Monthly Archives: May 2016

Find The Best Plan – Cheap International Travel Insurance

When traveling abroad, one must always take in consideration good and cheap international travel insurance. Travel insurances have now become a necessity when traveling. Many travel companies and insurance companies have coincided so as to make sure they provide the customers with the superb service they truly deserve. There have been many packages that come together with the booking of travels. Several cheap travel insurance can be searched online and offline, through a visit to a well respected travel agency or insurance company. This travel insurance makes sure that a trip is well secured with the assurance that the client will not have to worry about sometimes inevitable situations. Several coverage terms are available for different companies. They key to getting a good deal is through rummaging amidst the plethora of the offers available.

Being well informed of the availability of the offers is one good way to start a deal. Overseas travel is an adventurous risk which could lead to several uncertain situations as well. Countries have different cultures and even their medical systems are quite different from each other. A traveler may have a medical plan but having one does not assure that the international medical needs will be covered. Aside from these, basically, the two main reasons why a person must get cheap international travel insurance is the fact that sometimes, a trip is cancelled or it is delayed. When this happens, the travel insurance can take care of the expenses to be incurred. Cheap travel insurance worldwide is required for security. It will also provide the client the peace of mind he or she deserves when on the trip. Worldwide travel insurance is a must have for every traveler. An ideal plan covers the trip cancellation, medical transportation expense, baggage loss, delayed departure, curtailment, legal assistance or even overseas funeral expenses. However, carelessness will not be taken cared of by the company. The insurance can be arranged upon the time of booking the trip.

Most travel agencies offer cheap international insurance on packages. These packages are based on the traveler’s needs and wants. The traveler is therefore always the one in charge. He or she is the one responsible of choosing the perfect plan to suit his travel.

There are also some travel networks sites on the internet which provide information that is always easy to understand and offer rates that are within your budget. Having cheap online travel insurance can make someone smile without all the worries of unexpected expenses. A couple of them also offer a free and instant quote for the traveler to know what type of insurance he or she is most likely to avail.

There are several types of travel insurance. There is this thing called the emergency evacuation covering the medical expenses, group travel, annual multi-trip for those who travel on a regular basis, international insurance benefits for families and many more. Global travel insurance is the best way to ensure that the trip will be hassle-free.

To learn more on how to find the cheapest travel insurance policies visit also finding a cheap travel insurance company to get all the information you need to know to find out cheap annual travel insurance plans.

Tips to Purchase Travel Insurance

Buying travel insurance is not as simple as you think. Firstly, it is way more different than buying an article you’ve long desired and wait for its price to drop soon. It’s even different from buying an airplane ticket where you go online and do a price comparison to look for the cheapest one.

People who are new to it often find it very hard to get their way around it. Firstly, they struggle with the idea of whether they really need to get it or not. Most travelers believe they don’t really need it and coverage is simply spending more money unnecessarily.

To solve your confusions, here is an ultimate guide to buying travel insurance.

1. Do You Need Insurance?

To begin with, there are many countries that won’t let you in if you don’t have it. But the chances are that you’ll get away with many destinations that allow you to get away without it.

So do you wonder why you still need that? You’re right in thinking so. But it’s mandatory to be traveling with valid travel insurance. You plan a vacation because you want to escape all the stresses of life and have the time of your life. That is great thinking, but might not always end up being how you’ve planned.

Accidents never come with an invitation and are never welcomed. But they can become very bitter if you’re not prepared to battle with them. This is where travel insurance comes extremely useful.

2. Buy it Early

We all refrain from buying travel insurance because it is expensive. One of the sensible ways of saving on your buy is to get your travel insurance early. You’d still be only paying for the time you’re traveling.
However, you would still be covered for that time free of any charge.

So if you choose to purchase your insurance three months prior to flying, any changes to your travel plans are likely to be covered by your insurance company. It’s better not to wait last minute for things to go wrong and get your insurance beforehand.

3. Purchase Online

Nearly all of us admire online purchasing simply because there are plenty of discounts available. This is why it may be a great option to buy your insurance cover online.

