Eligibility of Life Insurance

Eligibility of Life Insurance

Life_Insurance_EligibilityWhen calculating life insurance, insurance agents not only assess your financial documents, they also assess the risk factor by which you live your life. The insurance agency will take in basic factors such as age, sex, height and weight, individual and family health history, identity proof, employment status, marital status and number of children. Then they take into account existing insurance, the hazard levels at work, tobacco use, alcohol use, hazardous hobbies (such as bungee jumping) and travelling to dangerous countries which pose a threat to an individual’s life. Depending on your geographical location, citizenship or residency status in the country may or may not matter. This varies in different countries. In general, age eligibility would require the individual to be between 18-60 years old. Minors are ineligible for applying for insurance and senior citizens generally are not allowed to apply for life insurance as they have reached a high scale on their mortality index.

(more…)

Read More

what is Hedging

what is Hedging

hedgeHedging an investment is a way of attempting to ensure against a negative event happening. Individuals hedge whenever they purchase insurance. If you purchase car insurance, it does not mean they will never be in an accident. It simply means that it reduces the negative impact of an accident, financially speaking at least.

For example, you own a fund named ABC Fund in your portfolio. You want and expect this particular fund to go up. But in order to hedge against the potential of ABC Fund going down, you invest in a new fund called XYZ fund which is negatively correlated with ABC Fund. So when ABC increases in value, XYZ will decrease in value. If you own a stock and you believe the company you invested in has good long term potential but you are concerned about short term potential losses you can buy a put option. A put option allows you as the buyer to sell the stock at a set price in the future.

(more…)

Read More