INSURANCE PROVIDER GROUPS

Aetna Medicare

2009-12-29T22:33:00.000-08:00

2010 Aetna Medicare Plan information is now available

Great news! We have new plans available for 2010! Enter your zip code above and click “Submit” to see what’s now available in your area.

Not eligible for Medicare?

See what other Individual plans Aetna has to offer.

Health Insurance and Products for Individuals

Are you struggling to find good health insurance coverage for you and your family? Running your own business or working for a company that doesn't offer health insurance?

Perhaps you've been laid off. Believe it or not, you may have more options available to you than just COBRA.

Whether you are a recent graduate, or early retiree — or perhaps you are just new to buying insurance on your own — we can help. Aetna Advantage Plans for individuals, families and the self-employed are designed to make it easy for you to find and choose the coverage that's right for you and your family.

Are you a small business looking to insure 2 to 50 employees? If so, please visit the Small Group Employer section of our website.

Questions? Please send us an e-mail, we're here to help.

Not sure which health insurance plan is best for you?

The NEW Aetna Benefits Advisor can help guide you.

What is the new Aetna Benefits Advisor?
It's a tool that is interactive. And it's easy to use. Get started now.

Aetna Advantage Plans for individuals, families and the self-employed are underwritten by Aetna Life Insurance Company (Aetna) directly and/or through an out-of-state blanket trust. In some states, individuals may qualify as a business group of one and may be eligible for guaranteed issue, small group health plans.

These plans are medically underwritten and you may be declined coverage in accordance with your health condition.

This material is for information only and is not an offer or invitation to contract. An application must be completed to obtain coverage. Rates and benefits vary by location. Health insurance plans contain exclusions and limitations. The Aetna Personal Health Record ("PHR") should not be used as the sole source of information about the member's health conditions or medical treatment. Information is believed to be accurate as of the production date; however, it is subject to change.

Universal Life Insurance

2009-12-29T22:25:00.000-08:00

Universal Life Insurance is a form of permanent life insurance. It can provide affordable guaranteed protection and flexibility.

A Universal Life insurance policy provides flexibility that allows you to change, within limits, the death benefit and the timing and amount of your premium. You can build your policy's cash value, or pay a lower premium and focus more on guaranteed protection.

MetLife's Guarantee Advantage Universal Life insurance can be right for you if you want:

Protection that can last a lifetime
The flexibility to choose between two policy designs:
- Protection plus cash accumulation, or
- Focus on affordable guaranteed protection
An option for a lifetime of guaranteed monthly income for your beneficiaries

Some things to consider about Universal Life Insurance:

Cash value growth is based on periodically-declared fixed interest rates. Should rates fall, cash accumulation could suffer, and higher premiums may be needed
Changing your policy's premium or death benefit can affect your policy's performance and guarantees, possibly requiring higher premiums later.

Your MetLife representative can help you determine whether Guarantee Advantage Universal Life insurance makes sense for you and your family.

¹ In the Guaranteed Protection policy design, departing from the payment schedule or making other changes to your policy may affect this guarantee and higher premiums could be required to keep the policy in force.

² Withdrawals or loans will reduce your policy's death benefit.

³ Reducing or stopping premium payments can affect your cash value and death benefit, and may cause certain benefits to be lost.

⁴ Some riders may not be available in all states. Optional riders are generally available for an additional fee and are subject to underwriting, contractual terms, conditions and limitations as specified in the policy. Most riders can be selected only when you apply for your policy.

Guarantees apply to certain insurance and annuity products (not securities, variable or investment advisory products) and are subject to the insurer's claims-paying ability and financial strength.

Like most insurance policies, MetLife's policies contain exclusions, limitations, reductions of benefits and terms for keeping them in force. For complete costs and details, see your MetLife Financial Services representative.

Guarantee Advantage Universal Life Insurance is issued by Metropolitan Life Insurance Company, New York, NY 10166 in New York State (policy form #1E-34-07-NY) and by MetLife Investors USA Insurance Company, Irvine, CA 92614 in all other states and jurisdictions (policy form #5E-34-07).

Business insurance

2009-12-29T22:21:00.000-08:00

Do you own a business? If you do, our staff can coordinate all of your insurance coverage to be certain that your family, your business, and your employees have peace of mind.

IPG can coordinate coverage for your business and personal life.

Life Insurance Types

2009-12-01T23:08:00.000-08:00

There are several different life insurance types and products available. These are the most common:

Life Insurance Type One: Term Life Insurance

Term life insurance type provides protection for a specified period of time. If you do not currently have life insurance, term can be a good place to start. It's generally less expensive than permanent life insurance, and is available in varying term periods with fixed premiums from a one- (annual renewable term) to 20-year period (level term). Furthermore, term insurance is sometimes convertible to permanent coverage, providing you with flexibility as your needs change.

Term insurance comes in two basic varieties: level term and decreasing term. These days, almost everyone buys level term insurance. The terms ��level�� and ��decreasing�� refer to the death benefit amount during the term of the policy. A level term policy pays the same benefit amount if death occurs at any point during the term.

Common types of level term are:

yearly renewable term
5-year renewable term
10-year term
15-year term
20-year term
25-year term
30-year term
term to a specified age (usually 65)

Yearly renewable term, once popular, is no longer a top seller. The most popular type is now 20-year term. Most companies will not sell term insurance to an applicant for a term that ends past his or her 80th birthday.

If a policy is ��renewable,�� that means it continues in force for an additional term or terms, up to a specified age, even if the health of the insured (or other factors) would cause him or her to be rejected if he or she applied for a new life insurance policy.

