Types of Insurance

Insurance is a means of providing protection against financial loss in a great variety of situations. For example, life insurance (L.I) helps replace income lost to a family if a wage earning parent dies. Health insurance (H.I) helps pay medical bills. Fire insurance pays all or part of the loss if a homeowner’s house is destroyed by fire. People can also buy insurance to cover unusual types of financial losses. Insurance works on the principle of sharing losses. People who wish to insured against particular types of losses agree to make regular payments called premiums, to an insurance company. In return, these people receive a contract, called a policy, from the company.

The amount of money paid by the insurance company to the policyholders is known as the benefit or the claim. The insurance company uses the premiums to invest in stocks, bonds, mortgages, government securities, and other income producing enterprises. The company pays benefits from the premiums it collects and the investment income the premiums earn. Insurance works because policyholders are willing to trade a small, certain loss – the premiums – for the guarantee that they will be paid in case of a larger loss. They can therefore own property, drive a car, operate a business, and engage in other activities without worrying about the financial that might occur.

There are three main types of L.I. Term L.I, whole L.I and endowment L.I. Most L.I companies sell policies that combine these basic types of insurance. term life insurance provides benefits only if the insured person dies within the period covered by the policy. Whole life insurance provides coverage for the life-time of the person insured. Endowment life insurance like other life insurance, pays the face value on the death of the insured person. But endowment is chiefly a means of saving money. Policy holders often use endowment policies to finance the education their children.

Health insurance pays all or part of the cost of hospitalization, surgery, laboratory tests, medicines and other medical care. The rising cost of medical care has increased the need for adequate health insurance. People without such coverage could face major financial hardship in case of a serious illness or accident. Private health insurers sell individual and group policies. Most people with individual health insurance are covered under a group plan where they work. Group plans may also cover the insured person’s dependents. Group health insurance generally costs less than individual coverage because administrative costs and other expenses are lower.

Individual health insurance is offered mainly by insurance companies, medical service plans, health maintenance organizations and employers. Many insurance companies that sell health insurance policies provide cash benefits to the insured person. A cash benefit is a fixed amount for each medical expense or day of hospitalization. If the cash benefits do not cover the entire cost of medical care, the policy holder must pay the balance. Individual health insurers offer four main types of health insurance. They are hospital expense insurance, surgical expense insurance, outpatient expense insurance and major medical expense insurance. Each has a different benefit coverage.

The Importance of Life Insurance

When we are young, we think that we are invincible. Because we think we are invincible we don’t think too much about what would happen after our passing. If you have a family you need to be thinking about what would happen if you suddenly passed away, even if you are young and you assume that you will live to an old age. This is what life insurance is for. While most of us don’t like to think about our death, we should all think ahead in think about how we can ensure that the people we love will be able to continue to live the lifestyle to which they are accustomed even after our passing.

Life insurance is like all types of insurance, you pay for it and hoping that you will never need to use it. While you don’t plan to have to use it anytime soon, it is a nice safety net to have in the event that you did pass suddenly. The idea is that you will pay life insurance premiums over the course of your life. This will allow you to have a sum of money that will be available to your beneficiary. The purpose of the money will be to pay for any end-of-life expenses such as the funeral, as well take care of any debt that you may have in your name. Many people also like to take it a step further and ensure that they have enough coverage for their loved ones to make housing payments and continue to live in the way that they have been. This is especially important if you are the main provider for your household.

Life insurance is particularly valuable for those who have children. When you have children, you need to think about how they will be taking care of over the course of their life. While most parents hope to be alive to see their children into adulthood, accidents happen. Life insurance will be there with an accident happens. It will be funding that will allow your spouse to be able to continue to care for your children even in your absence.

Because we never know what is going to happen tomorrow, it is better to take the time today to plan for what could happen. Life insurance is available in many different types and you can choose how much life insurance you would like to buy. If you have older children that will not require a spouse to care for them through childhood into adulthood, you can choose to have a less life insurance. You can choose just to have a policy that will cover basic end-of-life expenses. If you want to ensure that your spouse or your children will be comfortable even upon your passing in terms of finances, you can elect to have tens to hundreds of thousands of dollars in life insurance coverage.

