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Insurance or Assurance ?
What is the Term life Insurance.
First of all, let’s clear up a linguistic misunderstanding; insurance versus assurance.
Traditionally, Insurance is where a party (the policy holder) pays an insurer an amount, or series of amounts to insure against a possible event happening. If the event happens the insurer agrees to pay the policy holder a sum of money. For example; you insure your car against an accident. The accident may not happen, but if it does the policy holder can claim an amount from their insurance company for the damages. Insurance is like a bet, you (the policy holder) are paying money betting that an accident will happen, whilst the insurance company is taking the money in a bet that it won’t happen.
Assurance (from the word “to assure”) is where an event is going to happen, there is no doubt. In this case the policy holder pays the assurance company a sum or series of sums so that when the event happens (it will) the assurance company pays out an agreed sum of money. Assurance is more like a savings plan, you (the policy holder) are effectively saving your premiums, so that when the event happens you get back them all back plus any interest the assurance company may have earned on them.
When it comes to life however, there is a problem. We know we are going to die (it is assured), but we don’t know when. So a large proportion of companies selling assurance packages (they will pay you when you die, not if) call their policies insurance because they don’t know when the event will happen.
Hence the term life insurance.
Life insurance is a financial instrument where you agree to pay a series of premiums, up until the point where you die, and the insurance company agrees that at the point of your death they will pay your next of kin a certain amount of money.
Of course life insurance comes in a variety of flavours:
There are policies where the money is only paid out at the time of your death to your next of kin. This money can be used to settle the deceased’s financial matters (paying off loans, taxes etc.), paying for funeral expenses, or just to give the next of kin a lump sum so that the death of the policy holder does not burden them financially.
Some policies exist where the policy holder can receive payments based on the amount already paid into the insurance scheme before their death, to cover things like disability costs, specialist care costs for the elderly, or just to boost their pension in their old age. These policies typically pay out less money at the time of death as money has already been extracted from the overall total paid.
Other policies may be temporary, you insure against your death for a set period of time (for example you are travelling abroad and insure your life for the period that you are away).
There are common limits to all life insurance policies:
- No benefits or amounts will be paid to the policy holder’s next of kin if their death is the result of suicide.
- Death during war is not covered in normal insurance policies (specialized policies are available for this)
- An Insurance company will not pay out if fraud is proven (e.g. You take out a policy on your spouse, knowing full well that they have a terminal disease, but hide those facts at the time of signing the policy).
- Curiously, civil disturbances and riots also nullify a life insurance claim.
Murder is a common method of obtaining a large sum of money in books and films when it comes to life insurance. The beneficiary of the policy arranges for the policy holder to be killed so that they can become rich. However, this falls foul to two legal problems:
- Firstly, it is insurance fraud, you – the 2nd hand murderer deliberately tried to force the claim with an unnatural ending of the insurance policy.
- Secondly, it is against the law for anyone to receive any monetary gains from an illegal act they have committed.
So, in conclusion, Life insurance is a method whereby someone can: make sure that their next of kin are taken care of in the event of their death, cover their lives when they are entering into an unknown area (temporary life insurance, particularly related to travel), or a form of savings that can provide for them in the event of disability due to accident or old-age.
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Greece
The on-going saga continues….
I am very curious to see how this pans out as it is getting very close to crunch time.
Either Greece pull out and default – or the money men at the EU back off and give them some space to breath.
Strangely I can’t see either happening – so am at a loss to predict what’s going to happen.
Greece cannot afford to continue with the austerity package it has, and the people have said a resounding “No – they aren’t prepared to continue with it”, and the money men at the EU still reckon that if Greece falls the rest will come down like dominoes, so are terrified of it going.
Something has to give – and soon.
As they say – watch this space.
Pin It When to give it up ?
This is a thing that has always puzzled me, but has jumped into my mind again this week because a few of the news stories.
Two people come to mind :
Greece’s prime minister Mr Papandreou, and Italy’s own Berlusconi.
Both are very rich men (rich enough to retire and bask in luxury for the remaining days they have)
Both are almost certainly finished politically.
Yet both continue to try everything they can to cling onto to what ridicule remains to them – for neither have any respect left, and very little support.
So …. why ?
As a prime minister you have to spend long hours trying to sort out various problems, deal with factions, stop and start arguments, etc etc etc – It’s a hard life.
If you had the money to stop wouldn’t you ?
I would.
If you knew that you were having no effect at all on the current situation and that the popular opinion towards you was closer to hatred than respect, would you continue, or say “bugger off, I’m alright Jack, sort out your own problems – I’m off to a luxury villa some where” ?”
I would.
But this isn’t just a political thing, it spans all walks of life.
Pop stars who have more money than they can eat insisting on hitting the road when most doctors would warn them to stop – just keep going and hoping for another hit that will never happen.
CEO’s who captain’d epic disasters and are left with pension funds that will last several generations – just roll into another job when most of us are looking to retire.
Self made business men who work themselves into the grave when they could have handed over the reins and retired to a life of absolute luxury.
It’s mad.
Have we turned into workaholics or is it just a buzz thing – “the power – I need the power” ?
Personally I would love a life of leisure, and if I ever make enough to pursue it, you won’t see me for dust as I park my bum on a sunny beach somewhere.
The world is a strange place.
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http://www.bbc.co.uk/news/uk-england-london-15510444
Have a little read of the above story.
Protesters at St Paul’s etc…
Here’s the quote that interested me :-
Lucy, one of the protesters, welcomed the speech but said they needed a promise from the church that they would not be forcibly removed.
Now, ok – I agree it aint nice using physical force in an eviction.
But, sometimes it is necessary.
If the church goes through the appropriate legal channels and gets a court order saying that the protesters have to leave and they don’t ( which I suspect they won’t ) – what happens ?
You have to remove the people – physical force is the only remaining alternative.
Now – were the protesters to agree ( indeed give, in their own words, “a promise”, or “cast iron guarantee” ) that they will leave when told to do so, I would say “yep – the church has to agree to that as well”.
But they haven’t have they ?
They want assurances from the church that physical force will not be used, but they have offered no assurances themselves that they will go peacefully if told to do so.
The door swings both ways people – too many people so often forget that.
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Absolute Services
Med-I-Gym
