A Life Insurance is an agreement between an insurer and a policy buyer in which the insurer agrees to compensate the policy payer’s beneficiary or beneficiaries in the event of a death of the covered family member.

Of course, the provision of this agreement is that the policy buyer agrees to pay an insurance premium to fund this guarantee. Paid either in regular intervals or lump sums, the covered individual is assured that compensation and relief can be paid out and received by his/her loved ones.

How Does Life Insurance Work?

The coverage of one’s life insurance depends on the life insurance policy that was bought.

Often, beneficiaries are paid when the decesed is covered by a life policy. Covered events are based on the lives of those who are included in the life policy.

Examples of insured events are deaths, accidents, sickness, and untimely deaths.

Life Insurance Does Have Limitations

Life insurance contracts normally have limitations for both insurer and policy buyer. Exclusions are written in detail  in the contract to make as clear as possible the liability of the insurer to the policy owner.

Like most businesses, insurance companies are there to make a profit, and it is a wise move for insurance companies to spell it out in black and white what they can or cannot cover.

Two Kinds of Life Insurance

Life-based contracts fall in two classifications: protection and investment.

Protection policies, such as term life insurance, is a type of life insurance which is purely a protection mechanism that covers the insured for a specified amount of time.

Term life insurance does not have any investment vehicle and usually used as a no-frills and most cost-effective way to cover for any untoward incidences.

As for Investment Policies, this includes whole life insurance, combining both protection and investment packages  in which the primary intention is to aid the increase of capital through payment of premiums.

Who Are Involved In Life Insurance?

Individuals that concern insurance include: the insurer, the policy owner, the insured, and his/her beneficiaries.

The insurer is the party that pays beneficiaries of the insured in the event of his death or demise. There is a difference between the insured and the policy owner although they are one person most of the time.

The policy owner is the purchaser and payer of the insurance while the insured is the cover of the insurance purchased by the policy payer.

A wife may be the policy owner and her husband may be the insured. In this case, the wife purchased the insurance for her husband and promises to pay the premium.

The husband, on the other hand, is the cover of the insurance. In the occasion of his death, his beneficiaries would be paid a benefit by the insurer.

Beneficiaries are the recipients of insurance proceeds. They may either be individuals, organizations or business entities.

Is Life Insurance Expensive?

The cost of a life insurance is based on the insurer’s calculations of policy prices with the purpose of funding returns to be paid, covering administrative costs, and making a profit.

Price is based on the mortality tables computed by actuaries.

Actuaries calculate mortality tables with the use of actuarial science which is based on probability and statistics.

Expectancy estimates on life, which are essential in taxation regulation, can be taken from speculations in the average lifespan of an individual.

What Do Insurance Companies Need To See For You To Claim Benefits?

In the occurrence of the insured’s death, life insurance proceeds can be claimed upon presentation of proof of death.

Insurers normally require death certificates and insurer’s claim before they pay benefit to beneficiaries. Insurance companies also reserve the right to investigate a suspicious death of an insured person to determine whether they are obliged to pay the claim.

How Can I Get life Insurance Without The Hassle?

As you can see, getting life insurance can be rather discomforting.

If this was a few years back, you’d have to brave traffic to go to town to consult an insurance agent, then the 30 minutes or so waiting in the waiting room, then the battery of questions from the agent who will do his best to upsell you a better policy.

That’s all in the past. Now you can get everything you need from the comfort of your own home using the Internet.

With just a click of a mouse, you’ll get everything you need to know right in the comfort of your own home.

AND, that’s not all. You get 40% to 70% off the premium price! A Large Discount, if I may say so myself.

AND, getting a quote online is absolutely FREE. You have no obligation to buy, but you gain significant information to get the best life insurance policies at discount premiums?

Interested? Have I gotten your attention? Why not give it a try?

So come take a look at our Life Insurance Quotes and get started on the right foot to the lowest cost life insurance.

For comments, more questions, inquiries, please leave a comment below.

More Power To Us,

Erwin Chua

Consumer Advocate

Life Insurance Quotes For Consumers

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