But is it really just the world of sport that is not heeding the austerity measures? In a word, no. The whole business world is slowly starting to wake from the slumber of the past few years. Multi-national stock market listed companies could hardly have tapped their shareholders to make large purchases, when there were questions about their liabilities and exposures. We saw some rumours, and that is all they were yesterday, about two of the giants of the business insurance world, Aviva and RSA embroiled in take-over talk.

The talk is of Aviva undertaking a £7 billion takeover of it’s nearest UK rival, RSA. This tends to put the £50 million, well spent, on Fernando Torres into perspective. Go back just two years and Aviva’s share price was getting absolutely hammered by the speculators. In fact, it was to such a degree that their Chief Exec wrote to all the pension fund managers asking them not to offer Aviva shares out the short sellers. This ploy did not work, but it did show that the top brass were not happy with what they saw as an under-inflated share price.

The price has now almost doubled from the worst of those days, but will still have to double again to get within touching distance of previous highs. But, the increased share price helps them consider these types of bids. But why should a hostile takeover, not a merger, go on?

Firstly, there are concerns that the RSA share price will, as the markets gain more confidence, grow and grow. Whether this is as a result of super trading by RSA or just a bit of inertia, no-one knows, but the price will go up, making it harder to raise the funds to buy.

Secondly, the insurers are not so exposed (unless your AIG who moved too far away from real “insurance) to the effects of the mad speculation activities and toxic debt of the last few years, so they are worth buying.

Thirdly, as Aviva starts to get it’s act together following the recession, it is more likely to be a takeover target. So, the fatter that they can make themselves, by eating someone else, the more expensive they are to takeover.

We will just have to wait and see though. Rumours can of course be started by anyone, but this one does make sense and that is why it has been reported. We are of course seeing different analysts saying why and why not it should happen/not happen. The big question is what will it do to the market? Probably it will bring some stability, which translates into price increases as a big, big company begins to control a bigger percentage.

Both companies, whilst big in the commercial insurance world are both heavy weights in the domestic and life assurance arena, so we will see some big changes.

What is life insurance?

Life insurance is a kind of contract between the insurance company and you, where the insurance company agrees to pay a nominated beneficiary a sum of money, in case of your death, or some other events like critical or terminal illness. In return, you have to make payments for a fixed amount of money towards insurance premiums, at regular interval of time or you can pay in a lump sum amount also.

What are the types of policies?

The 2 basic types of life insurance policies are:

Term life insurance: It is a temporary insurance, where you need to pay towards premium each year to cover you, for any incident happening that year. It does not build up equity for the insured. On the event of death, before the expiry of the policy, the beneficiary collects the death benefit of the policy, which is free of income tax. It is more popular with young people, as it is the cheapest option.

The various types of term insurance policy are:

Group term: This type of insurance is usually bought by an organization or an employer to provide coverage to several people, so that there will be a discount on the premium amount.

Level term: It has a fixed amount of coverage, which are fixed for a certain period of time.

Increasing/decreasing term: In this type of insurance, though the premium remains same, the coverage decreases or increases throughout the insurance term.

Convertible term: It gives the insured person to convert the term of the policy to a permanent one.

Renewable term: This policy gives an option to renew the insurance coverage at the end of the insurance term, and you don’t have to resubmit your proof of insurability.

Whole life insurance: It is a permanent insurance policy which will give coverage throughout your lifetime. As long as you pay the premiums, the policy will continue. It also provides a savings element which will build up cash value.

The various types of whole life insurance policy are:

Single premium: You need to purchase the insurance by paying a single lump sum premium.

Indexed universal life: In this type of policy there is a combination of premium and death benefit flexibility, where, the current crediting rate of cash value varies according to a financial index.

Survivorship insurance: This type of policy provides coverage for two persons and gives payment of death benefit, only when both of the insured persons have died. This policy is used generally to pay estate taxes.

You need to understand the benefits, features and terms and conditions of all life insurance policies, before you choose a policy that will be best suitable for your needs.

Before buying an auto insurance policy, it’s important that you understand the basics of auto insurance coverage. Usually, there are seven principal types of car insurance coverage’s and they are given below:

Bodily injury liability coverage

This important coverage is necessary in maximum states. It covers injuries that you, the policyholder or designated driver cause to somebody else. It makes payments for loss of income, medical bills, suffering and pain and even funeral expenditures for people who become injured in a motor vehicle accident (given that you are liable for their injuries). Family members who are named in the policy are also covered while driving anyone else car with their approval.

Personal injury protection (PIP) or medical payments coverage

This coverage makes payment for the medical expenses for the injuries to the driver and passengers of the car of the policyholder. At its widest, personal injury protection can cover loss of income, medical bills and the cost of substituting services usually carried out by somebody injured in a motor vehicle accident. It might also cover funeral expenses. Furthermore, PIP would offer protection to you and your family members if you get injured while traveling in someone else car.

Property damage liability coverage

This type of coverage makes payments for damages that you (or somebody driving the car with your approval) might cause to somebody else property. Normally, this suggests damage to somebody else vehicle, but also includes damages caused to telephone poles, lamp posts, fences, houses or other structures. For used cars with book values of $15,000 or more, it is better to have sufficient coverage adequate to substitute or renovate someone else car.

Collision coverage

This coverage offers protection to your vehicle. It makes payments for damages caused to your car because of a collision with another vehicle or object or due to turning turtle. In addition, it covers damages resulting from potholes. Collision coverage is usually marketed with a deductible of $250 to $1,000. The more is your deductible, the less is your premium.

Comprehensive coverage

This coverage compensates for losses resulting from burglary or damages due to anything except a collision with another vehicle or object like fire, earthquakes, falling objects, floods, hailstorms, riots or vandalism. Damages resulting from hitting an animal (like deer or birds) are also covered. Comprehensive coverage also offers coverage without any deductible for transport costs incurred by you in case of a covered loss. Comprehensive coverage would also pay for damages caused to your windshield once the deductible of your policy (if any) is used.

Uninsured and underinsured motorist coverage

This coverage would pay you, a designated driver or your family member if one of you gets injured by a hit-and-run driver who is liable for your injuries. It covers medical and other associated expenses up to the limit of the insurance coverage you choose. Underinsured motorist coverage would reimburse you when the driver responsible for an accident has inadequate coverage to compensate your overall losses. This coverage would also offer protection to you if you are hit as a passer-by.

Car insurance market is full of competition. You should compare rates and coverage’s from different insurers for selecting the policy that is right for your needs.

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