However, this is not as simple as it may sound. Online purchases are mostly done with a low price indicator. But when buying travel insurance, there’s way more than just looking at the price. Before making the purchase, it is a must to carefully examine your policy and ensure you’ve studied it in depth.

Domestic as well as international traveling must be worry free if you truly wish to enjoy it. But when you purchase your insurance cover, it is very important that you can fully trust your company with their policies and know exactly what you’ve opted for. Once you experience this, you’d never go anywhere without travel insurance!

Don’t Risk It, Get the Protection and Security You Need With Travel Insurance

Let’s face it, getting travel insurance can be a very overwhelming and tedious process, making it easy to put off and even forget entirely. But before you head off on your international adventure, you might want to consider getting coverage through some travel insurance, just to be on the safe side.

With some luck, you’ll be glad it’s something you have and won’t need to use. But we all know that in life things happen, so it’s a good idea to find a travel insurance policy that fits your individual needs, travel agenda, and budget. Many travel agents and private companies offer travel insurance, and they have a wide variety of types and options to choice from.

What does Travel Insurance cover?

Basic coverage of travel insurance includes some financial losses while traveling, as well as limited medical expenses, including medical evacuation. The most common type of travel insurance is trip cancellation or trip delay insurance. This type of policy covers you and your travel companions in case you need to cancel, interrupt or delay your trip. However, the acceptable reasons for canceling or interrupting your trip will depend on the insurance policy, but most likely you’ll be covered for the following reasons:

o Sudden business conflicts
o Change of mind
o Delay in processing your visa or passport
o Illness or injury
o Weather related issues

In case your flight is canceled or delayed, travel insurance companies may provide additional coverage such as expenses that the airlines won’t cover, like taxi fares to the hotel or meals during your wait at the airport.

It’s also a good idea to have a plan with medical coverage of up to $1,000,000 in the case you become ill, need medical assistance, or have a flight accident occur. It’s also good to review the amount deductible by your insurance plan (this is the amount you’ll need to come up with before the insurance company picks of the rest). Make sure it covers repatriation (evacuation to your home country, rather than the nearest regional medical facility); make sure that does not mean you will be sent to the country where you purchased your travel insurance plan either, but your home country. If you’re planning a visit to multiple countries, make sure all the countries are included in the region covered by your insurance policy.

To learn more about these types of coverage and more specialized coverage, read The Basics of Travel Insurance.

To invest or not? How to make travel insurance work for me.

Purchasing travel insurance is great for insuring your money, should any unforeseen events pop-up, especially if you invest large sums of money on extravagant travel packages. To determine whether you want to invest in travel insurance your not, ask yourself these questions:

o Did you invest a lot of money into your travel plans?
o Are you traveling overseas?
o Which regions or countries are you visiting and for how long?
o Are you planning on participating in any extreme sports?
o Can you afford the cost of your trip back home if any emergency arises?
o Will you be able to afford medical care if you or someone you are with gets sick and needs immediate medical attention?
o How old are you and how is your overall health?
o Do you have any pre-existing conditions that need regular, special attention?

You can purchase your travel insurance for a single trip, multi-trip, or with an annual policy, all depending on how frequently you travel and the length of your trip. Comprehensive travel insurance can cost anywhere from 4% to 8% of the cost of your trip, depending on type of coverage, the length of the trip, the destination, and the age of the travelers. It is best to purchase your travel insurance between 7 to 21 days of purchasing your travel itinerary. Usually the maximum coverage period for insurance providers is for one year abroad.

Go through the fine print on your policy and check whether you will have to pay on the spot and redeem the money later for any medical expenses, or will the insurance company pay providers directly. If you have to claim it later on, you will want to hang on to all documents.

If you have a pre-existing medical condition, get an insurance policy that will specifically cover it. Also examine which adventure sports and activities the plan does and does not cover (rarely does it include scuba diving and hang gliding). Lastly, for your benefit, a policy that is flexible and can be extended while you’re already away is recommended. You never know whom you’ll meet, and you just might want to extend your trip.

