Whole Life Insurance vs. Universal Life Insurance

Whole life insurance and universal life insurance are similar in some ways. Universal life insurance was born from the premise of whole life insurance. People were looking to purchase whole life insurance that was a little more flexible and the idea for universal life insurance was born.

One of the advantages of universal life insurance is the flexibility compared to whole life insurance as well as the higher likelihood for elevated cash growth if the market outperforms the insurer’s general account.

The flexibility in universal life insurance is prominent in two ways: the death benefit and the premium payments are both flexible.

The death benefit can be increased if the insured is suitable or decreased without giving up the policy or starting a new one, which is what would be required if you had a whole life insurance policy.

The premium payments can be made in a wide range with universal life insurance from a small minimum amount to a maximum amount allowed by the IRS.

The big difference between universal life insurance and whole life insurance is that with universal life insurance, the insurance company gives some of the risk of maintaining the death benefit to the person who is insured. With a whole life insurance policy, as long as you make the premium payments, the death benefit is guaranteed to be paid out when the insured person passes away. With universal life insurance, if the cash value of the policy and the premium payments aren’t enough to cover the cost of the insurance, the death benefit will lapse and no longer be available.

Whole life insurance also hides the expenses, charges and costs of insurance from the insured party, where as universal life insurance discloses this information to the policy holder.

Universal life insurance also allows flexibility to the exit strategies from the insurance contract as well as a 0 interest loan which provide the insured with access to the growth inside the policy income tax free for the time being.

Universal life insurance was created from the ideals of whole life insurance but catering to the whims of people more so than whole life can. By increasing the flexibility of the insurance policy, universal life insurance policies are growing in popularity and demand with some people.

However, there are still people who want the strict controls that whole life insurance have in place, with less flexibility that makes them stick to a certain schedule.

There is a degree of flexibility in whole life insurance but mainly only within the seven types of policies that are available, as previously discussed in this article. Some whole life insurance policies offer some flexibility to premium payments, while others do not.

The Benefits of Life Insurance

Let’s face it—most of us don’t want to think about the possibility of dying, and what might happen after we die. But if you have a partner and a family, then it’s important to ensure that they’ll be taken care of if the worst does happen. Life insurance is the best way of doing that, particularly if your partner is staying at home to take care of the children —it helps to make sure that your family won’t suffer financially from the loss of your income if you die or are involved in an accident that causes permanent disability. And even if you’re a two-income household, life insurance will help ensure that your family remains financially stable. That’s the standard benefit of life insurance, but there are others.

Dividends

Depending on the type of insurance company you choose, you can benefit from dividends while you are the owner of a policy with that company. These companies are known as mutual insurance companies, and if you have a policy with a mutual company, you are eligible to receive dividends based on the type of policy you own, and the amount of the company’s financial surplus each year. However, you are not guaranteed to receive dividends every year, nor is there a guarantee on the amount you’ll receive.

Depending on the company you have a variety of options for using dividends. You can put the money towards paying future premiums, use it to increase the value of your policy, leave it on deposit to gather interest, or you can simply take the money as cash to spend as you wish. However, note that while dividends themselves are not taxable unless the total dividends you receive are more than the total you’ve paid in premiums, the interest you earn on dividends if you leave them on deposit is taxable.

Borrowing from your Life Insurance

If your life insurance policy has cash value, you may be able to borrow against it. One of the biggest advantages of borrowing against a policy rather than simply getting a loan is that you’ll pay much lower interest.

However, there’s a downside to this that you should be aware of. If you borrow against your policy and don’t pay it back, your beneficiaries receive less money if they make a claim—so borrowing from your life insurance can be counter-productive. Borrowing against the cash value of your policy should only be done if you have a true financial emergency—and the money should be paid back into your policy as soon as possible to ensure that your beneficiaries receive the full value of the policy.

Note that you must have permanent life insurance, rather than term life insurance, to be able to borrow against it. Additionally, there is a “waiting period” between buying the policy and being eligible for borrowing against it. Even more important, if your outstanding loan balance plus interest exceeds the cash value of your policy, the policy is terminated and your coverage ends—so it’s best to be cautious about borrowing.

How does Life Insurance benefit your family?

The very best way to see how life insurance can seriously benefit your family is to see what could potentially happen to your family without it. Imagine your family after you die. Whether it is an unexpected and sudden passing or a long, drawn out affair, your family will have expenses piled up on top of their heartbreak.

If you have hospital bills when you die, your family will be responsible for paying them after you are gone, but the expenses are sure to be heavy to say the least. In addition to hospital charges, you will also incur expenses such as funeral service bills. Your family, in the midst of their grief, will be surrounded by outstretched hands waiting for their share of your money. This burden could quickly take over their lives, draining college funds, savings, and any other resources that you thought were safe and secure for your family’s future.

If this still doesn’t cover the expenses (as well as your loss of income, don’t forget) your family may be forced to sell their house, their car, and any other resources that they can afford to dump. This process is both painful and wrenching for the entire family, especially coming on the heels of the loss of a family member.

So how does life insurance protect and benefit your family? Your life insurance policy is meant to provide a buffer between your family and the expenses that will be incurred upon your death. It will not make them any less upset, however it could provide them with a barrier between the expenses incurred upon your death and the continuation of their lives. It will allow them time to grieve and hopefully move on without needing to worry how far the next paycheck will stretch or how long the savings will hold out.

Your life insurance policy could pay off your mortgage, help your children get their educations, and even allow your family to bury you in peace. It will help your family to keep their peace of mind once you are gone, and help you to live secure in the knowledge that they will be taken care of. You will find that you can sleep easier without worrying about the future of your family once you are gone.

With a life insurance policy in place to help your family, you can spend your days secure in the knowledge that your family will be taken care of after you are gone. After all, all you really want for them is to be able to go on, right? An insurance policy will ensure that they have the financial means to do so. No one can ever replace you to your family, and nothing will ease the burden of loss that is placed upon them when you die, but at least that burden will not be added to by the financial burden that you might leave behind you. Your policy can save your family’s future, and that seems like a sound investment.

Life Insurance for Women

Life insurance information tends to be targeted towards men: they are traditionally the most frequent buyers of insurance—particularly life insurance. Women need life insurance for all the same reasons men do: to replace lost income, pay a mortgage, provide money for death expenses, provide for the long-term security of family. Life insurance is protection, and most women don’t have enough of that protection. Increasing numbers of women are buying life insurance, but most women who have life insurance don’t have enough.

How much life insurance do you need? That depends on several factors, including your age, salary, and family status.

Do you need Life Insurance as a Single Woman?

Single people are much less likely to buy life insurance, believing that without dependents, it’s just not needed—and single women are less likely than any other group to have life insurance.

Single parents have an obvious need for life insurance, but what about single women without children? Even for these people, life insurance may be needed to cover loans and debts for which the responsibility may fall on other family members. Life insurance is very affordable for women who are young and healthy, particularly since at this stage of your life your life insurance needs are likely to be low.

After Marriage

After you marry or are in a long-term relationship, life insurance becomes more important, even if you don’t have children. If you and your partner own a home together, life insurance becomes even more important, and if you have children, it’s an absolute necessity. This is true whether you work in the home or out of it.

If you work outside the home, the value of life insurance is obvious. Two-income households often depend on both incomes, and if your income is lost, the financial effects could be devastating for your family.

If, on the other hand, you’re caring for your home and family full-time, you still need the protection of life insurance. The work you do in the home has a dollar value, and if you were gone your family would need to spend money on child and home care. Life insurance is the ideal way to make sure your family is cared for, whatever happens.

After Retirement

Women live longer than men: for this reason, almost 60% of American women live alone by the time they reach 85. Partly because women are unlikely to have enough life insurance for their needs (if they have insurance at all), 50% of women aged 75 or over who live alone are living in poverty. Another reason is that women are more likely to take time off work to raise children, and therefore have reduced access to Social Security after retirement.

Insurance can be an affective way of taking care of retirement expenses. It does require choosing whole or permanent life insurance rather than a term policy—this will be more expensive, but provides the advantage of accumulating cash value that the owner of the policy receives as dividends. In addition, it’s crucial to consider the effects of inflation when deciding how much life insurance to buy, as even an average inflation rate will reduce purchasing power considerably over time.

