Life insurance provides a financial safety net in the event of death. It is a policy between an owner and an insurer, whereby benefits are paid to benefactors upon the death of the owner. A yearly premium is paid to maintain a life insurance policy. The rates for premiums vary on an individual basis and are determined by age, gender, health, and engagement in high-risk activities.
Life Insurance Details
There are many types of life insurance policies, including: universal, whole, accidental death, limited pay and more. Life insurance is best suited towards those who are at high-risk for death, those that are financial cornerstones in a family or business, and those who need the peace of mind.http://www.mahalo.com/how-to-determine-if-you-need-life-insurance .
In the U.S., life insurance is typically a for-profit business, and there are more than 2,300 companies. The total assets of U.S. life insurance companies was about $1.4 trillion in 1990.http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/1992/02/01/000009265_3961002085613/Rendered/PDF/multi_page.pdf . On average, life insurance payments comprise about 2% of disposable income in the U.S. In 2009, six life insurers were bailed out in the U.S. economic crisis: Allstate, Ameriprise, Hartford, Lincoln National, Principal Financial, and Prudential.http://www.cnn.com/2009/POLITICS/05/15/bailout.insurers/index.html
Life Insurance 101
The video shown here offers information about life insurance and how these types of policies provide coverage for families. It explains the coverage, the process of securing a policy and explains many of the terms commonly associated with life insurance. By learning a few factors about life insurance you can better prepare yourself for purchasing a policy and having all the necessary information to make a wise decision.
Disclaimer
The content in this page is not a substitute for professional financial advice. Please contact a finance professional before using the information presented here.
References
Fast Facts
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Fact:
In most cases, life insurance is non-taxable
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Fact:
Only 47 percent of American households have life insurance policies
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Fact:
Approximately 2% of disposable income in the U.S. is spent on life insurance
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Fact:
Most employers pay 80 percent of a life insurance premiums
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Fact:
Life insurance can be purchased from many employers, private insurance agents or online