Another good tip would be to get in touch with your credit card issuer before investing in travel insurance. A credit card information site, suggests calling your credit card issuer to see if you have any free travel benefits that you may not be aware of, for example, insurance on lost or damaged luggage. However, according to USTIA, canceling a trip at the last minute and being reimbursed by your credit card company is the most common misconceptions among travelers. And sometimes credit card companies have limitations on only cover up to 3 months of travel. It’s worth investigating.

Lastly, if you have existing health coverage, it would be wise to get in touch with them before hand, especially if you will need vaccinations and other medicine for your trip. Depending on your health insurance plan, ask for a ‘travel packet’ and they will send you important information regarding your coverage, if any, while abroad. It might turn out you might already be covered for somethings, but not for others.

Where can I purchase Travel Insurance?

There are many sites and companies offering travel insurance online. Among them are leading companies. A new online resource, helps travelers easily and instantly compare all the major travel insurance plans at one site. You’ll be able to get immediate quotes from several major, reputable travel insurance providers and compare policies and their prices. It’s a good starting point and one that you can trust.

Helpful Tips for once you’ve purchased your Travel Insurance:

o Scan your insurance policy electronically and save it somewhere securely online
o Make one copy for yourself to bring on your trip
o Make another copy for a trusted family member to keep at home
o Have the emergency hotline number accessible during your trip, but make sure you try it out before leaving home to ensure its operating and correct
o List out any medications you are taking (including vaccinations for your trip), and a list of allergies you have; keep this with your insurance emergency number
o Keep all receipts at home
o Review all the fine print in your insurance policy and determine which adventures you will be taking and which risks might not be worth it

Finally, get ready for a trip of a lifetime! Hopefully you’ll avoid ever using your insurance plan, but it will give you and your loved ones more security knowing you’re protected.

Travel Insurance For Backpackers And Hikers

If you have a tour in your mind and you want to travel the free way, a good backpacker travel insurance policy is a thing you must consider before tour. Backpacking trips are bit riskier than regular planned travels. So in such case good backpacker travel insurance becomes a mandatory criterion for a hassle free tour.

Most of the insurers don’t know all the benefits of insurance as they are unaware but these insurance policies help a traveler in many ways.

A Backpacker insurance policy is basically for those who are low on budget. You don’t have to pay high for regular insurance policy but you will surely get the essential coverage with backpackers travel insurance policy. It covers you and your luggage at very less cost, as this type of insurance is designed for backpackers who are known for their low budgeted and unplanned travel schedules.

Before going through you must know backpacker insurance policy and its features.

Features provided by backpacker travel insurance

There are some important features and coverage that backpacker travel insurance policy can provide, these are as follows;

  • In case if you have to extend you trip due to any unexpected reason, backpacker insurance covers it too.
  • You get all covers round the clock all the year no matter what time or circumstances are there.
  • If you get sick during you trip, all the medical expenses will be covered by backpacker insurance providers. Most of the time such insurance policies also covers personal incidents that occur during travel (please confirm this before buying insurance policy from you insurance provider).
  • Many travel insurance firms provide option to opt out which they don’t want to be covered and ask for the things which they want to be covered. This flexibility is an added advantage for insurers.
  • Many travel insurance firms provide the option to the insurer that what they really want to be covered in their policy. This flexibility is an added advantage for insurers.
  • Many backpacker tours for winter sports, some travel for scuba diving. Such adventurous sports have high risks involved which can lead you to physical damages. Covers for such sports are also available as an optional measure. You can add such sports covers in your existing insurance for added safety.
  • You can extend you insurance any time with a single click sitting at your home in front of your computer.
  • Make sure that insurance policy covers the location in which you are planning to travel. Some travel insurance companies provide insurance policies only for a certain country.