Planning ahead today will give you peace of mind for tomorrow. No one likes to think about their desk, but thinking about it now and applying those thought to life insurance, will help to ensure that even upon your passing yourself and your children will be well taken care of. It is worth the time and consideration now as it will be an invaluable asset in the event of your death.

Wellness and Financial Security

For the past decades up until now, wellness as an industry have grown so much and have developed into several branches. An example would be nutrition or food where grocery items such as precooked meat, pasta, etc. are being labeled with their caloric value aside from the expiration date. This is to make consumers aware of the nutrition that they get when they consume a particular food. Some groceries even included color coding where a red label means it contains a high amount of a certain nutrient which is more than the needed percent daily intake. On the other hand, green emphasizes balanced nutrition content.

People today are being more cautious about their health since they are exposed about certain diseases which can be seen through hundreds of television commercials and radio announcements as well as from publications such as newspapers and magazines. Most of these ads are sponsored by large drug companies that aim to sell their products to the public. Also, the commodity that is being sold can cost a lot compared to other brands and even much more expensive when put against generic brands. Let us be honest and ask ourselves why do we need to purchase and consume these drugs? Obviously the answer is “for wellness”

Health Insurance is a commodity that we pay through premiums which can be reimbursed when certain conditions such as illnesses occur. Some circumstances could need medical attention and having a policy to cover the costs will be able to save you from the risk of paying medical services out of your hard earned savings. Mason and Associates Insurance Services provides custom designed coverage that will surely meet your needs. Not only do they assist with small business health insurance, but as well as helping out a business in managing costs by designing a plan that meets the goal of the company. They do the leg work for financial security while you do the work for your health and physical well-being.

Another branch of the wellness industry is fitness, which can be again divided into little sub-parts. Two main sub-categories are totally different from each other, but can be incorporated in terms of use. The first sub-part is sports nutrition wherein food and drinks are used to enhance the performance of the person. And the second part is physical activity where the person is exposed to exercises such as resistance training, yoga, Zumba and even bodybuilding. The two categories when used in unison, becomes more effective in achieving your fitness goals.

Building Insurance Coverage

We can say that most people take out an insurance to insure their building in Cyprus, which usually covers various events, mainly fire, earthquake, burst pipes, flooding, acts of God etc. One cannot be too sure where the cause of damage will come from, so, it is our opinion that a building should be covered for all eventualities, even if this has a slightly higher insurance cost. Special care is needed however when signing the insurance policy for the so called “exclusion clauses”.

One such exclusion clause is that if a building is damaged as a result of a bush fire, there is no cover (unless you so stipulate). Other clauses which are of a special interest for buildings, is that if a building is not occupied for a period of 30 days continuously, then again you will find that you are not covered (practically all holiday homes). So and we know how difficult and incomprehensible is an insurance policy to understand, pay special attention to the exclusion clauses and insists on an all risks and eventualities policy.

Some insurance companies stipulate that they cover the replacement cost of the building or they cover the value of the building. The difference is that if for example you have a building, which has no value as such, e.g. because it is very old and/or because the land value is so high that the buildings have no added value as such, you will find that the insurance co will not pay. If for example you own an old house on a Makarios Avenue plot with €2.0 mil. development value and your building is damaged, then the insurance company can claim that since the value of the property is found in the land, there is no damage payable, despite the fact that the insurance company was happy for you to insure the building at the value which you stipulate. However, even in this example with the €2.0 mil. plot, if the only thing you want is to have the money to rebuild it, you will be uninsured. So in this case you should take out an insurance based on the replacement cost. The insurance company will pay only if and when you actually undertake to rebuild the house. So do not expect that you can keep your €2.0 mil. plot and get the replacement cost of your house without rebuild it. If however you do not insure the value of this house, but you insure its replacement cost, then the insurance company is liable to cover you for the rebuild.

