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LIFE INSURANCE PLAN |
Life insurance protection is a
contract in which an insurance company guarantees the
payment of a large agreed sum of money to your survivors
(or designated beneficiaries) upon your death. In
return, you pay a relatively small regularly scheduled
payment known as the insurance premium. Hence, the goal
of life insurance is to protect your loved ones
(parents, spouse, children, etc.) that are financially
dependent on you and help them avoid the financial hardship
that they may face if you die.
Additional benefits can be added in your life
insurance cover such as: funds accumulation,
accidental death, critical illness, dismemberment
benefits, family income, waiver of premium, and
others.
The plan is very flexible allowing you to pay the
premium monthly, quarterly, semi-annually, yearly or
a lump-sum payment in a variety of currencies
(USD, GBP, EUR, etc.)
Working Scenarios (Life
Insurance Protection)
Mr. Jones invested in a $700,000 life insurance
protection plan with an additional $200,000 critical
illness benefit in 2000 when he was 42 years old. In
2005 he was diagnosed with cancer. Since Mr.
Jones has been diagnosed with a critical illness
(cancer) he received $200,000 from the insurance
company. He used part of this amount to pay his
medical bills and to meet his family living expenses. Two years later (2007), Mr. Jones dies
from the implication of cancer. His wife and three
kids (the assigned beneficiaries) receive the
remaining $500,000. Mrs. Jones pays all the medical
and burial fees her beloved husband and all
outstanding loans and credit card balances, she uses
the remaining amount to purchase a house, cover the
family living expenses, and setup an educational
plan to cover for the college education of her three
sons.
Now lets look at the same example above assuming
that the Jones family did not have a life insurance
protection plan.
In the year 2000 Mr. Jones was a healthy 42 years
old man. Since he was healthy, he kept postponing
the investment in a life insurance protection plan.
In 2005 he was diagnosed with cancer. He tried
to get life insurance then but no company would accept
him as he had cancer. He was hospitalized and he had
to uses his entire savings in paying for the hospital bills and
medications. Two years later (2007), Mr. Jones dies
from the implication of cancer. His wife and three
sons ware left with a huge medical bills, unpaid
debts, and their entire savings were exhausted.
Facts that Can't Be Ignored
According to the World Health Organization, 58 Million
people (more than all the population of the U.K.) died
in 2005. The three leading causes of death were:
1.
Cardiovascular Diseases (Heart Disease and Stokes)
- Cardiovascular Diseases are the
number one cause of death globally.
- An estimated 17.5 million people
died from Cardiovascular Diseases in 2005.
- By 2015, almost 20 million
people will die from Cardiovascular Diseases, mainly
from heart disease and stroke.
2.
Cancer
- More than 7.5 Million people
died of Cancer in 2005.
- The most frequent cancer types
among men (in order of number of global deaths):
lung, stomach, liver, colorectal, oesophagus and
prostate.
- The most frequent cancer types
among women (in order of number of global deaths):
breast, lung, stomach, colorectal and cervical.
3.
Pulmonary Diseases (Lung Disease)
- An estimated 80 million people
have moderate to obstructive
pulmonary disease.
- More than 3 million people died
of Pulmonary Diseases in 2005.
- Total deaths from Pulmonary
Diseases are projected to increase by more than 30%
in the next 10 years.
* Source:
The World Health Organization (United Nation
Agency).
Given the figures above and the chances that any one
of us will be in those statistics one day, it is easy
to recognize the importance and the need for life insurance
protection.
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