Life's choices.Life insurers deploy coverages that protect insureds and beneficiaries from the financial ravages rav·age v. rav·aged, rav·ag·ing, rav·ages v.tr. 1. To bring heavy destruction on; devastate: A tornado ravaged the town. 2. of death, disability, frailty frailty Vox populi A state of delicacy or weakness which, which encompasses age-related fragility, in particular osteoporosis. See FICSIT, Osteoporosis. and even from living too long. Life insurance pays a death benefit--free from federal income tax--that can be used to replace lost income or to pay estate taxes. Disability insurance provides an income when an insured cannot work because of disease or injury. Long-term-care insurance pays for help in activities such as showering, using a toilet toilet /toi·let/ (toi´lit) the cleansing and dressing of a wound. toilet the cleansing and dressing of a wound. toilet , eating, dressing and moving from room to room. It also pays when a person becomes cognitively impaired See assistive technology. . The industry's critical illness policies pay upon diagnosis of illnesses such as cancer or heart disease. Annuities--the opposite of life insurance--pay an income stream in retirement and can be used as a hedge against outliving assets. While fixed annuity Fixed Annuity An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal. payouts remain constant, variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. payouts reflect the performance of underlying investments. A major decision is whether to buy permanent or term life insurance. Term insurance lasts for a specified time and yields a greater benefit for the premium dollar. Permanent insurance uses higher premiums to build up cash in the policy that will pay for the insurance later in life, when coverage becomes expensive. U.S. Life/Health Premiums: All Lines Direct Premiums Written 2003 ($ billions) Individual Annuities Ordinary Life Group Annuities Group Accident & Health Other Accident & Health Group Life Credit Accident & Health Credit Life Industrial Life All Other Note: Table made from bar graph. Source: Best's Aggregates--Life/Health |
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