Life Insurance Extras

The types of options that a person may add onto their life insurance policy vary widely, but the common denominator is that they will increase the cost of the premiums. Yet they are usually well worth it.

One of the best known is referred to as the “Waiver of Premium” option. This allows for a waiver of premium payments for a specified time, should the policy holder be incapacitated due to an injury or illness. Since the insured party may be unable to earn an income, this protection can be a financial lifesaver, especially since it can cover family members as well. Some companies may specify conditions, such as becoming “totally” or “permanently” disabled, or may quote an age upon which this option may take affect.

Another popular extra is the Critical Illness Cover. If an individual is unable to work because of a critical illness (such as cancer), this allows part of the maturity amount to be distributed in a lump sum. It may also, occasionally, be paid out as a regular payment to mirror former income. Each policy has its own list of such illnesses, and if the patient recovers, the money does not need to be paid back. It can be purchased alone or in conjunction with whole life, term or endowment insurance.

The Accidental Death Benefit provides a large monetary coverage (up to 100% of the regular benefits) to beneficiaries, should the policy holder incur an accidental death. It can be added onto policies for spouses and children, and for a relatively modest premium, can offer up to a million dollars in coverage, in addition to the main insurance benefits.

Accelerated Death Benefits will allow the insured or their covered spouse to collect benefits if the insured is diagnosed with a terminal illness. For example, if a person is given less than a year to live, they may obtain up to 50% of their coverage, although the amount provided will decrease the total payable beneficiaries by that much upon death of the insured.

The Permanent Total Disability option provides for additional insurance benefits if the insured should suffer permanent total disability as a result of an accident or illness. This defines “permanent” as a condition that lasts at least 2 continuous years, of which there does not appear any chance of improvement or the ability to resume work.

These life insurance “extras” are just a sampling of what insurance companies may offer policy holders. They are usually called Rider Benefits because they run, or ride along, the main policy. All life insurance comparisons should include several companies, and individual situations should be discussed with qualified and experienced professionals. Some companies may include one or two options at no cost to make their policies more attractive and competitive, and this should not be construed as lessening the value of the extras in any way.

Life insurance coverage that’s appropriate for an individual and his or her family will offer peace of mind, and should be considered a top priority when planning finances.

Whole Life Insurance And Your Will

There are lots of things to think about as you are looking at life insurance issues. One of the things that you need to think about is your will and how your next of kin is represented in the will. Often the whole life insurance policy will have a person listed as the beneficiary of your money if something happens to you. However, if the life insurance policy is counted as assets, and there is someone different than your beneficiary listed as the person who gets your assets, there could be a problem with your life insurance money. Therefore, you want to be sure that as you are working with your life insurance money, you are doing all that you can to be sure that you have made your will match the information in your policy.

First of all, it is always going to be important that you have a will. You want to be sure that you have a will because this is the one way that you have to make sure you know who is going to take care of your things and who will get any of your assets when you die. Remember that you should update your will so that you will be aware of changes in your life. Remember to update your will when you get married, and be sure to update it each time you have children. You want to be sure that you are keeping your will current, so that there will not be any problems with anything after you die.

The next step is to make sure that the information in your will matches the information in your insurance policy. There are two ways to do this. One is to be sure that the name of the person or people who gets the money from your insurance policy is the same name or names that are listed in your will as the person or people who get to have your assets when you die. However, in some situations this might not be correct, because you might have different wishes for your property than for the money from your insurance policy. If this is the case, you need to keep the names in your insurance policy, and then be sure to add a note into your will that states that although someone else is the beneficiary of your will, a certain person or group of people should get the money from your insurance policy. This can help to clear up any confusion, and to let everyone know what your wishes were before you died. This is especially important if you have been married more than once and have children with different spouses. It can be very confusing for them to figure out what you intended to do with your assets and with the money from your insurance. So, if you spell it out for all of them in your will, you probably won't be having any other problems with it. That way, you can be sure that all of the money goes to the right place.

Life insurance and Marriage

One of the best times in your life should be when you decide to get married. This is going to be the time in your life when everything falls into place and you will find that you are able to be very happy with the way that your life is at that moment. When you are looking at life insurance and marriage, there are some things to think about.

First of all life insurance is supposed to cover your spouse and your children if something happens to you. However, if you buy the policy before you are married, your spouse and children might not be listed as the beneficiaries of them money. Therefore, when you get married, you need to contact your insurance company and make sure that your spouse and children will be getting the money from the life insurance policy if something happens to you. This way you will know for sure that if something happens to you, your spouse and children will be protected and taken care of. This is usually something very important to remember because it is what allows you to have the peace of mind that life insurance policies should bring.

The other thing to think about is adding your spouse onto your policy if you already have one when you are married. Most of the life insurance policies will allow you to do this. This can be good because then whether something happens to you, or to your spouse, the money from the life insurance policy will be there for the one that is remaining and the children. Also, if something happens to both of you, you can know for sure that your children will be protected.

If you don't have a life insurance policy before you get married, then you and your spouse can take out one together. This is a good idea because it can be very important for both of you, especially when you have children. You need to be sure that you are able to do all you can to protect one another once you are married, and when you have kids you will need to be even more sure that you are able to protect those children. If you don't have a policy when you get married, there are lots of things to think about.

How much would you like to spend on the policy and how long do you want to spend paying for it?

How much should the policy cover?

You might want to think about getting the type of life insurance policy that you can take later and change to other investments if you would like to do so. This might be good for you because as a young couple it is often hard to tell where your needs will be several years from the time that you get married. The type of life insurance policy that can be either adjusted or that you can change into something else as you get older is always a good idea for this type of situation with your spouse.

The Benefits of Life Insurance

Many people never think about taking out life insurance, as most people don’t like to think that they might suffer an untimely death. But the reality is that life us unpredictable, and if you do die prematurely, how will your family cope financially?
Life insurance offers your family financial protection, so that they don’t have to deal with financial troubles on top of the grief of losing you. If you have dependents, or a large debt, such as a mortgage, you should seriously consider taking out life insurance so that you ensure that your loved ones won’t be faced with financial difficulties.

The benefits of life insurance are numerous – it can be used to pay any death taxes, be put towards legal and funeral costs, pay off any existing debts or be set up in a trust fund style to pay for your children’s continuing education costs.
Some life insurance policies also offer a guaranteed value, meaning that if you choose to cancel the policy for whatever reason, the guaranteed value will be returned to you. This guaranteed value is also sometimes paid to your beneficiary on top of the policy value, depending on the type of policy you originally took out.
Taking out life insurance while you’re young also has its benefits. The premiums will be lower, and assuming you continue to make your regular payments, you’re covered for life, even if you develop a condition or illness that might have excluded you from taking out coverage later in life. It’s much easier to get life insurance coverage when you’re younger, and for a lower premium, as you’re far less likely to be suffering from anything that may either increase or exclude you from taking out a policy.

Of course, it’s important to have the right cover for your situation. It is wise to talk to a financial advisor or planner before taking out any life insurance coverage to ensure that you and your family will be adequately covered in the event of your death.

Both Permanent Life Insurance and Term Life Insurance policies are offered by most insurance companies. Permanent life insurance generally requires lower premium payments, and your beneficiary is guaranteed payment if you should die. Term life insurance only covers a specific period of time, usually 5, 10, 20 or 30 years. If the policy lapses without renewal, your beneficiary will not receive any benefit if you die during the lapsed period.

It is important that you take the time to understand exactly what your insurance needs are before taking out a policy. Often, a combination of both permanent and term life insurance is needed to ensure adequate coverage for your family.
Life insurance provides peace of mind, for both you and your family. While nobody ever wants to think about dying early, it is an important thing to consider when you have financial responsibilities and/or dependents who rely on your income. If you are insured correctly, your family can focus on dealing with your death, rather than worrying about where they are going to find the money to pay for their day to day living on top of your funeral and other emergency expenses.

Whole life insurance types and their differences

There are many things that could happen to a person at any time. The unpredictability of life often leaves people in a precarious state of imbalance. They do not know how things are and they do not know sometimes how to deal with the unexpected things that come their way. It is often troublesome that these things happen. The fact that it is not expected is in itself a problem as people would need to adjust to it as quickly as possible. The problem is often compounded by the fact that surprises are rarely good surprises. They are mostly negative and bring about a lot of inconvenience to people. A sudden death in the family is probably the worst kind of surprise there is. Not only is it emotionally taxing, it also hurts the family financially. A person could help protect his family from this kind of inconvenience. A person can get whole life insurance to protect his family from all these financial problems that can be brought about by his unexpected passing.