Now the biggest which every travelers generally asks is “Do I really need a backpacker insurance policy? And is it really worth it? ”

Backpacker travel insurance is surely recommended for you if you fell into any of these categories

  • You travel alone at places which are expected.
  • Your travel schedule is unexpected and never planned.
  • You have medical history or you are above 50 years of age.

Backpacking is surely an adventurous trip but it has its own risks too. Backpackers are very prone to injuries, robbery and related issues. There are some possible issues in which backpackers can easily get coverage. These are as follows:

Tour cancellation – Trips are cancelled many times due to many issues. Sometimes due to bad weather and sometimes due to some personal reason, one has to cancel his/her trip.

Emergency medical care – backpackers are very much prone to issue like food poisoning, diarrhea and other infections. Such diseases can lead to serious health issues which can be covered by purchasing insurance.

Accidents – accidents are common and can be occur at any time. Insurance not only covers for your injury but also the person affected by your mistake.

Theft or robbery – backpacker usually travel alone. They also stay at budget hotels. All this makes them prone to things like baggage theft and robbery.

Considering the current global scenario which is quite unsafe, having proper backpacker travel insurance is very necessary.

A backpacker insurance policy can be a great help for every traveler who wants to travel the free way. So what are you waiting for? Get a backpacker travel insurance for yourself and roam free

Author is an travel insurance adviser who is spreading awareness about backpacker travel insurance

Fire Insurance Coverage

Home-InsuranceThe term ‘insurance’ is a written guarantee, which safeguards an insured individual and his/her assets in troubled times. For this guarantee, the individual needs to pay a substantial amount to the relevant insurance company, periodically, which is called a ‘premium’. This same money (and more) is used to help the insured individual in times of trouble.

Thus, when we talk about health insurance, it means that when we fall ill/undergo a surgery, the arising expenses will be borne by the insurance company. When we talk about car insurance, the cost to repair the car in case of damage will be borne by the company, and so on. All this certainly involves a lot of paperwork and legal jargon. In this article, we will learn about the importance of fire insurance coverage, its types, limitations, etc.

The Theory Explained

-Fire insurance is a type of insurance in which an individual pays some amount of money to the insurance company periodically, and in exchange, the company helps him/her out if and when that individual suffers loss or damage of property due to a fire.
-It should not be confused with property insurance, as it covers repair, reconstruction, even replacement costs much beyond what is covered in the latter.
-There is a maximum limit up to which the costs may be covered, this depends on the conditions written in the contract and the amount of loss that has occurred.

Coverage Conditions and Limitations

As mentioned earlier, this policy helps recover whatever is lost in case of a fire accident. However, in most cases, the contract will have a specified amount that is agreed to, mutually, at the time of signing the contract. This amount is what the affected person can claim at the time of loss. And it may not be equal to the loss that occurs. Also, there are exceptions to what a fire insurance can cover. Losses incurred due to a fire that is caused by natural causes―lightning strikes, or earthquakes―are not covered by fire insurance. According to the insurance companies, a ‘fire’ means the production of light and heat by combustion or burning. Thus, the loss that occurs should be the result of accidental ignition. The loss also includes the damage caused by efforts to extinguish the fire.

Therefore, a claim for loss by fire must satisfy the following conditions:

-The reason for the loss or damage should be an actual fire, i.e., it should not be caused by just high temperature or so.
-It should be accidental, not intentional. If it is deliberately caused, the insurer is not responsible.
-The damage must relate to the subject matter of policy.
-The goods damaged must be on the premises where the incident occurs.

Types of Losses

Losses covered by the policy include:

-Wages paid to fire-extinguishing staff.
-Furniture/other items that are destroyed in the process of saving them.
-Items damaged due to water that is used to extinguish the fire.

Losses that are not covered by the policy include:

-Damage caused by spontaneous combustion (if a bomb explodes due to its own defect).
-Damage caused due to wars, riots, earthquakes, rebellions, mutiny, enemy hostilities, etc.
-Damage caused due to burning of property by public authorization.
-Damage due to a theft occurring before or after the incident.

