What is Life Insurance?

Ensurance Inc. is committed to providing you the easiest and most convenient way possible to shop, quote and buy the high quality, low-cost life insurance you seek.

Comedians often joke that, “it shouldn’t be called life insurance. It should be called death insurance because it doesn’t pay unless you die. And even then it still doesn’t pay you; it pays everyone BUT you!”

Well, that’s partially true when referring to term insurance.

Term Insurance is essentially a bet you make with the insurance company that you will live for a certain period of time - called a term, usually 10, 15, 20, 25, or 30 years. The bet is however a bit counter-intuitive to what we would normally think of when we think about winning a bet. And while this may be getting a little confusing, follow out the logic and you should see what we mean by winning and losing the bet.

If you win the bet, meaning you live for that complete term, you lose the money you paid each year. (The assumption being hopefully you value your life over your money.) That money is kept by the life insurance company to cover bets that people sometimes lose.

When people lose the bet, meaning they die before the end of that term, then the term life insurance company must to pay money to the survivor or beneficiary on that bet. This pay-out is called the death benefit and is the amount you pre-selected and the life insurance companies approved when you bought the policy. Depending on your health, you may or may not be approved, or you may be approved for a lower amount than what you apply for. (Most life insurance products subject to underwriting requirements and most have suicide limitations apply.)

The death benefit is the amount of term life insurance you purchase. Some term life insurance product also have an option whereby you can build a surrender value meaning if you surrender the policy before the end of the term you can still get some money back. This can be a good value as well.

Another type of life insurance policy is called Variable Insurance and variable insurance is a life insurance policy that combines protection against premature death with a savings account that can be invested in stocks, bonds, and money market mutual funds at the policyholder’s discretion. The account builds cash value over time and in this regard is much different than term life insurance that expires and has no residual value. There is also a Variable Annuity life insurance product which is an annuity whose contract value or income payments vary according to the performance of the stocks, bonds and other investments selected by the contract owner.

And there is another life insurance product called Universal Life which is a flexible premium policy that combines protection against premature death with a type of savings vehicle, known as a cash value account, that typically earns a money market rate of interest. Death benefits can be changed during the life of the policy within limits, generally subject to a medical examination. Once funds accumulate in the cash value account, the premium can be paid at any time but the policy will lapse if there isn’t enough money to cover annual mortality charges and administrative costs.

A-Share Variable Annuity is a form of variable annuity contract where the contract holder pays sales charges up front rather than eventually having to pay a surrender charge.

And Accelerated Death Benefits is a life insurance policy option that provides policy proceeds to insured individuals over their lifetimes, in the event of a terminal illness. This is in lieu of a traditional policy that pays beneficiaries after the insured’s death. Such benefits kick in if the insured becomes terminally ill needs extreme medical intervention, or must reside in a nursing home. The payments made while the insured is living are deducted from any death benefits paid to beneficiaries.

Cheaper, more affordable life insurance is always something we shop for, more so when we are older than when we are younger. But the irony is that life insurance is cheaper when we are younger and we can lock in a low rate by buying it at a young age. Unfortunately however that seldom happens.

Here at Ensurance Inc. we strive to provide free, instant online life insurance quotes from all major life insurance partners and carriers. So if you want cheaper life insurance, we have it. If you cannot find it here, it may not exist or it simply may not be worth your money. But always be sure you know the financial rating and the history of any insurance company you decide to buy life insurance from because life insurance, unlike many types of insurance, is a very long term contract. (You can always check an insurance company’s financial ratings for free by going to www.ambest.com and www.standardandpoors.com and obtain much more life insurance carrier information.)

There is more to learn about life insurance and periodically we will update this page and publish more life insurance articles to the site, so be sure to check back from time to time.

But for now please just sit back, relax, and enjoy your life insurance shopping experience here, where you'll never find any pushy sales people. That's right, life insurance with no pushy sales people. Now there’s a concept!