Whole life insurance is an insurance policy whose term is the rest of the life of the person insured. This therefore financially secures the people for the monetary problems that may be brought about by his passing. There are different ways to pay for a whole life insurance. In most cases however, whole life insurance premiums may be paid annually. There are different kinds of whole life insurance policies as well. The six different whole life insurance policies are: non-participating, participating, indeterminate, economic, limited pay and single premium.

There are differences between these whole life insurance policies. In non-participating whole life insurance, all values related to the whole life insurance policy are already determined at the time of the issuance of the policy. This means that if for some reason, the values change during the course of the policy, the agreed upon value at the time of the issuance of the policy would still be the value that would be given.

In indeterminate whole life insurance, there is only a difference of the insurance premiums. This means that the insurance premiums could possibly vary from one year to the other. A limited pay whole life insurance policy on the other hand, limits the number of years that premiums need to be paid. In other cases, insurance premiums need to be paid annually for the duration of the policy lest one would lose the policy altogether together with the benefits of security that it brings. In limited pay, the insured needs to pay only for a limited number of years agreed upon at the issuance of the policy. This means that while the insured may need to pay only for, say 20 years, the insurance policy remains active for the duration of his life.

Whole life insurance is a smart way of protecting one’s family for the duration f your lifetime and after. These days, people should understand that people need to take care not only of their own lives, but also the lives of their loved ones.

Self-funded health care

Self-funded health care describes a Self insurance arrangement whereby an employer provides health or disability benefits to employees by assuming the direct risk for payment of their claims for benefits. The terms of eligibility and coverage are set forth in a plan document which includes provisions similar to those found in a typical group health insurance policy. Unless exempted, such plans create rights and obligations under the Employee Retirement Income Act of 1974 ("ERISA").
Many employers seek to mitigate the financial risk of self funding claims under the plan by purchasing stop loss insurance from an insurance carrier. These policies typically provide for risk retention limitations both on a specific claim and aggregate claims basis. An important aspect of self funded group health plans lies in the requirement that the employer remain liable for funding of plan claims regardless of the purchase of stop loss insurance. In other words, only the employer has a contractual relationship with plan participants and beneficiaries. The stop loss policy runs solely between the employer and the stop loss carrier and creates no direct liability to those individuals covered under the plan. This feature provides the critical distinction between fully insured plans (subject to State law insurance regulations) and self funded health plans which, under the provisions of Section 514 of ERISA, are exempt from State insurance regulations.
Stop loss policies should be distinguished from "reinsurance" arrangements. Under reinsurance arrangements, one insurance carrier cedes risk to another carrier to lessen its risk. Reinsurance arrangements fall under specific State insurance regulations designed to assure the financial integrity such arrangements.
While some large employers self-administer their self funded group health plan, most find it necessary to contract with a third party for assistance in claims adjudication and payment. Third Party Administrators provide these and other services, such as access to preferred provider networks, prescription drug card programs, utilization review and the stop loss insurance market. Insurance companies offer similar services under what is frequently described as "administration only" contracts. In these arrangements the insurance company provides the typical third party administration services but assume no risk for claims payment.

