Life Insurance Policies- Term Life Insurance and Permanent Life Insurance Basics

The basic idea about life insurance is to make sure that our loved ones are provided for in the untimely event of our death.

There are a few benefits to a life insurance policy that will come in handy to you while still alive. Life insurance is put defined into two categories- Term Life Insurance and Permanent Insurance.

The Term Life Insurance covers an individual for a certain amount of time while the Permanent Insurance covers an individual for their whole life. Term Policy premiums are noticeably lower that the Permanent Life Insurance.

Permanent Life Insurance does offer the policy holder the right to build a tax-deferred cash value through their policy that they can use in case of emergencies.

The cash value associated with the Permanent Life Insurance grows steadily over the first 10 years of the policy and then will grow at a faster pace after that. Some policies will have a more steady cash value than others, but once you attain that full value, it can come in handy in a lot of different situations. Some individuals choose to pay up their policy with the cash value while others would prefer to take out a loan against their policy that offers a lot lower interest rate than can be attained from financial institutions.

If you do take a loan against your policy, you are not required to pay it back as you would a loan from your financial institution, but keep in mind that the amount that you borrowed and all applicable interest will be deducted from the amount that is given to your beneficiary at the time of your death. What is known as a total or a partial cash withdrawal can also be made from your permanent life policy.

Specifics of this will vary per policy but the withdrawals usually will reduce the benefit equally. If you were to take out $10,000 from a $30,000 cash value, you would have a reduction on the death benefit of $10,000.

Permanent Insurance Policies will be in effect for your lifetime, assuming you make all applicable payments to the company. Term Life gives you coverage only for a specified amount of time, but will offer you lower premiums that you are required to pay.

All in all, conducting thorough research and comparisons on multiple life insurance policies can sometimes be very time consuming and stressful. Take your search for insurance quotes online and watch how much time, money, and aggravation you save.

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Do You Find Insurance Confusing? Here's an Essential Guide Just For You

Insurance can at times be somewhat of a minefield for many people; with so many different products available, choosing the right one and making sure that we are properly covered can be a challenge. Although this may be the case, it is also an essential part of our everyday living.

Buildings Insurance

Your home is likely to be your most valuable possession so it is important to ensure that adequate buildings insurance cover is set in place.

Buildings insurance covers the structure of the building plus anything you would normally leave behind when you move. This will include things like patios, drives, fences, walls and permanent fixtures like kitchens and bathrooms. Accidental damage caused by fire, storms, or burst pipes, for example will also be covered.

Having buildings insurance cover in place is not if fact a legal requirement although nearly every mortgage lender will insist that cover is taken out as they look to protect what is their asset too, albeit temporarily.

Many lenders will offer a block building insurance policy arrangement. The cover provided and premium rate are agreed between the lender and insurer, but instead of issuing each borrower with an individual policy number a master policy is set up, with both the lender and insurer having copies.

These premiums are not always the most competitive in price so it is advisable to shop around for quotes also.

The amount that each property will need to be insured for will of course vary. The valuer will provide a figure for the re-instatement value of the property, ie the cost of rebuilding in the event of total destruction. There is no specific link between this figure and that for the valuation for mortgage purposes, or the price that the purchaser has agreed to pay.

Contents Insurance

Contents insurance offers cover on the household goods and possessions inside your property and will often include the garden too if applicable. In other words, contents can be defined as everything that you would normally take with you when you move.

The lender will not insist that you take out a contents insurance policy however in many cases it is advisable. Not doing so could see you unable to replace your belongings in the event of disasters such as fire, flooding or burglary.

Many policies offer cover on a \’new for old\’ basis which means should anything happen to your possessions such as the TV or washing machine; you should be able to replace the damaged goods for a new model.

Mortgage Payment Protection Insurance (MPPI)

Mortgage Payment Protection insurance (MPPI) is also known as accident, sickness and unemployment (ASU) insurance and, as the name suggests, it covers your mortgage repayments if you have an accident, fall ill or lose your job.

Most policies will provide cover for a period of 12 months. Your policy should cover the full amount of your mortgage and linked expenses such as other insurance policies and pension plans.

Many providers of payment protection insurance will offer modular coverage. For example, you can choose unemployment only option if job loss is your main concern or an accident & sickness only module depending on what you feel is more important to you.

You won\’t be able to claim money against your policy immediately after you make a claim. Typically, you have to wait three or four months – what is known as the deferral period – before you begin to receive insurance payouts.

Often however, for an additional charge, some insurers will provide back-to-day-one cover that covers you from the first day you make a claim.

Payment is made 30 days after you made your claim and you need to have been off work for at least a month. In addition most policies have an excess period – usually 30,60 or more days – that is excluded from the payout should you make a claim.

Life Insurance

Life cover pays out a lump sum when you die, or earlier if you are diagnosed with a terminal illness. This lump sum payment may be used to pay off an outstanding mortgage or simply passed on as part of an inheritance.

There are two types of life insurance: Level term and decreasing term.

