What is Life Insurance?
Ted Wainman
20 years: CA & educator
Life Insurance policies will pay out on the death of an individual which may or may not happen during a particular time period. The sum paid out may be fixed or may reduce over the time of the policy. Life Assurance provides ‘whole of life’ cover and will pay out to the beneficiary on the death of an individual. Ted outlines the different types of life insurance policies, for example, universal life coverage and endowment life policies.
Life Insurance policies will pay out on the death of an individual which may or may not happen during a particular time period. The sum paid out may be fixed or may reduce over the time of the policy. Life Assurance provides ‘whole of life’ cover and will pay out to the beneficiary on the death of an individual. Ted outlines the different types of life insurance policies, for example, universal life coverage and endowment life policies.
Join now to start learning today
Finance Unlocked is the video learning platform built for finance professionals.
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
What is Life Insurance?
6 mins 30 secs
Life insurance refers to all insurance that is related to life (or death) of an individual. Life Insurance relates to an event that might happen (such as the death of the individual during a specified period) while Life Assurance relates to an event that will definitely happen (that is, death at some point).
Key learning objectives:
Understand the difference between life insurance and life assurance
Understand if life insurance short or long tail
Outline the different types of policies available
Book a demo to access
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
What is the difference between life insurance and life assurance?
Life insurance relates to an event that might happen (such as death during a specified time frame). Life Assurance relates to an event that will definitely happen – death at some point.
Is life insurance short or long tail?
Life insurance (and assurance) is, by its nature, a long tail business. As a result the performance of the underlying investments and their return will play a significant role in pricing of these policies.
What are the different types of policies available?
There are many different types of life assurance and insurance policies available – designed to meet the specific needs of the policy holder and/or the beneficiaries. These include: term insurance, whole life assurance, universal life coverage, endowment life policies and with profits policies.
Book a demo to access
This content is also available as part of a premium, accredited video course. Sign up for a 14-day trial to watch for free.
Ted Wainman
11:09
09:51
Related videos
History of Insurance
The history of insurance can be traced, in some form or other, back to prehistory and to the world of barter and trade. In this video, Ted covers the history of the various types of insurance, some of which include, property insurance, life insurance, and national insurance.
Ted Wainman • 09:51
What is General (Non-Life) Insurance?
In this video, Ted discusses the various forms of general insurance and explores the concept of IBNR – Incurred but Not Reported – this refers to the statistical calculation of claims relating to events that have occurred but have not yet come to light.
Ted Wainman • 09:01
UK Insurance Regulation
It is evident that when an insurance company fails, this has an adverse impact on the policy holders as well as the FSCS due to the interconnectedness of the financial market. Therefore, there is an incentive to ensure that insurance companies are financially sound, well run with good corporate governance structures in place, and an appreciation of the risks that they are underwriting.
Ted Wainman • 06:16
UK Insurance Regulators & Solvency II
The regulation of insurance companies has developed from the FSMA 2000 to the concept of ‘twin peaks’ regulation in 2010. Today the responsibility for regulation is split between the FCA (Financial Conduct Authority), the PRA (Prudential Regulation Authority) and the FPC (Financial Policy Committee).
Ted Wainman • 10:46
Insurance Capital and Liquidity
In this video Ted outlines how insurance companies are funded and how that capital is then regulated, including outlining key points of the Solvency II framework. Finally he outlines how insurance companies can prevent liquidity risk which could prevent it from paying out claims.
Ted Wainman • 06:08
The Need for Global Insurance Regulation
In the first video of this series, Sukhy emphasises the importance of regulating insurance companies with reference to the infamous collapse of AIG during the financial crisis. Sukhy discusses the international role of the Financial Stability Board (FSB) in insurance regulation post-financial crisis.
Sukhy Kaur • 09:19