Generally, the premium for the policy is based on the insured person��s age and health at the policy��s start, and the premium remains the same (level) for the length of the term. So, premiums for 5-year renewable term can be level for 5 years, then to a new rate reflecting the new age of the insured, and so on every five years. Some longer term policies will guarantee that the premium will not increase during the term; others don��t make that guarantee, enabling the insurance company to raise the rate during the policy��s term.

Some term policies are convertible. This means that the policy��s owner has the right to change it into a permanent type of life insurance without additional evidence of insurability.

Life Insurance Type Two: Whole Life Insurance

Whole life insurance type covers you for your entire life, not just for a specific period such as term insurance. Your death benefit and premium in most cases will remain the same. Whole life insurance also builds cash value, which is a return on a portion of your premiums that the insurance company invests. Your cash value is tax-deferred until you withdraw it and you can borrow against it.

Unlike term life insurance, a portion of your premium money goes toward your cash value which in turn could pay off your entire policy only after a few years. Also, your premium will remain constant during the time you are covered unless you choose otherwise. And, unless you make a change to your whole life insurance policy, you have lifelong coverage with no future medical exams. Whole life is also a good choice because of the tax savings.

The rate of return on a whole life insurance policy is very low compared to other investments, even with the tax savings factored in. Most investment professionals would agree that life insurance should not be used solely as an investment tool and you should judge your policy choices on the protection and not the rate of return. But, if you are in need of life insurance, the tax benefits and cash value is an added bonus when purchasing protection for your loved ones.

Life Insurance Type Three: Universal Life Insurance

Universal life insurance type is also called adjustable life insurance. Remember that, with permanent life insurance, some of your premium is invested. Features of universal life include:

Flexible premiums. After you pay an initial premium, universal life insurance provides flexibility in paying your premiums. For example, if the portion of invested premiums is growing, you can pay future premiums from this buildup in value.
Of course, the investment performance determines how much, if any, flexibility you have to modify your premiums. With universal life insurance, you invest a part of your premiums in a money market account or similar investment that earns a stable, positive rate of return. Insurance companies also offer universal life insurance with a guaranteed minimum rate of return.

Cash value feature. The portion of invested premiums accumulates a cash value. This cash value is held in an accumulation fund. You can withdraw the cash value from a universal life insurance policy. You can also claim it as an asset when you apply for a loan. Any withdrawals from the accumulation fund are deducted from the policy's cash value.

While the invested premiums of a universal life insurance policy are generally restricted to safe, low-yielding investments, a variable universal life insurance policy lets you invest a portion of premiums in riskier investments such as stocks and bonds. Variable universal life is a hybrid. It combines features of universal life and variable life insurance.

Death benefit. With universal life insurance, your beneficiary receives a death benefit when you die. Your beneficiary generally does not owe federal income taxes on the death benefit. Death benefits are also free from probate costs and can be protected from creditors in case of bankruptcy. Because of these features, universal life insurance is often used in estate planning.

Life Insurance Long Beach - Kelly Williams Insurance Agency

Life Insurance

2009-12-01T23:02:00.000-08:00

Life insurance is a crucial step in planning for your future and the future of your loved ones. It can fulfill promises made to your family if you are no longer around by providing a death benefit to your beneficiaries in return for premiums paid to the insurance company. Life insurance can also provide benefits while you are living.

Advantages of the Death Benefit

Life insurance provides income tax-free money to your named beneficiary(s) that can be used to pay funeral expenses, debt, tuition, estate taxes or virtually any financial need you leave behind.
Life insurance can provide business security by enabling partners to buy out the interests of a deceased partner and prevent a forced liquidation.

Advantages of Living Benefits

The cash value growth of a permanent life insurance policy is tax-deferre1, which means you do not pay taxes on the growth of the cash value unless the money is withdrawn.
Loans or withdrawals can be taken against the cash value of a permanent life insurance policy to help with expenses, such as college tuition or the down payment on a Long Beach home.

Note: Accumulated growth may be taxable upon withdrawal. If the policy is a Modified Endowment Contract (MEC), tax penalties may apply prior to age 59. Consult a tax advisor on your specific situation. Policy loans and withdrawals reduce cash value and the death benefit and may be subject to other charges outlined in the contract.

Estate Planning for Unmarried Couples

2009-12-01T23:01:00.001-08:00

by Brian Redhead

In his article entitled “Estate Planning Tips for Unmarried Couples”, author Randy Hecht illustrates the profound challenges faced by unmarried couples in the realm of estate planning. Though he recognizes that the obstacles faced by such couples are comparatively major to those faced by married couples, he asserts that these obstacles are not insurmountable. Through careful strategizing and a thorough awareness of the legalities surrounding state-specific estate planning, unmarried couples can ensure that they have the same rights as their married counterparts.

Indeed, it is beyond unfortunate that, in the eyes of the law, couples that are unmarried, whether they’ve been together for one year or fifty years, are synonymous with strangers. According to the US Census Bureau, the number of unmarried couples is increasing by several million each year (Reeves, “Financial”). Such couples have no legal rights when it comes to property or healthcare, often creating painful circumstances when one partner is in extremely poor health or has passed on unexpectedly. Hecht offers the following suggestions for unmarried couples to effectively plan their estates to protect themselves against such dire circumstances: create a concrete power-of-attorney for each other, prepare a durable health care directive, and maintain updated beneficiary designations on all insurances. Additionally, unmarried couples with children need to often make special accommodations for all family members to ensure no one is slighted in the event of an unexpected death (Reeves, “Living”). While some states are trending toward broadening the rights of domestic partnerships, most states still require that unmarried couples take substantial precautions to ensure their rights are adequately protected.

References

Hecht, David (2004). “Estate Planning for Unmarried Couples”. Retrieved on March 18th, 2009,
http://www.aarpmagazine.org/people/Articles/a2004-03-19-mag-estateplan.html.

