A promise of compensation for specific potential future losses in exchange for a periodic payment. Insurance is designed to protect the financial well-being of an individual, company or other entity in the case of unexpected loss. Some forms of insurance are required by law, while others are optional. Agreeing to the terms of an insurance policy creates a contract between the insured and the insurer. In exchange for payments from the insured (called premiums), the insurer agrees to pay the policy holder a sum of money upon the occurrence of a specific event. In most cases, the policy holder pays part of the loss (called the deductible), and the insurer pays the rest. Examples include car insurance, health insurance, disability insurance, life insurance, and business insurance.

Life Insurance
Includes all you need to know about provisions and types of life insurance policies. Learn about incontestable provisions, suicide provisions, reinstatement clauses, excluded risks, and settlement options. Once you speak the lingo, read up on the different types of life insurance: Term life, cash value, whole life, single premium life, universal life, variable life, and variable universal life.

Introduction to Insurance
Find out how to protect yourself by learning the basics behind insurance and what factors should be considered when purchasing insurance.

Health Insurance
Learn about the various kinds of health insurance available, including HMOs, PPOs, FFS plans, and Medicare.  Find information about the advantages and disadvantages of each type of plan to help you decide what plan is best for you.

 Specific Definition of Insurance

1. the act, system, or business of insuring property, life, one’s person, etc., against loss or harm arising in specified contingencies, as fire, accident, death, disablement, or the like, in consideration of a payment proportionate to the risk involved.
2. coverage by contract in which one party agrees to indemnify or reimburse another for loss that occurs under the terms of the contract.
3. the contract itself, set forth in a written or printed agreement or policy.
4. the amount for which anything is insured.
5. an insurance premium.
6. any means of guaranteeing against loss or harm 

 Insurance or Assurance, device for indemnifying or guaranteeing an individual against loss.

 Reimbursement is made from a fund to which many individuals exposed to the same risk have contributed certain specified amounts, called premiums.

 Payment for an individual loss, divided among many, does not fall heavily upon the actual loser. The essence of the contract of insurance, called a policy, is mutuality.

 The major operations of an insurance company are underwriting, the determination of which risks the insurer can take on; and rate making, the decisions regarding necessary prices for such risks.

 The underwriter is responsible for guarding against adverse selection, wherein there is excessive coverage of high risk candidates in proportion to the coverage of low risk candidates. In preventing adverse selection, the underwriter must consider physical, psychological, and moral hazards in relation to applicants.

 Physical hazards include those dangers which surround the individual or property, jeopardizing the well-being of the insured.

 The amount of the premium is determined by the operation of the law of averages as calculated by actuaries. By investing premium payments in a wide range of revenue-producing projects, insurance companies have become major suppliers of capital, and they rank among the nation’s largest institutional investors.

Life Cover

Life Cover is also known as life insurance or life assurance, and is commonly held as one of those things ‘you’ve just got to have’.  What exactly is life cover and how does it work?  Don’t let complicated insurance terms obstruct your understanding: here are the basics to help get you in the know!

Life cover is an insurance policy that exists between you (the policy holder) and an insurance company (the insurer) whereby the policy holder pays a certain premium every month in exchange for the insurer’s commitment to pay a certain sum of money to a stated beneficiary upon the policy holder’s death.  In other words, this means that a designated beneficiary, such as your spouse or child, gets paid a lump sum of money either all at once or in installments if you die.  This gives them the financial support that they need to continue living their lives without your assistance.  Life cover payouts can pay for schooling and education, rental, or even just pay for your funeral – it all depends on which type of life cover, and how much, you choose to take out.

There are many different types of life cover, such as accidental cover which will pay out a sum of money if you die in an accident that is covered by the policy – such as in public transport or during a hijack.  This type of insurance is often cheaper because it only pays out on accidental deaths.

As with most types of insurance, you need to be sure to read the fine print: this kind of accidental death coverage usually does not cover suicides or death from an illness.  You also get special life cover that you only pay premiums for a certain number of years, or are particularly geared towards a certain type of coverage.

