn of the death, the policy lapses. Insurance companies will take steps to find out why a policyholder stopped making payments.

When an insurance company stops getting payments, it sends letters to the insured informing him the policy may lapse as a result of unpaid premiums. If the letters go unanswered, the company might initiate a search to find the insured. If that comes up empty, the company will then lapse the policy.

If a beneficiary to a policy never steps forward, it unfortunately means the insured paid money to a policy throughout his life and his beneficiaries never see a penny. This is why its a good idea to make sure beneficiaries are aware of any life insurance policies you have.

If you’re lucky, the state may have your money

In some cases when a beneficiary fails to claim a death benefit for several years, the money is transferred to the state where the insurance policy was purchased under the escheat laws.

If a company knows an insured died and it cannot find the beneficiary, it must turn the full death benefit over to the state comptroller’s department within three to five years of the insured’s death. The money is transferred to the state where the insured bought the policy. The money is considered “unclaimed property” and gets lumped in with dormant bank accounts and uncollected rent deposits. The controller’s department maintains a database that lists the names and addresses of lost life insurance beneficiaries.

Many states will try to contact life insurance beneficiaries in an effort to pay the death benefits. In Texas, for example, the names and addresses of the beneficiaries are published annually in each county in the state. In New York, the Web site of the New York State Comptroller’s Office of Unclaimed Funds has an online search to find any unclaimed death benefits owed to you. You can find out the procedures in your state by contacting the office of your state comptroller or treasurer.

Keep in mind your chances of finding the policy with the state are slim. The insurance company has no obligation to hand the money over to the state if it’s unaware the insured died. In most cases, it’s the beneficiary who contacts the insurance company.

Also, the insurer only transfers the money to the state three to five years after it cannot find the beneficiary but knows the insured died. If the state doesn’t have the death benefit, it’s likely the insurer is still looking for the beneficiary or doesn’t know the policyholder has died.

Unclaimed death benefits are rarely transferred to the state. Dave Potter, a spokesman for Hartford Life, says less than 1 percent of his company’s death benefits go unclaimed.

Del Chance, a life insurance claims manager at State Farm, says, “Turning over life policy benefits to an individual state after the death of an insured is extremely rare. State Farm utilizes their own search techniques as well as outside vendors to locate lost beneficiaries in the event of the death of one of our insureds. By and large these procedures have always located the beneficiary.

Tips for making sure your life insurance beneficiaries get your death benefit:

1. Give your beneficiaries your policy information. It can be a difficult and awkward conversation, but an important one.
2. Keep all your financial records (especially your life insurance policies) in one place. Don’t force your beneficiaries to search your house from top to bottom after you die.

Tips for looking for lost life insurance policies:

1. Go through canceled checks or contact your relative’s bank for copies of old checks. Look for checks made out to insurance companies.
2. Ask those who may have known about your relative’s finances. Speak with the relative’s lawyer, banker or accountant. Also contact the relative’s insurance agent.
3. Contact your relative’s past employers. They might know of possible group life insurance. The insured might have also purchased supplemental life insurance through work.
4. Check the mail for a year. Premium bills and policy-status notices are usually sent annually.
5. Look at income tax returns for the past two years. Check for interest income from policies or expenses paid to life insurance companies.
6. Contact the Medical Information Bureau. If your relative bought life insurance fairly recently, there might be a trail of the companies to which he applied. The Medical Information Bureau (MIB) maintains a database that might show if insurers requested your relative’s medical information within the past seven years. Record searches can be requested through the MIB’s Policy Locator Service and cost $75. The MIB says that nearly 30 percent of searches turn up leads.

Knowing and understanding your credit score is very important if you are going to apply for a new credit card and succeed in this procedure. Checking out your credit score may be a little confusing and you may know this if you have faced this process before. You should know that every number has its own meaning and the rating scale has many of them. If you are a smart credit card consumer you must know your credit score to understand what your place on the rating scale is. You also should know that every number tells some information about you as a consumer and a borrower. Do you know that your future employers, your landlords, creditors and insurance providers review your credit score and seeing its numbers they can determine your reliability as a borrower? That is why you should know very well your credit score.

The more loans and credit cards you had the better, because your credit score is determined by the credits you had and have at the present moment. The rating chart is as follows.

760 – 849 – excellent credit score and your creditor will be happy to see you as a client and will propose you the best offers available.
700 – 759 – great credit score and getting a credit at good terms will not be a problem for you.
660 – 699 – good credit score and it will be easy for you to get a credit with quite good terms.
620 – 659 – fair credit score and you will be able to get a credit with moderate rates.
580 – 619 – poor credit score and it will be difficult for you to be approved and your interest rates will be very high.
500 – 579 – very poor credit score and you hardly will be qualified for a credit card but if yes, your interest rates will be extremely high.

