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Some Lesser Known Types Of Insurance

March 9th, 2011

umbrella insurance 300x225 Some Lesser Known Types Of InsuranceThe common and most popular insurance are home, auto and mortgage. There are also lesser known types of cover such as universal-life, variable universal-life and umbrella among others.

Universal-life cover is the same as whole life where a person contributes premiums and names a death benefit. This however is different from whole life in the sense that, a person can choose to change the rate of premiums and also rename a beneficiary. This policy puts up a cash value whereby a person contributing premiums can withdraw an excess amount of money later for personal use.

Variable-life is one unique type of insurance. Part of the policy is put into investment and this can be a good or a bad thing depending with the economy. If the investment increases, the death benefit will also increase but if there’s a loss in investments, the death benefit will decrease consistently.

Variable universal-life is a combination of variable and universal life insurance. A person has the right to change the amount of premium contributed each month and rename the beneficiary. This policy allows the company to use part of the contribution in investments and the same profit and loss sharing applies as in variable life.

With term life, a person can purchase cover for a short period of time for example from 1-30 years. This policy does not build up a cash value and because it is temporary; it is cheaper than permanent policy.

Umbrella cover is not popular among many individuals or companies. This all areas that other cover policies do not cover. Auto cover and home cover risks that can be investigated.

Umbrella insurance covers all what cannot be expected after home and auto cover have failed. The premiums for this cover are paid yearly and this is in addition to the other cover: auto and home cover. An example where umbrella insurance will benefit a person is when there has been a car accident and the court has ruled in favor of the other driver. This means that the driver who has to compensate for the accident needs to pay a lot of money and using the auto insurance cannot add up to the required value. The extra cash for paying the full compensation will come from umbrella insurance. A car that has been insured against collision alone will not benefit from insurance if a tree or people damage the car while rioting. The umbrella insurance will cover all these risks and including theft.

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A Walk Down the History of Insurance

March 1st, 2011

egyptian 300x229 A Walk Down the History of InsuranceStudies have shown that the idea of cover dates back to ancient times. It is known, for example, that the ancient Egyptians insured cargo shipped from one destination to another. The basic idea of cover is to guard against, or protect against, monetary loss of a product or object. The potential loss could occur during transit, or while stationary. The cost of this insurance is governed by time, the replacement value of the product, and the risk factor the product is exposed to. The risk of loss is greater, for example, in the ocean shipment of a product than it is by local land shipment. People have bought insurance against loss on almost every item imaginable. There are items that are uninsurable, but they are hard to find. Many cover Cos. specialize in “hard to insure items”. Lloyds of London is a famous example of a Co. that will supposedly write an insurance policy on anything! The cost of exotic or hard to replace items can be extremely high. It depends on the item, its uniqueness, and what it would cost to replace it, if it can be replaced. So, cover should be viewed and divided into categories.

Life cover is insuring against the loss of life. The cost of life insurance depends on the age of the person. How much longer will they live? The physical condition of the person. Do they have a terminal illness? And so forth. Life cover is also divided into categories. For example whole life, term, etc.

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Banks Vs Insurance Companies

February 6th, 2011

images Banks Vs Insurance CompaniesPeople around the globe are asking themselves if they should put their money into banks or insurance companies. In a global economy, banks have institutions all over the world just like insurance companies. Banks share information and process loans, lend cash, make deals, and keep the flow of money moving faster than ever before. Insurance companies on the other hand, tend to be more conservative with their investments. Here are some of the differences.

Bank Pros:

One of the nice things about putting money with your bank is that they probably have a local branch for you to drive or walk to. It is easy to process your deposits, get cash, and to get a loan for a vehicle or a home. If you buy a certificate of deposit, you can simply drive down to your local branch and talk to a live person who will assist you with new products and rates. Banks now are taking their business online and you can process many of the same features as your local branch from the comfort of your home. Banks in the United States are covered up to $250,000 by the FDIC.

Bank Cons:

One does not have to look very hard to see the cons in the banking system. The 1920′s crash, the Savings and Loans Crisis, and the 2008 Market Crash are due to Banks, Wall Street insiders, and Government not looking out for the people. These crashes were due to one thing, “Greed.” Ever heard of the phrase “To Big to Fail?” Banks can also leverage money. If you give them $1, they can loan out $30 or more.

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Fundamental Factors Of Insurance

January 3rd, 2011

Auto Insurance 300x199 Fundamental Factors Of InsuranceSo we’ve all heard about the huge health insurance debate that has raged in this country for many years now. Parties on either side of the aisle have presented their case in hopes to sway the voters over to their point of view. While these are important issues, it is way beyond the scope of this article. In this article, I’ll go over the very basics of insurance, it’s principles and terminology. That way, when you hear news reports and such, you’ll be better informed.

The concept of insurance is as old as the hills. What is likely the most famous company that has been around for hundreds of years is Lloyds of London. Back when the British Empire was sending out ships in search of new trading partners, they would insure them through Lloyds. If the ships came back with new riches, Lloyds would get a cut of the profits. If they disappeared, Lloyds would cover the loss.

Today, insurance is based on the same principle. It is a protection against potential losses due to unforeseen events. The math is based on an idea called the “Law of Large Numbers.” This means that when there are thousands of people paying a little bit of money each, if one of them has a terrible accident, the insurance company will be able to pay out enough to cover their costs, while still being able to stay in business.

In order to create a new policy, the insurance company has to evaluate the potential risks involved. If the risks are low enough, and they think they can afford to pay out in case of an accident or event, then they will initiate coverage. If, on the other hand, the risk is deemed to be too great, like car insurance for somebody who has been in twenty accidents, they will not be able to offer coverage.

To stay in business, the insurance company has to make sure that any risk of any event happening is smaller than the total amount of people participating in the plan. If the risks start to get too large, then the company will have to do one of two things.

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What Kind of Insurance Do I Need?

October 17th, 2010

insurance 289x300 What Kind of Insurance Do I Need?What kind of insurance do I need? There is no one right answer to this question, because as an adult your life is constantly changing: and your insurance needs will change right along with it. But there are some benchmarks to look out for that will indicate whether an additional plan is in order; and, of course, the best thing you can do for total peace of mind is to work with an experienced insurance agent who will make sure all your needs are met. Meanwhile, here are just a few of the many life milestones that should prompt you to call your agent.

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