Capital market

• The primary market is where new securities are issued and sold for the first time.
• Insurance


  A contract, represented by a policy, in which a policyholder receives financial protection or reimbursement against losses from an insurance company
• Insurance


  • The company pools clients' risks to make payments more affordable for the insured
  • Used to hedge against the risk of financial losses, both big and small, that may result from damage to the insured or their property, or from liability for damage or injury caused to a third party
• Key components of insurance policies

  • Deductible
  • Policy limit
  • Premium
• Premium


  The price of a policy, typically expressed as a monthly cost
• Policy limit


  The maximum amount that an insurer will pay under a policy for a covered loss
• Deductible


  A specific amount that the policyholder must pay out of pocket before the insurer pays a claim
• Most common types of personal insurance policies

  • Auto
  • Health
  • Homeowners
  • Life
• Law requires car insurance in the United States
• Examples of business insurance policies

  • Covering damage or injury that occurs because of cooking with a deep fryer
  • Covering damage or injury that could occur during test drives
• Other specific insurance policies

  • Kidnap and ransom (K&R)
  • Medical malpractice
  • Professional liability (errors and omissions)
• Whole life insurance may or may not be the right type of life insurance for you
• Life insurance


  A contract between an insurer and a policy owner where the insurer pays a sum of money to named beneficiaries when the insured dies in exchange for the premiums paid by the policyholder during their lifetime
• Types of term life insurance

  • Decreasing term
  • Convertible term
  • Renewable term
• Term life insurance


  • Designed to last a certain number of years, and then end
  • The best term life insurance policies balance affordability with long-term financial strength
• Permanent life insurance


  Stays in force for the insured's entire life unless the policyholder stops paying the premiums or surrenders the policy
• Types of permanent life insurance

  • Whole life
  • Universal life (UL)
  • Indexed universal life (IUL)
  • Variable universal life (VUL)
• Whole life insurance


  A type of permanent life insurance that accumulates a cash value in order to last the lifetime of the insured person
• Universal life (UL) insurance

  A type of permanent life insurance with a cash value component that earns interest, and features flexible premiums
• Indexed universal life (IUL)

  A type of universal life insurance that lets the policyholder earn a fixed or equity-indexed rate of return on the cash value component
• Variable universal life (VUL) insurance

  Allows the policyholder to invest the policy's cash value in an available separate account, and has flexible premiums
• Insurance


  For protection should anything happen to you
• In the Philippines, people don't talk about insurance as much as they talk about investments
• Insurance is a critical part of your financial strategy
• Many people don't understand what insurance is and so only a few want to buy it
• Even those who buy insurance don't actually understand it or appreciate its importance in building and preserving wealth
• As a result, many people don't have insurance or the coverage is usually not enough
• People have all kinds of protection - they insure their house, cars, phones, appliances, and even buy travel insurance
• When it comes to life insurance, people remain skeptical
• Life insurance


  Insures your family's ability to continue on without being financially devastated
• The insurance provided by the company people work for is usually not enough to cover a family's expenses
• Once people resign or retire from their respective companies, their insurance coverage also stops
• Insurable


  Able to get life insurance based on medical exams, blood tests, and/or health records
• There are people who are not insurable because of age, disease, risky habits, and other health and lifestyle matters
• It is highly encouraged to buy life insurance as soon as possible while still healthy and insurable as it is cheaper
• Some policies can be issued without a medical exam with limited medical questions, but these "guaranteed" policies typically charge higher premiums and are only available in lower amounts
• DIME Method


  Debt, Income, Mortgage, Education - a way to calculate the amount of life insurance protection needed
• Stay-at-home parents should have life insurance to replace their valuable services to the family
• According to Salary.com, the monetary value of the services of a stay-at-home parent is worth USD112,962 per year
• Reasons single people buy life insurance

  • They have loved ones to take care of
  • They may have plans to start a family soon
  • They are in a business partnership and want to protect the business
  • They want to take advantage of the tax benefits
  • They want to leave a legacy