Reeves, Scott (2005). “Financial Tips For Unmarried Young Couples”. Retrieved on March 19,
2009 from
http://www.forbes.com/2005/08/02/finances-investing-livingtogether-cx_sr_0802shackingup1.html.

Reeves, Scott (2005). “Living Together Makes More Sense”. Retrieved on March 19, 2009
From
http://www.forbes.com/2005/08/03/marriage-finances-money-cx_sr_0803middleage.html

How to spend $700 billion in 6 months

2009-12-01T23:00:00.002-08:00

Post By: Dana Sunderlin

NEW YORK (CNNMoney.com) -- Remember that $700 billion financial sector rescue plan from October? It's all but spoken for.

After Treasury Secretary Tim Geithner promised to spend up to $100 billion on a toxic asset purchase plan Monday, only $10.2 billion remain unallocated in the Troubled Asset Relief Program.

After former Treasury Secretary Hank Paulson determined how Treasury would spend up to $460 billion of the funds in his tenure, the new administration has committed another $230 billion in just two months. But with the government's rescue programs still incomplete, Geithner may need to ask for more.

(For a look at how Treasury and other government agencies have used taxpayer dollars to rescue the economy, click here.)

"Secretary Geithner is going to need to go to Congress and ask for more money sooner rather than later," said Anne Vorce, policy director at the New America Foundation, a public policy think tank. "He's done everything possible not to go back to Congress, but now the amount left is a worry."

Click to Read More

Top lenders pull plug on small biz loans

2009-12-01T23:00:00.001-08:00

Copied and Pasted by Daniel Powell

NEW YORK (CNNMoney.com) -- At a time when small business owners desperately need loans and credit lines to help them weather the recession, some of the industry's most active lenders have bolted shut the doors to their vaults.

Temecula Valley Bancorp (TMCV) and Capital One Bank (COF, Fortune 500) have stopped taking applications for new loans through the Small Business Administration's flagship 7(a) loan program, and Bank of America (BAC, Fortune 500) has slowed its lending volume to a trickle. Small Business Loan Source, a non-bank SBA lender that specialized in commercial real estate financing, is closed to new applications and leaving all new SBA lending activity to its parent company, First Bank in Clayton, Mo.

These four institutions were among the 30 largest SBA lenders in the 2008 fiscal year, accounting for 4% of the program's loan volume, or $524 million of the $12.8 billion that waslent to nearly 70,000 businesses, according to data compiled by Coleman Publishing, which monitors small business lending trends.

The article talks about how banks are slowing and some are altogether stopping to loan to small businesses at a time where they may need it most.

View the original article HERE

Toxic Asset Plan

2009-12-01T22:59:00.000-08:00

Post By: Dana Sunderlin

President Obama’s administration recently drew up a plan to use capital injections as an incentive, in order to get private investors to buy up a trillion dollars worth of bad assets from those banks who are currently reluctant to give out loans to different consumers and companies. Along with these incentives, private investors would receive federal loans to buy the assets. Treasury Secretary Timothy Geithner feels that it would be “cheaper to provide taxpayer financing than have the government buy the assets outright.”

Many people feel that the toxic asset plan is not the answer for a revival of credit markets. It has been found that this new prospect that taxpayers may need to pay for underperforming assets is making banks reluctant to sell these bad assets off to lower bidders. The plan has made banks afraid to buy and to sell, since the government’s plan for these toxic assets has created additional value for them; “As long as there’s the prospect the federal government will overpay for the toxic assets…these banks would be insane to sell in the private market.” As a result, the plan is not resolving anything.

However, President Obama’s take on the plan is that it is a critical element in the revival of our economy and he is confident that it will work. Treasury officials reportedly have no solid forecast on when these asset purchases will actually begin, although many believe that it will be within a few weeks.

Sources:

http://www.msnbc.msn.com/id/29817617/

http://www.reuters.com/article/newsOne/idUSTRE51B27A20090212

http://www.financialexpress.com/news/us-could-use-capital-injections-for-bad-asset-plan/434279/

Today's Job Market and Your Work-Life Balance

2009-12-01T22:58:00.002-08:00

By: Jeremy Radnor

Everywhere you look today, it seems there is more evidence of the poor job market and weak economy. The media would lead you to believe that things cannot get any worse and we are facing the end of the world. This is obviously an exageration but the current situation should not be taken lightly. It is time to take a closer look at the job market and how people are coping and behaving.

To begin with, recently the unemployement rate has reached a 17 year high. As terrible as this is, people are quick to forget that still over 90% of the US is employed. This means that more than 9/10 people have a job. None-the-less, as things seem to turn increasingly worse, the work-life balance that has been stressed in the past is quickly being forgotten. Employers and employees used to promote a balanced approach to work and life. This has benefits for both the employee and employer. Employees have more free time and feel better. This leads to better work in the work place. Today, there is no balance. It would appear the work force has been divided into two segments, work and life.

The work group can be divided into two additional segments. The first group being those who work to ensure they are employed. This group consists of employees who work ridculous hours in a day just to ensure they arent fired. The second group are those who work out of love. With the job market as it is, many people have been forced to try new and different careers (careers of passion). Employees are finding themselves feeling happier and more fulfilled.

As for the life group, these people have decided to simply ignore the current situation. This is extremely evident within generation-Yers. Many generation-Yers are taking the current situation as an opportunity. Yers have been using their severance pay or unemplyoyment aid to simply live it up. Yers have been quoted saying they are gonna take their severance and backpack through India or they use it to go out and party. Although these may not be good fiscal decisions, they are definitley enjoying life.

This leads me to the point of this article. Just because things are a little worse than usual, it doesnt mean everything changes. Work-life balance is still a vital aspect of a successful life (professionally and personally).

