Insurance World

Though Life Insurance is neither an investment plan nor a savings scheme, it still plays a significant role in the financial portfolio of most individuals. The main purpose of Life Insurance is to protect the dependents of a person from financial loss in the event of his death.

Financial obligations arise out of many situations in life like when getting married or divorced, having a baby, buying a house, sending your child to college, starting a business, taking care of a parent who is aged or sick or on retirement. If a person is shouldering these responsibilities he must ensure that these obligations continue to be fulfilled even after his death. If he has a family who depends upon his earning capacity, he is a perfect candidate for life insurance. A person should consider the long term as well as the short-term financial obligations to decide whether he needs life insurance. The questions to ask are:

1.
Do you have people including family and business partners who are financially dependent upon you over a long period of time?

2.
In the event of your death, do your dependents have enough assets and resources including liquid cash to take care of all their needs and to pay off your financial debts?

The second question requires a further assessment of the short-term financial needs of the family of the deceased. These include working out the following factors:

Inheritance procedures can be time consuming and the family will need funds till they get access to the property of the deceased.
The availability of other liquid assets like bank accounts or stocks can reduce dependency on life insurance.

The existence of a large amount of non-liquid assets as against liquid assets makes it necessary to have insurance.
The amount of debts and taxes the person stands to owe after his death.

Businessmen must ensure there is enough cash flow in the business for his inheritors to maintain his business.

Considering the above questions, one would find most people do need life insurance, though one can do without it if one has no dependents or young kids to support. Still, other obligations like a home mortgage or a sole proprietary business or planning for a comfortable retirement for yourself or your spouse are some of the reasons why a life insurance is still a good financial program to pick up.

Instead of a computer or a car, parents looking for a useful gift for a new college grad may want to consider health insurance.

New college graduates and their parents are often surprised to learn that many health insurance plans stop providing coverage to adult children through a parent’s plan even when they are living at home.

Typically, most adult children who are students will lose their coverage when they attain a certain age, graduate or are no longer attending school on a full-time basis. Since most of these new college graduates won’t have coverage until after they have found a job, many find themselves falling through a gap in coverage.

The number of young adults who fall into this category can be significant. According to a 2002 Census Bureau report, 18-to-24-year-olds are the least likely age group to have health insurance coverage.

Some find an effective way to address this need is with a type of product called temporary or short-term medical insurance. Such policies are designed to fill short gaps in health insurance coverage and usually cover periods ranging from one to six months. Exact length of coverage may vary by state and company.

For example, Assurant Health -a company that helped to pioneer the concept of short-term coverage-offers policies that typically cover periods of 30 to 185 days. Generally, this type of plan is more affordable than permanent insurance plans because the insurer is taking less risk.

Because temporary policies are usually designed to cover the unexpected, most do not include coverage for preventive care, physicals, immunizations, dental or eye care. Also, temporary policies generally do not cover pre-existing conditions.

While typical customers for short-term medical insurance are graduating students no longer covered by a family plan, but not yet covered by an employer’s group plan, the policy may also be of interest to others. People changing jobs or making a transition to a new career, or new employees facing a short waiting period before becoming eligible for an employer’s group insurance plan, may find that it fills a need.