Term Life Insurance | Ultimate Guide to Retirement
Home Print


The Law of Big Numbers

insurance risklife insurance

The interaction between empirical mathematical probability and theoretical mathematical probability has given birth to the Law of Big Numbers. Empirical probability eventually approximates theoretical probability when the experiment is repeated enormously. In this way it becomes possible to calculate the probability of accidents by means of the Law of Probability and Law of Big Numbers.
Insurance is an agreement/contract that intends to cover the loss/damage inflicted upon the insured's property. According to the Law of Compensation, insurance must not provide the insured with money they could use to their discretion that is, compensation must not be greater than the value of the lost/damaged property so much so that it improves upon the situation of the insured prior to the loss.


For us who live in the industrial country of the United States of America and wish to make the best of whatever means is available to us, it is important to be aware of proper ways to protect and utilize our property and belongings. It is thus vital that we safeguard our health in the first place and our hard-earned life-long achievements in the second. We would therefore, introduce different kinds of insurance in an order of importance:

1. Health Insurance: It is the first and foremost insurance that covers medical expenses generated by accidents, treatment, hospitalisation, and medicine which individuals may find difficult to afford.
2. Insurance against Fire in Residential/Commercial Premises: This is an obligatory insurance required by banks when giving out loans on residential/commercial properties.
3. Car Insurance: This is an obligatory insurance as road accidents are likely to cause tremendous damage.
4. Business Insurance: This insurance is required by the law to protect and safeguard businesses.
5. Mortgage Insurance: It is an essential insurance to protect our properties in America. You can insure your home's monthly instalments to the bank against very little money and make sure that in case of accidents the insurance company will pay out your debts to the bank. This is the least we can do to safeguard the happiness and safety of our families.

The best time to apply for mortgage insurance is when you are still young and enjoy good physical health. We would especially like to address women as the real family managers.

Ladies, it is important that you inspire fortitude in your husbands and make them realize that they who spend most of their time outdoors to earn a living for their family need to protect the outcome of their hard work. In case of death or other contingencies they can make sure that their bank debts are paid and that their wives and children shall live unscathed in the dream home they have bought for them. Needless to say that any step taken to secure the financial and intellectual values of your family will eventually bring forth health and peace of mind for the household. Fortitude is the means to protect values and it is our principal objective to maintain and secure our family's health and peace by making the right decision at the right time.

To understand the point let’s consider the following example

If you are a 45-year-old non-smoking male and enjoy good health and wish to apply for an insurance policy worth $500,000, your annual premium will only be $1,000, which shall remain fixed for a ten-year period.
In response to our respectable clients and friends who have requested life insurance our company is pleased to inform you that this service is now available with us whatever your budget is. Please note five factors will be taken into account when calculating the life insurance premium:

1. Age (date of birth)
2. Being a non-smoker
3. Health
4. Sex (male/female)
5. Occupation

You may ask yourself why you may need health insurance. But you need to remember that your income is by far your most important asset that provides you and your family with your essentials. It is an unfortunate yet probable possibility that you may be overcome by death and leave the fate of your dear family to life. It is in such critical and decisive situations that your well-mediated life insurance will be available to provide your family with their needs.

If you are married,
If you have children,
If you possess numerous estates, and
If you own your own business in the State of California, we urge you to make a sound financial plan and apply for life insurance for your family. We pray that you, our fellow-countrymen, will lead a long healthy peaceful life and that you will never have to use insurance compensation.

Generally Americans select one of the following three methods for estate planning:

1. Method One __ no action is taken

Individuals who opt for this method will have their property divided between their heirs under the direct supervision of the court in accordance with the State of California Probate. The court will appoint an executor to undertake division of property.
Disadvantages of Method One:

• Heirs will have no control over division of the deceased's property
• The executor will claim 7% of the total value of the property as court expenses
• The procedure will take a minimum nine months to complete
• The court will oversee and supervise all details relevant to the case
• Probation proceedings will be public
• Tax exemption will only be available for one of the heirs
• Creditors will be able to oversee division of property

2. Method Two __ formulation of a will

Absence and presence of a will have similar disadvantages with the only exception that in the case of the latter the property will be divided to accommodate the deceased person's wish.

Some people use a proxy for their estate planning. A proxy however, becomes void posthumously and is not legally binding. Moreover, many financial firms do not recognize proxies.

2. The Third and the best Method __ forming a Trust

By setting up a trust, individuals can settle all their financial issues in one single document and benefit from Trust’s guaranteed advantages:

• Inheritance tax is either reduced or exempted
• Trusts involve far less expenses
• Division of property is speedy and private
• Individual’s properties are safeguarded
• Trusts remain valid and binding posthumously
• Trustees can be appointed for non-US individuals who wish to enjoy maximum tax exemption

In the inheritance tax table the amount of levied tax is calculated with respect to the size and value of the deceased’s property. As individual’s properties differ from one another in value and size, judges need to seek specialist legal advice to issue a verdict.

Shawn Rabban (310) 714-5616