A Guide To Life Insurance - Nature Of The Contract Continued ....

 

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Nature Of The Contract Continued...

This condition used to be applied very strictly, to the extent that a man might not, for example, insure the life of his father. However, this rule is now more liberally interpreted and some offices would allow a man to insure the life of his father to provide for the CTT that would become payable on his father's death.

Unless some similar financial interest is established, a parent may not insure the life of a child (except under certain industrial assurance policies to provide for funeral expenses), but a lender may insure the life of his debtor, since he stands to suffer a loss if the debtor dies before repaying the loan. (http://www.ifrs.org/Current-Projects/IASB-Projects/Insurance-Contracts/Pages/Insurance-Contracts.aspx)

One relatively modern innovation in life insurance is the appearance of policies designed specifically for the needs of women.

The bulk of traditional policies were designed with the male breadwinner in mind, but changing economic and social conditions have led not only to women having independent careers but also to a rise in the divorce rate.

The importance of providing life cover for a wife, whether working or not, is not always appreciated: there are few husbands who would not have difficulty in bringing up a young family without their wives, but women have been far quicker to encourage their husbands to take out life insurance cover than men have been to realise their own dependence.


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Read On: click here for More On Tax Relief


An important factor to bear in mind when considering the cost of life insurance is tax relief.
Since 1853 successive Governments have recognised the value of life insurance to individuals and the economy and have allowed two major concessions, which will be dealt with here since they affect life policies of every type.
The first is that each premium paid on a "qualifying" policy attracts tax relief. The method of granting this relief has been changed with effect from April 2009.click here for More On Tax Relief


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