Home / Types of Life Insurance Policies
There are many different ways of describing the different types of companies which provide life insurance and life assurance policies. One of the main distinctions, which interests customers and prospective customers, is who owns the company.
Life Insurers can either be owned by those who hold shares in them (privately or publicly) or by those who hold policies with them (their customers), these are called Mutual Companies.
Policy holders with mutual life insurers often have what are called membership rights and benefits which can be varied but usually include voting rights when appointing Directors to run the company. It is important to point out however that is not always the case that having any policy with a mutual life insurer confers on the policy holder membership rights, this is because some mutual life insurers only offer such membership to those with certain types of insurance or assurance policies, or policies started before a certain date.
Whereas shareholders in a company can buy and sell their shares, members of a mutual life insurer can not unless of course the mutual votes to de-mutualise and in so doing issues shares to the members which can then be traded as other shares.
De-mutualisation has been a popular choice for a number of mutual life insurers over the years, leading to millions of life insurance and life assurance policy holders receiving shares which they can either keep, in the hope that the value of the shares grow and in the meantime earn dividends on them, or they can sell them. These shares are often described as ‘windfall’ shares because they have not been bought by the insurance or assurance policy holders who receive them.
The pressures on life insurance companies owned by shareholders (who demand increasing profits and therefore increased share values and dividends) are often very different to mutual life insurers which are owned by their customers; however the types of life insurance and life assurance policies offered by both types of insurers are broadly the same.
The possible windfall benefits offered by de-mutualisation have caused some to buy a life insurance or life assurance policy from mutual life insurers when their prices are at least as good as the alternative life insurers available, because of the chance of them receiving windfall shares.
At Direct Life we offer the life insurance products from mutual companies and those with shareholders.
22 May 2007 12:41:22
Prospects for a diagnostic test for prostate cancer have been improved by recent genetic findings.
Researchers at Northwestern University in Michigan discovered a 'genetic marker', which increased the likelihood of carriers developing a virulent form of prostate cancer.
The findings, presented at a meeting of the American Urological Association in Anaheim, California, found that prostate cancer sufferers carrying the 8q24 marker had a 40 per cent of having a close family member with the disease, compared to a 20 per cent chance for patients without the marker.
Lead researcher Dr Brian Helfland said that the study - which also showed that African-American men were twice as likely as those of European descent to carry 8q24 - would help with the advancement of new treatments and earlier diagnosis.
Dr Helfland said the findings "will help us understand the mechanisms underlying prostate cancer".
"They hold great promise for the development of new treatments and prevention."
Prostate cancer accounts for nearly a quarter of all new male cancer diagnoses, though a rise in incidence has in been part been down to improved detection techniques, through the use of Prostate Specific Antigen (PSA) screening.
18 June 2007 16:42:06
The health risks associated with obesity may lead to more expensive life insurance premiums, according to the Association of British Insurers (ABI).
However, any eventual claims made later would not be affected by being overweight, said spokesperson Jonathan French.
As with other lifestyle factors such as smoking, insurers assess the likelihood of a claim being made when pricing their policies.
Mr French confirmed: "If you are obese there is a higher risk of other health problems resulting from that and therefore the risk of a claim is going to be higher and insurers will price their policy accordingly."
However, he added: "The sum assured is not affected in any way by the reasons for claims - they're a constant which is set at the beginning of the policy."
"When you purchase your policy, you tell the insurance company what you want the sum assured to be."
Mr French's comments should have particular resonance for UK adults, over fifty per cent of whom are overweight, according to the department of health.
20 June 2007 14:37:23
Quitting smoking could save you more than £3,000 on life insurance premiums, a new study has shown.
The findings, from comparison site Moneysupermarket.com, revealed that a 25-year, £100,000 life insurance policy for a 35-year old smoker would cost £17.90 per month with Norwich Union.
This monthly charge is 79 per cent higher than that for a non-smoker, with the non-smoker making a saving of £2,370 over the 25-year course of the policy.
Policyholders with LV= were hit even harder for smoking, paying more than twice as much as non-smokers; quitting would save £3,150 over the policy term.
Emma Walker, head of life insurance at Moneysupermarket commented on the findings:
"The premium difference between a smoker and a non-smoker is vast and there are considerable savings to be made simply by shopping around for the cheapest deal to suit your circumstances."
"The upcoming smoking ban has inspired 1.2 million smokers to say they intend to quit by July 1st, so if you're keen to give up, you should find plenty of support from others in the same position."
However, she confirmed that providers would only lower the premiums if a former smoker had been truly successful in kicking the habit:
"In order to be classed as a non-smoker and qualify for life-insurance premium savings, insurers insist on smokers having packed it in for a full year."
"Once smokers have given up for 12 months, they should go back to their insurer and ask for non-smoker rates, subject to tests to prove they have quit."
