Every one wants a life insurance, but not every gets it. Even though you have enough money to pay the premiums, you may still be denied of a life insurance. Your application for a life insurance policy undergoes a strict underwriting before it can be approved. Underwriting is the risk assessment of the candidate?s application and the amount of premiums that he or she needs to pay.

Underwriters help the insurance companies in analyzing the risk involved in approving a particular application. At the end of the day, insurance companies are looking to make profits, and for this underwriting becomes an important exercise for them. Underwriting includes three steps, performed one after the other. The steps include examining the application, deciding to insure or not, determining the premium.

The first step needs the companies to gather information about the applicant. The application needs to be examined against many parameters, such as marital status, sex, type of living area, age, and current health status and so on. All these parameters are looked into one by one, and a final conclusion is then drawn.

After the details are collected, the decision making phase starts. Here all the parameters are gauged one by one, and the applicant is remarked for each parameter. These parameters are also known as the risk factors. For an applicant to have his application approved, he must score low on these risk factors. Although each of the risk factors has its own weight and importance, it is common belief that most insurance companies emphasize more on the age and health of the applicant. A young age and a good health of the applicant make it easy for the insurance company to approve the application. Similarly, an old aged and ailing applicant may not get a nod fro the insurance company. Living environment is another aspect considered by the companies. A good living environment implies that the applicant would suffer lesser ailments, and hence live long. As against this, a polluted and unhygienic living environment creates doubts in the minds of the insurance company. The gender of the applicant can also play a role at times. Many companies believe that women live healthier and fitter than men, for they do not take depressions. Interestingly, married men are believed to live a healthier life than the married women, indicating that the marital status also plays a role in the approval or denial of the insurance policy application. Lastly, the living habits of the customer also determine the fate of the application. If the applicant is a smoker and/or drinker, the chances of an approval are bleak.

The above risk factors not only determine the approval or denial of the insurance policy, but also the monthly premiums. Once the application is approved, the score of the applicant on the risk factors also decides his pr her monthly premium amounts. A young and fit individual would have to pay lower monthly installments, as compared to an old and ailing individual.

The selection of the right life cover must not only involve the cost of the policy. The selection process is a bit more complicated than just picking the cheapest policy there is. If you are looking for the appropriate life cover then you should be able to include in the equation the more important aspects such as the type and amount of coverage.

If ever you meet an insurance agent he would definitely suggest you to have a live cover which is four times or even eight times of your annual salary. If you have a salary of $40000 you would have to have a life cover of $160000. This amount may not necessarily be enough for you. You are bound to know more about your family than any insurance agent would.

The life cover provided by term insurance runs only for a fixed period of time. As the name implies, term insurance shall provide life cover which can ran for a minimum of one year to a maximum of ten years. The beneficiaries under a term insurance can claim for death benefits only when the policyholder dies within the timeframe covered by the term insurance. In most instances, the term insurance is chosen by an individual if the insurance cost is the major consideration in the selection of the appropriate cover.

The amount of money paid in lump sum allows your family to plan their lives from there on. Your efforts to pay the monthly premium now can mean a world to your family, in case they happen to lose you. Sadly, many people have no clue about these lucrative life insurance schemes and hence such people just do not avail them. Others discover them very late, and have to pay heavy premiums at their age. Also, at an old age they may not be fully covered either. It is hence advisable to invest into a life insurance policy as soon as you can.

Life insurance policies come in two types, namely term insurance and investment type insurance. In case of the term insurance, your family can only claim the insurance if your death occurs during the active or valid phase of the policy. Once the policy has expired, no claims can be made. As against this, investment type insurance keeps you insured as long as you live. All that you need to do is make regular payments of your premiums. This policy is also termed as the whole life policy. One good thing about this policy is that every month, the insurance company deposits some part of your premium into your investment account. You can then withdraw this amount some time later. The amount would however get paid to your family, in case you happen to die before you withdraw the money.

The whole life type of insurance policy is generally defined by a premium amount that will remain unchanged for the entire life of the policy. Further, when you opt for this type of life cover, you will not have any control on how the insurance company will invest the funds.

You can even get a chance of paying a premium of a lower rate if you tend to buy a life cover when you are young than paying a premium of a higher rate when you are older. The earlier you buy it the better it is for you.

The word insurance refers to any contract where a person pays another person or business to insure the safety, but to be more precise, pay for the replacement of any such personal property if said property is lost, destroyed, or damaged in some other way other then the neglect or purposeful destruction of the owner of said property. There is insurance for just about anything, insurance is generally divided into four areas; vehicle, property, health, and life insurance.

Insurance has been around since civilization began. The earliest form of insurance was the old protection rackets that organized crime families still use even today. Criminals or rulers of a country would ?guarantee? that a business or home would not be damaged or destroyed by criminal activities for a weekly cut of said profits of the business. This form of blackmail and extortion quickly led to merchants and shopkeepers living in their businesses. So that when the criminals came they would be greeted by sword and spear. These actions, taken by these early businessmen, led to the old saying, ?The greatest protection comes by the sword.?

The earliest known form of a true form of a contractual insurance agreement came as early as 3 or 2 millennia B.C. These simple agreements stated that a merchant, trader or transporter of goods would guarantee the safety of said cargo or shipment. If the goods were lost, the transporter of said goods would pay either the sender or receiver for the loss or both. Other insurance contracts were simply a fee paid by the carrier so that of the goods were lost then the fee would cover said loss of goods. These agreements were usually done by a verbal agreement, but they were later back up by laws etched in stone and papyrus.

Contemporary life insurance began in the late 17th century England as a replacement for traders insurance. In America the first modern life insurance plans began in the late 1760s. The Presbyterian Church in New York and Philadelphia created the Corporation for Relief of Poor and Distressed Widows and Children of Presbyterian Ministers in 1759. This was fashioned under the Christian doctrine that it is the responsibility of the Church to help the poor, needy, and widowed. Later the Episcopalian priests created a comparable fund in 1769. From 1787 to 1837 over a dozen life insurance companies came into being, but less then half survived that century.

Now in the modern age insurance is now a necessity for a normal life in every nation on Earth. Insurance now covers Life, property, health, and even liability from lawsuits. The insurance commodity is now a multi-billion dollar business. The first known insurance business was started after the Great London Fire in 1666. The fire destroyed 13,200 houses. After this tragedy, Nicholas Barbon opened an office to insure buildings. In 1680, he established England’s first fire insurance company, “The Fire Office,” to insure brick and frame homes.

The first insurance company in the United States was founded in Charleston, South Carolina in 1732. The company insured against fire damage and Benjamin Franklin assisted in popularizing the concept of insurance in the country at the time. In 1752, Benjamin Franklin founded the Philadelphia Contributorship for the Insurance of Houses from Loss by Fire. Franklin’s company was the first to make contributions toward fire deterrence. His company also tried to warn against certain fire hazards, but it refused to cover structures that were at considerable risk of fire, such as wooden houses or warehouses.