Life Insurance

Life insurance is not an enjoyable subject nor is it something we tend to think about often. However it must be thought about at some point in time. You may wonder how much life insurance you require to prepare for your future. Life insurance is something you need for sure if you have a family that is dependent on your earnings. If you are single and have no dependents than your needs are different.

When it comes to calculating life insurance you need to consider a selection of factors. These include, as previously mentioned, whether you have dependents or not, and if yes then how many. You also have to consider your marital status, how much money you earn as well as how much your spouse earns and how many more years you both have to work.

What you want to guard against is ending up in a situation where you are either under or over insured. In other words having not enough life insurance or too much. If you are under insured then there will not be enough money left over to care for your family if you should die. On the other hand if you are over insured that means that you are spending too much money on insurance and it is a waste.

As a general rule of thumb most insurance providers say that when it comes to life insurance you should have six to 10 times the amount that you are earning on a yearly basis. You can also calculate how much you require by multiplying your annual earnings with the number of years until you retire. To use a very simple example, a 40 year old male who is earning $20,000 annually will need $500,000 in life insurance (25 years x 20,000= 500,000).

You can use whichever method you prefer to calculate how much life insurance is enough for you. What you must not lose sight of is the fact that the purpose of life insurance is to replace the earnings of a person who has passed away. To put it another way, the amount of life insurance you take out for yourself should be large enough to replace the financial gap that will be left behind for your loved ones in terms of expenses in the event of your death. This is particularly the case if you are the primary breadwinner in the family (or the only breadwinner!). Life insurance is also meant to pay for other expenses as well such as burial costs, estate tax preparation fees, and so on.

Here are three quick steps you can take right now:

1.    Figure out the amount of death benefit that your loved ones will need. Be clear about what it is you want your life insurance policy to cover. This is not the same for everyone. Some people want the money to pay for their funeral costs and taxes while others want it to pay off their mortgage or help to fund their children’s education. 

2.    There is more than one kind of life insurance to choose from. Your job is to decide which one is most suitable for your needs. If you want money for your loved ones in case of your passing then choose permanent life insurance or term life insurance. If you want insurance that will make it possible to save for the future then choose permanent life insurance.

3.    Get some quotes, preferably from two to three different companies. Bear in mind that when it comes to life insurance the more coverage you wish to have the more money you will pay for it.

Only you can decide after careful reflection and an honest assessment of your needs how much life insurance is enough for you. Sit down with your loved ones and talk it over. Only then will you be in the position to make the best decision possible. 

Insurance Claims, Insurance Claim

Insurance claims are the requests of the insured policyholder to the insurer or insurance issuing company for financial reimbursement whenever s/he suffers a loss related to the insured property, life, auto or health. But the insurance claim should be done in accordance with the specifications of the insurance policy or contract.

Insurance claims vary from person to person and from policy to policy. The maximum amount of redemption in case of an insurance claim depends on the scheme under which a person has enrolled and the regular premium amount s/he is paying. At the time of repayment of the claim to the policyholder, the insurance company is only giving back the premium amount, either in entirety or in part.

INSURANCE CLAIMS: GENUINE CLAIMS VERSUS FRAUDULENT ONES

Some insurance claims are fraudulent in an attempt to defraud the insurance company. So it is necessary for the insurer to carefully process every insurance claim before approving it in order to avoid insurance fraud.

INSURANCE CLAIMS: PROCESSING

The following areas are ensured in the processing of insurance claims:

The insured person suffers a loss either of his life or health or non-life general type.

The policyholder or the beneficiary calls up the insurer claiming the insurance and asking about all the minute details of the process of claiming the same, along with the documents required.

The insurance company asks for the details of the loss and the relevant documents in support of the claim. A notice has to be issued by the policyholder for claiming the same with utmost urgency mentioning all the possible details (name of the policyholder, names of the persons associated with the accident, witness particulars, their addresses, etc.).

The insurance company would make all the possible queries and inspections through the company representatives or consultants. They have the right to inspect all the relevant properties related with the loss, along with police verifications and determination of the policyholder's liability structure.

The processing period is mentioned in the contract document, which is the approximate time required for verification of the authenticity of the insurance claim.