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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

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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Read On: read next:for Term Assurance Example

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


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