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Monthly Archives: May 2017

Disaster Decision

Disaster insurance is typically defined as additional homeowner’s insurance to cover events like hurricanes, tornadoes, earthquakes, and floods. Home insurance policies typically cover hurricanes and tornadoes (review your policy to be certain in covers damage from such events). But often damage from floods and earthquakes isn’t covered. This extra insurance, if desired, must be purchased in addition to your standard homeowner policy, and it can be expensive, depending on where you live.

Because disaster insurance can be expensive, it’s a type of coverage some homeowners opt not to buy. But in some cases they are required to buy. For example, mortgaged homes in the US that are located in designated flood hazard areas are required to buy flood insurance through the US National Flood Insurance Program. Of course, once those mortgages are paid, there is no longer a requirement to buy such insurance.

But homeowners in those areas should carefully consider whether they really want to take the risk that their home and everything in it could be swept away, leaving them with nothing but an empty lot. Homeowners that aren’t in designated flood hazard areas should still know that floods can cause plumbing problems, like sewer and septic backups. These often aren’t covered in a standard homeowner’s policy, and they may want to consider an endorsement for coverage.

Must know about Insurance with Ethics

The difference between your premium amount, and the amount the insurance company will have to pay out if the loss occurs, is simply the odds the insurance company is getting for taking on the bet. It’s just like going to the horse races and betting on a horse that pays out 10 to 1.

This view of insurance has led to a number of people and religious communities disapproving of insurance because of its similarities to gambling. Among those groups that avoid insurance are the Amish and Muslim communities. What these people do instead is create a system of what is known as social insurance. What this means is that if there is a disaster and someone suffers a heavy loss, then the whole community will step forward and help them to deal with their loss and rebuild. While this system is very simple, it has the potential to be just as effective a safety net as insurance. However, it requires that the community actually does step forward and help those who suffer from disasters. This means that it is more successful in small closed and closely knit communities than in large modern societies.

Social insurance systems therefore are not always effective. Often the community that is supposed to adopt it is not suitable. Also, in very large disasters the system can break down as a small community will not be able to rebuild itself completely without outside assistance. This is why larger modern insurance systems can be more robust. However, in extremely large disasters, modern insurance systems can also run into difficulties. This is witnessed by the fact that it is impossible to insure against certain risks such as floods and earthquakes. This is because the damage would be simply on too large a scale for the insurance companies to cope with.

There are other ways in which insurance doesn’t follow the gambling model. For instance insurance companies seek to reduce the risk of the loss occurring constantly, for instance by requiring the installation of fire alarms, or by reducing the loss if the insured against event does occur, for example by providing rehabilitation to accident victims. Therefore insurance is like a gamble in the reward and risk elements, but other elements are different.

Information about Insurance Brokerage Firms

The insurance broker also relays data relating to the potential client’s business and risk profile to the technical division of the insurance company. The broker’s role may vary according to the size of the insurance company it serves. For big insurance companies, brokerage firms may operate in specialized areas, while elsewhere they may be required to look after the entire range of policies that an insurance company may have to offer.

Insurance brokerage firms are also supposed to manage knowledge and information flow relating to their clients and the markets in which they operate. Accordingly, they have to maintain detailed records. Not only that, but they also collate data from other sources and then analyze them to see the big picture. In addition, they identify new industry trends and developments on the basis of collated data and evaluate various insurance products on the market.

In many countries, in fact, insurers are already selling their products mainly through brokerage firms. In other words, brokers have emerged as the sole distributor of policies for the insurance companies in those countries. Nevertheless, this trend is yet to evolve into a global practice.

Life Settlements

A life insurance settlement, (also referred to as a senior life settlement or life settlement) is a financial transaction in which a senior citizen possessing an unneeded or unwanted life insurance policy sells the policy to a third party, as opposed to surrendering or lapsing it back to the life insurance company. The seller receives immediate cash for the policy from the purchaser. The purchaser becomes the new beneficiary of the policy at maturation and is responsible for all premium payments from the time of the purchase until the seller passes away.

For senior citizens to receive an estimate on the amount available to them, they simply need to sign a release and provide information about the policy, there is no need for a physical or medical visit. “The life settlement process is a very simply process,” says Grant Shellhammer of┬áLife Settlement Pro, “Once
the necessary documents are received we can provide an estimate of the settlement amount, there is never any obligation or cost to the client.” With life insurance policies being surrendered and lapsed on a daily basis, it is important for consumers to understand how beneficial a life settlement can be.

There is no standard amount available through a life settlement and every individual case is different. The industry has seen anywhere from 2-10 times the case surrender value available through a life settlement. Many seniors are not aware that there is potentially a lot more value in their policies.

The education and availability of life settlements could also be blamed on the agents and financial professionals. They have a duty to provide their clients with the best options and recommendations. By letting a policy lapse or surrender without seeing if a life settlement is available is not servicing your clients correctly. “We gladly work with agents and financial professionals across the nation to help them assist their client with life settlements,” stated Grant Shellhammer.