Level term insurance will often run alongside an interest only mortgage. It lasts for a set period and pays out the set amount you chose at the outset in case of death during the term.

Decreasing term insurance often run alongside a capital repayment mortgage. It offers a smaller payout year on year as the outstanding mortgage debt falls.

With both types of insurance there are many factors that the provider will take into account when calculating the premium. These factors will include; your age, weight, whether you a smoker or non a smoker and your medical history amongst other things.

A Five Point Plan When Taking Out Insurance

1. By speaking to a specialist adviser before you buy insurance could pay off. Ensure that you adviser is able to offer a range of policies from a variety of different providers.

2. Shop around for mortgage payment protection insurance (MPPI). Don\’t just agree to take out the policy offered by your lender without doing some research of your own. Policies offered by the lenders are not always the most competitive in the marketplace.

3. Don\’t forget to budget for your monthly insurance payments. For MPPI & Life insurance, the younger & healthier you are, the lower your costs, however payments can still easily add up to over £50 per month.

4. Never forget to find out what your excess is, or how much you need to pay before your insurance will pay out. Many policies have exclusions so don\’t forget to find out what these are too.

5. Many people fail to adjust their insurance policies accordingly when their circumstances change. If you insurance policies are not reflecting your current commitments then you could find that you and your dependents are underinsured.

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Term Life Insurance Defined

Term life insurance is by far the simplest form of life insurance. Term life insurance is simply that, insurance for a term or specific period of time. It pays a benefit only if you die in the designated period of time. On the downside, it pays nothing if the policy expires before you die. It is often referred to as temporary life insurance.

Policies generally last for 5, 10, 15, 20, or 30 years. Many policies are convertible, which means that you have option of switching to a permanent life policy. The main advantage of a term life policy is that they generally have lower premiums. They are good for covering needs that may disappear in time, such as car or mortgage loans.

They also have some distinct drawbacks. Premiums generally increase with time. This means that you will be paying considerably more in your later years, when your need for protection is generally lower. Another factor to consider is that your coverage may expire at the end of your term, leaving you with nothing to show for your investment. You are essentially back at square one.

Insurance agents often recommend that customers switch term companies every couple years, in order to take advantage of promotional pricing. One should be mindful of doing this, as you will be subject to a new contestability period. A contestability period is normally two years. If you die during this period, the insurance company will likely review the statements you made on your application. If you have made any inaccurate or incomplete statements, the insurance company will likely refuse payment.

Life insurance is no laughing matter. When you are considering purchasing life insurance, please do some research first. Spend some time considering questions, and pose them to a trusted insurance broker. Be especially wary of purchasing insurance from a door to door salesman, as they are likely trying to sell term life insurance which may or may not suit your needs. After all, it is your hard earned money that is being spent. And it is the well being of your family that will be impacted by your decision.

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Where to Start When Searching For a Good Life Insurance Policy

If you are in search of a good life insurance policy, the first thing you should do is decide on what the policy should do for you. Is your aim to ensure your kids\’ continued education or to make funds available for settlement of mortgage and credit card debt? Maybe you have a lot of estate and want life policy as a vital tool to plan your estate. Knowing precisely what you want will help you decide the type of coverage and the cost that is suitable for you.

Immediately you ascertain the type of policy and the cost that suits you best, the next is you start conducting searches on some of your priority companies. To get accurate information, get to some of their real customer to sample their idea about the company.

Advice from real customers can give you authentic information that will guide you to make knowledgeable decision and choose the best insurance company. Also pricing, ratings on general customer service, policy options, easy claims process etc, are necessary information you must know about the company before you buy life coverage.
Price is an essential factor to be considered, though several companies are available struggling to grab customers like you which is an advantage to you to conserve fund. There might be price variation for same coverage from company to company, look for the company that has the exact policy you\’re opting for at a moderate price and buy.

Finally, there are websites that gives you easy access to multiple quotes from several companies, making extensive price comparison online will help you search for a good life insurance policy quicker.

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Orphaned Life Insurance Clients

It is obvious to any successful life insurance agency that that orphan leads are important and should not be discounted. If someone has purchased a service from you, keeping them happy and current can help both parties involved. The problem, however, arises from trying to make the seemingly simple phone call to get the orphaned client with a new advisor.

\”The problem is simple,\” says Rene Lacape, Marketing Manager for Equote Life Insurance. \”When you have a client who has not been assigned to an agent for quite some time, it\’s quite possible this may be the first time they have heard from your company in years. This is not something they think about daily. Suddenly getting a phone call from a new agent can be confusing and basically a strange feeling at best.\”

The call is not about apologizing for the years that have passed since they talked, however. The call is not about trying to impress them and lure them into something else, either. The call is about developing trust and building a new relationship with the customer encouraging them to meet and talk about things. Since it\’s likely a new agent is now on the account, getting them to meet for the first time is crucial.

