Defining Life Insurance
Providing a specific definition that encompasses all the elements of life insurance is not an easy task. Most would say that it provides a sum of money if the person who is insured dies whilst covered under the policy, and this may have been an accurate assumption when the concept of life insurance was born back in ancient Rome.
Today, however, life insurance has become more sophisticated and the application of cover has stretched beyond its founding purpose. Originally, policies were put in place for short periods of time to cover temporary risk situations such as a sea voyage, but over the centuries it has been found to be a useful tool in catering for the needs of a number of situations which include:
- Temporary Threats: The original concept and purpose continues to be an important factor in life insurance with many concerned for loved ones and the financial consequences of certain unforeseen events.
- Savings: Planning one’s financial future as a long term exercise. This has become more important as societies develop from tribal and community oriented to affluent individual independence.
- Investment: As living standards rise, the accumulation of wealth and protecting it against such factors as inflation has helped life insurance evolve into an investment vehicle.
- Retirement: Similarly to savings, with the ever changing cultural environment, the provision for one’s later years has become a key objective for many.
Whether for personal needs such as end of life expenses, educational funds or disability income, or for business needs such as employee benefits and key persons cover, it is important that any potential purchaser of life insurance fully understands their specific needs and goals and implements a policy that works towards achieving their objectives.
Most insurance brokers will provide free quotes, advice and insurance consultations to help navigate the life insurance application process and many websites, such as www.alliancegroup.com.hk or Wikipedia will provide online information resources to assist in the understanding and explanation of the available options.
