Life Insurance Blog

There is a condition in life insurance policies which talks of &lsquoinsurable interest. Let us try and understand what it is so that we can better understand who can and cannot take a life insurance policy for other person. A person who has an insurable interest in another person life is one who is in a position to suffer a loss if the other person suffers any injury or worse, death. We can take the example of a father who has an insurable interest in his son. If his son faces an accident and dies because of that the father stands to lose considerably in that circumstance. Let take another example of a businessman who runs a business that depends heavily upon the well being of two of its best employees. Although in this case there is no blood relationship, the businessman has a considerable magnitude of insurable interest on these two employees, as the well being of his business depends upon them. If anything untoward happens to any one of them his business may have to be shut down or he may face a huge amount of loss while trying to find suitable replacements for them. The businessman may argue with the life insurance company that his business depends on the well being of his trusted employees and that they are vital to the success or failure of it. The life insurance company will accept that argument and allow him to purchase life insurance policies for these two employees.

Let take another case in the point to elaborate insurable interest in its fine sense. Let say there are Mr.X and Mr.Y living next to each other. Both have splendid relationships and their families enjoy each others company. They go out on vacations together and also enjoy their holidays together. In this circumstance if Mr.X wants to take out life insurance policies for Mr.Y, the life insurance company will not accept the argument that Mr.X has an insurable interest on the life of Mr.Y. Neither is Mr.Y a dependent of Mr.X and neither is Mr.X going to face any financial losses in the event of death of Mr.Y. As such the finer sense of insurable interest suggests that the person who is willing to take out life insurance policies for another must tend to lose financially because of the death of the later. It does not really matter whether or not he is a blood relation of the insured. It also does not matter whether the insured is dependent or not. What matters is that the person paying the premium tends to lose from the untimely death of the insured. One feature of life insurance policies is that the insurable interest needs only exist at the time of taking the policy.

Most Australian families are not concerned about not taking life insurance policies in spite of the fact that they plenty to lose in the event of an untimely death. However taking a life insurance policy can be beneficial for a large number of reasons and some of these are worth the while to consider taking a policy. Let discuss some of the benefits that I am referring to.

Funeral advancement benefits &ndash the first financial loss that hits the estate or the family of the deceased is the funeral costs. These days funeral costs are extremely expensive and if the family and the friends are quite big in numbers then one need to call everybody to the funeral. These costs are quite handsome and for the estate of the deceased that can mean quite a significant financial burden. Funeral advancement is given to the estate or the beneficiary of the deceases immediately when the proof of death or a death certificate is shown. This amount can be spent towards meeting the funeral expense.

A typical Australian life insurance company will cover all sorts of death and not merely deaths that are caused by accidents. However in the case of any death due to suicide within 13 months of taking the policy that will not be covered by the policy. Most Australian insurance companies would allow you to keep the insurance policy for a period of 99 or 100 years there by ensuring that a long term planning can be made for life insurance.

Typically an Australian life insurance company will cover for any death anywhere in the world and provide service throughout the clock. No matter wherever the death occurs the insurance company will be available to claim the money. Companies such as Allianz will cover you even if you travel abroad and for any event occurring while you are there. Some insurance companies do not require medical tests. However some others may require you to disclose your existing medical conditions if any and also undergo some tests. The best policy would be to compare the life insurance quotes online before taking out the policy.