Life Insurance Products

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Life insurance is a financial product that provides a financial safety net for individuals and their loved ones in the event of the policyholder’s death. It is a contract between the policyholder and an insurance company, where the insurer promises to pay a designated sum of money, known as the death benefit, to the beneficiaries upon the death of the insured. Here’s an introduction to the key aspects of life insurance:

  1. Purpose of Life Insurance:
    • Financial Protection: The primary purpose of life insurance is to provide financial protection for the policyholder’s loved ones or dependents in the event of their death. The death benefit can help replace lost income, cover outstanding debts, and meet financial obligations.
  2. Types of Life Insurance:
    • Term Life Insurance: Provides coverage for a specific term or duration, offering a death benefit if the policyholder dies within the term. It is generally more affordable and straightforward.
    • Whole Life Insurance: Offers lifelong coverage with a cash value component that grows over time. Premiums are typically higher than term life insurance, but the policy accumulates a cash value that can be accessed or borrowed against. – Whole of Life and Endowment policies are no longer offered..
  3. Death Benefit:
    • The death benefit is the amount of money the beneficiaries receive upon the death of the insured. It is a tax-free lump sum paid by the insurance company and is typically used to cover funeral expenses, replace lost income, and settle outstanding debts.
  4. Terminal Illness
    • A terminal illness benefit is a provision within some life insurance policies that allows the policyholder to receive an early payout if they are diagnosed with a terminal illness. This benefit is designed to provide financial support during a difficult time and can help individuals cover medical expenses, settle debts, or address other financial needs. Here are the key features and considerations related to the terminal illness early payment from life cover:
  5. Premiums:
    • Policyholders pay regular premiums to the insurance company to maintain coverage. Premium amounts can vary based on factors such as the insured’s age, health, coverage amount, and the type of policy.
  6. Policyholder and Beneficiaries:
    • Policyholder: The person who owns the life insurance policy and pays the premiums.
    • Beneficiaries: The individuals or entities designated by the policyholder to receive the death benefit. Beneficiaries can include family members, dependents, or charitable organizations.
  7. Underwriting Process:
    • To determine premium rates and eligibility, life insurance companies typically conduct an underwriting process. This process involves assessing the applicant’s health, lifestyle, and other factors to evaluate the risk of insuring the individual.
  8. Riders and Additional Coverage:
    • Policyholders can customize their life insurance coverage by adding riders, which are additional provisions or benefits. Common riders include accelerated death benefit riders, which allow the policyholder to access a portion of the death benefit if diagnosed with a critical illness or being Total Permanently Disabled.
  9. Tax Benefits:
    • In many jurisdictions, life insurance death benefits are generally tax-free for beneficiaries.

Life insurance is a fundamental financial tool that provides peace of mind and financial security for individuals and their families. Choosing the right type and amount of coverage depends on individual circumstances, financial goals, and the specific needs of the insured and their beneficiaries. It’s advisable to consult with insurance professionals or financial advisors to make informed decisions about life insurance coverage.

  1. Level Premiums:
    • Definition: Level premiums remain constant throughout the duration of the policy. The policyholder pays the same premium amount each year for the entire term of the policy.
    • Advantages:
      • Predictability: Policyholders know exactly how much they will pay each year, providing budgetary stability.
      • Long-Term Cost: While level premiums start higher than stepped premiums, they may become more cost-effective over time, especially as the policyholder ages.
  2. Stepped Premiums:
    • Definition: Stepped premiums start lower but increase over time as the policyholder gets older. The premium is recalculated periodically, often annually or at the end of each policy term.
    • Advantages:
      • Initial Affordability: Stepped premiums are often more affordable in the early years of the policy, making them attractive to younger individuals.
      • Flexibility: Stepped premiums may suit those who expect their income to increase in the future, as they can initially start with lower premiums.

Considerations when choosing between level and stepped premiums:

  1. Budget and Cash Flow:
    • Level Premiums: Provide consistent, predictable payments over the policy’s duration.
    • Stepped Premiums: Offer lower initial costs but can increase significantly over time.
  2. Long-Term Cost:
    • Level Premiums: May be more cost-effective in the long run, particularly for those who maintain the policy for an extended period.
    • Stepped Premiums: Could be more cost-effective initially but may become more expensive as the policyholder ages.
  3. Financial Planning:
    • Level Premiums: Suit those who prefer stable, long-term financial planning and want to avoid substantial premium increases as they age.
    • Stepped Premiums: Can be suitable for those who prioritize lower initial costs and anticipate increased income in the future.
  4. Policy Duration:
    • Level Premiums: May be more advantageous for long-term policyholders.
    • Stepped Premiums: Could be beneficial for those who don’t plan to keep the policy for an extended period.
  5. Age at Policy Inception:
    • Level Premiums: Generally if taken up at a lower age, premiums will be less in price. Most ages.
    • Stepped Premiums: Generally from age 10 to age70. Lower at the start but increase with age.
  6. Risk Tolerance:
    • Level Premiums: Offer stability and predictability. May not need the cover later in life.
    • Stepped Premiums: Involve the risk of increasing costs over time.

When choosing between level and stepped premiums, individuals should consider their current financial situation, long-term financial goals, and risk tolerance. It’s essential to review policy details and discuss options with an insurance advisor to ensure the chosen premium structure aligns with the policyholder’s needs and preferences.


          How much is needed?

for an example of lump sum and ongoing life cover you may need click on the link  
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Increase your chance of payout at claim time
The Average age of death is around 81 for a male and 83 for a female. The majority of people’s life/death insurance contracts will finish before they reach that age due to age related price increases, to escape price increases due to age and Inflation adjustments………………Did you know you can fix the price of cover to age 65, 70, 80, 90, or 100 to dramatically increase your chances of a payout?
 A 2 tier structure for your life cover is a good idea
A) You could use Cash back life cover to age 100 to save for your funeral, and be covered while you save. 
B) Take rate for age and level premium Life Insurance at the same time. Rate for age you can keep until you’re in your 50’s when the kids leave home as your needs should be less by then, or decrease it as it is not needed. Where  The level premium life covers types  will continue to the age you leveled it to (65  70  80  90  or  100) which will cover your longer term needs.

for example you could take out even a 3 tier structure

$300,000  temporary cover (rate for age or stepped) Short term

$100,000 level to age 70  or 80 payments  longer term – cashflow

$30,000  with your premiums levelled out to age 100 to take care of the long term estate needs

Life Insurance Early payment feature If the life assured is suffering from a critical illness and are terminal ill, there could be an early payment if they are unlikely to survive 12 months.


Benefit is paid to the remaining policy owner(s)
Inflation adjusted option
Generally guaranteed renewable until age 100 once accepted into the policy
Premium payment structure options
Stepped option / Rate for age and Level Premiums(payments) options
Features and Benefits
Bereavement Support,   Special events increase  &   Children’s funeral benefit
Additional Benefit
Future Insurability option



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