A life insurance policy can be purchased for self or for someone else. Typically, life insurance mandates some sort of agreement between three parties – the insured, the insurer and the owner. The person whose life is being insured is referred to as the ‘insured’. The insurer is nothing but the insurance company. The owner is the person who actually buys the policy. The owner and the insured could be the same or they could be two different people. If you were to purchase a policy for self, then you would be the owner as well as the insured. If, however, you buy it for your partner, then the partner is the insured person and you are the owner. If you are the owner of a policy, it is your responsibility to pay premiums at regular intervals.

A life insurance contract involves another important member – the beneficiary. A beneficiary is the person who benefits from the death of the insured – the lump sum amount becomes payable to him or her in event of the death of the insured person. There are two types of beneficiaries, the irrevocable one and the revocable one. The revocable beneficiary can be changed at the will of the owner while the irrevocable one cannot be changed unless and until the permission of the beneficiary is sought.

A life insurance policy is subject to many terms and conditions. Most policies will come along with certain exclusions. Exclusions are certain conditions, which, if satisfied, will absolve the insurer from making any payments that would otherwise have been made. In most of the policies, suicide in the first two years of the policy term is not covered.

In the first two years of the policy period, often referred to as the contestable period, the insurer reserves the rights to make an immediate pay out. In event of death of the insured, the company may stop payment and conduct investigations of its own. These investigations aim to ratify the cause of death. If it is discovered that death was deliberate or a result of homicide, then the insured is relieved from paying the lump sum amount.

The amount to be handed over to the beneficiary is known as the face amount. This is usually paid in the event of the death of the insured is the attainment of a certain age by the insured.  This date, when the amount becomes payable to the beneficiary is known as the maturity date. A life insurance policy is more often than not, a sort of protection for the spouse of the insured in event of his or her untimely death. To purchase an insurance policy, the owner of the policy must have an insurable interest. Insurable interest is a reason to secure the life of a person. Insurable interest is an important consideration that determines the unassailability of a policy especially when the owner and the insured are not the same. In the absence of the same, a policy is declared as invalid.

When a person dies, a solid proof of the cause of the death has to be handed over to the insurance company in order to claim the policy benefits. In most cases, a notary’s signature on the death certificate is an accepted form of proof. The benefit could be paid in one go or an allowance that is paid at regular intervals. This guarantees the beneficiary some sort of monthly income for the rest of his or her life.

There are two types of insurance policies, the temporary one and the permanent one. The temporary insurance or the term life is a cover that insures a person for a fixed period. For instance, a 20-year term life insures a person for a period of 20 years. There are two types of permanent insurance policies: the whole life and the universal policy. In the whole life policy, the person has to co0ntinue paying premiums, never mind how long he lives. If he passes away, the payout will be done at whatever age. The Universal policy is a bit more flexible with more flexibility in the payment of premiums. So it would be best to ask an expert for advice as to which would be best suited for you.

The good news is that you may have an interesting option to solve this problem.
If you are over 70 years old and hold a life insurance policy in your name, then you will be surprised to learn that there are investors out there, who are willing to buy the policy from you at a percentage of the face amount. The buyer pays all the expenses of the transaction as well. This usually works out to more money than you would get were you to turn in your policy to your insurance company for a settlement. The investor who buys the policy from you becomes the beneficiary of your policy and you get a large amount of cash right away.

Insurance companies have found that 90% of their policyholders either let their policies lapse or turn them in for a small settlement and in the end, the company does not have to make the big payout. Therefore, they have been offering life insurance policies at bargain rates, especially to senior citizens. This has created an opportunity for investors to make lucrative offers to seniors who may be willing to sell their policy. Insurance companies do recommend that you hang on to your policies, but there are many circumstances where the option of selling the policy becomes attractive:

The beneficiary has already passed away.

The premiums are causing a financial burden.

The reason for the original purchase of the policy no longer exists.

You hold more than one policy.

Selling the policy will take care of all your expenses, making life very much easier

As you can see, there are many reasons why you may have no more use for your policy, and rather than letting it lapse, it may be worth your while to investigate the Life Settlement avenue. There are many companies willing to take care of all the details. The internet can help you find those that are offering the best “deals”. Be sure to find a reputable company and to investigate all the options. Percentages will differ, and the older you are, the better will be the amount offered.

Perhaps now, all your wonderful dreams can come true. All those grandchildren to visit and play with, that exotic holiday to the Far East and maybe even a nicer apartment in a prettier area – retirement could very well become what it was supposed to be, one long and happy vacation!

The probability of a random death occurring within a fixed term is quite low, whereas with permanent life insurance, the insurance company is providing cover for a definite eventual death and therefore does charge very high premiums to make the insured literally “self-insure” themselves. So, compared to forms of Permanent Life Insurance (like whole life insurance, universal life insurance or variable universal life insurance), Term Life Insurance is the least expensive, and allows for a substantial coverage at a much lower cost.

If you are not looking for an investment for your surplus cash, but you do need to have a financial safety net for your family who are dependant on you, then this may be the answer for you.  Term Life, is just that, it is insurance for a term or period of time which you decide on for your convenience; usually 1 year, or multiples of 5 (for example, 5, 10, 15, 20 years). Term Life Insurance gives you the liberty and luxury of being able to insure your life, thus buying security for your dependants, at a time when permanent life insurance premiums may appear prohibitive to you. There are all kinds of circumstances under which Term Life Insurance becomes both attractive and welcome.

Without having to pay out the higher premiums demanded by forms of permanent life insurance, you can insure yourself for the time it will take your youngest child to finish college (including all tuitions), until you pay off your mortgage or any other outstanding debts, or even till the age you have decided to retire. This keeps your family financially protected and secure against unforeseen and unfortunate events.

The longer-term policies have higher premiums, as your “reinsurability” does lessen with every passing year, so you have the option of taking a one-year policy and renewing it every year (paying progressively higher premiums). Alternatively, you can calculate the difference between, say, a fifteen-year policy and an annually renewable policy and decide which one is suitable for you.

Of course, the younger you are (and therefore less likely to die!), the more substantial the coverage will be that you can get at a lower price.

Many insurance companies offer Term Life Insurance and today most of them are on the internet. As there are some variations in the length of time that you can take this policy (renewable term insurance, annual renewable term insurance, level premium term insurance, etc), it is a good idea to do proper research before coming to a decision.

All companies are willing to give quotes online, so you will be able to compare prices. Some more research will also reveal the most reliable companies, reputed to pay out claims quickly and with a minimum of fuss. If you do have a critical period in your life, where life insurance at an affordable price will bring a sense of security to all concerned, you really cannot find anything much better than Term Life Insurance.