\”It\’s all about going back over things and getting the client to come in and chat is the best way to rekindle and improve the relationship,\” advises Rene Lacape. \”They do not want a sales pitch. They do not want a pity party. You have to find a way to connect to the client in a way that will make them interested. If you can get them to feel that it is important to review everything with you, you can make your job a lot easier.\”

\”One of the most important outcomes is simply a review of their current life insurance policy. You have to get them to go over what they have in a way that makes them feel as if they are not pressured. The key is to not bring up the word \”review.\” You have to get them to realize that you are new to their account, and that going over the policy together is not to make sure that it is ok. It is often more about getting you both on common ground, and seeing if they need coverage or even change the type of life insurance they have,\” said Rene Lacape.

The appointment is just that, an appointment. This is not a policy changing experience. It does not have to be a high-pressure situation that makes the client feel uncomfortable. If you can get them to realize this, you have a much better way of getting them to that appointment. A phone call and e-mail can only do so much. Use these as tools to get to that appointment to get the ball rolling on the advisor/client relationship. It may be difficult, but trying new approaches and a more cautious approach may be more beneficial in the long run.

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Birla Sun Life Insurance gifts ‘Bachat Plan' for its traditional savers


Mumbai, : Birla Sun Life Insurance Company (BSLI), one of India\’s leading life insurance companies, is introducing the BSLI Bachat (Endowment) Plan, an insurance plan that will help customers build a corpus through regular systematic savings. With this plan customers can start saving for their future and provide financial security to their families with as little as Rs.400 per month. The policy term for this plan is 20 years and customers can get a life cover of up to 180 times their monthly premium. At the end of the term customers receive the maturity amount including a loyalty addition.  Customers can also double the insurance cover by opting for the Accidental Death Benefit Rider by paying a nominal additional premium. The premiums paid under this plan are currently also eligible for income tax benefits under Section 80C and Section 10(10D).


Salient features of the Bachat Plan are:


  • Choose your Monthly Base Premium based on your needs beginning with as little as

              Rs. 400

  • Get Life Cover – Insure coverage for up to 180 x the Monthly Base Premium
  • Get Bachat additions every year
  • Get loyalty additions every year


On the occasion of the launch Mr. Fabien Jeudy, Chief Actuarial Officer, Birla Sun Life Insurance said  \”This product will help customers save for their long term goals by saving affordable amounts regularly along with safety and growth. This product is targeted at customers who are not comfortable with market linked savings and for whom safety and growth of savings is of importance\”



About Birla Sun Life Insurance

Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between the Aditya Birla Group, a well known Indian conglomerate and Sun Life Financial Inc, one of the leading international financial services organization from Canada. With an experience of over a decade, BSLI has contributed significantly to the growth and development of the Indian life insurance industry and currently is one of the leading life insurance companies in the country. Enjoying trust of its over 2 Million customers, BSLI is known for innovations. BSLI offers a complete range of offerings comprising of protection solutions, children\’s future solutions, wealth with protection, health and wellness as well as retirement solutions and has an extensive distribution reach over 500 cities through its network of over 600 branches, close to 1,70,000 empanelled advisors and over 700 partnerships with Corporate Agents and Banks. This is well supported by the sound financials that the Company has. The AUM of Birla Sun Life Insurance is close to Rs. 16,000crs and it has a robust capital base of over Rs. 2450 crs as on March 31, 2010. For more information, please visit


About Aditya Birla Financial Services Group (ABFSG)

The Aditya Birla Financial Services Group (ABFSG) has a significant presence across various verticals, including life insurance, insurance broking, mutual funds, private equity, security based lending, factoring, insurance advisory services, retail broking and distribution of third party products.

The seven companies representing Aditya Birla Financial Services Group are Birla Sun Life Insurance Company Ltd., Birla Sun Life Asset Management Company Ltd., Aditya Birla Capital Advisors Ltd., Aditya Birla Money Ltd., Aditya Birla Money Mart Ltd, Aditya Birla Finance Ltd.  and Birla Insurance Advisory & Broking Services Ltd.

The ABFSG is committed to being a leader and role model in a broad based and integrated financial services business. Its 7 lines of businesses, with over 4.5 million customers manages assets worth USD 18 billion approximately and prides itself for having a talent pool of over 15,000 committed employees. ABFSG has its wings spread across more than 500 cities in India through 1600 branches and over 200,000 channel partners. This allows ABFSG to offer its customers virtually anything other than a savings or current account. With over a billion dollar revenue, ABFSG is a significant non bank player and one of the few players who have a top 5 position in both life insurance and mutual funds.

ABFSG is a part of Aditya Birla Nuvo Litd (ABNL), a USD 3 billion conglomerate having leadership position across its manufacturing as well as services sector businesses. ABNL is a part of the Aditya Birla Group, a USD 29 billion Indian business house operating in 25 countries across the globe.

About Sun Life Financial Inc.

Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of March 31, 2009, the Sun Life Financial group of companies had total assets under management of $375 billion. For more information please visit


For further media information, contact:

Atul Malikram