Also you will find on many occasions, that the replacement cost is higher than the market value of the building. If we are to take an aged apartment of a low quality and limited demand, having a market/sales value of (say 100 sq.mts.) of €90.000, the replacement cost might be more than €105.000. So be very careful and we suggest you insure your building on a replacement cost basis, i.e. the cost of demolition, clearance, new design and permit costs, construction building costs, V.A.T. etc. As an indication of the cost nowadays for an ordinary apartment, the replacement cost is approximately €1100/sq.m. Replacement cost means rebuilding the property as new, but with the use of the materials/quality that the building has. So you cannot claim the sum to replace your building with granite floors, since what you have in your house are mosaic tiles, outdated kitchen and wooden windows etc. The insurance company must cover the cost of rebuilding based on the same, or as near the same materials/quality. Care is needed however since if in your effort to reduce the insurance bill, you estimate a replacement cost lower than the actual, then the insurance company will pay the analogous reduced amount. (If your house has a replacement cost of €100.000 and your insurance is for €70.000, the insurance company will pay only 70% of the replacement cost – If you over estimate your property, the insurance company will only pay the actual amount as a maximum).

Another problem that you must consider is that over and above the replacement cost of your building, you must take into account also the common areas, such as basements, parking, swimming pool, cost of clearance etc. For this reason it is recommended that in the case of a building/project which comprises numerous units, a comprehensive assessment is made at regular intervals (say every 2-3 years), which will cover the units themselves and the common areas as well. Bearing in mind that building costs increase by around 7%-10% p.a., this is highly recommended.

Another problem, which is quite difficult to solve, is what happens if in a comprehensive project e.g. a block of flats of 10 apartments, 8 units are fully covered, whereas the other two are either under insured or have no insurance at all! In such event the project cannot be rebuilt (since the replacement cost is paid when you actually replace the property, what is the legal situation in this case?). For this reason for such projects, which comprise more than one holding, a comprehensive insurance should be undertaken and paid as part of the common expenses, so as to reduce the risk described above.

Of course insurance claims do not happen often and for this reason not many people have an adequate insurance cover or the above details are not given proper attention as a priority. It is strange, since, we are all happy to pay €300.000 to buy an apartment, but we become quite difficult when paying an amount of money to protect this investment.

What is even more irritating, is that, should you obtain a loan from a bank and the bank itself insures the building and suddenly the bank/insurance has to pay up the insurance amount, if you are under insured, then you must pay the insurance/bank the difference!! So it is a crazy situation for all concerned since banks by using their own insurance company, bear no responsibility.

As far as the individual buildings are concerned, it is the responsibility of each owner to cover his property adequately and to seek explanations from the insurance company and seek some form of a “fully comprehensive insurance – all risks”. For these reasons, but more importantly in case of joint ownership you must insist on a comprehensive insurance for the whole project, including roads etc, which should be updated every 2-3 years getting a new valuation by a qualified surveyor and do not base your estimate on the historic cost of the initial purchase. – For those people who think that they will take an additional insurance, they will not get a “double” payment, since an insurance payment is paid only once, up to the total “proper” amount.

A Brief Description About Insurance

Insurance means protection against any tragedy. Most people do insurance to themselves and their family. The main purpose of taking insurance is to recover in case any disaster happens. Insurance does not increase your financial status, however it is a service charge taken by insurance companies to give you protection against any kind of mis-happening. Insurance can be of short term or long term; in either case people have to pay some amount to the insurance companies for a limited time. The amount, which is paid by people to insurance companies, is called premium and decided as per the scheme taken.

Now the problem is that how to decide that which policy is suitable for you, Well for that you can go to an insurance agent and discuss all your needs and budget. The person will suggest you the best policy as per your situation and you need to trust the agent. There is one more way to get insurance is that do some research on internet, for example find out the companies who provide insurance and go to their website, you will get all the information about the insurance policies they provide. Don’t just check one company and decide anything, but check 2-3 companies and see which company is reliable and giving you extra benefits other than insurance.

How to decide the insurance

1. First of all figure out what kind of insurance policy you need and check weather the policy you are going to take covers all the things you need or not.
2. There are different types of policies available in the market. Some policies are based on time and some are based on time. If you are taking insurance policy for long term then the premium amount would be lees, however if you taking policy for short term then the premium amount can be high. Second thing is that you need check the policies thoroughly because 2 kinds of policies can have the same amount but there is a possibility that the benefits under those polices differ from each other. Some policies cover all kind of damage while some does not. So be very careful while selecting an insurance policy.
3. As I mentioned above if you will go for an agent then he will tell only about those policies that his company is selling but if you will go for your own and search on Internet then you will have different companies and insurance policies to select. So better you decide first which one to choose.
4. If possible investigate about the company whose policy you are going to take. Check if somebody from your friend circle or relative has already taken policy from the company and they are satisfied with the company’s services. Check the record of company like how old the company is and how much customers they have.

