The Basics of Life Assurance (from ‘The Mad Money Book’)

Article Title: The Basics of Life Assurance (from ‘The Mad Money Book’)
Shared by: Craig Lock
Category (key words): Life Assurance, Life Insurance, Insurance, Insurances, Financial Success, Personal Finance, Money, Money Management, ‘The Mad Money Book’, Financial Independance (enough there now, craig)
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ed money

We hope that the following article may be informative and helpful to you. If it helps others "out there" in any way, then we're happy.

"We share what we know, so that you and your money may grow."

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THE BASICS OF LIFE ASSURANCE

"In this world nothing can be said to be certain except death and taxes."

• Benjamin Franklin

A life assurance policy is one product you can't test before buying. This makes it all the harder to choose from the huge range of policies on offer from various companies. It is especially difficult when faced with a persuasive salesman or woman, who often cannot explain why their company's product is superior to others available on the market. In this we have assumed that the salesman has identified that you have a genuine need or shortfall of cash in your estate should you die ("fall of your perch" sounds better, less harsh). Oh dear! (Bear in mind that a minority of "unscrupulous" salesmen might attempt to disturb you by creating a life assurance need when there is none).

Therefore, it is vitally important to analyse your needs (financial) carefully and buy the assurance that is right for you.

For example , whether you buy or rent life assurance will depend on the family budget. Let us look at the difference between what is termed permanent and temporary assurance.

To buy: Permanent assurance has a savings element with an increasing cash value each year and promises a guaranteed minimum pay out after x number of years; therefore it is ideal for saving for the future.

To "rent": On the other hand, term assurance provides cheap cover for a certain period of time with no payout at the end. Most modern policies are in effect a combination of permanent and temporary assurance and are so flexible that a special tailor-made plan can be packaged for every individual need. As a result, there are infinite number of choices in savings amounts and life covers.

Here are some simple guidelines to help the "man (or woman) in the street"* choose a life assurance policy:

* sounds rather funny, that expression!

* TYPES OF INSURANCE (or ASSURANCE):

There are three basic types of life assurance policies:

1. Those that provide assurance against death, disability, illness or hospitalisation. Put simply, insurance replaces income by providing cash at an unknown time in the future. Regular savings or investment contracts provide further capital ( a ‘fancy' term for money) on retirement, for children's education, starting your own business, a new car or an overseas holiday.

Lump sum capital investments provide monthly income (also called annuities) for further capital growth. These are called insurance bonds or single premium plans. In New Zealand and Australia the tax on the investment earnings of all life assurance policies is paid by the company, so the growth is tax-free to the customer (as it is currently and expected to remain so).

In my next article, we will have a look at

THE TEN GOLDEN RULES IN BUYING LIFE ASSURANCE:

Happy buying your financial security... now and in the future

Craig Lock (Eagle Productions Books: "Information and Inspiration Distributor" )
"Writers should think like a business-person; but then any business-person would have the good sense not to become a writer."

What's the definition of an aspiring writer? A waiter!

Cut that out now, craig... you're meant to be writing about how to best manage your hard-ea
ed money.

Better go back to your old job then (sorry, too late)!

"Together, one mind, one life at a time, let's see how many people we can impact, encourage, empower, uplift and perhaps even inspire to reach their fullest potentials

THIS ARTICLE MAY BE FREELY PUBLISHED

Don't worry about the world ending today... it's already tomorrow in little scenic and tranquil New Zealand

PPS

As they carry me to my deathbed, I'll be saying: "Lord, Can you just give me one more hour to finish off one last article. PLEASE!"

• craig (as inspired by the quote of singer, Barry Manilow)

"Í'm not scared about dying...

I just don't want to be around when it happens."

• Woody Allen