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Short-term Protection...

Pure Protective Life Insurance

The fundamental point about pure (or protective) life insurance has already been made.

It is designed to protect, not to enrich, and works on the same basis as fire or motor insurance: unless a claim is made no benefit can be paid. (see http://www.protective.com/financial-professionals/by-product/life-insurance.aspx)

There are a variety of policies suitable for different needs and situations.

In setting premium rates for short-term protection policies, life insurance companies assess the likely pattern of deaths of policyholders from published Tables of Mortality, the likely pattern of interest rates over the period and the likely level of expenses, and then attempt to set the premium rates at such a level that sufficient funds are available to meet all claims with a small safety margin to spare.

These assessments vary from company to company, and so do company expenses, so that the difference between the cheapest and dearest rate on any type of policy may be quite large in percentage terms.


An Online Guide To Life Insurance - Read ....

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The factors determining the annual cost of a pure protection policy are the age at entry and the term of the contract, i.e. the number of years it is to run.
The younger you are when you take out such a policy, the cheaper a given sum assured will be.
For a 30-year-old man the premium rate on a 10-year assurance has to cover the low mortality and claims pattern of the early years and the rising mortality closer to age 40.
For the 40-year-old, the premium has to reflect not only........ see: read next:for Term Assurance Example


Disclaimer

Our insurance website is an independent marketing website which acts as an introducer to 'whole of market' companies who offer specialist Independent Financial Advice. Each company is authorised and regulated by the Financial Services Authority.

 

We are not authorised to give advice and we are not liable for any financial advice provided by, or obtained through a third party. The information published on this website is for information purposes only. This site has been approved for compliance purposes by a Firm of Independent Financial Advisors who are authorised and regulated by the Financial Services Authority (FSA). The Chartered Insurance Institute

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