Life Insurance

What is life insurance definition?

Generally speaking, Life insurance is a contract (Policy) between you (Insured) and insurance  company (Insurer) for the cost you pay (Premium) guaranty an amount of money (Coverage) will pay to your beneficiary upon a premature death.

How calculate the premium of life insurance?

The cost of insurance (Premium) you pay to insurance company is basically for Risk management and coverage amount you request. It calculates based on your insurability.

What is insurability?

Insurability means risk assessment which is doing by insurance company about life insurance applicant. This based on Age, Gender, Health and also your living habits like: hazardous sports (banjo jumping), job risk (Pilot…) and even driving fault (speeding).

Why do you need life insurance?

When you are young and in good health, it is hard to feel life insurance needs. But in case of premature death, life insurance can help protect your loved ones and their life style. Another advantage of permanent Life insurance is offering “Living benefit” through Cash value portion of it which could be as emergency fund, supplement retirement income or child’s education.

Is life insurance coverage taxable?

In case of death, designated beneficiary of the policy will receive the coverage of life insurance from Insurance Company “Tax Free”. If there is no beneficiary named on policy, the coverage will automatically goes to the estate of the insured and will release after all legal procedure.

How much Life insurance do we need?

If you don’t have spouse, children or any dependents and don’t think about saving and cash value advantage, you may don’t need that much life insurance. Just may some basic coverage for final funeral costs.

Life insurance is essential when you get married, have children and usually have liabilities which need to have financial protection.

You should consider a few things in case of death:

  • How much immediate expenses will load to the family financial?
  • How much is liability (mortgage, credit card, debt…)?
  • How many children are in the family and how old are they?
  • How much is your income which is spending as living costs?

Based on above and other life style and financial information, insurance broker will do FNA (Financial Need Analysis) in order to determine your life insurance face amount.


What is the joint first to die (FTD) and joint last to die (LTD) life insurance?

Joint life insurance is a policy with two insured, usually husband and wife and is less expensive than individual (saving policy fee). In joint first to die (FTD) once first insured dies, face amount will pay to the beneficiary and policy will lapse. In joint last to die (LTD) after death of first insured policy will in force for second one and after second insure’s death, beneficiary will receive the face amount.

How many types of life insurance are in the marketplace?

Basically there are two major types of life insurance:

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