Types of Policies

Actual Value Policy
It pays you the full value for your current house minus any depreciation. There are certain limits regarding the maximum payout available in the event of a fire. This is decided by the insured individual and the insurer at the time of signing the contract.

Replacement Value Policy
It covers the cost of replacing the existing home. However, this can get a little complicated, because if the value of the property has depreciated since its purchase, the payout also decreases. However, if the value has gone up, the payout increases.

Floating Policy
It covers the damages to property that belongs to the same person, but which may be located at different places. This is done under a single sum and for a single premium. For instance, this policy might cover goods lying in two warehouses at two different locations.

Specific Policy
It covers the damage up to a pre-decided, specific amount. The selected amount is less than the real value of the property. The actual value is not taken into consideration while determining the amount of indemnity. In such policies, the ‘average clause’ does not exist, which makes the insured individual liable to take some damage upon himself.

Some other types are valued policy, comprehensive policy, etc., which more or less contain the same clauses and conditions of the above mentioned policies.

Importance – Why is it Needed?

The importance of this policy can be ascertained after listing down its benefits, as follows:

-It covers the damages occurred to the building.
-It covers for damaged home decor (if any), like carpets, clothes, wardrobes, plywood furniture, etc.
-It pays for the expenses incurred due to damaged electronic items, like television, cooler, computers, etc.
-In case of a business, i.e., if an office building or factory is destroyed, it covers the price of the shares broken.
-It covers the medical expenses for the employees if they get injured.
-In case of loss of life, it provides the loss of life advantages to the employee’s family.
-It pays for repair and replacement of the machines and other electrical/electronic items, and assets that are destroyed due to the incident.

A fire accident can incur heavy property and financial loss. Having a fire insurance coverage saves you from financial disaster and bring you back from the cold. Of course if the incident is natural or intentional, the policy may or may not cover the damage; however, at a turbulent time when you’ve probably lost your house, money, assets, this policy will help you. You can already fathom this by reading the advantages mentioned above. That is why a fire insurance is so very important. It is a safety net that will protect you when you are threatened by a fire accident.

A fire accident may or may not occur, but do not risk the chance. You have worked all your life for your house and other belongings, do not ignore the importance of this policy, for it will safeguard you in trouble.

What Does Homeowners Insurance Cover?

Homeowners insurance policies, better known as HO policies, have been designed to help home owners safeguard their home and personal belongings. Considering that they have the responsibility of protecting their home and personal property, they should definitely opt for insurance. In fact, they can be sued by people who accidentally fall and injure themselves on their turf. Moreover, a homeowner may also be forced to vacate the home and arrange for alternate accommodation in case the home gets damaged. Thankfully, a wide range of insurance policies are available in the market.

Basic Homeowners Insurance
The most basic policy insures the property against damage due to 11 factors or perils of nature. Some of these factors are: fire, lightning, smoke, vandalism, theft, ice, snow, windstorm hail, riot, and volcano eruption. The popularity of this policy, better known as HO-1, has diminished over the years, since the policy does not protect against loss or damage to property on account of plumbing issues as a result of freezing. Loss on account of heating system malfunction is, again, not covered by this policy. HO-2 is also a basic policy, but with a wider scope of coverage. HO-2 protects the property from damage on account of 17 factors, and hence, it is a marginal improvement over HO-1.

Popular Homeowners Insurance
It’s evident that both HO-1 and HO-2 provide only minimal coverage. For people who live in areas that are not prone to floods or earthquakes, HO-3 is a good policy, since it provides peace of mind to the homeowner on many fronts. For instance, this policy provides protection to the homeowner who may get sued by people who meet with an accident on his/her turf. Damage to the residence and personal property are also covered by this policy. As far as damage to the home is concerned, the insurance company agrees to pay the price that is equal to the cost of replacing the property (replacement cost). In case of personal property, the homeowner is entitled to receive the actual cash value of the property. For people living in flood prone areas, flood insurance should be purchased in addition to HO-3.