When choosing your preferred type of life cover you should always be careful to ask three questions:

1.      What does this life cover include, and what does it omit? How does this benefit me?

2.      How much will this life cover pay out if I pass away? How does this benefit my family?

3.      How much must I pay each month? What happens if I miss a payment?

Once you have answered these three questions then you need to look at the company that is offering you the life cover – how well known are they? Who underwrites them?  Are they a reliable company that is going to be around in the next twenty or thirty years to actually pay out the lump sum to your relatives?  It is a great idea to approach at least five different companies to get a broad idea of the different life insurance plans and options available to you, and then compare each plan on the three-questions grid.

Your family is your life and you don’t want to leave them financially unprepared to deal with their future if you are suddenly no longer around to take care of them: make all the provisions you need to ensure their successful and healthy futures with your life cover policy!

Life Insurance

A life insurance policy allow you to make provision for your dependents when you die or become permanently disabled.  You can also ensure financial security when you retire with a Retirement Annuity.

 A life insurance policy pays a lump sum (based on the policy’s terms and conditions), after your death, to provide for your family or settle any debt (i.e. outstanding amount on your car or home).  Some life policies allow you to include disability cover.

 A wide spectrum of life cover is available in the South African market.  Term Life Insurance or Credit Life Cover would be ideal if you only want life cover for a certain period of time, i.e. while paying a bond on your house.

See Bond Insurance

 Term Life Insurance is relatively cheap, but does not have an investment/cash value.  When the agreed cover period have passed, the cover merely expires.

 Whole Life Cover expires after the policy holder’s death or when you surrender the policy.  Your premium is invested by the insurance company and you can borrow against the policy as soon as it has a cash value.

 Universal Life Cover has an investment component included.  Your return on investment depends on the performance of the investment.  The growth rate is not guaranteed, but rapid growth is a possibility.

Understanding Insurance

In today’s fast paced, technology driven and increasingly commercial world we are expected to ‘get with the program’, as it were, and become instantly familiar with all the new products available on the market and the jargon that goes with it.

For some this is a simple matter, but for others it means sometimes having to ask seemingly obvious and therefore embarrassing questions.  The same here can be said of understanding insurance, and the various insurance packages and options available.

We all have some kind of idea about the purposes of insurance, that is, we understand that by ascribing to a particular insurance package we can financially protect ourselves and our possessions, but not everyone is fully aware of what this actually entails, what insurance packages are ultimately available and where you can go to get ‘protected’.

At the end of the day, though, understanding insurance is not as difficult as it may initially seem, for all it really boils down to is an understanding of your own needs, and assessing the risk factors in your own life.

For instance, then, have you recently bought a new house, car, computer or any other possession you believe to have value and now have nightmares about it either being broken into, stolen, or damaged?  Have you started wondering what would happen to your spouse and children if you had to suddenly be diagnosed with a dreaded disease, become disabled through an accident or worse?  Are you planning a family or even a solo holiday around the country or overseas and are afraid of what might happen in you were injured or lost your luggage en route?  Are you starting up your own business and would like to secure financial support for you business assets?

If you can answer yes to any of these questions, then you are well on your way to understanding insurance and what it can do for you, for these are the basic assessments you would need to make when deciding on which insurance package is best suited to your current needs. 

The next step in understanding insurance is to select the specific insurance company with which you would like to insure, and the specific package tailored to suit your own budget.  With this in mind it is helpful to know that South African insurance companies usually fall into two categories.  Firstly, general insurance providers, like OUTsurance and SANTAM among others, who offer coverage for a wide range of insurance needs, including motor, household and business.

Secondly, there are the specific insurance providers, like 1st for Women and Sanlam, again among others, who offer more specialised insurance options, covering either one or two insurance market areas, usually for a specific target market.