Types of Insurance

There are so many types of insurance policies available in the market. You can insure your life, health, home car and so many others. Below I am going to discuss some of the most common policies, which people normally takes.

Health Insurance

This kind of insurance is basically related to your and your family’s health related problems. Once you have taken health insurance either for yourself or for any of your family members you can go to registered hospital for any kind of treatment for which you are registered and the payment will be done by insurance company, however you will have to submit bills to them to claim your amount.

Most people get health insurance from their office itself for a limited amount and they can nominate their family members as well in the policy. Always keep in mine some points while taking health policy like how much premium you will have to pay, for how much you are covered and for what all disease.

Life Insurance

Today almost everybody knows about this policy and people are even aware of the importance of life insurance. Life insurance as understood covers your life in case of any mishappening. People take this policy so that if something happen to their life then their family would have something to survive. The money you invest in Life insurance will come back to you only after maturity or in case of death of the insured person. People who come under income tax slab also get benefit from the insurance and get tax rebate. Following things need to be taken care while choosing a life insurance plan.

1. The policy should be in a person’s name that is earning member of the family since that person will have to pay the premium amount of the insurance
2. Try not to take policy in our children’s name, take the policy for other family member for the benefit of your children
3. Always keep the insurance amount less so that you can invest in other financial plans.
4. Never taken expensive plan like credit or mortgage life insurance, instead always go for general life insurance.
5. Discuss each and everything about the policy from the agent who is giving you the policy like for how much amount you are covered and how much you will get at the time of maturity. What would be the premium annually, half yearly, quarterly or monthly etc?

Home Insurance

If you have your own house and you want to get recover from any kind of damage to your house then you should take this insurance. People take this insurance to protect against damage from any kind of natural disaster. All insurance companies have different rating for the insurance they provide, so you need to check which company is has what standard for each rating.

While choosing a plan check what all have been covered in the policy apart from the house, for example garage etc. There are two types of cover resale cost and rebuild cost. Rebuild is a bit expensive but provides better coverage. Mostly when you take home insurance policy it does not cover the households so you need to check this also. If you want to cover households also then you can do so by paying extra fee. Make sure the cover has replacement value.

Auto Insurance

These days there is so much crowd on the road in big cities and in small towns as well. So people who have their vehicles must cover with auto insurance. This kind of insurance basically covered you car or scooter from any kind of damage happens on road.

Demolition Insurance

Before the work can begin in Japan to rebuild the country, large parts of the north of the country will have to be effectively levelled in order to begin work and that brings its own problems, as well as the need for comprehensive demolition insurance.

Construction companies have demolition insurance to protect not only their own workers, but also to protect people who come into contact with the work being carried out.

The problem in Japan will not only be the potential of radioactive contamination in certain areas, but also the issue of small scale pollution which the Tsunami will have caused as it swept away homes, offices, factories and all manner of dumps.

Think for a moment about the wave that hit the Japanese shore and how it swept away all before it, and think of all the materials, waste and chemicals that the water would collect on its relentless march through the towns and villages. It will have collected human waste, petrol, diesel, oil, waste medical materials and all manner of other toxic wastes.

And all that pollution will have been deposited over the whole area, with fields as well as streets and playgrounds all being subjected to harmful materials.

Building land is basically classified into two sections: green and brown. Green land is fields and areas that have had no previous buildings, or workings anywhere near them (virgin land in other words). Brown land will have been contaminated to some degree either by previous buildings, industrial property, or mine workings. In other words, it has been worked before and so therefore might be harmful to the construction teams that are there to start building.

This is why demolition insurance is so important to construction companies.

And before any work can begin in earnest, there has to be a full assessment as to the quality of the land. Engineers and surveyors have to determine the quality of the land and how it should be classified.

