Life Insurance
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Life insurance has taken on increasing importance as an investment in the modern era for many reasons. One reason for this is that people are living longer, mainly from advances in technology and biomedicine. Another reason life insurance is more significant as an investment to many consumers is because of the precarious nature of Social Security funds in the future when increasing demands on the system are projected to drain the fund. However, life insurance, unlike other insurance, is self-maintained, i.e., no one makes you carry it as is the case with auto or homeowners insurance. Further, there are numerous types of life insurance investments, with multiple pages offering everything from “illustrated dividends” to “mortality savings” which makes the process of choosing the right insurance investment even more complex. Additionally, the longer one waits to purchase life insurance, the more costly is becomes. On top of this factor, life insurance expenditures must be tailored to individual budgets, which is where consumption economics plays a role. Yet, insurance purchasing as an investment can be fraught with risk because the average consumer must rely on information from insurance companies, information that may often turn out to be inaccurate or is not forthcoming, “Unlike most retail products, from macaroni to mutual funds, life insurance policies carry no unit pricing—no breakdown of what you are paying per qua
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f permanent insurance, the kind that pays cash value, but it is also the most complex form of insurance and the one least understood by consumers. However, the responsibility for this does not fall only on the shoulders of consumers, but also on those providing insurance:
Permanent insurance—which encompasses policies that build up savings, including whole, universal and variable insurance—is more complicated. Here your insurer invests part of your premiums and credits you with dividends; your policy accumulates a cash value that grows tax-free. But it’s often unclear exactly how much gets invested, where it goes and how much you get back. The illustrations used to sell policies rely on assumptions made by your insurer, which may or may not turn out to be accurate. Moreover, illustrations almost never itemize all the costs. As a result, cash-value insurance policies are virtually impossible for the average buyer to understand.
(Keating 2)
This research will focus on permanent insurance as it is the only category of life insurance that builds cash value during the policyholder’s lifetime. Permanent life insurance is related to consumption economics, because it is a method of insuring that when one shifts in the economi
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Some common words found in the essay are:
Social Security, Milton Friedman, LIFE INSURANCE, Silversmith Silversmith, life insurance, CONSUMPTION ECONOMICS, INTRODUCTION Life, Security Americans, Census Bureau, cash value, CITED Consumption, consumption economics, Variable Annuity, permanent insurance, insurance investment, social security, insurance policies, life insurance investment, term insurance, income hypothesis, permanent income, permanent income hypothesis, purchasing life insurance, permanent insurance policies, savings social security,
Approximate Word count = 2507
Approximate Pages = 10 (250 words per page)
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