Do you know your position on this credit score scale? But your credit score is not fixed forever and you can always turn the situation for the better. You should know that paying your bills on time you raise your credit score, but missing your payments or delaying them you influence negatively on your credit score. It is one of the basic rules of improving your credit score: you merely must pay on time.

Check your credit score and if it is rather high you will save money in interest charges. You should think about your credit history right now even if you are not going to take a credit today, because good credit record will help you when you need more money. It will be a real advantage if you increase your credit score in advance before applying for a credit card.

Nowadays we are living in the world where info quickly enhances the quality of our life.

Due to this if you are properly armed with the info in your sphere of interest you can be sure that you will always find the way out from any bad situation.

Are you enjoying the unforgettable moments of life “pregnancy”? Is the due date of delivery getting near? Pregnancy is the earlier step towards motherhood. No doubt, the news of the coming baby spreads happiness on every face. Everyone get excited and anticipated for the arrival of new born baby. But, this fact is also very much clear that a hefty amount is required for the maternity costs. Acquiring insurance policy for pregnant woman on time shows your intelligence and wisdom. Insurance policy helps to secure the mother with new unborn baby from many usual and unusual calamities like miscarriage or loss of the baby. It helps to cover all the expenses related with maternity. You can avail the best insurance policy from a large number of branded financial institutions. They provide you health as well as travel insurance.

When the due date of pregnancy comes closer, many health advisors and physicians suggest the women to sit at home and she is prohibited to move. In some exceptional cases, pregnant women have to travel from one place to another. At that time, obtaining suitable travel insurance provides you safety and protection. Like this, by acquiring travel insurance policy, you can enjoy your traveling or holidaying without any fear or tension.
Continue reading “Insurance for pregnancy” »

Your insurance excess forms part of your policy terms and is designed to give you some control over your premiums by sharing some of the insurance risk with the policy holder. All standard insurance policies include an excess figure for each type of cover and, if a claim is made, this excess is deducted from the amount paid out by the insurance provider.

So, for example, if a home contents policyholder makes a claim for £1,000 following a burglary but has a £500 excess, the insurer may only pay out £500. The actual excess amount may depend upon the type of cover and it’s terms and conditions and be applied to a particular claim or be an annual cap.

From the insurers point of view, the policy excess achieves two things. It allows them to offer customers the option to reduce their premiums in return for agreeing to a larger excess figure. In addition, the excess also limits the number of claims because, if a claim is relatively small, the customer may find they either wouldn’t get any payout once the excess was deducted, or that the payout would be so small that it would leave them worse off once they took into account the loss of future no-claims discounts.

The most important thing to remember about an excess is that it is usually a flat rate rather than a proportion of the cover. Also, regardless of the size of a claim, the excess will be deducted from the final payout received by the policy holder which can reduce the benefit of submitting a smaller claim.

What level of excess applies depends on the insurer and the type of insurance. With motor insurance, many firms have a compulsory excess for younger drivers. The logic is that these drivers are most likely to have a high number of small value claims, such as those resulting from minor prangs.

With medical or Critical illness insurance, whether for a human or a pet, it is worth watching out for annual excess limits. Where these apply, the claimant may have to pay an excess every year for an ongoing claim. For example, where a health condition requires treatment lasting two or more years, the claimant would still be required to pay the policy excess even though only one claim is made.

How much impact an excess has in the event of a claim depends on the type of insurance. An example would be when making a claim on a contents insurance policy for various stolen items. The policyholder would have to weigh up the short term need to replace the lost items with the longer term cost of losing any no-claims discount accrued. Things differ with a motor insurance claim where the policyholder may have to find the excess amount from their own pocket to get their car repaired or replaced.

Though this isn’t widely known, it is possible to take out a separate policy against having to pay the excess on cover from another insurer. This has to be done through a different insurer but works on a simple basis: by paying a flat fee each year, the second insurer will pay out a sum matching the excess if you make a valid claim. Prices vary, but the annual fee is usually in the region of 10% of the excess amount insured.

Like any type of insurance, it is vital to check the terms of excess insurance very carefully as cover options, limits and conditions can vary greatly. The excess insurer may simply pay out whenever your main insurer judges a claim to be valid, but they may instead have their own rules about exactly what is covered and what would invalidate a claim. You may also discover that there are rules restricting you to a certain number of claims per annum.

Health surveys in the UK states that almost 20-25% of all people suffer from serious diseases like cancer and heart attack before they reach the age of retirement. Thus, in the case if you are working buddy, and are caught by any serious disease, you have to quit continuing your work. Thus, you have to discontinue your regular job, and will have to look for some options which give you enough financial freedom to avail medical treatment. Here, having a critical illness insurance gives you appropriate protection against the any critical illness or financial scarcity.

The compensation amount you are paid under this insurance is used in both, availing the medical treatment and putting your entire family at financial ease for the days you are not regular on your work. The compensation amount paid under critical illness insurance comes to great help for member of a family who are depended upon the insurer.

