| Life and health insurance have long been recognized | | | | of the many who are exposed to the same peril. The |
| as necessary and essential elements in an individual's | | | | essence of of insurance is the sharing of losses and, in |
| or a family financial program. In a modern society, a | | | | the process, the substitution of a certain small loss ( |
| sense of family responsibility meant that life and health | | | | that is to say the premium payment ) for an uncertain, |
| insurance would grow in importance. And still today life | | | | large loss. In the peril under consideration is that of the |
| and health insurance continue to occupy an important | | | | death, the financial loss suffered can be reduced |
| role in the financial planning process. This article has the | | | | through life insurance. If the peril is instead disability, the |
| purpose to provide an introduction to this process and | | | | financial loss can be compensated by the health |
| highlights the means by which life and health insurance | | | | insurance. Insurance may be defined from two |
| can assist in accomplishing one's financial plans. A | | | | perspectives: that of the society and that of the |
| personal financial planning can be considered the | | | | individual. From the society's point of view, life or health |
| process where an individual or a family decided to | | | | insurance may be defined as a social device where |
| develop and implement an integrated plan to | | | | individuals transfer the financial risks associated with |
| accomplish their objectives. The essential elements of | | | | loss of life or health to the group of individuals, and |
| this financial planning concept are the identification of | | | | which involves the accumulation of funds: and this |
| financial goals and the development of an integrated | | | | concept means that the insurance exists when there is |
| plan to accomplish the objectives. As all of us know | | | | a transfer of the risk from the individual to the group. |
| humans are exposed to many serious perils, such as | | | | From the individual's point of view, life or health |
| property losses from fire and windstorm, and personal | | | | insurance may be defined as an agreement where |
| losses from disability and death. Although individuals | | | | one party pays a stipulated consideration ( the |
| can not predict or prevent completely the occurrence | | | | premium ) to the other party ( the insurer ), in return for |
| of these dangerous events, they can provide against | | | | which the insurer agrees to pay a defined amount of |
| thier financial effects. The function of insurance is to | | | | money if the person whose life is insured dies or |
| safeguard against such misfortunes by having the | | | | suffers an illness to a stated time. |
| losses of the unfortunate few paid by the contributions | | | | |