In the case of Japan, it’s likely that the Government will want this part of the process in place very quickly. Their priority will be the construction of the lost communities, so taking time analysing the ground will have to be conducted as speedily as possible to ensure that people are able to once again move into their homes and out of shelters.

And for the demolition companies who will be called into clear the ground for work to start, they will need to be reassured that they have the correct demolition insurance in place to be able to work safely and quickly in what will be a challenging environment. All parties will want to ensure that no delay happens when building work starts, but that does not mean short cuts will be allowed, especially when the safety of workers, as well as future occupants, has to be a priority.

AIG Life Insurance

AIG, or the American International Group, Inc. is a world leader in financial services providing, including life insurance. AIG is–or was up until very recently at the time of this writing–the leading international insurance organization, having operations in over 130 nations and jurisdictions. AIG companies provide commercial, institutional, and individual financial services through the most extensive worldwide property-casualty and life insurance networks of any insurance company, although they are being closely competed with by MetLife. What’s more, AIG companies are leading providers of financial services and asset management across the globe. AIG has its common stock listed on the New York, Ireland and Tokyo stock exchanges.

AIG’s member companies in the life insurance industry include: AIG American General in Houston, Texas; American General Life and Accident Insurance Company in Nashville, Tennessee; and The United States Life Insurance Company in the City of New York.

However, AIG has recently taken extremely heavy financial harm to itself because part of its financial services included underwriting and buying subprime loans and lending to other financial institutions who did the same. This leaves many people wondering about the financial stability of AIG.

AIG is in fact planning to sell its three life insurance units in Japan. These sales could total close to $10 billion. AIG now owes $85 billion to the United States government.

AIG intends to sell shares in American Life Insurance Co (ALICO), AIG Star Life Insurance Co, and AIG Edison Life Insurance Co.

“It would be hard for a single domestic insurer to make the acquisition by itself,” a senior official at a major life insurance company was quoted by the Japanese business daily Nikkei as having said.

“We know absolutely nothing regarding [who the potential buyers are],” says Tokyo AIG spokesman Fumiyasu Sato.

AIG has also announced plans at the time of this writing to sell at least most of its life insurance and retirement asset management affiliate companies in the U.S., Europe, and Latin America, and in fact the vast majority of all of its businesses with the notable exception of certain of its core property and casualty insurance businesses in its attempts to pay back the U.S. federal government for preventing it from having to declare bankruptcy. Where not long ago AIG’s stock traded at over $70 a share on the New Yorks Stock Exchange, it now trades for less than $4 a share.

AIG spokesman Peter Tulupman has said, “Literally, everything else that doesn’t fit under that definition, we are considering for sale.”

“We won’t exactly be the AIG of old, but we’ll have a very secure position. This is going to be a formidable company that emerges from this,” says AIG CEO Edward Liddy.

However, more than one economist is concerned that at least for now AIG is going to have some trouble getting rid of its life insurance and most other businesses. “He’s trying to refocus AIG to be a true insurance company. The question is, with current market conditions, will there be reasonable bids? If he doesn’t generate enough cash to pay off the loan, then everything comes tumbling down,” says Rob Haines, a debt analyst at CreditSights Inc.

However, AIG is going to do everything it can to retain a majority stake in its American International Assurance Co. life insurance unit. “The businesses we are retaining could not be re-created today,” says Liddy, who once upon a time was the CEO of Allstate Insurance Co. and was appointed by the US government to take the helm at AIG. He is confident that the sales he is orchestrating will bring in more than enough revenues to repay the feds while also securing the interests of the company’s shareholders.

Both Moody’s Investors Service and Standard & Poor’s, two of the most respected independent insurance and financial services rating agencies, have downgraded AIG’s ratings; both raters cited the fact that AIG has borrowed extremely heavily against its credit line and that the amount borrowed exceeds what was anticipated, and Liddy’s sales attempts are fairly risky.

It is probably advisable for those who hold AIG life insurance policies or annuities to watch and see who, if anyone, buys AIG’s life insurance businesses, and to see if the company does retain its majority stake in its American International Assurance Co. life insurance unit before choosing whether or not to change life insurers.