One of the most popular kind of insuring nowadays is the endowment life insuring. This kind of insuring supplements the budget and is the best way of capital accumulation in many developed countries. It would be interesting to know that first life insurance company was created in the USA in 1759. It even exist nowadays. It’s Presbyterian Ministers’ Fund in Philadelphia.
There more then 2000 companies of life insuring today. They are divided into two main types: joint-stock companies and the reciprocal companies. The owners of the joint-stock companies are the stockholders. But the reciprocal companies owners are the owners of the policies. More then 90% of life insuring companies exist in the form of joint-stock companies, but such great companies as The Prudential Insurance Company and The Metropolitan Life are organized in the form of the reciprocal companies. More then a half of the assets of the life insurance companies are in the reciprocal companies owning.
Some may claim that life insuring is really risky and even insecure thing. Though insurance companies are still one of the richest financial establishments. During last century there were no cases of bankruptcy of such companies. The federal government never interferes the life insurance companies activity. The responsible regulation over their activity is put on the each state government. They control the sale policy, the providing of an appropriate liquid assets for compensation of losses and the limits of amounts of the risk assets.
There are two main kinds of life insuring: the continuous life insurance and the term life insurance. Policies of the continuous life insurance are sustainable. The initial payment exceeds the amount that is needed for the insuring in the case of death as the probability of death is really low. As a result, policy accumulates the cash value during first two years. It will reduce in future because the compulsory amounts for the death cases will also reduce. The owner of the policy can borrow some accumulations of the policy value for life insuring or can demand it after the policy cancellation.
From the another side, the term life insurance have the compulsory term amounts. It means that every year you need to pay the compulsory amount for the case of death. The size of the amount rises with the speed of time as the probability of death rises. The term life insurance policies have no cash value and, as a result, is the kind of insuring without saving possibility.
So, why do people insure their lives? The endowment life insuring helps to protect your life and the life of your relatives or it can provide you freedom of the choise and even can ensure your oldness. That is why this kind of insuring is one of the most wide-spread instrument of savings. As an example, about 78% of the USA citizens have already got policies of life insuring. People spend at about 1750$ a year for their own safe. The endowment life insuring contract is signed for the period from 5 to 40 years. After opening the policy people have to make some contributions and the insurance companies have to protect the person and create his capital step by step.
Getting the endowment life insuring policy guarantee not only the safe of his owner, but also brings income and tax exemptions for all the members of his family.
The endowment life insuring policies in the case of loss of a breadwinner will provide your family with everything needful in the difficult moments. Still all the kinds of endowment life insuring help to provide your children’s future in the way of accumulated capital for different events such as wedding, education or some other important events.
The retirement programme of life insuring can provide you with everything needful after retire.
In addition to all main points of life insuring the companies can suggest you the policy in the case of critical diseases.
The life insuring policy is the guarantee of your financial security. The problems with the health means the loss of possibility of working. As a result, you can have problems with money. Just imagine you left home and forgot your purse. What can you do? Of course, we have to pay for everything in our life.
The life insuring policy also protects from the accidents that can provide you from loosing incomes.
We don’t have to forget that our life is full of surprises. Some of them are pleasant, but the others are connected even with tragic events such as death of our relatives. Nevertheless that death is a great loss for everybody there exist another point of view that is worth paying attention to. It’s the financial side of the problem.
We can claim that policies are thrift-boxes in some way. All the people’s contributions are payed back to him with the policy cancellation. The life insurance is also the instrument of accumulation. People create the capital that will feed him after retire. In another case you’ll have to live with really constrained funds. Think of your future today and don’t put it till tomorrow what you can do today.