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.
What is Life Insurance?
6 mins 30 secs
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
Overview:
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).
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.
Ted Wainman
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