Best Life Insurance

Insurable interest is when you have a financial stake in (or directly benefit from) the existence of an object or individual and would experience hardship if anything were to happen to it. For example, you have an insurable interest in your car because you would suffer a loss if it is damaged or destroyed.

Key Things to Know About Insurable Interest

• Insurable interest forms the basis for all types of insurance policies – without insurable interest, you wouldn't have a need to insure something.
• If you rely on someone or something financially, or if you would stand to lose money if the person or object were to disappear, then you likely have an insurable interest.
• Insurable interest can help prevent moral hazards in insurance. If you would gain, either financially or otherwise, from the destruction or death of the insured object or individual, you do not have a true insurable interest.

Insurable Interest in Car Insurance

Insurable interest in car insurance is typically proved by having a vehicle in your own name. If your name is on the title, it is clear that you would suffer some sort of loss, financial or otherwise, if the vehicle were to be damaged, totaled, or stolen.

If your name is not on the title, proving insurable interest can be a little more difficult. You'd need to prove that you stand to lose money if something happened to the vehicle or that you handle the vehicle's finances for a dependent or relative.

For example, if the car is in a relative's name, but you take care of that relative financially, you may be able to prove that you have a reason to insure the car yourself. You may also be able to show insurable interest if you use someone else's car regularly, like if you use their car every day to commute to work.

Insurable Interest in Life Insurance

Life insurance is the most common situation where insurable interest is talked about because the laws surrounding who qualifies are more complicated. In general, you must be immediate family or have a relationship that is recognized by law to have an insurable interest. You cannot take out a life insurance policy for your neighbor or friend because there isn't a close enough relationship, but you can take out a policy for your spouse, children, or parents.

Companies can also have insurable interest in their employees and executives, like presidents or CEOs, because the loss of those people would result in financial and emotional hardships.

If you are wondering whether you have insurable interest in someone else for the purpose of life insurance, it is best to speak with a licensed life insurance agent to help you go through the options.

Life insurance can cost anywhere from $14 per month to over $2,000 per month depending on the type of policy and factors like the policyholder's age, gender, and family history. For example, a young, healthy female will likely pay less for life insurance than an older man with a family history of serious illnesses.

Factors That Affect Life Insurance Costs

• Age
• Gender
• Health history
• Height and weight
• Family health history
• Smoking and nicotine usage
• Abuse of substances or drug usage
• Credit history
• Criminal background
• Driving record

Term life insurance policies are typically the cheapest option since the policies only last for a certain amount of time and the premiums only pay for the death benefit itself. Permanent life insurance policies, on the other hand, usually cost more than term life policies because they are active for the life of the policyholder and the premiums go toward the death benefit as well as a cash value component. Depending on the type of permanent life insurance policy, the interest accrued by the cash value savings account may be enough to outweigh the higher premium expenses.

Now that you have an idea of what can affect the cost of life insurance, check out WalletHub's guide to the types of life insurance that are available.

In order to get life insurance you may want to contact a local life insurance agent or broker. Also, consider asking family members and friends for a referral - ask them about their life insurance agent and insurance company.

There are a few ways to get life insurance:

1. Contact a local life insurance agent.

2. Visit a life insurance broker online.

3. Call a life insurance company direct.

You'll want to consider:

1. What type of life insurance to buy?

2. How much life insurance you need?

3. What is your budget for your life insurance?

4. If married, does your spouse need life insurance, too?

5. How long do you need life insurance?

When choosing a life insurance company consider:

1. The financial strength rating of the insurer.

2. The cost of your life insurance.

3. The types of life insurance plans avilable.

4. The reputation of the insurance company.

5. Does the insurer pay their claims in a timely manner?

6. Are there any complaints filed with the Department of Insurance in your state against the insurance company?

7. How long has the insurer been in  business?

Remember, life insurance policies come with a money-back guarantee which may vary by state. So, if you aren't satisfied with your life insurance, you may be able to get your money back. Some insurers have a 15, 20, 30 or 60 day money back guarantee.

There are several types of life insurance and each has its own unique properties but the general principle is that you are insuring someoens life. When that life ends the insurance company pays the beneficiary the amount of the policy.

A good example is a family - dad, mom, some children. Dad and mom purchase a life insurance policy so that, should one of them die, there will be money that the remaining family can use to transition to a life without the parent or parents.

If you have a permanent life insurance policy that builds cash value inside the policy from which you can take a loan, you can contact your life insurance agent or carrier to request how much money is available from the cash value of your policy to be taken as a loan.

You may also want to ask about the rate of interest that will be charged and when the interest payments are due.

Once the required paperwork is completed and received by the insurance company you may receive a loan from your life insurance policy in as little as 1-2 weeks.