Life Insurance Information

Nearly everyone has had some experience with the practice of purchasing insurance, in one way or another.  It may be that you were purchasing a home and the mortgage lender required Homeowners Insurance as a stipulation of the loan.  It may have been required when you bought a automobile.  Insurance is a device that grants for the transfer of all or part of a risk from one party to the insurance company.  Each person pays a small, certain cost, the PREMIUM, to the insurance company, the INSURER.  The INSURER, in turn, draws up a legal contract, the POLICY, between you, the INSURED and them, the INSURER.

Any legal contract, and in this case an insurance contract, needs to have certain parts to it to make it a valid contract.  These “parts” are competent parties, a legal purpose, an offer and acceptance and consideration.

By definition, RISK is the chance or uncertainty of loss.  For a RISK to be insurable it has to be measurable. PURE RISK is measurable.  SPECULATIVE RISK is not.  SPECULATIVE RISK.  An example of SPECULATIVE RISK is investing in the stock market.

Life Insurance, specifically, is a contract that transfers risk of financial loss associated with premature death from the insured to the insurer.  The need to cover the obligations that might be left behind upon death is the reason we need to be sure we’re covered by a life insurance policy.  The policy proceeds are paid by the insurance company to the beneficiary of the policy.

Use MyBeneLife.com for your life insurance needs and get instant Annuity Quotes.

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This entry was posted on Sunday, November 23rd, 2008 at 9:28 am and is filed under Annuities. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.