Links:

http://www.msnbc.msn.com/id/29832932/

http://www.msnbc.msn.com/id/29306449/

http://www.msnbc.msn.com/id/29662606/page/2/

Toxic asset plan nears completion

2009-12-01T22:58:00.001-08:00

By: Jeremy Radnor

WASHINGTON - Treasury Secretary Timothy Geithner could announce as soon as Monday his much-anticipated plan to get toxic assets off the books of the country's struggling banks, administration and industry officials said.

The plan will use the Federal Reserve and the Federal Deposit Insurance Corp. to make the resources of the government's $700 billion financial rescue fund go further, the officials said Friday.

Geithner is being forced to tap the Fed and the FDIC for support because the prospects for getting additional money from Congress for the bailout effort have dimmed significantly given the recent uproar over millions of dollars in bonuses provided to troubled insurance giant American International Group Inc., the largest recipient of government support.

To read more click here.

Link:

http://www.msnbc.msn.com/id/29807119/

How to become an estate planner?

2009-12-01T22:56:00.002-08:00

Written by: Liwin Troy Lee

An estate planner is someone who plan for individual or corporate estates. Estates are collection of assets a person or entity obtained during their lifetime. Estate planning include drafting a will or trust fund, tax planning and planning for the amount of money you contribute to charity after you die.

1) Complete an advanced degree in law, finance or accounting. All three of those degrees gives you an education to make you qualify to work as an estate planner.

2) Enroll in a Certified Estate Planner Program. One of the most prestigious programs is National Institute of Certified Estate Planners.

3) Complete the course work to receive your Certified Estate Planner Degree. Some of the coursework will cover estate planning, gifting, joint ownership accounts.

4) One you pass all your coursework, you are qualified to sit for the Certified Estate Planner Exam. the exam consist of 100 multiple that covers all the material you have learned in your course work. You can take the test as many times a you want. There is, however, a $10 retesting fee.

5) After you get your certification. You must meet all the degree requirements. Generally you have to take 8 to 16 CPE credits every two years. An example of a CPE course includes advanced estate planning.

6) Agree to follow ethics set by the National Institute of Certified Estate Planners. This includes reading issues on professional ethics held by the organization such as not revealing you client's confidential information or engage in illegal activities. You have to sign a statement saying you have read the document.

7) Start promoting yourself as a certified estate planner.

Sources
National Institute of Certified Estate Planners
How to become an estate planner
Accredited Estate planners

Estate Planning: Online Information

2009-12-01T22:56:00.001-08:00

By Nicholas Vanikiotis

Let’s face it, pretty much everyone and everything today is online, whether it is banking information or social networking sites. Who will control such sites and gain access to them when you pass away? This is a question people should ask themselves, especially when we are living in a digital age. Putting account IDs and passwords in either a safety deposit box or a virtual deposit box is not a bad idea.

Imagine if you did not have any of your accounts or passwords stored for your beneficiaries. This would make it very tough for them to gain access to money and any other delicate information. In most cases they will have to get a court order that will cost your beneficiaries time, money, and the hassle of going through the process.

There are many online deposit options available. For example, Wells Fargo offers an online protection service of all your financial documents, which can include your will and any other estate plan documents you may have. They are also not very expensive at all. For example, keepyousafe.com only costs $50 per year for up to 5 gigabytes of storage. Thus, placing your account information in a secure place is a valuable investment and will ensure that your beneficiaries can gain access to your accounts after you pass away.

http://online.wsj.com/article/SB124796142202862461.html?mod=relevancy

http://www.atelier-us.com/consumers-and-ecommerce/article/wells-fargo-to-offer-online-safe-deposit-box-for-the-security-minded

http://www.nolo.com/legal-encyclopedia/checklist-29472.html;jsessionid=2CC16BF05710149684C5A4BCBDB28D42.jvm1

http://www.keepyousafe.com/pricing.php

Estate Planning Help

2009-12-01T22:55:00.000-08:00

In these economic times more and more people are worried about their money and what will happen to it. There are a few options for you to explore. One of these is to visit a financial planner or specialized estate planner. Another option is to go to a seminar to learn what you can or should be doing.
The seminars have lawyers and professional planners who speak and answer your questions. They speak on topics from your estate to long term care (and LTC Insurance). Many seminars are free, while some are at a cost. It is a smart idea to attend one to get some basic information to mvoe you on the right track, but visiting a planner is still a must to ensure your estate and needs are met in the most efficient manner.

Posted by Chris Keeler

http://www.bristolpress.com/articles/2009/09/13/news/doc4aadb6a03741a150155695.txt

http://www.themorningsun.com/articles/2009/09/13/business/srv0000006367756.txt

http://pr-usa.net/index.php?option=com_content&task=view&id=262441&Itemid=33

Life Insurance: A Component of Estate Planning

2009-12-01T22:54:00.002-08:00

By Nicholas Vanikiotis

Life Insurance is one of the many components when planning your estate. It plays a slightly different role than the other assets in your estate. It is intended to make sure your estate has value at the time of your death. Thus, it is important to understand the different options available and to make sure it is included and given the proper attention when planning your estate.

The two main types of life insurance are whole life and term life insurance. The main difference is that whole life is permanent while term life is not. Term life insurance is a short-term option, which is usually taken by people who are younger since it is inexpensive relative to whole life insurance. Term insurance is taken out for a specific purpose and only last for five to ten years. This may be a good option for a young doctor going to work overseas in a hostile area where death is more likely than at home. Another aspect of term insurance is the premiums increase over time.