Actual Cash Value = Cost of Replacing the Property – Depreciation of the Property

Most Comprehensive Policy
The HO-5 policy or Comprehensive Form Policy, is equivalent to purchasing an HO-3 policy with a ‘Special Personal Property’ endorsement. This would help protect unscheduled personal property from all possible risks, except those that are specifically excluded. It’s no wonder that the cost of this policy is 15% more than the cost of the most popular coverage provided by HO-3.

Insurance Policy for Older Homes: In case of older homes, the cost of replacing the property is usually more than the market value of the property. This is on account of depreciation. Hence, for older homes, insurance will not cover more than the actual cash value of the property. This is where the HO-8 policy, which is a modified version of the HO-1, assumes importance.

Since homeowners insurance is indispensable, the owner should shop around for the best homeowners insurance quotes after settling on the appropriate insurance policy. Tenants can also ensure that their personal property is protected by opting for HO-4, better known as Contents Broad Form or Tenants Policy.

Home Improvement Addition

Renovating your home is certainly the best opportunity, not only to step-up your living space, but also to add to the value of your house. There are many ways in which you can increase the value of your house. You can get attractive interiors done, expensive furniture installed, and even build a fireplace. However, all these things would not add as much value as a complete well-planned home re-modeling would. When you think of financing the plan, you need to be well-prepared by considering many factors. Getting to know all the important aspects such as home market values in your locality, minor home upgrade expenses, architectural plans and patterns, home improvement loans, timetable, and schedule for completion, can save you valuable time and preclude unnecessary stress.


Zoning Policies and Regulations
The first thing you need to do is receive permission from the local government authorities to commence with the construction. In a majority of regions, you are required to abide by your city or town zoning policies and ordinances, and also obtain a construction license before building an extension to your home. The expenses for such licenses may differ from state to state. However, you need to be ready for spending around 2 – 5% of the entire cost of the renovation on this license.

Structural Specifications
You are required to carry out soil testing which would evaluate the stability of the soil on which you intend to build the addition. If you reside in a coastal area which has a substantial amount of loose soil or clay in the soil, such tests can help find if you would need pilings to hold the structure firm. Most of the contractors provide such services as this is a decisive step in the renovation.

Choosing a Contractor
You need to be very careful when choosing the appropriate contractor for the work. Get referrals from your friends, family, and colleagues for a good contractor, or look out for builders who provide special services in the type of architecture you desire. When choosing a suitable contractor, ensure that he is licensed, bonded, and covered with insurance. This not only ensures that you employ one of the best contractors around, but also protects you in the situation of a mishap. Finally, choose a contractor who will suit your needs, and most importantly your budget.

Considerations for Unexpected Errors
Plan your budget according to some costs that may not be anticipated. Probably, after deciding on a firm budget, you might think of adding more to the existing plan. You also need to consider the expenses which may incur due to some unfortunate occurrences such as damages to the house’s power supply. Irrespective of the possibilities, you need to include a margin for errors in both the estimated budget and also the approximate completion date for the project.

Home Insurance Updates
In a majority of cases, making an preferment increases the value of the house. It is crucial that your home insurance policy covers the changes and modifications that you are anticipating. To avoid any issues later, it is recommended that you consult with your insurance agent before you start with the construction.

While planning your house renovation, make sure you consider these important points for a hassle-free execution of the plan.

Get The Best Homeowners Insurance

A homeowner has the responsibility of protecting his home from unforeseen events that can cause irreparable damage to his property. Homeowners insurance policies, also known as ‘HO Policies’, protect the home against damage, and provide insurance against loss of personal belongings.

Choosing the Appropriate Policy

HO-1: This is the most basic policy that covers damage due to the following factors: fire, lightning, smoke, vandalism, theft, ice, snow, windstorm hail, riot, and volcano eruption. Since this policy provides very basic coverage, its popularity has faded over the years.

HO-2: In addition to insuring against the above mentioned events, this policy protects against loss due to the following: freezing of plumbing, flooding due to plumbing overflow and heating system malfunction. Generally, mortgage lenders insist on a homeowners insurance. This is because the house functions as their collateral. While HO-1 covers damage due to 11 factors, HO-2 protects against 17 factors that may result in loss of property and belongings.

