Misplaced Pages

This is an old revision of this page, as edited by Jguk (talk | contribs) at 13:20, 11 January 2007 (Taxation of life assurance in the United Kingdom). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

Are annuities life insurance?

While annuities are often sold by life insurance companies and involve many of the same principles and concepts of life insurance, I don't believe it is common to call them a form of life insurance. I think the annuity discussion in this article should be limited to noting the similarities with life insurance, and linking to the annuity discussion. See also Talk:Annuity. - Taxman 17:24, May 17, 2004 (UTC)

From a regulatory point of view annuities are usually considered life insurance; this makes sense from a logical ponit of view as well, since their pricing is in part based on mortality rates. — Stumps 10:22, 6 March 2006 (UTC)

In my Life classes we were explicitly told that annuities are NOT life insurance. The only thing they insure against are outliving your finances. They are only regulated by insurance laws because they are sold by life insurance companies (and only sold by life insurance companies, no one else). This is for the US, at least. I also took out the sentences about annuities in the endowment section because it had nothing to do with endowments. I added their current illegality but I'm not at home (and won't be for some months) so I don't have my books for reference. It's a tax law from 1984.Gaviidae 18:56, 9 June 2006 (UTC)

Annuities are NOT only sold by insurance companies. Banks and other financial institutions can also sell forms of annuities.

Banks and other financial institutions offer annuities through insurance company subsidiaries or third-parties (at least in the US). In fact, they are REQUIRED to inform customers that the annuity is NOT a bank product. Drop into any branch and ask, or take a look at the disclosures at the bottom of this page. Cmadler 21:29, 4 January 2007 (UTC)

I believe that you're correct in that, if we take the definition of insurance literally, annuities are not life insurance. HOWEVER, every state - and I do mean, EVERY state in the United States - views this from a regulatory aspect as IF it were life insurance. I know this, because I am the person that does the filing for my company for approval of life and annuity products. I also know that in terms of my certification, LOMA views life and annuities together. NickBurns 20:26, 13 September 2006 (UTC)

Look at this way: life insurance is income protection for an early death; an annuity is income protection for a long life. They aren't the same thing. Betaeleven 16:34, 13 November 2006 (UTC)

Rewrite

I have rewritten the entire article, deleting the old. I would welcome comments. Johnwhunt 17:26, 9 Mar 2005 (UTC)

Biggest thing off the bat is where are your sources? I am an agent and know a fair bit about this, but I do lack authoritative reference sources in front of me at the moment. That is the thing Misplaced Pages needs the most, to counter the critics on the basis of reliablity. I suppose I should grab some from the library. I have not had time to review your whole change, but intend to. As long as you are open to suggestions I think we can end up with a great article. - Taxman 18:45, Mar 9, 2005 (UTC)

I am an licensed insurance agent and the sources are the licensing exam and continuting professional education materials I have accumulated. I have no problem with changes unless they deviate from a NPOV or are incorrect. Johnwhunt 14:16, 10 Mar 2005 (UTC)

I found a page here http://www.ducksoftware.com/insurance/life.php which seems a lot like the wiki page, and a set of errors (??). I wondered where the sentences about annuitites came from out of the blue in the endowments section. I think someone originally left a sentence out somewhere because the only reason annuities should be mentioned is because modified endowments follow annuity tax rules. So that makes sense. Also wondering why this article and the ducksoftware one list paid-up or single-pay as a seperate type of Whole Life. Isn't it just a different way of paying your premiums, much like deciding whether to pay monthly or semi-annually or lump sum? Why are endowments under "Permanent"? They are by nature temporary, but different from term in that there's a cash value.Gaviidae 18:16, 11 June 2006 (UTC)

Insurance vs. assurance

Is there a difference between "assurance" and "permanent insurance"? The description of the difference between life insurance and life assurance resembles the description of the difference between term life insurance and permanent life insurance. --Damian Yerrick 05:53, 5 Jun 2005 (UTC)

USA versus UK

It seems to me that the life insurance article takes a predominately USA specific perspective, whilst the life assurance article is talking from a UK perspective. As the actual products and markets have many differences, any merger should be careful to highlight these differences.

Complete re-write

I intend to re-write the life insurance page from a generic perspective introducing county specifc information further down.