Stranger Originated Life Insurance

Stranger-Originated Life Insurance (STOLI) is a life insurance arrangement, in which speculators, who have no relationship to a person, initiate a insurance policy against their life and fund the premium payments for investment purposes.[1][2] STOLI is best thought of as a "mortality futures" transaction where certain parties have one expectation as to the future value of the article of trade that is the subject of the “futures contract”, while other parties have a different expectation as to the future value of that article of trade. In a STOLI transaction, the article of trade that is the subject of the “futures contract” is the life expectancy or mortality of the insured. While current marketing practices suggest STOLI is an easy way to make money with little if any risk and that all parties will profit, STOLI is actually a complicated transaction involving at least six parties to the transaction and where certain parties will profit and certain parties will lose, just like in any “futures contract”. As such, we will explore herein the various risks of loss and potential for profit from the perspective of each of these parties to the transaction.
STOLI is not a type of life insurance product. It is instead a marketplace term for a transaction that came into being roughly 2004 and which makes use of three legitimate but otherwise separate financial markets, namely: 1) the primary market for new life insurance products issued by an insurance company, 2) the secondary market where inforce life insurance products can be sold for more than the insurance company will pay on termination (i.e., the cash surrender value), and 3) the market of special purpose lenders who finance the payment of life insurance premiums. The basic structure of the transaction is also marketed or referred to as Investor Owned Life Insurance (IOLI), Charity Owned Life Insurance (ChOLI) and Speculator Initiated Life Insurance (SPINLife).
By any name, the transaction (hereafter referred to as STOLI) is defined as an ownership scheme in which a life insurance policy is owned (either initially or ultimately) by an investor group unrelated to the insured, where the insured (or someone with an insurable interest) pays little or nothing for the life insurance, and where someone other than the insured (or someone without an insurable interest) pays for the insurance. Further, in a STOLI transaction, the purpose of the insurance is not for protection against premature death or as a wealth accumulation vehicle, but rather for a profit on the future trading of a life insurance contract.
The basis for such profit expectations revolves around a single factor – the life expectancy of the insured. For instance, like in any “futures” contract, the different parties to the STOLI transaction have different expectations as to the future value of the life insurance death benefits that are article of trade in this “mortality futures” contract. In other words, on one side of the STOLI transaction, certain parties are calculating life expectancy one way, while certain parties on the other side are calculating life expectancy differently. Whichever party calculates life expectancy most accurately will profit, and whichever party miscalculates life expectancy will lose, as we will see below. These various parties to a STOLI transaction are: 1) An insured 2) A life insurance agent/broker (the distributor) 3) An investor group (the viator or life settlement market maker) 4) A special purpose lender 5) The life insurance company 6) The IRS because STOLI policies do not qualify for tax exempt treatment afforded to other forms of life insurance
A typical STOLI transaction begins with a life insurance agent/broker proposing to a prospective insured that he or she “owns” a “wasting asset” in the form of their insurability, and that they can make money “selling” this wasting asset by simply consenting to be insured under a STOLI policy. The insured, who does not need life insurance for traditional reasons such as income replacement, family protection, retirement planning, funding a stock redemption agreement or financing estate taxes, consents to being insured in exchange for the promise of either “free insurance” or some cash payment or both.
Insureds generally pay nothing towards STOLI policy premiums, and in some cases, are actually paid up front cash in exchange for consenting to being underwritten and insured. The investor group serving as market maker for the policy puts up the money to pay premiums (either directly or indirectly through borrowing) and/or to pay the insured this up front cash (again either directly or indirectly through borrowing), all for the exclusive purpose of earning a profit from the collection of STOLI death benefits, which are expected to be greater than the amount they paid for the policy, plus an expected minimum rate of return on the market maker’s STOLI investment.
Regulatory issues make it impractical for the investor group to own the STOLI policy and pay premiums directly during the first two years. As a result, STOLI transactions involve a finance company during this two-year interim period. These special purpose lenders loan funds for the payment of premiums to the insured (or a trust created by the insured) often on a non recourse basis (i.e., the insured can default on repayment and the lender has no recourse for recovering loaned amounts from the insured) at interest rates as high as Prime plus 5% or more (for example, 12% to 14% compound annual loan interest).
The typical proposal for a STOLI transaction suggests that, after these first 2 policy years, the market maker will purchase the policy from the insured for it’s “fair market value”, but the market maker is not generally required to purchase the policy nor is this purchase price guaranteed. While the insured is generally entitled to repay the loan during the first two years and keep the policy, this is unlikely for reasons discussed in “The Insured” section below. Also, while this “fair market value” is presumed to be enough to repay premium loans, pay above market interest, and pay the insured a profit, this “fair market value” is actually a function of the market makers calculation of the life expectancy of the insured at the that time (i.e., 2 years after the date of the initial policy purchase).
“Fair market value” is, by definition, the price at which a willing seller will sell and a willing buyer will buy. The seller of a STOLI policy is the insured (or the trust of the insured), and the buyer is the viator or investor group formed to make a secondary market for life insurance policies. Both are willing sellers/buyers when they expect a profit. The insured seller does not generally perceive a need for the life insurance for traditional reasons, and has no investment in the STOLI contract (beyond the tax cost which may or may not be disclosed in the sales process), so the insured is a “willing seller” at almost any price given there are few if any other exit strategies out of the STOLI transaction.
For instance, an insured has only three (3) options under a STOLI policy, namely: 1) continue the policy by repaying the premium loan and accrued above market interest and start paying above market premiums, or 2) surrender the policy for its cash value after repaying the premium loan and accrued above market interest and take the difference as a loss, or 3) sell the policy to the life settlement market maker for an amount presumably greater than the cash surrender value and hopefully also enough to pay off the premium loan, pay accrued above market interest, pay termination fees (if any), recoup taxes paid and earn the promised profit. Of course, unless the insured decides they need life insurance for traditional reasons, the only practical option is to sell the policy to the life settlement market maker, and thus the STOLI insured will generally be a “willing seller” at any price.
On the other hand, for the market maker buyer to be a willing buyer, the purchase price of the STOLI policy must be low enough such that the investor group still profits when death proceeds are collected some number of years in the future. For example, an investor group seeking a 12% return on its investments over a 10 year holding period could pay up to $370,000 for a $1 million STOLI policy (ignoring taxes for the moment) provided the life expectancy of the insured was 10 years or less. In other words, a $370,000 investment earning 12% for 10 years is equal to $1 million. As such, the maximum price a market making buyer will pay for a STOLI policy can be estimated using simple time value of money calculations using the insured’s life expectancy as the holding period (n), the “hurdle rate” of the investor group (typically in the 12% to 14% range) as the discount rate (i%), the amount of the death benefits expected in the future as the future value (FV), and solving for the present value (PV).
Of course, the less a market maker pays for a given policy and the shorter their holding period until they receive STOLI death proceeds, the greater their profit. It is thus important to remember that life settlement market makers are in business to pay as little as possible when purchasing STOLI holdings in order to maximize investment returns to their investor group. Also, while life insurers generally reserve the right to change their calculation of life expectancy over time by adjusting the pricing of their life insurance policies to reflect actual mortality experience, life settlement market makers “lock in” their calculation of life expectancy at the time they purchase a STOLI policy, and thus risk either reduced profits or even a loss if they miscalculate life expectancy.
For these reasons, and given the current lack of regulation of the life settlement secondary markets, the amounts these investor groups pay for STOLI policies is often far less than their intrinsic “fair market value” of a given policy as calculated above. In other words, after the insured consents to being underwritten and insured under a STOLI policy, the market maker has no obligation and little or no financial incentive to purchase the policy from the insured for an amount that is sufficient to repay premium loans, and pay above market interest, and pay the insured a profit, and are not required to purchase the policy at all. This is not to say that life settlement market makers won’t deliver on the promise to purchase the STOLI policy and pay an amount sufficient to pay a profit to the insured, but is to say that there are financial forces working against the insured receiving such a profit.
One way investor groups may be able to ensure their profit targets while also paying profits promised to the insured is by selling STOLI holdings to a 3rd-Party rather than holding STOLI policies until death benefits are paid. Selling STOLI holdings shortens the holding period of the investor group to something less than the life expectancy, and thereby eliminates the risks associated with different life expectancy calculations. For this reason, certain STOLI investor groups have been seeking to securitize STOLI holdings for sale on Wall Street in the same way real estate developers pooled real estate holdings and sold them as Real Estate Investment Trusts (REITs), and the way mortgage companies bundled mortgage holdings and also sold to the community of public investors.
If STOLI holdings are securitized and sold to the general public, then the number of parties in the STOLI transaction increases to include #7 the investment banking firm that securitizes individual STOLI holdings and sells them to #8 the public market of individual investors. As such, STOLI transactions involves at least six parties, and potentially as many as eight, each involved for the purpose of turning a profit. Each party thus represents a “friction point” whose profit erodes a portion of the economic benefit otherwise available to other parties in the transaction but further down the line.
While there may be transactions other than STOLI that involve eight or more parties/friction points, few involve a financial product that is generally available in the market usually with only two parties seeking a profit from the transaction (i.e., the life insurance company manufacturing the product and the life insurance agent/broker distributing the product, but not the insured who is actually a consumer who is paying for insurance coverage in a traditional life insurance transaction and not seeking a profit and thus not a friction point). In other words, implied in the STOLI transaction is that there is a sufficiently large profit margin in a non STOLI transaction that this “excessive” profit can be divided among an additional four to six parties, and all will still profit, which is simply not possible.
While certain parties to a STOLI transaction do profit without regard to life expectancy (e.g., the life insurance agent/broker and the investment banking firm if STOLI holdings are securitized), certain other parties will profit while certain other parties must lose depending upon the ultimate accuracy of their respective life expectancy calculations. For instance, if life settlement market makers are correct in their calculations of life expectancy, then these investor groups will profit along with those parties on the same side of the STOLI transaction (e.g., the insured, the special purpose lender, and potentially the public investor), and the life insurance company must lose. On the other hand, if the insurance company is correct in its life expectancy calculations, then the insurer will profit and all other parties on the other side must lose.

Title insurance in the United States

Title insurance in the United States is indemnity insurance against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. Title insurance is principally a product developed and sold in the United States as a result of the comparative deficiency of the US land records laws. It is meant to protect an owner's or lender's financial interest in real property against loss due to title defects, liens or other matters. It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy. The first title insurance company, the Law Property Assurance and Trust Society, was formed in Pennsylvania in 1853.[1] Title insurance was created in the United States by William Penn and the vast majority of title insurance policies are written on land within the U.S.

Typically the real property interests insured are fee simple ownership or a mortgage. However, title insurance can be purchased to insure any interest in real property, including an easement, lease or life estate. Just as lenders require fire insurance and other types of insurance coverage to protect their investment, nearly all institutional lenders also require title insurance to protect their interest in the collateral of loans secured by real estate. Some mortgage lenders, especially non-institutional lenders, may not require title insurance.

Title insurance is available in many other countries, such as Canada, Australia, United Kingdom, Northern Ireland, Mexico, New Zealand, China, Korea and throughout Europe. However, while a substantial number of properties located in these countries are insured by US title insurers, they do not constitute a significant share of the real estate transactions in those countries. They also do not constitute a large share of US title insurers' revenues. In many cases these are properties to be used for commercial purposes by US companies doing business abroad, or properties financed by US lenders. The US companies involved buy title insurance to obtain the security of a US insurer backing up the evidence of title that they receive from the other country's land registration system, and payment of legal defense costs if the title is challenged.

Trade Credit Insurance

Trade Credit Insurance or Credit Insurance is an insurance policy and a risk management product offered by private insurance companies and governmental Export Credit Agencies to business entities wishing to protect their balance sheet asset, accounts receivable, from loss due to credit risks such as protracted default, insolvency, bankruptcy, etc. This insurance product, commonly referred to as credit insurance, is a type of Property & casualty insurance and should not be confused with such products as credit life or credit disability insurance, which the insured obtains to protect against the risk of loss of income needed to pay debts. Trade Credit Insurance can include a component of political risk insurance which is offered by the same insurers to insure the risk of non-payment by foreign buyers due to currency issues, political unrest, expropriation, etc.

This points to the major role Trade Credit Insurance plays in facilitating International trade. Trade credit is offered by vendors to their customers as an alternative to prepayment or cash on delivery terms, providing time for the customer to generate income from sales to pay for the product or service. This requires the vendor to assume non-payment risk. In a local or domestic situation as well as in an export transaction, the risk increases when laws, customs communications and customer's reputation are not fully understood. In addition to increased risk of non-payment, international trade presents the problem of the time between product shipment and its availability for sale. The account receivable is like a loan and represents capital invested, and often borrowed, by the vendor. But this is not a secure asset until it is paid. If the customer's debt is credit insured the large, risky asset becomes more secure, like an insured building. This asset may then be viewed as Collateral (finance) by lending institutions and a loan based upon it used to defray the expenses of the transaction and to produce more product. Trade Credit Insurance is, therefore, a trade finance tool.

Terrorism insurance

Terrorism insurance is insurance purchased by property owners to cover their potential losses and liabilities that might occur due to terrorist activities.