HO-3: This policy provides protection against the perils of nature. The premium may be higher in case of homes located in areas prone to hurricanes and windstorms. The policy also covers up to $2,000 worth of jewelry against loss due to theft. It covers the cost of rebuilding the house in case it gets destroyed. Just like the HO-2 policy, HO-3 covers the cost of damage to the house on account of flooding due to plumbing overflow and heating system malfunction. Liability suits that may be filed against the homeowner by people who may get injured on the property are also covered by this policy. However, it provides no protection against floods and earthquakes, for which, a homeowner is expected to buy additional insurance.

HO-4 and HO-6: These policies do not cover any damage to the building. They only provide protection against loss of personal property. Hence, it is ideal for condominium owners and tenants.

HO-5: This is the most comprehensive policy. The cost of the policy is 15% more than the cost of HO-3. In addition to including the coverage provided by HO-3, this policy insures against loss of building and property due to a number of factors. Buying a package that provides protection against a number of factors gives peace of mind to the owner. Also, it is cheaper to buy a single policy that protects against a number of factors, rather than buying individual coverage.

Shopping for the Best Quote

A homeowner should shop around for the best quote after deciding on the appropriate policy. He/she may get a good quote by installing motion sensors and surveillance cameras. In general, arming the house will help get a good deal on the policy. The insurance company should have strong fundamentals and should not be involved in any insurance fraud. The homeowner should also be aware of any consumer complaints against the company.

The amount of HO policy coverage for personal belongings is generally half of the amount of coverage provided for the home. Although a HO policy remains in effect, a landlords insurance policy is a must for houses that have been rented out or leased. This is because, ‘HO policies’ are only designed to provide adequate coverage for owner-occupied houses.

Life Insurance Benefits

The death of a family member is traumatic, especially if he or she was the breadwinner of the family. At such times, the bereaved family members have to cope with not only a personal loss, but a financial crisis as well. This is where life insurance comes into picture. It guarantees that in your absence, your loved ones are taken care of, and are financially secure.

What is Life Insurance?

Life insurance is a legal contract between two parties, namely the insurance company, and the policyholder. It ensures that the beneficiary receives financial support in the event of the insured’s death or accident. The terms of the insurance policy state that the policyholder agrees to pay the specified premium at regular intervals. Life insurance depends on a host of factors, including the age, income, expenses, outstanding loans, number of dependents, health, etc. It is mainly of four different types, universal life insurance, term life insurance, whole life insurance, and endowment life insurance. Described in detail below are the advantages life insurance offers.

Benefits of Life Insurance

-Life insurance provides monetary coverage to the family members in the event of the policyholder’s demise.
-It acts as an excellent investment, protecting your assets. Life insurance provides custom-made investment options that are suited to one’s changing financial needs at different ages. Planning for your children’s higher education, marriage, a home, and even retirement options can all be taken care of by investing in life insurance. For a young couple with kids, life insurance can provide education as well as wealth insurance. Whereas for an elderly couple, the same can offer retirement and mortgage plans. Whatever money you saved when you earned, now serves as a source of income when you retire.
-After the demise of the insured, life insurance can be a constant source of income for the bereaved family members, making it easier to fund children’s education and pay bills on time. If the policyholder has incurred any debt during his lifetime, a policy cover will help his spouse/family to repay the debt.
-Funeral expenditure nowadays is costly. Paying for the services, at a time when you are still numb and reeling from the sudden loss of a loved one can be hard, to say the least. In such cases, a life insurance policy can come to your aid, by taking care of the funeral expenses.
-You can add riders or health insurance plan to your life insurance policy, and have guaranteed protection against the increasing hospitalization costs and critical ailments.
-When you apply for a policy, you need to pay the stipulated premium at regular intervals. This practice gets you into the habit of saving a certain amount of money for long-term use, which is essential to satisfy your financial needs.
-Life insurance is non-taxable, and hence makes for a great source of savings.
-In case of a cash crunch, when the policyholder needs a loan, he can avail of one through the insurance policy, without having to worry about the hassles of repayment. The insurance carrier deducts the loan amount from the life insurance policy upon maturity.
-If the policyholder owns a piece of land, he has to pay estate taxes. If he intends to transfer the possession to his heir, a life insurance policy can help by offering the required funds.