Whole Life is the other option of insurance. This one is a lifetime commitment and attached by a savings component, which you have the opportunity to invest in different investment vehicles of your choosing. There are variations of whole life insurance that give you more freedom regarding the terms of the policy and how the savings component is handled.

http://www.investorguide.com/igu-article-348-life-insurance-types-of-policies-and-provisions.html

http://www.rhondasherwood.com/pdfs/EstatePlanning.pdf

http://www.newyorklife.com/nyl/v/index.jsp?vgnextoid=c4bc2f5a919d2210a2b3019d221024301cacRCRD

Estate Taxes for Estate Planning

2009-12-01T22:54:00.001-08:00

A lot of the estate planning process focuses on reducing or trying to eliminate taxes. The government imposes a tax known as the Unified Gift and Estate Tax which puts a tax on the transfer of your property to others both during your lifetime and when you pass away. But not everyone will have to pay federal estate taxes. According to estateplanninglinks.com, “If your estate falls under the government exemption your trustee/executor does not have to file an estate tax return (Form 706) and pay the required tax within 9 months of your death.” It’s important to know what property will be included in your estate for federal estate tax purposes. The estate includes all property owned by the decedent at the time of death: investments, cash, real estate, vehicles, personal property, life insurance proceeds from policies owned by the decedent within three years of death, life insurance paid to the estate, retirement assets and business interests.

There are some estate tax exemptions that can be helpful. The first is personal exemption, The "personal estate tax exemption" allows a certain amount (or all) of a deceased person's estate to transfer free of the estate tax. Next, there is a marital deduction. According to findlaw.com. “A deceased person's estate can pass tax free to a surviving spouse, as long as the surviving spouse is a U.S. citizen and his or her interest in the estate is not a nondeductible terminable interest. A nondeductible terminable interest is an interest in the property that is held by someone other than the surviving spouse.” And lastly there are other deductions which include; against the gross estate include certain administrative expenses, funeral expenses, claims against the estate, certain taxes and other indebtedness and charitable bequests.

With everything that has to do with estate planning, you should always consult a professional. According to Forster, “Should you realize that your assets do fall under the category of taxable, you should start looking for an estate planning tax consultant. There are a lot of ways you can protect your possessions from taxation laws. Most of these methods include different types of trusts that will give you estate-tax exemption. Living trusts also allows you the freedom to control your possessions while living, and care for your spouse and/or heirs without having to go through months of probate.” It is best to have an estate planning adviser who can regularly update your trusts and will. He can also monitor any amendments in estate-tax laws and make any necessary adjustments. This way, your beneficiaries will be protected from any new laws that may prevent them from receiving your bequests.

Sources: http://www.estateplanninglinks.com/epl_course/taxes.htm

http://estate.findlaw.com/estate-planning/estate-planning-taxes/estate-planning-taxes-overview.html

http://www.streetdirectory.com/travel_guide/143756/taxes/the_benefits_of_estate_planning_tax_advice.html

Tax Friendly Places for Retirement

2009-12-01T22:53:00.000-08:00

Posted by: Janielle Viggiano

No matter where you live, the federal taxes will be about the same. But you'd be amazed at how much your state and local tax burden may vary. And if you itemize deductions, how much you pay -- and deduct -- in local property taxes could affect the bottom line of your federal return, too.

People planning to retire "often use the presence or absence of a state income tax as a litmus test for a retirement destination," says Tom Wetzel, president of the Retirement Living Information Center. "But higher sales and property taxes can more than offset the lack of a state income tax."

Seven states -- Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming -- have no state income tax. Two states -- New Hampshire and Tennessee -- tax only dividend and interest income that exceeds certain limits. But many of the remaining 41 states (and the District of Columbia) that impose an income tax offer generous incentives for retirees. If you qualify, moving to one of these retiree-friendly areas could be cheaper than relocating to a state with no income tax.

Click here to read more!

Insurance for Your Future

2009-12-01T22:52:00.000-08:00

By: Laura Reginelli

Losing a loved one is emotionally devastating. On top of that, families then have to endure the financial burden of losing someone as well. According to State Farm, life insurance “is protection against financial loss resulting from death. It is an insurance company's promise to pay your beneficiary a specific amount of money when you die in exchange for timely payment of premiums.”

Although the subject of death is a touchy one, it is important to make sure that your family will be covered if you are to pass away. On top of losing someone that you deeply care about you could also possibly lose a substantial source of income on top it that. With that being said, it makes sense to purchase life insurance before any medical problems occur and when you are healthy. Generally the older one becomes, the more expensive his or her policy will be due to the increased chances of death or medical problems. There are two specific types of life insurance offered, term and permanent. With term insurance you gain coverage for a set amount of time, pay a lower rate in the short run and find it easier to comprehend. However, with permanent life insurance the protection spans a lifetime, has higher premiums but in turn can help you build up equity. Whichever you decide is best, it is important to make sure that both you and your family are insured for the uncertainty of the future.

Sources: http://money.cnn.com/magazines/moneymag/money101/lesson20/
http://www.statefarm.com/insurance/life_annuity/life/life.asp
http://www.metlife.com/individual/insurance/life-insurance/index.html#types

Probate

2009-12-01T22:51:00.000-08:00

Probate is how an estate is distributed in court or the legal process of administering a deceased persons estate as per their will. This process is usually only gone through when there are significant assets to be transferred. This does not include life insurance or retirement benefits which have a set beneficiary. A living trust is not subject to probate.
The court appoints an executor who will be in charge of managing the estate. When there is no will then the court names an administrator. Either of these hold a fiduciary duty to the family and the court to act on another's (the deceased) behalf. AS an executor you do get paid for your service, depending on the size of the estate.The will can be contested and this begins another process to resolve it.

