Life Insurance
Capital Ingenuity helps clients understand the complexities of life insurance.

Life insurance is not something the average person enjoys talking about because of it's obvious implications. However, it can be an extremely powerful tool used to protect loved ones against the loss of a family member. Here's how it works.

There are three parties involved in a life insurance contract: the insured, the designated beneficiary, and the owner of the life insurance policy. The insured is the person whose life is being insured for the purpose of protecting someone else who may financially suffer as a result of the insured's loss of life. The designated beneficiary is the person who is entitled to receive the proceeds of the life insurance policy after the insured dies. The owner of the policy can be the insured, the beneficiary, or a third party such as a spouse.

The owner of a life insurance policy pays "premiums" to a life insurance company to insure the life of the insured. As life insurance companies insure many people at a time, the risk associated with the insurance company having to pay on a policy are pooled and spread out across the premium payments that are paid on many life insurance policies.

There are many different kinds of life insurance policies with many different features and options. For instance, a life insurance policy can insure the insured's life for a specific period of time (known as term insurance) or for the duration of their life (known as permanent life insurance). There are several different kinds of term and permanent life insurance.

In addition to understanding the many different kinds of life insurance policies and their associated benefits, a life insurance policy owner also needs to have an understanding of how to determine how much insurance to purchase on the insured's life. Unfortunately, some life insurance sales representatives attempt to sell a potential policy owner too much life insurance because the commissions earned on life insurance sales tend to be quite high.

On the other hand, if the proper analysis of the insured's and the life insurance policy's designated beneficiary's personal situation is not adequately performed, a sales representative may not recommend enough insurance. When an inadequate amount of insurance is purchased, a beneficiary can be exposed to excessive financial risk.

At Capital Ingenuity, we help clients understand the complexities of life insurance and show them how to determine their life insurance needs. Because we do not earn commissions on the sale of products, clients know that they are receiving an unbiased education in the concepts of life insurance.