Mortality Risk: Life Insurance - Essay Prowess

Mortality Risk: Life Insurance

Mortality Risk: Life Insurance

Mortality Risk: Life Insurance

Mortality Risk: Life Insurance

Mortality Risk Analysis & Insurance Options.

The Saeeds have opted to purchase the life insurance on Saeed considering that he has a very instrumental role in the family regarding supporting it financially. Further, the wife, Kakka is not employed at the moment. Therefore, it would be very essential that the insurance coverage is skewed towards Saeed. That would be of great assistance to his family member in case anything unfortunate happens to him. The family, at the moment, has few expenses compared to what they would have if they were living a full-fledged kind of life. However, if these expenses could be challenging considering that the wife is not working. Hence, the mortgage fee is on him, as well as, making the insurance payments. Below is a clear breakdown of the possible or estimated coverage of the Saeeds that would be essential in case Saeed passed on

Required Life Insurance Allocation Amount
Loans, Mortgage or rent and other debts 200000
Income replacement 600000
Final expenses 17500
education- 50000
Total life insurance need 867500
Less existing life insurance 0
Less Aseets 5000
Additional Life Insurance Needed 862500

Above is the chart that represents the extent in which the Saeeds expected needs in case there occurs the death of Saeed. The calculations and compilations of this data are based on the current situation of the Saeeds where Saeed is a student, and the wife is unemployed. Also, the family is currently renting considering that they are in a foreign country where they can only reside for the years that Saeed is going to engage in his studies. There is a need to secure the payment that Saeed is currently getting to ensure that in case he dies, he does leave the immediate beneficiary in deep financial crisis. Considering that he is accustomed to approximately 60, 000 income replacement, it will be important that the cover assists in maintaining the lifestyle that they have been having even after the demise of the only income earner that exists in the family. The fact that the family does not have alternative investments makes it seek a higher income replacement plan. That means that the retirement account can only be funded by the employment income replacement and no other plan. However, the plan is safe for adjustments especially because the family has not yet embraced the need to invest at this moment. It will be essential that the family takes some years to be assured that they can lower their income replacement value given that they will have taken measures to invest in other avenues besides employment.

Part of this overview is an outline of approximately three life insurance cover plans that the family of Saeed intends to consider. They find it essential to enroll with a 40-year term, as well as, Universal Life Insurance package that is being provided by a set of insurance companies.   

Company Prudential Life Farmers Insurance West Coast Life CORP
policy type universal life 40 year Term Universal life
Policy Coverage  $                11,520.00  $           150,000.00  $                  170,000.00
Annual Payment  $                      980.00  $              11,000.65  $                     13,500.72
Monthly Payment  $                        81.70  $                    916.72  $                       1,125.06
A.M Best Rating A A+ B+
S & P Rating A A- A

As stipulated in the chart above, three insurance companies were investigated. These companies include the farmers’ insurance, prudential life, and the west coast life CORP. In consideration of the fact that the analysis was conducted on different companies with different policies, the Saeed opted to choose the West Coast Life. Arguably, the west coast life is considered to be preferable especially in the context of the extent in which it serves the interests of the family. First, the family prioritizes the fact that it will have a long and healthy life. Therefore, there is the need to organize a manner in which it will access an effective medical care. Therefore, the universal life insurance is best suitable in this case. Despite the fact that the Saeeds are looking for a plan that can serve them for at least 40 years, a company that will serve the interests of a longer life is welcome.

The choice of the universal insurance cover, therefore, is influenced by the fact that it has attractive and competitive market features. Also, there is measurable flexibility that could assist in meeting the consumer needs. The Saeeds complement the policy because of its flexibility and potential return. Some of the companies that were selected had attractive ratings. Ranging from A+ to B+ is not that bad. However, the best regarding satisfaction had to be chosen, in this case being the West Coast Life.           

The rates provided in this context are calculated, and possible predictions made regarding what could occur in the future. It is clear that the monthly and annual payments vary from one insurance cover to the other. It also differs regarding the stipulated time of cover. The different companies have the basis in which they develop their premiums and conditions to ensure they serve their scope of customers appropriately.