Trusts vs Wills

2009-12-01T22:50:00.002-08:00

By Jessie Bruyn

A trust is an agreement between two people in which one person manages the property and assets of another person - the beneficiary. There can also exist a living trust in which the specified person manages the assets of the other person in the event that they are disabled and cannot manage their property by themselves. When the person dies, the trustee becomes responsible for the assets and allocates them to desired individuals.
A will, on the other hand, is a legal tool used only after the individual is deceased. The only say in the division of assets with a will is the creator, whereas with a trust the trustees have access and rights as well. When creating a will, the person appoints an Executor to handle the business and distribute the assets. Wills usually require Probate, or court involvement. However, having a responsible Executor helps eliminate the court's involvement in distribution after the death of a loved one.
Initially, a will is less expensive but can require more expenses after the death. On the otherhand, a trust is more expensive at first, but requires less expenses after death.

http://www.premack.com/columns/2003/2003-03-04.htm
http://legal-dictionary.thefreedictionary.com/will
http://legal-dictionary.thefreedictionary.com/living%20trust

Estate Planning

2009-12-01T22:50:00.001-08:00

The Benefits of Budgeting

2009-12-01T22:49:00.000-08:00

Post by Shawn Chandok
Article by Paul Sullivan

Now Even Millionaires Can See the Benefits of Budgeting

SOMEONE with $100 million has nothing to fear, not even fear itself. But not long ago, a client with such assets called and asked Bruce Bickel, her wealth adviser at PNC Wealth Management, to put her on a budget.

“She said we’ve never done this before, and we think we should,” said Mr. Bickel, managing director of private foundation management services at PNC. “It’s all relative. Their loss has put them in a fear response.”

That mindset is a direct result of the financial panic that turned one year old this week. At this time last year, Richard Fuld was center stage in the financial crisis; Ken Lewis, chief executive of Bank of America, was being hailed as Merrill Lynch’s savior; and Bernard L. Madoff was little known beyond the financial world.

None of that is true today. And even though a year has passed, wealthy investors remain cautious.
The Boston Consulting Group predicted this week that worldwide wealth would not return to 2007 precrisis levels until 2013. It also said it found that the number of millionaires was down 18 percent and that, across the board, clients of wealth management firms had lost trust in their advisers.

Click here to read more!!

Estate Planning: Why is it important?

2009-12-01T22:48:00.000-08:00

Article by Pat Perkins

Post by Shawn Chandok

What is an Estate Plan?
Simply put, an estate plan is a blueprint designed during a person’s life for the purpose of specifying the manner in which a particular estate will be disposed of after death. An estate plan typically attempts to conserve estate assets by reducing tax liability and other expenses as well as eliminating uncertainties with respect to the administration of a probate. (A probate is the process of certifying the validity of a will by judicial means.) Depending on your goals, your concerns regarding the legacy you want to leave behind, your family structure and the number and kind of assets you own, your estate plan could be simple or complicated. The process of estate planning usually entails the input of one or more specialized, professional advisors including your lawyer, financial planner, accountant, life insurance agent, banker and broker

Why Do I Need an Estate Plan?
If you don’t own anything of value and have no living relatives, pets or children, then you probably don’t need a will. You can die “intestate” (without a valid will) and your personal items will be distributed according to your state’s laws. However, this description applies to a very, very few. The rest of us whether married or single, young or old and with or without children need to have some sort of estate planning in place in the event of our deaths.

As Ben Franklin once opined, “In this world nothing can be said to be certain, except death and taxes,” but with good estate planning, you may be able to at least reduce some of the taxes your estate will be required to pay upon your death. These taxes, called estate taxes, are determined by an assessment of the total gross value of your estate; they are levied when you die and can eat into the value of the estate you leave to your heirs or beneficiaries. If you want to control the disposition of your assets–home, car, pets, money, stocks & bonds, life insurance, personal valuables–as opposed to letting Uncle Sam decide for you, then you need a proper estate plan. You might not be able to take it with you, but you sure can decide who gets what you leave behind.

Click here for more information!!

Your Financial Future: Getting Your Will Right

2009-12-01T22:47:00.002-08:00

Post by David Held

Your Financial Future: Getting Your Will Right
You may need legal help to have things turn out the way you want
By: Martha M. Hamilton

It’s easy enough to understand why most of us are reluctant to write a will. Who wants to confront mortality?

I finally drafted a will about 10 years ago after my lawyer sister insisted. I realized that if I were to die before my pending divorce was final, everything would go to my soon-to-be-ex-husband unless my will said otherwise, and that turned out to be just the motivation I needed.

Now things have changed, and I really need to pull together a new will. It has been on my to-do list for more than two years.

And yet, I haven’t done it, and I suspect I’m not alone. So I turned to Edward L. Weidenfeld, a highly respected lawyer whose specialty is estate law, to ask how people can get themselves motivated to prepare for the inevitable. And what he said was persuasive.

First, when you die there is going to be “a division of your worldly goods, and if you don’t say with some precision how you want it done, the court’s going to apply standards that may not reflect your wishes, and be more expensive,” he said.

But, more important, he added, “it’s really the caring thing to do. Just like you don’t like a houseguest who leaves everything in a mess, most people really don’t want to pass on a mess for their family.”

One legacy you don’t want to leave behind is a family fighting over your assets.

Click HERE to read on!

Death Panel

2009-12-01T22:47:00.001-08:00

Post by David Held

Everyone knows that planning estate is a tremendous task that most people do not want to do. No one wants to plan his/her death, but it has to be done! Planning is not only done with your family, but physicians and lawyers, as well. Planning an estate does not only have to only be about distributing belongings, it also has to do with how you are treated when you are in the last stages of life. Do you want a do not resuscitate clause, meaning if you flat line in the hospital or anywhere you are getting treated you do not want them to bring you back to life(no paddles/electric shock to the heart).

Bill Thomas, M.D. of Ithaca, N.Y. says, “The entire point of doing this planning is thoughtful communication with a physician and creating some documents that can guide your care…It’s so you decide.” As I stated before not many people want to have this conversation, but it is completely necessary! This should definitely be done if you are diagnosed with a terminal disease, but it should be done in your 20’s. It is better to be safe than sorry, especially when it comes to your life.