The type of diseases covered by this medical insurance includes many of critical illnesses like cancer, stroke, heart attack, bypass surgery, kidney failure, paralysis, blindness, deafness, speech loss, coma, Parkinson’s disease and major organ transplantation. If you want to make claim for the compensation, you (the insurance holder) has to live through 30 days of survival period. The another benefit of availing critical illness insurance is that the compensation amount you are going to have can be utilised in the way you wish.

With the presence of number of insurance companies in the market, it becomes a confusing task for insurance buyers to pick the best deal. Online method of looking for some insurance companies is one of the easiest ways to get a best deal. There are several of websites of insurance companies such as www.uklifeinsurancesolutions.co.uk  which will offer you free quotes. Comparing those quotes give you an opportunity to buy a critical illness insurance at cheap rate. Taking some of these considerations in mind can give you better deal while availing this medical insurance.

One of the biggest fears for many people is not being able to pay the mortgage
 - or meet other financial commitments – if they are made redundant or unable to work due to illness or accident.

This is particularly worrying in the current uncertain climate, but one of the simplest ways to cover loss of earnings is by taking out income protection.

What is income protection?

Income protection pays out a regular tax-free replacement income if you are unable to work because of ill health or an accident; it enables you to pay the mortgage, as well as the daily costs of living.

How does it work?

Income protection policies pay out a set amount of income after a specified period of time, and you can elect a waiting period of between one and 12 months; the longer you defer, the cheaper the policy.
It usually then pays out until you either return to work, retire, the policy expires – or death.

How much does it cost?

Premiums are based on age, health, amount covered, term of the policy, waiting period, and whether you smoke.

For a 25-year old male with cover until the age of 60, the average premiums range from £23 per month for a four-week deferral period, to £11 per month for a 52-week deferral period (*).

The rates for women are slightly higher, and the average cost of for a 25-year old female with cover to age 60 range from £34 per month for a four-week deferral period, to £15 per month for a 52-week deferral period (*).

Should I take it out?

While life insurance might be the first protection policy that springs to mind when you have children, and mortgage payment protection insurance (MPPI) the first policy when you buy a new home, income protection insurance could actually be the better option.
This is because it’s a lot more likely that one or both parents will not be able to work through long-term sickness than through dying, and because MPPI offers limited cover, and policies can be relatively difficult to claim on as they often include a number of exclusions.

What about PPI?

Payment protection insurance (PPI), a similar policy to MPPI, but which covers other debts, such as repayments on loans or credit cards, is also notoriously unreliable when it comes to paying out in the event of a claim, and can often be over-priced and mis-sold.

Nonetheless, if you do qualify for a payment, the short-term lifeline it offers can help you to survive a financial crisis, so it should not be dismissed out of hand – but a cheaper alternative may be to buy PPI from a standalone provider.

When should you take out income protection?

Before taking out income protection, check what cover you already have through your job, as many companies offer life assurance and sickness benefits.

The level of cover required from income protection varies from person to person, so after finding out what is offered by your employer, calculate your current expenditure and take out cover to meet the shortfall – but bear in mind that your outgoings may be cheaper if you’re not at work.

If you do decide to take out life insurance, it’s a case of the sooner the better, as younger and healthier individuals will be offered cheaper premiums, plus it’s beneficial to take out a policy before there’s any sign of trouble – to ensure you have the necessary cover in place should anything go wrong.

Having some knowledge of how to calculate finance charges is always a good thing. Most lenders, as you know, will do this for you, but it can helpful to be able to check the math yourself. It is important, however, to understand that what is presented here is a basic procedure for calculating finance charges and your lender may be using a more complicated method. There may also be other issues attached with your Loan which may affect the charges.

The first thing to understand is that there are two basic parts to a loan. The first issue is called the principal. This is the amount of money that is borrowed. The lender wants to make a profit for his services (lending you the money) and this is called interest. There are many types of interest from simple to variable. This article will examine simple interest calculations.

In simple interest deals, the amount of the interest (expressed as a percentage) does not change over the life of the loan. This is often called flat rate or fixed interest.
The simple interest formula is as follows:

Interest = Principal × Rate × Time

• Interest is the total amount of interest paid.
• Principal is the amount lent or borrowed.
• Rate is the percentage of the principal charged as interest each year.

To do your math, the rate must be expressed as a decimal, so percentages must be divided by 100. For example, if the rate is 18%, then use 18/100 or 0.18 in the formula.

Time is the time in years of the loan. Continue reading “How to work out your finance charges” »

Term life insurance is becoming more and more popular as a way to protect loved ones you may leave behind. The premiums are much less costly than ones for whole or universal life insurance, which is one of its big selling points. 

What is “Term Life”?

Term life insurance is a policy you buy for a specific period of time. You could choose to have your policy expire in ten years or as many as thirty. If you die within that time frame, the policy pays the death benefit to your beneficiaries.
Continue reading “Term Life Insurance – a safe bet?” »