It is considered to be a difficult product for insurance companies, as the odds of terrorist attacks are very difficult to predict and the potential liability enormous. For example the September 11, 2001 attacks resulted in an estimated $31.7 billion loss. This combination of uncertainty and potentially huge losses makes the setting of premiums a difficult matter. Most insurance companies therefore exclude terrorism from coverage in Casualty and Property insurance, or else require endorsments to provide coverage.

On December 26, 2007, the President of the United States signed into law the Terrorism Risk Insurance Program Reauthorization Act of 2007 which extends the Terrorism Risk Insurance Act (TRIA) through December 31, 2014. The law extends the temporary federal Program that provides for a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism[1].

The United States insurance market offers coverage to the majority of large companies which ask for it in their polices[2]. The price of the policy depends on where the clients are residing and how much limit they buy.

Variable universal life insurance

Variable Universal Life Insurance (often shortened to VUL) is a type of life insurance that builds a cash value. In a VUL, the cash value can be invested in a wide variety of separate accounts, similar to mutual funds, and the choice of which of the available separate accounts to use is entirely up to the contract owner. The 'variable' component in the name refers to this ability to invest in separate accounts whose values vary--they vary because they are invested in stock and/or bond markets. The 'universal' component in the name refers to the flexibility the owner has in making premium payments. The premiums can vary from nothing in a given month up to maximums defined by the Internal Revenue Code for life insurance. This flexibility is in contrast to whole life insurance that has fixed premium payments that typically cannot be missed without lapsing the policy.

Variable universal life is a type of permanent life insurance, because the death benefit will be paid if the insured dies any time as long as there is sufficient cash value to pay the costs of insurance in the policy. With most if not all VUL's, unlike whole life, there is no endowment age (which for whole life is typically 100). This is yet another key advantage of VUL over Whole Life. With a typical whole life policy, the death benefit is limited to the face amount specified in the policy, and at endowment age, the face amount is all that is paid out. Thus with either death or endowment, the insurance company keeps any cash value built up over the years. With a VUL policy, the death benefit is the face amount plus the build up of any cash value that occurs (beyond any amount being used to fund the current cost of insurance.)

If good choices for investments are made in the separate accounts, a much higher rate-of-return can occur than the low fixed rates-of-return typical for whole life. The combination over the years of no endowment age, continually increasing death benefit and high rate-of-return in the separate accounts of a VUL policy could typically result in value to the owner or beneficiary which can be many times that of a whole life policy with the same amounts of money paid in as premiums.

Universal life insurance

Universal Life is a type of permanent life insurance based on a cash value. That is, the policy is established with the insurer where premium payments above the cost of insurance are credited to the cash value. The cash value is credited each month with interest, and the policy is debited each month by a cost of insurance (COI) charge, and any other policy charges and fees which are drawn from the cash value if no premium payment is made that month. The interest credited to the account is determined by the insurer; sometimes it is pegged to a financial index such as a bond or other interest rate index.

Whole life insurance

Whole Life Insurance, or Whole of Life Assurance (in the Commonwealth), is a life insurance policy that remains in force for the insured's whole life and requires (in most cases) premiums to be paid every year into the policy.

Workers' compensation

Workers' compensation (colloquially known as workers' comp in North America or compo in Australia) is a form of insurance that provides compensation medical care for employees who are injured in the course of employment, in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence. The tradeoff between assured, limited coverage and lack of recourse outside the worker compensation system is known as "the compensation bargain." While plans differ between jurisdictions, provision can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents of workers killed during employment (functioning in this case as a form of life insurance). General damages for pain and suffering, and punitive damages for employer negligence, are generally not available in worker compensation plans.

Employees' compensation laws are usually a feature of highly developed industrial societies, implemented after long and hard-fought struggles by trade unions. Supporters of such programs believe they improve working conditions and provide an economic safety net for employees. Conversely, these programs are often criticised for removing or restricting workers' common-law rights (such as suit in tort for negligence) in order to reduce governments' or insurance companies' financial liability. These laws were first enacted in Europe and Oceania, with the United States following shortly thereafter.

Vision insurance

Vision insurance is a form of insurance that provides coverage for the services rendered by eye care professionals such as ophthalmologists and optometrists. There are many vision insurance companies. The typical vision insurance plan provides yearly coverage for eye examinations and partial or full coverage eyeglasses, sunglasses, and contact lenses, with or without copays, depending on the plan chosen.

List of Vision Insurance companies

Davis Vision

Eyemed

Cole Managed Vision

VSP

AFLAC

Vision Benefits of America

Wage insurance

Wage insurance is a form of proposed insurance that would provide workers with compensation if they are forced to move to a job with a lower salary. The idea is usually proposed as a response to outsourcing and the effects of globalization, although it could equally be proposed as a response to job displacement due to increasingly productive technology (e.g. factories, or computers). Economic consensus generally holds that in both cases -- the integration of the global economy through free trade, on one hand, and greater technological efficiencies, on the other -- the changes will have a net benefit across the world. However, economic theory also indicates that, while people over the aggregate will be better off, many individuals will not be able to keep their current job at their current wages. Those individuals may be able to retrain and move to more highly paid wages, and the reduced cost of goods (which is likely to result from either case under consideration) may offset at least some of the wage loss. These compensating effects are likely to take several years to come about, however, and some people might never be fully compensated by normal market mechanisms. Wage insurance would offer compensation in these situations.

Zombie fund

A Zombie Fund (a.k.a. Closed Fund) is a with-profits life insurance fund, which is closed to new business. So it is running off its investment portfolio, keeping the capital invested while for the last members to die, but not underwriting new policies.

Some critics have argued that investment performance falls once a fund closes. Zombie Funds can attract negative coverage, as in the case of Resolution plc.

For further information on zombie funds please see here: http://www.investmentcheck.co.uk/zombie.html

Group insurance

Group insurance is an insurance that covers a group of people, usually who are the members of societies, employees of a common employer, or professionals in a common group.
Group insurance may or may not be converted to individual coverage. As group insurance gets big business for an insurance company with minimum operational expenses (under one master policy issued to an employer, union or any recognised group), it is usually less expensive than individual policies.
Group coverage can help reduce the problem of adverse selection by creating a pool of people eligible to purchase insurance who belong to the group for reasons other than for the purposes of obtaining insurance. In other words, people belong to the group not because they possess some high-risk factor which makes them more apt to purchase insurance (thus increasing adverse selection); instead they are in the group for reasons unrelated to insurance, such as all working for a particular employer.
A feature which is sometimes common in group insurance is that the premium cost on an individual basis may not be risk-based. Instead it is the same amount for all the insured persons in the group. So for example, in the United States, often all employees of an employer receiving health insurance coverage pay the same premium amount for the same coverage regardless of their age or other factors. Whereas under private individual health insurance coverage in the U.S., different insured persons will pay different premium amounts for the same coverage based on their age, location, pre-existing conditions, etc. Another distinctive feature is that under group coverage, a member of the group is generally eligible to purchase or renew coverage all whilst he or she is a member of the group subject to certain conditions. Again, using U.S. health coverage as an example, under group insurance a person will normally remain covered as long as he or she continues to work for a certain employer and pays their insurance premiums whereas under individual coverage, the insurance company often has the right to non-renew a person's individual health insurance policy when the policy is up for renewal, which they may do if the person's risk profile changes (though some states limit the insurance company's ability to non-renew after the person has been under individual coverage with a given company for a certain number of years).

Lenders Mortgage Insurance

Lenders Mortgage Insurance (LMI), also known as Private mortgage insurance (PMI) in the US, is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. It is insurance to offset losses in the case where a mortgagor is not able to repay the loan and the lender is not able to recover its costs after foreclosure and sale of the mortgaged property.Typical rates are $55/mo. per $100,000 financed, or as high as $1,500/yr. for a typical $200,000 loan.

Landlords insurance

Landlords insurance is a policy to cover a property owner from financial losses connected with their property which they let out. Mainly a landlord insurance policy will cover the building itself with the option of including the contents left within. Landlords are usually required to take out specialist insurance as most standard house insurance excludes covers whilst a property is being rented
The policy will normally cover standard perils such as fire, lightning, explosion, earthquake, storm, flood, escape of water/oil, subsidence, theft and malicious damage. Each insurance policy is different and may or may not include all these items. Most companies will provide the option to have extra cover on top of what is considered the standard cover. These may include things such as accidental damage, legal protection, alternative accommodation costs or rent guarantee cover.
Common differences in use of the phrase landlords insurance is buy to let insurance, let property insurance, rented property insurance, or property owners insurance.