Ultimately, though, the key to understanding insurance lies in the realisation you need not be afraid of doing research, of comparing the various packages offered by South African companies and assessing how much you can afford in the way of insurance premiums before ultimately making a final decision.

Insurance allows you to practically prepare for those situations where financial support is most needed, and so you need to be just as adequately prepared to be able to make the best possible insurance choice.

Always on the Hunt for Knowledge: Information Sources on Health Insurance

Health insurance can be confusing, especially if it is your first time shopping around with different providers. Terms such as deductible, co-payments, and pre-existing conditions can be confusing if you do not know what they really mean. There are many ways to find out more about health insurance so that you are as knowledgeable as possible. You could talk to a health insurance company who can give you an explanation and also an example to further your understanding. The Internet is also a great informational tool when you have any questions regarding information that you need to know about health insurance.

Logically, you would assume that the experts at the insurance company would be able to answer any questions that you have about terminology and any other queries that you have. The best way to get in touch with them is to simply call your provider and ask any questions that you have, no matter how general or specific. They are there to help you, and this should be your primary concern. Think about it-if an agent isn’t helpful with your preliminary questions, just how helpful will he or she be if you need to settle a claim? If you get your health insurance through the company that you work for, there is usually a person in charge of handling any questions. Usually their title is “benefits administrator” and you would go to them with any questions regarding your health insurance plan, such as adding a spouse or children to your plan.

For answers to general questions such as terminology confusion, an Internet search engine can point you straight to your answer. This is a great options available to anyone who does not want to call their health insurance company just for a couple of simple questions. There may be information that you had overlooked in the past when you quickly skimmed through your policy. Your specific provider may have a web site where you can get facts about anything, including anything that you may not have been clear on regarding any additional benefits they offer. You can read all of the literature available at your own pace and on your own time.

If you would like to know more about health insurance, rest assured that there is a lot of information out there. You could make a call to your current provider and ask away on any questions that you have. For those who would prefer to learn the ins-and-outs of insurance at their own pace, the Internet has limitless information that is available to you at any time of day. Health insurance can be complicated at first, but the more you know the better off you will be.

Affordable Health Insurance for the Unemployed

Being unemployed can be a financial downside to say the least. You may be dependant on someone else to cover your daily expenses such as a place to live and food to eat. Health insurance is something that everyone needs and not enough people have available because of these other financial burdens. Any emergency such as a car accident or broken bone will require adequate medical assistance. What do you do when you don’t have insurance and can’t afford expensive medical bills? If you are unemployed, you need to find health insurance to prevent this from happening.

COBRA is a law in which many people could be eligible to remain on an employer’s health insurance plan even after they lose their employment. The most ideal person for this coverage is someone who is between jobs and is not in need of long-term help. It can last at least a year to those who qualify, but the premium amount is still an expense that some unemployed individuals may not be able to take care of with their lack of income. If you are able to pay the premium and are eligible, COBRA will also cover your spouse and children who are dependent on you for insurance. The best way to determine if you could receive health insurance is to contact your local employer’s benefits department and fill out the required forms.

You can also shop around for typical health insurance. Many free Internet services are proven reliable by the Better Business Bureau Online. By speaking with one of these insurance experts, you can get help finding the most affordable health insurance that will fit your specific needs. They know the rates of thousands of insurance companies and can fix you up with appropriate coverage for your specific needs. If you have a spouse or children, having health coverage is a necessity. Life is full of unexpected events and you cannot ensure that everyone will stay completely healthy until you have insurance again because accidents do happen. Finding an affordable coverage rate on your own can be a hassle. The experts at these companies are offering their assistance to you, often as a free service. Whether you need to find something short-term or for an extended period, they are qualified and dedicated to helping you.

If you find yourself unemployed at any time in your life, you are probably without health insurance. This can be a nightmare whether you have a family or not because medical expenses can put you into debt quickly. Luckily, there are ways of finding affordable coverage providers that can keep your health, as well as your finances, safe. A simple doctor visit can cost you significantly more money than it would with insurance. Do not let yourself become one of the many people who are unfortunately living life without proper insurance coverage.