Thus, you have seen how essential it is nowadays to opt for a life insurance policy. If you haven’t yet applied for one, do it without delay. Do it at a time when you are young and healthy, with no major ailments. The sooner you apply, the lesser the premium amount you have to shell out. Compare insurance quotes from several companies. This way you can make a wise and informed decision based on what’s best for you and your family’s requirements. In case anything happens to the breadwinner of the family, life insurance can come instantly to rescue. It can be your ally in the worst of times, working like a protective blanket, offering monetary assistance and peace of mind.

Whole Life Insurance Advantages

Whole life insurance is also called cash value insurance or permanent life insurance or straight life insurance. It provides coverage for the entire life as long as premiums are being paid. These premiums are decided at a fixed rate. Further, the insurance company invests some part of the premiums and creates a savings account or cash value that gradually accrues, and is tax deferred. This cash value can be withdrawn or borrowed. However, such a transaction can cause a decrease or cancellation in the death benefit. In case of the following four conditions, a whole life insurance may be purchased.

-It is possible to pay the premiums and obtain the required coverage
-The savings in the life insurance policy won’t be required for minimum ten years
-The policy is affordable and has good rates
-There is a need of more tax deferred savings


Some of the major advantages are described below:

1 – Constant or Fixed Premium
In term life insurance, the premium increases on renewal. In case of whole life insurance, the premium remains constant. It does not increase with time. Also, if dividends are used, the premiums that have to be paid are minimized.

2 – Death Benefit
The death benefit does not decrease in case of whole life insurance. When demise occurs, this death benefit is not subjected to federal income taxes. As per the requirement, the death benefit can be accepted as a lump sum amount or a monthly income.

3 – Cash Value
In contrast with other life insurance policies, the whole life insurance policy accrues usable cash. As the policy holder pays premiums, this cash goes on increasing. In case the policy is surrendered, the policy holder gets the cash values. This cash value is tax deferred.

4 – Dividends
A participating whole life insurance policy has a feature of dividends. These are received as cash. They can be used to minimize premiums, to generate interest or purchase paid up additions.

Other Advantages

-The policy guarantees a high degree of safety.
-This insurance provides coverage for a lifetime.
-It generates tax deferred cash.
-Some withdrawals and loans are tax favored.
-A non-participating insurance has relatively less out-of-pocket premium payments.
-In participating insurance, the dividend can be used to purchase paid-up additional insurance, and this results in increasing the face value of the coverage.
-In limited payment insurance, the premiums are paid for a limited number of years, while the coverage is for the entire lifetime.
-In single premium insurance, there is only one large premium, and hence, the policy has an immediate cash value.
-In indeterminate premium insurance, the premium is adjustable, but never more than the maximum value stated in the policy.
-The policy holder can borrow a loan using the cash value as collateral.

Types of Whole Life Insurance

As is obvious from the above information that these benefits can be gained through different types of whole life insurance. Now, let us take a look at the major types, and understand their features in brief.

In non-participating whole life insurance, the premium and face value remains constant for the insured’s entire life. The costs of this policy are fixed, but it does not pay any dividends.

A participating whole life insurance has a feature of paying dividends. These dividends are a consequence of favorable mortality, excess investment earnings and expense savings. However, it is not warranted that these dividends would be paid to the policy holder. They may be used for a variety of purposes.

The above-mentioned categories have a variety of options which are mentioned below:

-Level premium whole life insurance
-Limited payment whole life insurance
-Single premium whole life insurance
-Indeterminate premium whole life insurance

The final decision to opt for insurance should depend on what sort of coverage you want and your current physical and fiscal health.