Keyman insurance

Keyman insurance is an important form of business insurance. There is no legal definition for Keyman Insurance. In general, it can be described as an insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of the member of the business specified on the policy. The policy’s term does not extend beyond the period of the key person’s usefulness to the business. The aim is to compensate the business for losses and facilitate business continuity. Keyman Insurance does not indemnify the actual losses incurred but compensates with a fixed monetary sum as specified on the insurance policy.
An employer may take out a Key Man insurance policy on the life or health of any employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company. The employer does this to offset the costs (such as hiring temporary help or recruiting a successor) and losses (such as a decreased ability to transact business until successors are trained) which the employer is likely to suffer in the event of the loss of a key person.
Who can be a Keyman?
A Keyman can be anyone directly associated with the business whose loss can cause financial strain to the business. For example, they could be: a Director of a company, a Partner, key sales people, key project managers and people with specific skills or knowledge which is especially valuable to the company.

Inland marine insurance

Inland marine insurance indemnifies loss to moving or movable property and is an outgrowth of ocean marine insurance. Historically, ocean marine insurance held the transporter responsible for property loss before, during, and after the completion of the voyage. In the 1800s the non-ocean portion of the journey grew as cargoes were transferred to non-ocean vessels (such as barges) and the term "inland marine" was coined.
Inland marine policies became known as "floaters" since the property to which coverage was originally extended was essentially "floating." The coverage has grown to include property that just involves an element of transportation. The property that is insured under inland marine coverage is typically one of the following:
* Actually in transit
* Held by a bailee
* At a fixed location that is an instrument of transportation
* A movable type of goods that is often at different locations
The following coverages represent a wide range of the types of coverages typically called "inland marine":
* Accounts Receivable
* Bailee Customer's Goods
* Builders' Risk
* Communication Towers and Equipment
* Computer Coverage
* Contractors Equipment
* Commercial Floaters
* Dealers
* Exhibitions
* Fine Arts
* Furriers
* Installation
* Jewelers
* Leased Property
* Mobile Medical Equipment
* Motor Truck Cargo
* Museums
* Musical Instruments
* Processing Risks
* Rigger's Liability
* Scheduled Property
* Transportation
* Trip Transit
* Valuable Papers
* Warehouse Legal

Flood insurance

Flood insurance denotes the specific insurance coverage against property loss from flooding. To determine risk factors for specific properties, insurers will often refer to topographical maps that denote lowlands and floodplains that are susceptible to flooding.
Hidden Floods
Nationwide, only 20% of American homes at risk for floods are covered by flood insurance. Private insurers are unable to insure against the peril of flood due to the prevalence of adverse selection, which is the purchase of insurance by persons most affected by the specific peril of flood. In traditional insurance, insurers use the economic law of large numbers to charge a relatively small fee to large numbers of people in order to pay the claims of the small numbers of claimants who have suffered a loss. Unfortunately, in flood insurance, the numbers of claimants is larger than the available number of persons interested in protecting their property from the peril, which means that insurers are unable to cover their costs in flood insurance.
In certain flood-prone areas, the Federal Government requires flood insurance to secure mortgage loans backed by federal agencies such as the FHA and VA. However, the program has never worked as insurance, because of adverse selection. It has never priced people out of living in very risky areas by charging an appropriate premium, instead, too few places are included in the must-insure category, and premiums are artificially low." The lack of flood insurance can be detrimental to many homeowners who may discover only after the damage has been done that their standard insurance policies do not cover flooding.
Flooding is defined by the National Flood Insurance Program as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or two or more properties (at least one of which is your property from: Overflow of inland waters, unusual and rapid accumulation or runoff of surface waters from ANY SOURCE, and mudflows.
This can be brought on by landslides, a hurricane, earthquakes, or other natural disasters that influence flooding, but while a homeowner may, for example, have earthquake coverage, that coverage may not cover floods as a result of earthquakes.

Earthquake insurance

This is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake loss.
Most earthquake insurance policies feature a high deductible, which makes this type of insurance useful if the entire home is destroyed, but not useful if the home is merely damaged. Rates depend on location and the probability of an earthquake. Rates may be cheaper for homes made of wood, which withstand earthquakes better than homes made of brick.
As with flood insurance or insurance on damage from a hurricane or other large-scale disasters, insurance companies must be careful when assigning this type of insurance, because an earthquake strong enough to destroy one home will probably destroy dozens of homes in the same area. If one company has written insurance policies on a large number of homes in a particular city, then a devastating earthquake will quickly drain all the company's resources. Insurance companies devote much study and effort toward risk management to avoid such cases.

Dental Insurance in the United States

This insurance designed to pay the costs associated with dental care. Dental insurance pays a portion of the bills from dentists, and other providers of dental services. By doing so, dental insurance protects people from financial hardship caused by unexpected dental expenses.
The most recent data (2007) from the National Association of Dental Plans shows that 57% of the population in the United States has dental benefit coverage. Some 97% of those who do have dental coverage get it through their employer or another group, most often as a policy separate from their health insurance plan. Depending upon the type of medical coverage you have, it may be a good idea to have a compatible program to eliminate any gaps or overlap between the two plans. That may save money while allowing you to take advantage of receiving necessary preventive care.
Not all dentists are pleased about participating in any type of dental plan. It means more work for them (and especially more paperwork), and less pay. It is also important to have adequate coverage for your situation, so you can access the features you need and are not paying for something you will not use. Most group dental insurance plans do not have restrictions, such as pre-existing conditions but do have annual maximum payments.
The most common types of dental insurance plans are either Preferred Provider Organization (PPO) or Dental Health Maintenance Organization (DHMO). Both types are considered managed care, and each dental insurance plan has advantages and disadvantages.
Dentists participating in the PPO plans have negotiated their fees with the administering company, and provide their services under the plan, but this usually does not cover all fees. Dental plans usually have small deductibles to consider about $50 and DPPOs and traditional indemnity plans usually pay a percentage of the charges, leaving the patient with a co-pay. DHMOs usually state their co-payments as a fixed dollar amount per procedure.
If your employer is paying the monthly premiums for the dental insurance plan and the dentist you use is part of the PPO, this might be an attractive option.
A Dental Health Maintenance Organization is another dental insurance plan option, based on the model of medical HMOs. Here, too, the patient is enrolled in a program, and can visit any dentist in that program. However, dentists may end up having to provide services at 'below cost' rates, and not be able to spend as much time with each person as a PPO could offer. Working in an HMO setting, the dentist has many more people to see and is compelled to function in an environment where volume matters. Although a patient will be seen and treated, the relationship with the dentist may not developed if there is a lack of time. If you want to be seen by a dentist who takes time with his or her patients, this may not be your optimum dental insurance plan.

Crop insurance

This insurance is purchased by agricultural producers, including farmers, ranchers, and others to protect themselves against either the loss of their crops due to natural disasters, such as hail, drought, and floods, or the loss of revenue due to declines in the prices of agricultural commodities. The two general categories of crop insurance are called crop-yield insurance and crop-revenue insurance.
Crop-yield insurance: There are two main classes of crop-yield insurance:
Crop-hail insurance is generally available from private insurers (in countries with private sectors) because hail is a narrow peril that occurs in a limited place and its accumulated losses tend not to overwhelm the capital reserves of private insurers. The earliest crop-hail programs were begun by farmers cooperatives in France and Germany in the 1820s.
Multi-peril crop insurance (MPCI): covers the broad perils of drought, flood, insects, disease, etc., which may affect many insureds at the same time and present the insurer with excessive losses. To make this class of insurance, the perils are often bundled together in a single policy, called a multi-peril crop insurance (MPCI) policy. MPCI coverage is usually offered by a government insurer and premiums are usually partially subsidized by the government. The earliest MPCI program was first implemented by the Federal Crop Insurance Corporation (FCIC), an agency of the U.S. Department of Agriculture, in 1938. The FCIC program has been managed by the Risk Management Agency (RMA), also a U.S. Department of Agriculture agency, since 1996.
Crop-revenue insurance: is a combination of crop-yield insurance and price insurance. For example, RMA establishes crop-revenue insurance guarantees on corn by multiplying each farmer's corn-yield guarantee, which is based on the farmer's own production history, times the harvest-time futures price discovered at a commodity exchange before the policy is sold and the crop planted. There is a single guarantee for a certain number of dollars. The policy pays an indemnity if the combination of the actual yield and the cash settlement price in the futures market is less than the guarantee.
Crop-revenue insurance covers the decline in price that occurs during the crop's growing season. It does not cover declines that may occur from one growing season to another. That would be called "price support," and would raise a series of complex agricultural-policy and international-trade issues.