Advantages to Managed Care Plans

There are many different types of Health insurance plans out there. Picking the right one for yourself can be troublesome in the beginning, especially if you don’t know what you are looking for. You might have trouble deciding which one would be better for you.

Health insurance is divided into two large categories-indemnity and managed care plans. Indemnity plans, also commonly called reimbursement plans, will reimburse your medical expenses up to a certain limit. Under the Reimbursement plan, the insurer pays a percentage of the total charges, regardless of how much the charges are. With the indemnity plan, the insurer will pay a specified amount every day for a specified number of days. The amount reimbursed does not rely on the cost of medical care, but what you are reimbursed will never exceed your expenses.

The other popular type of health insurance plans is managed care plans. The three types of policies categorized as managed care plans are HMOs, POSs, and PPOs. This type of insurance is more popular than the indemnity plan, as they offer more flexibility. With these types of options you either pay a monthly fee no matter how many times you see a doctor, or pay a co-payment but no monthly fee. With managed care plans, you are given options of care. The plan you choose and the amount of money you wish to pay determines how big of a network of doctors and specialists you can see and still be covered under the plan. Some managed car plans (most often PPOs) offer sponsorship programs from a network of hospitals and medical services. You can often get this kind of plan through your employer.

Managed healthcare plans are better for the average person due to the fact that they are more cost effective. While indemnity plans may give you a lot more freedom in cost, you will have to use the healthcare provider that the insurer chooses. If you have a specific disability, this can present itself as a problem. In the long run, a managed care plan will save you money, especially if emergencies arise when you are out of town. These types of plans also are more flexible in policy. Before you purchase any kind of health insurance, be sure to research the many options available for you and your family to ensure you receive the best coverage possible for the lowest monthly premium or deductible.

Advantages to Indemnity Health Insurance Plans

Indemnity health insurance plans are more regularly known as traditional health insurance plans. These health insurance plans can be costly but often cover most health problems that may arise, while other insurance plans exclude some illnesses or diseases from their coverage. Some disadvantages to indemnity plans are that they do not usually cover preventative health care like physicals, and traditional health insurance plans often cover only a percentage of your bill. Research the advantages and disadvantages to indemnity health insurance when you are considering health insurance options.

While the disadvantages may seem problematic, there are many advantages to indemnity health insurance plans. You may have a higher monthly premium and you may need to pay upfront costs and submit claims paperwork, but your deductible will be more manageable and your coverage will be wider. Some health insurance plans will not cover certain medical expenses or care, but indemnity plans often do.

Another benefit of indemnity health insurance plans that many people desire is the freedom to choose your own physician. While other health insurance plans offered by the insurance industry limit your choice of physicians and hospitals to a list of preferred providers, indemnity insurance will cover any physician or hospital. This benefit may seem unworthy of mention, but there has been more than one instance where a mother finds that her son or daughter’s pediatrician is not in their preferred provider network and has to search for another pediatrician. This also means that you can see a specialist without having to consult with your primary care physician first.

Overall, indemnity health insurance plans also offer you the best emergency medical coverage in the industry. While preferred provider organizations (PPOs) or point-of-service (POS) plans limit the physician you can see to a list of network physicians and hospitals, the freedom of choosing any physician is nationwide with indemnity health insurance plans. This means that if you are traveling across the country and have an accident or a medical emergency, you can go to the nearest hospital or see the closest physician without worrying about the expense. There have been instances where hospitals or physicians will either refuse to treat patients or treat them only minimally because the hospital or physician is not inside the plan’s preferred provider network – meaning that the patient’s health insurance will only cover a small part of the expense and the patient is liable to pay the rest of the bill. This is a risky financial situation for the physician and/or hospital since patients are often unable to fully pay costly medical bills. With indemnity health insurance plans, this is almost never the case. Consider this and the other benefits of indemnity health insurance when choosing the plan that is right for you.