Life Insurance

At various times in our lives we are encouraged to insure our lives to make sure that in the case of our untimely death, there is a lump sum of money available to provide our loved ones with a comfortable life or at least, not left with large bills left to pay.

There can be four parties in any Life Insurance policy. The party providing the insurance, the party being insured, the owner of the policy and the beneficiary. Normally the owner and the party being insured are the same person but in some cases, such as a firm wanting to protect themselves from losing a valuable human resource or a wife wanting to insure her husband, another party may take out a policy. The beneficiary is the person to whom the insurance is paid out to, normally a husband, wife or other family member.

Life Insurance is sold like other insurance at a premium that is worked out by taking into consideration three things. The age, the gender and whether the person being insured is a smoker. This information helps determine what premium should be charged based on mortality rates which currently assumes that approximately two people in every thousand aged 25 will die rising to approximately 25 in every thousand for those aged 65. Based on this information, statisticians will determine the premiums required to cover the risk which for a 25 year old male with a $100,000 policy, should at a minimum be around $200 per year.

The premiums paid to the insurance company are then invested to provide a pool from which claims and operations are paid.

Wikipedia: Life Insurance

A joint venture with Capital Life has seen the approval of branches set up to sell insurance to the five and a half million plus residents of the provincial capital of Jinan and an estimated 91.8 million people across the rest of the province.

Most consumers shop for and buy life insurance without understanding how a life insurance company sets rates. Lifeinsure.com, however, brings customers behind the scenes and uncovers the inner workings of insurers. A good online life insurance agent, such as Lifeinsure.com, is the easiest and certainly the most accessible way to the find the best rates.

MYTH: Insurers have similar ways to underwrite policies and all are pretty much the same in their methodology.
FACT: While there are similarities, each life insurance company has a distinct way that they underwrite or set insurance rates. Diverse factors contribute to how an insurer sets rates. An experienced insurance agent knows how to direct clients through the maze of factors and different insurance companies toward the right policy.

MYTH: Life insurance companies measure risk for populations, not individuals.
FACT: For individual life insurance, companies measure risk through a combination of broad population statistics on length of life plus a review of each individual’s health history. The factors looked at mirror the kinds of things one’s physician might look for in reviewing one’s health; including cigarette smoking, cholesterol, ratios of good cholesterol to bad cholesterol, weight, adverse medical history and participation in dangerous recreational activities (for example: skydiving or motorcycle or auto racing). If an activity or health concern, in general, might shorten a life span, it could factor into the life insurance rate.

MYTH: Everyone at the same age is charged the same for life insurance.
FACT: Women are charged less for life insurance at the same age as men because, statistically, women live longer then men. The key factors determining life insurance rates are in order; Age, health history, gender, medical history of parents and siblings and lifestyle factors such as certain recreational activities.

MYTH: People with questionable medical histories usually cannot get insurance.
FACT: What life insurance companies call “higher risk� people can often get “rated policies.� Rated policies carry an extra charge to account for the risk but can usually be found for people with health or lifestyle issues. Sometimes one company will charge extra while another will not.
It can be a good idea to use an online insurance agency such as www.lifeinsure.com to shop for you with many insurance companies. A skilled knowledgeable agent with relationships with several agencies can find good rates.

MYTH: People in a high-risk rating category are at the mercy of life insurance companies when determining rates.
FACT: A good online life insurance agency has experience discovering which life insurance companies have the best rates for different medical conditions or situations. They make insurance companies compete to find the most competitive rates for clients in higher rating categories. This is often different from a local agent who may have less access, may not have the knowledge base or is tied to only one life insurance company.

MYTH: There is not much variability among the rates charged by insurance companies for term life insurance or any of the types of life insurance.
FACT: Different rating factors lead to immense variability between rates charged by different companies. Comparison shopping pays off and a good online life insurance agent can serve as an excellent comparison shopper.

MYTH: Insurers will never know if I fib a little on my application.
FACT: Insurers are used to doing extensive background checks and can catch inaccuracies. The best strategy is to be as truthful as possible and use an experienced agent to search out a policy that takes all factors into account.

MYTH: Rates determined based on risk factors like smoking or skydiving are fixed and can never decrease.
FACT: Over time, as health improves, if one loses weight and keeps it off or quits smoking for a number of years, one can reapply to lower one’s insurance rates. There’s no downside to this, since once issued, a life insurance policy’s rates could go down but contractual rates on a life insurance can not be changed, once a policy is issued and paid for, if your health or personal activities change.

In the lengthy battle with Laci Peterson’s husband over the $250,000 life insurance policy, a judge in modesto, California has awarded the proceeds to Laci’s mother, Sharon Rocha.

Laci’s husband, Scott Peterson, who was convicted of killing Laci and their unborn child Christmas eve of 2002, maintains he is innocent and refuses to give up the claim while his case is appealed but California law states that people who kill their spouses forfeit their inheritance rights.

The Petersons had taken out life insurance policies on each other on June 25, 2001 and a year and a half later, Laci disappeared leading to a massive search that resulted in her body being found in San Francisco Bay.

LIFE insurance companies from Cyprus will be paying around £4 million for all the relatives of the victims of Helios Airways flight ZU522, which crashed in Greece on August 14, killing all 121 passengers and crew members on board.

The Life Insurance Company Union in Cyprus has already reported 92 cases where victims were covered for life insurance. Various insurances will pay out a total of around £3,417,000, a figure which remains provisional. Out of the 92 cases, 34 are people that took out family life insurances amounting to a total of £1,085,000, while the other 58 took out individual life insurances on themselves amounting to a total of £2,332,000.

