Life Insurance Began Around 450 A

Category: Finance, Insurance.

Life Insurance or Life Assurance is a form of insurance that provides a payment of a sum of money to a named beneficiary upon the death of the policyholder or to the policyholder if still living after reaching a specified age.

Insurance is when cover is provided for an event that might happen while assurance is the provision of cover for an event that is certain to happen. The terms insurance and assurance are often interchanged but there meanings are different. Life assurance typically covers the insured in the event of natural death whereas life Insurance covers accidental death. It is possible to take Life Insurance out on your own life or another. Who can take out a Life Insurance policy? It is therefore possible for the person that is insured to be a participant in a contract but not necessarily a party to it. Cestui qui vit refers to when the policy owner is not the insured.

Insurance companies have sought to prevent people taking out speculative policies on people they expect to die. CQV usually requires those purchasing a policy to have an insurable interest in the insured. History. This is designed to prevent people with no interest murdering the insured to receive the payout. Insurable interest usually includes family members and business partners. The first form of Insurance reputedly took place 5000 years ago in China. Life Insurance began around 450 A. To spread the risk of having their cargo pirated merchants would share their cargo with another boat so that if captured the entire shipment would not be lost.

D. in ancient Rome where burial clubs were formed to cover the funeral expenses. People would speculate on the date at which they expected prominent people to die. Life Insurance appealed to the gambling instincts of people in Victorian England. Such wagers were made illegal in 177 Why take out life insurance? Policies are arranged to cover Mortgage repayments so that in the event of death a mortgage is paid off. Nowadays people take out Life Insurance to make sure loved ones are cared for after death. Life Insurance can replace the primary earner s salary.

Some people take out a policy to ensure that there is adequate childcare after the death of the primary child carer. This ensures that the family does not fall on hard times after your death. Another reason to take out Life Insurance would be to cover education expenses so that school/ University fees are covered after the death of the primary earner. There are two major categories of Life Insurance: Protection policies and Investment policies. Types. Protection policies typically provide a lump sum payment on the death of the insured.

It is the cheapest way to provide financial protection for your family. It pays out if you die within the dates of your policy but otherwise you get nothing. The main objective of Investment policies is to facilitate the growth of capital by regular or single premiums. There are many types of cover available under these broad categories. Alongside paying out in the event of your death it is also possible to build up an investment value that can be cashed in during your lifetime. Factors that influence policy. The three main variables in a mortality table have been age, and use of, gender tobacco.

Insurance is based on probability and the Insurance Company is likely to assess you against certain criteria. People that are considered of greater risk to insurance companies include. Dangerous sports/ hobbies such as aviation, motor sports, climbing, parachuting and skiing. High- risk occupations such as the oil and gas industry, pilots and fishermen, the Armed Forces. Poor medical history- especially smokers. And over 60s.

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