I will re-write the life assurance page as a UK specific page to cover the unique complexities of the UK market. Simon West 08:07, 2 November 2005 (UTC)

The words "life assurance" are used in the UK. I typed in "life assurance" to find out what they meant. If a combined page is created, I think anyone searching for "life assurance" should be directed to that page, and it should be made clear that life assurance policies are the UK equivalent of US life insurance policies.

The page would have a redirect. ~ clearthought 02:45, 26 July 2006 (UTC)

Difference in UK and USA usage

I was taught that the term life insurance, in UK usage, although common, is entirely incorrect; insurance refers to protection against something which might happen (eg. your house burning down), whereas assurance is protection against something that will happen (eg. your death). If this can be confirmed, I think it should be noted early on in either article. TheMadBaron 14:06, 15 December 2005 (UTC)

Investing / Lending and BTW what about bonuses?

I see an anon added lending as an activity in the phrase "... a pool of money from which to invest or lend, pay claims, and finance the insurance company's operations", and then this was reverted with an edit summary alomng the lines of 'lending is a form of investing' ... quite right, from what we migfht call a 'finance' perspective, but if we are talking about policy loans then from an operational perspective these are quite different things. Perhaps the question should be: are policy loans a significant enough activity to mention in this context? And what about bonuses?? Surely they rate a mention somewhere? — Stumps 09:28, 6 March 2006 (UTC)

Dividends?

I'd say that maybe the majority of companies are mutual (not sure) and the major difference that policyholders see is the payment of dividends (though not legally required or guarenteed, most mutual companies do them). What about having (under the Whole Life/Cash Value section) a subpart on dividends? Or a sub page.?? Gaviidae 19:07, 9 June 2006 (UTC)

Critisism

What's this critisism part of the page??

"Criticism

Life insurance policies have been used as a financial exploit; motivating people to murder somebody after purchasing a life insurance policy (ranging from $100,000 to $1,000,000) just for easy money. Despite the suspicion of a multitude of those type of circumstances; the insurance customer pays the high quantity anyway. Forensic Files has many episodes about that type of scenario. This scenario is similar to insurance fraud."

If I were more familiar and sure of myself in this Wiki thing, I would delete this. Easy money? Insurance companies are allowed to investigate the causes of death. Insuring someone just to kill them off has legal ramifications-- and the "insurance customer" would be the person purchasing this illegal policy anyway. This is based on some TV show??? And yes, if this scenario ever occurs, it is indeed fraud and isn't paid out to the perp. This is not legitimate insurance information.Gaviidae 12:48, 22 June 2006 (UTC)

The entire criticism section is very biased and off-key. I don't know of a single state I am licensed to sell insurance in that DOESN'T require the purchaser of a policy to have an insurable interest in the insured. On top of that, the majority of states require that the insured sign or at least be notified of the coverage. I have not had this experience, but I am certain that if an insured said, "that person has no reason to benefit financially from my death and is probably up to something," the insurance company would NOT issue the policy. Again, that concept is INSURABLE INTEREST.

Secondly, the circumstances used to describe what motivates people to purchase life insurance on children may certainly be true. But it is far from the norm. People buy life insurance on their children to protect their insurability. I write policies on my client's children on a regular basis. These clients have family histories of conditions such as diabetes and other such conditions that would make life insurance an impossibility if for no other reason that exhorbitant cost.

Further, single people (and everyone else) should have life insurance in an amount sufficient at least to cover final expenses. Policies written for this purpose are commonly called Final Expense policies. I see too many obituaries with a footnote that states "a memorial fund has been set up at the funeral home to help pay for the burial of John Doe, because he had no life insurance."

These criticisms should be evaluated closely. There is suppose to be a neutral point of view on this site, and it is severely lacking in this article. (unsigned comments)

It's OK to have a mention of how life insurance policies can be misused, or the targets of fraud, etc. But yeah, it needs to stay in a NPOV context, and any mention should be at a minimum. NickBurns 20:28, 13 September 2006 (UTC)

I agree that the criticism section is weak if not outright superfluous. It's like some sort of blog thing where people just keep adding opinionated verbiage that doesn't seem to fit the neutral tone which an encyclopedia article should have. 2*6 03:29, 1 December 2006 (UTC)

U.S., UK perspective...

