Introduction
There are some industries that are very important in the current world, like insurance. But the intricacies that surround them are what some people might find intriguing and hilarious at times. But to get a clear understanding, it is important for a person to always understand that every business is all about making profit, no matter how sweet an advert about it might look. Until this fact is internalized, one will always find themselves playing life, life insurance games with the industry stakeholders.
To be Life Insured or not?
Probably the first question that could spring to anyone’s mind in the life, life insurance games is whether to get a life cover policy or not. It is not uncommon to come across a fellow who is perfectly going by without a single life cover to his life. For a married couple without kids who are covered by the group cover at work, they will find the benefits that come with the same to be just perfect for them. And yet those with children and the obligations that come along like school fees are usually quick to take as much insurance cover as the pocket allows. In short, the amount and type of life insurance depends on an individual’s needs and finances. However, one cannot say that the need for a life cover isn’t important.
Term or Cash Value?
There are two sides to life, life insurance games, and these are term and cash value policies and their accompanying benefits. Of course, term life policies are more popular than the cash value ones, mainly due to the differences in the premiums, but among other factors. To start with, the premiums formula isn’t general, but rather specific to an individual or family. Term life policies are generally less expensive since the policy runs for a stipulated timeframe, normally between 1-5 years. The premiums could generally be anything above $100, but rarely more than $1000. In this type of cover, the death benefits are guaranteed. However, the policy does not save any benefits for the beneficiary should the policyholder live through the policy period. There is usually an option for policy renewal on expiry, but at the underwriter’s discretion. Age is a major limiting factor to renewal.
With cash value life, life insurance games, the stakes are higher starting from the premiums to the benefits. In most cases the policy remains in place throughout the insured’s life, and benefits accrue upon death. However, to the policyholder, there are still other benefits that come with the policy. For most people who prefer cash value life insurance, they do so for the savings benefits that come with it. Part of the premium remains attached to the insured’s death benefits while the remainder can be put into securities which earn interest but at a fixed rate. The saving remain the insured’s regardless of whether they cancel the policy or not. However, should the cash value policy mature upon death of the insured, then the beneficiaries only get the policy’s face value, but not the accumulated value. Moreover, one can secure loans or a mortgage used a cash value policy.
Tips and Comments
It is no doubt that the life, life insurance benefits games will remain to play a pivotal role in the industry. And for as long as these games exist, the question of over insurance and underinsurance will always exist in many people’s minds.
