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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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Social Compliance Auditing?

November 18th, 2010

social compliance audit Social Compliance Auditing?Social Compliance Auditing is basically a corporate buzzword which covers a broad range of concepts, the most obvious of which is making sure your workers are treated fairly (but this is not the only one).

The idea of a Social Compliance Audit, or Corporate Social Responsibility is relatively new, but has been brought about by consumers who wish to ensure their products are made with all due consideration given to the people and processes involved. This has been a big problem in recent years, as companies outsource their production to China and other 3rd world countries, where laws on environmental and worker protection are non-existent at worse and regarded as best-practice guidelines at best. The most famous case in the news recently involved a Foxconn factory where Apple products are made in Shenzhen, China. A total of 15 workers committed suicide due to inadequate working pay and the promise of insurance money for families if they were to die. Foxconn responded by erecting nets outside the windows to prevent falls, as well as a global pay increase of around 20% to all workers.

Still, this is just one instance of an international problem that highlights the importance of Social Auditing. Indeed, the problem is not just limited to 3rd world countries – a recent Dispatches program from Channel 4 in the UK highlighted a number of factories within the UK itself that were illegally employing Indian workers at half of the national minimum wage and in inadequate working conditions, producing clothes for resale in prominent high street retailers. Companies can no longer ignore their Corporate Social Responsibility and must be vessels for social change.

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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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Do Rich People in General Need Insurance?

July 21st, 2010

It all depends on how rich the people really are, and how often they partake in certain activities. For instance, consider a certain person with a lot of money rarely drives. Even his groceries are delivered to him, and he perhaps does not even need to pay much extra expenses to the people who deliver certain things to him. Obviously this likely takes auto-insurance out of the picture, unless he owns many vehicles, or certain ones that he drives rarely and cares enough about for the insurance on them. He would likely predict that the overall chances of getting in an accident are low, so he may assume ahead of time that he would choose to make a one-time payment to cover for one of those if they would occur.

See how the very mindset of a person who makes a lot of money could be SO different from someone let us say, who is more average with a regular job? Even something as having their accident costs handled could be seen from an entire different kind of perspective.

Considering a typical rich person may be in extraordinary healthy condition, he may be in a situation which does not involve much illness. In this situation, during the more rare instances where he would get sick, he would have no problem making the one-time payment considering how rich he is.

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