Buying the Right Type

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Buying the Right Type

These two types of policy clearly have different uses and applications, and the most important decision in life insurance is to buy the right type for your needs. Broadly speaking, at the younger ages when family responsibilities are heavy (from marriage through to when children become independent) protection is more important, whereas in the later stages of working life investment becomes the priority. The structure of the website follows this pattern, starting with the pure protection type of policy and moving through policies designed for investment and house purchase to those more relevant in retirement and old age.

It has to be said at the start that there are often hundreds of policies of one type available and that it is impossible in a website of this kind to offer advice on the "best buy". Life insurance companies change their premium rates for particular policies from time to time in response to market conditions or internal considerations.

Furthermore, though some will be covered in Section 11, it is impossible to cover all the minor variations in policy conditions that may, for any one individual, be extremely important.

And though it is only current rates of premium per sum assured (together with any specific differences in conditions of the contract) which determine the relative value for money of protective life insurance, this is not true of investment-oriented policies.

The best value here will not be found by comparing premium rates because the ultimate maturity value delivered to the policyholder will depend mainly on investment experience, the result of the investment decisions of the life company over a period of many years, and this is not easy to predict.

As regards protective life insurance, it is in any case more important to choose the right type of policy than the cheapest individual policy available, since the difference in actual cost will not be very large.

In choosing an investment-oriented contract it is more important to pick the right one for the individual (as is made clear in Sections 5 and 6), but in general this is beyond the ability of the individual and requires the assistance of an insurance broker or other adviser. It is possible, given the necessary background knowledge, for the individual to decide such matters himself, but there are good arguments against doing so, and this website is not intended to be a "do-it-yourself 'guide.

However, as is explained in more detail in Section 12, the advice available to individuals on life insurance can be of very variable quality. In some cases it is less professional and objective than it ought to be, largely for historical reasons concerning the structure and development of the life insurance business. So long as selling life insurance can earn an agent large sums of money (which it can) and professional guidelines and training are lacking (something that is only now beginning to be remedied) the individual does face the risk of being advised by someone with less than adequate qualifications and/or professional integrity. Armed with the information given in this website, however, nobody should fall prey to one of the small minority of disreputable or incompetent advisers.

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The Average life table

It has been constructed from the mortality experience of the population of England and Wales during the three-year period 2017-74.

The column headed lx shows, for each sex, the numbers who would survive to exactly age x out of 10,000 born who were subject throughout their lives to the recorded death rates of the period.

Column ex is the "expectation of life", that is the average future lifetime which would be lived by persons aged exactly x if likewise subject to those death rates.

Age Males Females

x 4 ex 4 exThe Average life table

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