All of this should be included in your living will. “A living will is a document that tells doctors and medical professionals your wishes regarding life-and-death decisions such as whether to accept or refuse life-prolonging treatment after a critical accident. You should complete documents recognized by your state.”

Source #1, #2, #3

Estate Planning: What You Need to Know

2009-12-01T22:45:00.002-08:00

By PAUL SULLIVAN

Estate planning rarely gets the attention it should get.

Saving for your children’s education, purchasing a second home, deciding when and how to retire — these are all topics that people talk about with their friends and their financial advisers. But deciding what happens to whatever is left of your money when you die is often passed over. It shouldn’t be, though, because it is crucial to a financial plan.

But not discussing something that is going to happen will not stop it from happening. And at some point, someone is going to have to sort out your estate — regardless of how big or small it is. Here are some ofthe key issues that should be addressed:

Read On

Poor Credit Personal Loans – Credit Report Repair Helps Lower Rates

2009-12-01T22:45:00.001-08:00

Poor credit personal loans are a financial tool that many Americans are using to help get some extra cash. Going through a credit report repair program could go a long way towards getting you lower interest rates. Your ultimate goal in getting a poor credit personal loan should be to get the lowest interest rate you can get without having to pay any extra fees. Some personal loan companies will lower your rate but watch out for the fees up front that could end up costing more.

Many personal loan companies offer borrowers up to $25,000 if they qualify. You may not need this much money but it could go a long way towards paying off bills and digging yourself out of the hole of bills everywhere. Although most financial planners suggest not using debt to pay off debt it might be a good idea to help get some bills out of the way if you get a low interest rate on a personal loan. It would not be advisable to pay off debts with a lower interest rate though.

It should not be difficult to find a poor credit personal loan company out there as they are advertising all over the Internet and on the television. If you watch CNBC or FoxBusiness at all you know exactly what I am talking about. It seems like every single time there is a commercial break there are several ads for debt consolidation or personal loans. This is not a bad thing if you need these services; make sure to jot down the number of these companies when you do see the commercials.

Click here to read more...

The Estate Tax: A New Conspiracy Theory

2009-12-01T22:44:00.001-08:00

Post by David Held
By CATHERINE RAMPELL

The political fight over the estate tax, the subject of a weekend article in The Wall Street Journal, may soon be re-engaged in Congress.

In 2001, President Bush pushed through a law that gradually decreased the levy on heirs over the course of a decade, until the estate tax finally disappears altogether in 2010. In 2011, though, the tax will rebound to its pre-Bush levels.

This policy quirk has spawned lots of “throw momma from the train” jokes among tax wonks, since potential heirs stand to gain a lot by having their rich relatives die in 2010. But the estate tax law also has implications for the federal budget.

Let’s say Congress, distracted by health care reform, leaves the current estate tax laws untouched. If a rich person dies at 11:59 p.m., Dec. 31, 2010, the government won’t get a dime. But if, through the wonders of modern Medicare-financed medicine, he manages to hang on another minute and instead dies at the stroke of midnight on Jan. 1, 2011, the government collects 55 percent of his net estate worth over $1 million.

Hmm. I smell a new job for those “death panels.”

Click here to read on!

Estate Planning Tips

2009-12-01T22:42:00.000-08:00

By Shawn Chandok

By now, I think Dave, Ahmed and I have discussed the components of estate planning enough to say we can almost consider ourselves as experts. This is exactly why I have decided to provide some common estate planning tips that can be applied to anyone.
First and foremost, the most important part of estate planning is obviously having a will. Once this is established, you should make sure your will is notarized with the correct number of witnesses. This number varies from state to state and avoids any post death problems between beneficiaries. In addition, beneficiaries should never sign the will as a witness.

Another important tip should include naming an executor who will manage your estate from the moment you die until your wealth is distributed. Usually most people use their lawyers however this is a very important job, so make sure your lawyer is someone who is both trustful and dependable.

If you are a person with an exceptional amount of accumulated wealth, an irrevocable living trust maybe more beneficial tax wise. I say this so because in 2007 and 2008 only people with assets greater than $2 million had to pay estate taxes. In 2009 that number has increased to $3.5 million and it is expected to rise in 2011. An irrevocable living trust such as an Irrevocable Life Insurance Trust “is commonly used to remove the value of property from a person’s estate so that the property can't be taxed when the person dies. In other words, the person who transfers assets into an irrevocable trust is giving over those assets to the trustee and beneficiaries of the trust so that the person no longer owns the assets. Thus, if the person no longer owns the assets, then they can't be taxed when the person later dies.” Thus, it is clear how trusts are more tax friendly.

Source#1
Source#2
Source#3

Insurance & Technology

2009-11-30T20:53:00.000-08:00

November 20, 2009

Honor Roll: This Week's Top Insurance Blogs (Nov. 15-21)

Our favorite insurance technology-related blog posts from around the Web (November 15-21, 2009):

Tectonic shifts: HP Plus 3Com versus Cisco Plus EMC

Technology industry analyst Judith Hurwitz write that the implications HP’s planned acquisition of 3Com go further than what meets the eye. “It also pits HP in a direct path against EMC with its Cisco partnership,” Hurwitz suggests.
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An Exciting New Day

AgencyPort’s Steve Hauck offer his perspective on the company’s recent acquisition by Sword Group. “AgencyPort management will remain intact and business will operate the way it always has,” he writes.
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‘Tis the Season for Overflow Help (look to the Cloud?)