I keep reading all of this talk about representing U.S. or UK views, but not about representing all' views. I would think other nations would have life insurance/assurance too, no? Since Misplaced Pages is a global, worldly encyclopedia, we should not just represent the U.S., UK, or both, we should write a standpoint from a global perspective. ~ clearthought 02:47, 26 July 2006 (UTC)

Of course we should. It's just that people that know anything about life insurance outside the US and UK haven't added anything. I don't know anything about the rest of the world, so I can't add anything, but if you do, or you have the time to do some research please go ahead. If there's too much US/UK material for a properly balanced article reduce it, summarize and move the rest to a sub article. - Taxman 16:52, 26 July 2006 (UTC)

More on the US vs UK vs World issue

I completely understand and agree that there should be information about all perspectives of insurance/assurance around the world. I just don't agree, AT ALL, that the articles should be merged. However, I **DO** agree there should be one spot to look for it.....

This would be my suggestion: That we have a "landing page", like a disambiguation page, that gives a brief overview of the topic, and then lists a summary of types: ie, Life insurance (North American model), life assurance, and so on. There is SO much information that I think perhaps to try and have a comprehensive article on all insurance/assurance products would be a nightmare to create, edit, and maintain. If there is a separate model for, say, Asia, then an article on the Asian model could be written, and the "landing" page could include it in the list.

I'm not knowledgeable about the world models, but I can verify the US model, as I work in the legal dept. of an insurance company and have LOMA texts to refer to. NickBurns 18:40, 21 September 2006 (UTC)

weak external links

An external link was added today ( Life Insurance - Essential Info ). IMO it is bland and not appropriate. I suggest we delete it.

2*6 20:09, 2 December 2006 (UTC)

strong external links

Re: Life Insurance History Project

At first the link was to the site home, which is just an insurance quotes page. An anonymous editor deleted it, which I understood. I added it back, this time pointing it to the page describing the "Life Insurance History Project", and providing the text of many very old life insurance and actuarial documents. The same anonymous editor (68.155.70.148) again deleted it, with the comment, "(visitors are still one click away from applying for an insurance policy. otherwise, any commercial site could create an "about" page and spam wikipedia)". While true, it ignores the actual, high quality and unique content available in this specific case. I suggest we re-add the link (BTW, I am not affiliated with the site owner, nor was I the editor who added the original link.). 2*6 22:04, 9 December 2006 (UTC)

I don't see the high quality content. I also don't see how old life insurance documents would be that valuable, enough to justify their inclusion on the page. I'll take another look at it when I get a chance, but I just don't see it. The agressive behavior continuing to re-add the link is fishy. - Taxman 19:59, 11 December 2006 (UTC)

I agree with Taxman. Betaeleven 20:33, 11 December 2006 (UTC)

For the record, currently more than half of 2*6's edits are to this talk page. Do I smell socks? Stumps 20:38, 11 December 2006 (UTC)

Well, Stumps, if you do then your nose is paranoid. ;) I only edit when logged in, and only have one edit account. My user page links to my home page, granting anyone who is interested information as to my actual identity. The reason I have edited this page so many times is that the "weak external links" section was created as a subopic of the US/English merger discussion. I tried to move it out, then I added a note saying that a bugzilla report had been filed. When someone moved all topics out of the subtopic, I then edited it again, removing mention of the now moot issue with subtopics. Back to the issue at hand, if folks don't think an encyclopedia benefits from old source documents concerning the subject, why the heck do we bother providing external links to anything? 2*6 22:37, 11 December 2006 (UTC)

Taxation of life assurance in the United Kingdom

This section says "All (UK) insurers pay a special rate of corporation tax on the profits form their life book". Could I ask who added that?

My understanding is that UK life assurers pay a single tax charge which is levied on both shareholder and policy holder profits, with shareholder profits being taxed at the normal corporate rate (30% if a large company), and policy holder profits at the lower rate of income tax (currently 20%).

I have already changed the value of the tax credit given to policy holders from 22% to 20% as I thought 20% applied from 6 April 2003. jguk 13:20, 11 January 2007 (UTC)