Crime insurance

This insurance to cover losses due to victimization by criminals. Many businesses purchase crime insurance that allows them to file claims for employee theft or other offenses with the potential to cause financial ruin. Anarcho-capitalists favor the use of crime insurance by individuals as well, to cover losses due to murder, rape, and other violent crimes in addition to property crimes; this type of crime insurance is termed aggression insurance.

Chargeback insurance

This refers to an insurance coverage protecting a merchant who accepts credit cards. The coverage protects the merchant against cardholder fraud in a transaction where the use of the credit card was unauthorized, and covers claims arising out of the merchant’s liability to the service bank.
This coverage can apply under a number of circumstances, including:
* A credit card is lost or stolen and used before the cardholder can report it
* Identity theft
* Post-purchase "ship to" information changes

Bond insurance

This is a service whereby issuers of a bond can pay a premium to a third party, who will provide interest and capital repayments as specified in the bond in the event of the failure of the issuer to do so. The effect of this is to raise the rating of the bond to the rating of the insurer; accordingly, a bond insurer's credit rating must be almost perfect.
The premium requested for insurance on a bond is a measure of the perceived risk of failure of the issuer.
Government bonds are almost never insured; municipal bond insurance was introduced in the US in 1971, and by 2002 over 40% of municipal bonds were insured, often by a procedure involving payment of a single premium at the purchase of the bond.

Accidental death and dismemberment insurance

This is a form of insurance covering death or specific types of injury as a result of an accident.[1] In the event of accidental death, this insurance will pay benefits in addition to any life insurance held. Death by illness, suicide, or natural causes is generally not covered by AD&D. Additionally, AD&D generally pays benefits for the loss of limbs, fingers, sight and permanent paralysis. The types of injuries covered and the amount paid vary by insurer and package, and are explicitly enumerated in the insurance policy.
There are four common types of group AD&D plans offered in the United States:
* Group Life Supplement - the AD&D benefit is included as part of a group life insurance contract, and the benefit amount is usually the same as that of the group life benefit;
* Voluntary - the AD&D is offered to members of a group as a separate, elective benefit, and premiums are generally paid as a payroll deduction;
* Travel Accident (Business Trip) - the AD&D benefit is provided through an employee benefit plan and provides supplemental accident protection to workers while they are traveling on company business (the entire premium is usually paid by the employer);
* Dependents - Some group AD&D plans also provide coverage for dependents.

Term Insurance

Term insurance covers you for a term of one or more years. It pays a death benefit only if the policy holder dies during the period the insurance is in force. Term insurance generally offers the cheapest form of life insurance. You can renew most term insurance policies for one or more terms even if your health condition has changed.
However, each time you renew the policy for a new term, premiums may climb higher, just like a rent agreement every time you renew the lease. This policy is particularly useful to cover any outstanding debt in the form of a mortgage, home loan, etc.
For example if you have taken a loan of Rs10 lakh, you will have an option of taking an insurance to protect the loan in case of passing away before the debt is repaid
Universal Life
This is a flexible life insurance policy and is also market sensitive. You decide on the several investment options on how your net premium are to be invested. While the mony invested has the potential for significant growth, such funds are subject to market risks including the loss of the principal.
Unit Linked Product
Market-linked plans or unit-linked insurance plans (ULIP) are similar to traditional insurance policies with the exception that your premium amount is invested by the insurance company in the stock market.
Market-linked insurance plans (MLP) mimic mutual funds and invest in a basket of securities, allowing you to choose between investment options predominantly in equity, debt or a mix of both (called balanced option).
The major advantage market-linked plans offer is that they leave the asset allocation decision in the hands of investors themselves. You are in control of how you want to distribute your money among the broad class of instruments and when you want to do it or pull out. Any of the products mentioned above except term products could be unit-linked.

Whole Life Insurance

Whole life insurance covers you for as long as you live if your premiums are paid. You generally pay the same premium amount throughout your lifetime.
Some whole life policies let you pay premiums for a shorter period such as 15, 20 or 25 years. Premiums for these policies are higher since the premium payments are made during a shorter period. There are options in the market to have a return of premium option in a whole life policy. That means after a certain age of paying premiums, the life insurance company will pay back the premium to the life assured but the coverage will continue

Money Back Insurance

The money back plan not only covers your life, it also assures you the return of a certain per cent of the sum assured as cash payment at regular intervals. It is a savings plan with the added advantage of life cover and regular cash inflow. This plan is ideal for planning special moments like a wedding, your child's education or purchase of an asset, etc. Money back plan have "participating" and "non participating" versions in the market.

Working for Aviva

The business landscape in the insurance sector is rapidly evolving with an enhanced focus on responsive 'go to market' strategy, innovative and flexible product portfolios, cutting edge processes and systems, robust distribution models, diversified investment options and high quality talent.

We at Aviva India believe in defining the market by continuously creating competitive advantage on a sustainable basis on the back of becoming a 'trusted adviser' of our key stakeholders and creating 'customers for life'.

The open and transparent culture at Aviva encourages individuals to create their own boundary, take risks and realise their potential. This has been done to enable them to expand their horizons for both personal and professional growth. By sharing our strategic direction, business performance and success stories, we encourage employees to become our 'Partners' in driving critical business agendas. Empowerment, confidence in abilities, recognition and support are some of the key building blocks for encouraging the spirit of entrepreneurship and passion for winning at Aviva.

At Aviva, we give you the opportunity to chart your own destiny, as you grow with and contribute to building the organisation.

Fire Insurance

Fire Insurance is governed by All India Fire Tariff effective from 31.3.2001 issued by Tariff Advisory Committee, a Statutory Body. It is a commercial policy covering building, offices, machinery, contents and personal belongings of the office. It mitigates the risk of loss of customers arising from fire breakout. The insured should take all possible steps to minimize the loss.

Calculation of Fire Insurance Amount/Premium:

The market value of the property is considered while insuring the sum. The amount of premium depends on a number of factors and individual policies of different insurers.

Fire Insurance Claim Procedure:

* Individuals/corporates must inform insurer
as early as possible , in no case later than 24 hours.
* Provide relevant information to the surveyor/claim representative appointed by the insurer.
* The surveyor then analyzes the extent/ value of loss or damage.
* The claim process takes anywhere between one to three weeks

Long Stay Travel Insurance

Long stay travel insurance comes in a variety of flavours ranging from the young backpacker or gap year student looking for adventure and the opportunity to see the world before settling down to 40 years of daily grind right through to the 75 year old grans and grandads who want to spend the winter visiting their grandchildren in Australia. We provide below details of various long stay travel insurance policies available for all ages from 18 to 89. Policies designed for the younger people include cover for a wide range of sports together with winter sports cover. Sadly if you're an 80 year old great grandmother with a penchant for white water rafting then I'm afraid that we'll have to negotiate a special rate on that policy.

Income Protection Insurance

Payment Protection Insurance - Otherwise known as Income Protection Insurance. Similar in many ways to Mortgage Protection Insurance, this is a more flexible cover that can be used for any number of purposes. The main differences between the two types of policy are outlined below :-
Mortgage protection insurance benefits are paid directly to the lender i.e. the building society or bank that granted the mortgage, whereas payment protection benefits are payable directly to you.

Payment protection benefits can be used for any purpose. They can be used to pay mortgage payments, but the premiums for mortgage protection insurance are cheaper.

Mortgage protection insurance can cover 100% of your mortgage payments up to a maximum of 65% of your normal income. Payment protection can cover up to 75% of your income.

Mortgage protection insurance gives 3 months free cover on every new policy, and the premiums are slightly less than for payment protection insurance. It is not unusual for a customer to take out both types of policy, one to cover mortgage payments, the other to pay loans etc and to provide living expenses in the event of a claim.