Life insurance companies paying out millions

With the devastating effects of Hurricane Katrina, Forbes has announced it expects the Insurance industry will be hit with claims totalling more than $25billion making it the costliest storm in US history.

With such an enormous cost to the Insurance industry, customers can expect these costs to be passed on with an increase in premiums.

Lincoln Benefit Life Company, an Allstate Company, has decided to no longer issue new Lincoln Benefit Life branded long-term care insurance policies, effective October 31, 2005. Customers who have existing long-term care insurance policies with Lincoln Benefit Life Company will not be affected. They will continue to have their policies serviced through LifeCare Assurance, a third-party company that has administered the Lincoln Benefit product since its inception.

“This decision is in line with the focus of Allstate Financial, the life and retirement savings business unit of The Allstate Corporation, which is to simplify and strengthen our product offerings by developing a limited portfolio of top-tier products,” explains John Lounds, senior vice president in product management, Allstate Life Insurance Company.

The Lincoln Benefit Life long-term care insurance product is currently offered through independent financial representatives appointed to sell Lincoln Benefit Life Company products, along with Allstate exclusive agencies and financial professionals. The company has offered long-term care insurance since 1997.

According to Lounds, the actual Lincoln Benefit Life long-term care product and its administrator, LifeCare Assurance, have performed well, and this decision is not reflective of any aspects of the actual product performance, rather of the category in which the product resides.

“Lincoln Benefit Life’s focus is on developing and offering retirement savings and life products and we want to focus more of our attention and resources on our core product lines,” he explained.

This recent decision is one of many product decommissionings undertaken by the business unit. In fact, according to Lounds, Allstate Financial has decommissioned more than 100 products since the end of 2000. This strategy has strengthened the business unit.

The company does not expect this decision to impact net income or its workforce.

Despite this decision, Allstate recognizes the need to be able to offer long-term care insurance to the Allstate customer base, many of whom are nearing retirement. In line with this, Allstate plans to offer a long-term care insurance product issued by a third-party carrier, yet to be determined. The product would be sold through Allstate exclusive agencies and financial professionals.

Besides long-term care insurance, Lincoln Benefit Life, an Allstate Company, also offers fixed and variable life insurance, and fixed and variable annuities.

For more than 65 years, Lincoln Benefit Life Company has been an innovator in bringing insurance and annuity products to policyholders nationwide. Lincoln Benefit Life was acquired in 1984 by Allstate Life Insurance Company specifically for its ability to develop competitively priced insurance and annuity products for distribution through independent agents. By the end of 2004, the company had $211.3 billion of life insurance in force and more than $2.7 billion in assets under management. And its financial strength and ability to meet its obligations to policyholders are reflected in the high rankings it has received by independent statistical rating agencies. Lincoln Benefit Life prides itself on its ability to provide exceptional products and service to its customers.

Lincoln Benefit Life Company is a proud member of the Insurance Marketplace Standards Association - IMSA. Membership signifies commitment to honesty and fairness in the sales and service of individually sold life insurance, long-term care, and annuity products.

North American application activity for individually underwritten life insurance declined -3.1% in June, year-over-year, according to the MIB Life Index. It was the Index’s fifth consecutive monthly drop this year. Year-to-date, June application activity was off -3.3% for North America; off -3.4% and -2.7% for the U.S. and Canada, respectively. Second quarter applications (Apr.-June) U.S. and Canada combined were off -4.0% versus Q2 2004. By comparison, Q2 2004 activity was less than -1.0% below that of Q2 2003.

The U.S. MIB Life Index(SM) declined -3.0% in June, year-over-year, for all ages combined. Year-over-year, declines were seen across all three age groups: -4.1%, -1.4% and -0.4% for age groups 0-44, 45-59 and 60+, respectively. Year-to-date, the 60+ age group is running +1.5% ahead of 2004 levels. Despite reasonably consistent monthly growth, the 60+ age group remains -7.7% off from its June 2003 peak. For the second quarter, U.S. application volumes were -4.4% behind that of Q2 2004.

Canadian application activity declined -3.9% in June, year-over-year, for all ages combined. Like the U.S., year-over-year declines were seen across all three age groups: -3.9%, -4.3% and -2.2% for age groups 0-44, 45-59, and 60+, respectively. For the second quarter, Canadian application volumes were -1.6% behind that of Q2 2004.

At a time when a section of the existing life insurance players prepare to exit from the intensely competitive market, new and strong players are warming up to take on the challenge.

Among the first of the new set of entrants could well be Punjab National Bank (PNB).

The RBI has given its go-ahead for the bank’s proposed foray into the life insurance business. The new company would aim to be a niche player with a predominant focus on the group life insurance segment.

The life venture would be floated jointly with the Principal Financial Group, US, and Bangalore-based Vijaya Bank. There is also a possibility that Berger Paints might participate in the equity of the life insurance company that is to be christened Principal PNB Life Insurance Co. Confirming the development, Ranjan Dhawan, General Manager, PNB, said that the new company would soon be moving the Insurance Regulatory and Development Authority (IRDA) for the final approvals before taking a plunge into the market.

PNB set to enter life insurance biz

Shriram Life Insurance Co, the recently formed joint venture between the Chennai-based Shriram Group and the Sanlam Group of South Africa, has obtained the licence to operate in the crowded life insurance market in the country.

The company, which received the R1 licence from the Insurance Regulatory and Development Authority (IRDA), is set to commence operations from September 1, a press release from the Shriram Group said here on Tuesday.

The Shriram Group manages funds of over Rs 6,700 crore in its truck financing business and has a significant presence in consumer durable financing, insurance and stock broking. Sanlam Life Insurance, a part of Sanlam Group, is one of the biggest life in surance providers in South Africa.