Travel Insurance

Our travel insurance providers all offer an easy to use online system that lets you buy your travel insurance online. The cover can be arranged within a matter of minutes and in all cases the certificate can be printed from your PC, truly instant holiday insurance.
Each of the insurers below offer a variety of policies able to cover everything from a weekend in Paris to 12 months backpacking around the world. Their customer care is second to none, giving you total peace of mind without having to worry about what to do should things go wrong. They are all internet travel insurers with policies underwritten by major international insurance companies.
Quotes can be obtained for a single trip of any duration from 1 day to 18 months, annual multi-trip cover, or the special 'BackPackers' policy of 6, 12 or 18 months.

Employers Liability Insurance

Not so long ago, when all insurance was done via a broker, there was a clear line between employers liability insurance and public liability insurance. Public liability insurance was insuring you and / or your staff against any claim made by the general public, whereas employers liability insurance covered you or your company against claims made by members of your staff. The advent on online insurance has allowed the insurance companies to build more complex products that offer both of the above types of cover together with other benefits. These products are variously called business insurance or tradesman's insurance or liability insurance. The public liability insurance page has business insurance from all of the leading online insurers. Basically the insurers will now build a product containing whichever elements you require.

If you employ staff, however small the company, it is a legal requirement to take out employers liability insurance, so that you and they are protected if they need to claim as a result of some act or omission of yours.

We are delighted to be working with 4 of the UK's leading employers liability insurers.

professional indemnity insurance

Professional indemnity insurance covers you against claims where you have provided advice or services, in a professional capacity. Some of the modern business insurance products that can be found on our public liability insurance page have indemnity insurance combined with public and employers insurance to offer a single insurance product to suit many small businesses.

Insuredrisks.co.uk is one of the leading providers of online business insurance. Since starting at the end of 2002, the company has issued over 30,000 online policies. Try their link first, answering just 7 simple questions will get you an online quote for professional indemnity insurance. Policies can be bought online and all certificates and policy documents are delivered electronically for you to print immediately. Should your profession not be covered by the online quote system insuredrisks.co.uk has access to Lloyds brokers that enables almost all risks to be covered.

Public Liability Insurance

If you are a self-employed tradesman or small business, your livelihood could be ruined by one simple error. Public Liability insurance is designed to shield you from this, by covering you against damage to property occurring in the course of your trade. Cover can be arranged for up to £10 million, and is now often a requirement for corporate employers.

Unfortunately the culture of claiming millions of dollars in damages for anything and everything has found its way across the Atlantic and we are now seeing huge rises in premium costs for all types of liability insurance. Even more disturbing is the fact that fewer and fewer insurers are offering policies, making it ever harder to get underwriters to cover particular risks.

An equally frustrating situation is that many councils and organisations are demanding that public liability insurance be in place before their buildings, grounds or playing fields can be used for leisure purposes such as exhibitions, fetes, parties or whatever. The cost of insurance for such a one-off event has risen to ridiculous levels and I'm afraid that we are now looking at premiums of at least £100 for such cover.

Having painted such a gloomy picture, we are delighted to be working with some of the UK's leading providers of online liability insurance.

Transport Insurance

Car Insurance

Both in the High Street and in the Hyperspace world of the Internet, the motor insurance marketplace is an area of keen prices and tight margins. Most of the large direct insurers now have an internet presence, together with the traditional insurance companies, and many of the larger brokers. The amount of information that you must input before you can get a quote varies greatly from site to site, so follow our hints below if you really are in a hurry.

We are continually scouring the web, looking for the best car insurance offerings, and we've tried to bring you the best of the bunch, with a mixture of brokers and direct insurers. Please try and find time to get quotes from at least two or three of our sites, since they all vary dramatically depending on the parameters input. Good Luck.

Bike Insurance

The insurers featured below offer the very best deals on all type of bike, scooter and moped assurance. They are a mixture of online direct insurers and traditional brokers but they all offer the same high class of customer care combined with low online prices. An insurance is influenced by a number of factors such as the area that you live in, engine size, your age and insurance history etc. We strongly advise you to obtain a quote from several of the insurers listed. Although it's a pain, the savings that can be made will make it all worthwhile.

Van Insurance

All of our commercial vehicle insurers offer a wide range of cover and pricing options, and special schemes for many different trades. They specialise in selling van assurance on the internet, they pride themselves on offering a high standard of customer care, and should be able to beat all high street quotes. Give them a try, they might be able to save you a considerable sum on your commercial insurance premiums.

Caravan Insurance
The purchase of a go anywhere home is a dream that is shared by millions of people. However the purchase of a touring caravan is a serious financial outlay and it is essential that your caravan is properly insured and secured. Our insurers offer the very best online caravan insurance available in the UK.

Cycle Insurance

Each year, over 150,000 bikes are stolen and 26,000 cyclists are involved in accidents - shouldn't you be insured? More disposable income is being spent on leisure activities year on year but unfortunately leisure equipment and accessories are seen as rich pickings by would-be thieves. Many household insurance policies don't fully cover leisure items, or even if they do the cover can be expensive. Both of our cycle insurance providers offer a value for money product and should be able to beat all high street quotes. Give them a try, they might be able to save you a considerable sum on your bicycle insurance premiums.

Breakdown Insurance

You don't want your car to break down, but you know it's going to happen one day - and inevitably at the worst time. Roadside rescue breakdown insurance comes in a variety of flavours, the more features that you add, the more expensive the product, and the greater the peace of mind to you, the driver. Both of the insurance brokers featured below offer an excellent value for money product. As always, we advise you to obtain more than one quote since premiums vary greatly between insurance companies depending on the weighting that they apply to the various variables that determine the cost of a particular product.

Income Protection Insurance

Payment Protection Insurance - Otherwise known as Income Protection Insurance. Similar in many ways to Mortgage Protection Insurance, this is a more flexible cover that can be used for any number of purposes. The main differences between the two types of policy are outlined below :-
Mortgage protection insurance benefits are paid directly to the lender i.e. the building society or bank that granted the mortgage, whereas payment protection benefits are payable directly to you.
Payment protection benefits can be used for any purpose. They can be used to pay mortgage payments, but the premiums for mortgage protection insurance are cheaper.
Mortgage protection insurance can cover 100% of your mortgage payments up to a maximum of 65% of your normal income. Payment protection can cover up to 75% of your income.
Mortgage protection insurance gives 3 months free cover on every new policy, and the premiums are slightly less than for payment protection insurance. It is not unusual for a customer to take out both types of policy, one to cover mortgage payments, the other to pay loans etc and to provide living expenses in the event of a claim.

Mortgage Protection Insurance
Mortgage Protection Insurance continues to pay your mortgage payments during unemployment or disability. Payments are made for a maximum fixed term, usually one or two years. You may be able to obtain cheaper mortgage protection cover by using an age rated payment protection plan such as the PayProtect product

Life Insurance

The insurers shown below quote online for UK life insurance. You are encouraged to get quotes from a number of companies, a half hour spent online could save you hundreds of £££s in life insurance premiums. On this website you will find pages of insurers offering a variety of general insurance available to residents of the United Kingdom. The products include home, van, motorcycle, travel, life and pet insurance. As we only display insurers who provide quick online quotations for UK residents you can instantly compare quotes

Student Insurance

Student insurance is a must if you're living in digs, a flat, shared accommodation or a hall of residence. Your personal possessions stand a very real chance of being stolen or destroyed. Can you afford to replace them? The cost of insurance is extremely small if you compare it to the replacement cost should the unexpected happen.

Wedding Insurance

Today's average wedding costs well over £10,000. Did you know that you can be held financially responsible for the behaviour of the guests at your reception ?. Wedding insurance policies bring financial safety to the various expenses associated with the modern wedding.

Home Insurance

We offer you a choice of home insurers. Each of them offers some excellent, value for money prices on house and contents insurance, and no single one is consistently cheaper than the others. They all offer a variety of policies providing house and contents cover and several offer specialist policies for special circumstances such as holiday homes, listed buildings and leased properties. We've tried to point out the strong points of each one, but if you have the patience, we would strongly advise you to get a quote from at least two of them. We are confident that all of them offer extremely competitive quotes for buildings and contents insurance and rest assured that each of them has a customer care policy that absolutely guarantees…