This post is ostensibly about security risks related to cloud computing, but the real interesting bit is at the end, where Javed Ikbal breaks down the 67 days it (allegedly) takes to fix a cross-site scripting problem.
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Text Mining: The Intersection of Content & BI

“In most cases text-mining software is pointed at electronic documents, such as call center comment fields, e-mail-based surveys and online feedback forms, but there are still lots of paper documents out there,” writes Intelligent Enterprise’s Doug Henschen in this post about structured and unstructured text mining.
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November 17, 2009

Government Report: NY Fed Could Have Done More in AIG Negotiations

Apparently, the New York Fed could have done more last year when it was negotiating with AIG trading partners. At least that's what Troubled Asset Relief Program special inspector general Neil M. Barofsky suggests in a government report officially released today.

From the New York Times:

UBS, of Switzerland, alone offered to give a break to the New York Fed in the negotiations last November over how to keep A.I.G. from toppling and taking other banks down with it. It would have accepted 98 cents on the dollar.

But UBS's good-faith gesture was quickly drowned out by Goldman Sachs and the top French bank regulator. They argued, with others, that it would be improper and perhaps even criminal to force A.I.G.'s trading partners to bear losses outside of bankruptcy court.

The banks and the regulator were confident that the New York Fed was not willing to push A.I.G. into bankruptcy, because earlier in the fall the New York Fed had stepped in with $85 billion to prop up the insurer.

The New York Fed, led then by Timothy F. Geithner, who is now the Treasury secretary, therefore had little leverage in the negotiations, according to a post-mortem of what has emerged as the most inflammatory episode in the rescue of A.I.G.

Read the full story here.

November 16, 2009

Mere Efficiency Insufficient for Securing Positive Return-on-Assets

With the announcement of the Deloitte Shift Index this morning, a recent I&T Blog contribution from Guidewire's Marcus Ryu gains credibility. Readers may recall that Mr. Ryu discussed diminishing returns from mere efficiency improvements, arguing that insurers should emulate the transition that occurred in manufacturing from efficiency/automation-orientation to precision-orientation, lean manufacturing techniques and just-in-time production/inventory approaches.

The argument about the limits of mere efficiency appear to be supported by Deloitte's report that despite major improvements in labor productivity over the last four decades, many US industries — including insurance — have experienced alarming decreases in their return-on-assets.

According to a Deloitte source, the insurance industry's average return-on-assets has dropped by 142% from 2.6 to negative 1.1%. The source further asserts that technology does emerge as a differentiating factor between insurers, with adoption of digital infrastructure the key difference between top and bottom performers.

Delioitte shared with me other factors affecting capital performance within the insurance industry:

— Insurance is labor intensive, which is not expected to be alleviated except by technology.

— Inability to grow market share – with gains generally at the expense of competitors rather than the opening of new markets – pressures profitability.

— Firms with the best return-on-assets capitalize on technology to generate higher returns.

— The rate at which companies lose their return-on-assets leadership is due to greater dependence on the a volatile stock market.
Low competitive intensity, mainly due to high barriers to entry, benefits insurance.

November 13, 2009

Honor Roll: This Week's Top Insurance Blogs (Nov. 8-14)

Our favorite insurance technology-related blog posts from around the Web (November 8-14, 2009):

The Role of the Modern Insurance CIO

Celent's Craig Weber shares his impressions of today's insurance carrier CIOs, having spent time with many of them at a recent industry conference. In a completely unrelated story, Craig Weber recently spent time with many insurance carrier CIOs at I&T's 2009 Executive Summit.
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Finally! Offshore Firm Buys McCamish

Novarica's Matt Josefowicz, who appeared in an I&T video earlier this week, expresses his lack of surprise regarding InfoSys Technologies' Acquisition of McCamish Systems.
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It's World Usability Day!

Bruce Temkin quotes Mahatma Gandhi in this post on scenario design and usability, and suggests that firms should place more value on improving ease of use. In a related post, he shares data from Forrester's Customer Experience Rankings, naming the Top 25 companies (including a couple insurers) in its Ease of Use Index.
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How MDM Helps Meet Data Warehousing Promises

Initiate's Lawrence Dubov discusses how the concept of master data management (MDM) co-exists with the data warehousing (DW) and operational data store (ODS) concepts developed in the 80s and 90s. "MDM takes the science and art of data warehousing dimensions and ODS development to the next architectural level," Dubov suggests.
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November 12, 2009

Accenture/Guidewire Battle Rekindles

The latest salvos in the Accenture/Guidewire legal battle have been fired, with Accenture filing a new suit on Nov. 10 in the Delaware District Court, adding to the exiting case before Judge Sue L. Robinson. Guidewire fired back the next day with a press statement alleging, in essence, that Accenture was engaging in what observers of the software industry and others have sometimes termed "competition by litigation." Accenture has now reacted to Guidewire's statement.

Insurance & Technology received the following response from Accenture this morning:

"Defendants typically attack a patent’s validity as a defense, however, we are confident that our patents will be upheld both at trial and by the patent office.

"The Accenture Claim Components Solution currently helps process 40 million property and casualty insurance claims globally, including approximately one-third of all insurance claims in the United States. It is recognized to be one of the most innovative technology solutions in the insurance industry, with eight US and 10 other worldwide patents granted since 1999. It was the first Web-based claims solution on the market, the first deployed to 20,000 claims handlers in a single implementation, and was the highest analyst-rated claims solution in 2009.

"When anyone violates our intellectual property, we will pursue all appropriate legal remedies to protect it."

We'll be reporting in greater depth over the coming days about the meaning of this latest development and the potential impact of the matter once verdicts in the specific actions are reached.

Esurance: The Differences Between E-Commerce Companies and Insurance Companies

The night before Esurance CIO Phil Swift teamed with his colleague, director of systems engineering Deepak Srinivasan, to deliver the opening presentation of the 2009 Insurance & Technology Executive Summit, he told me that one of his big picture goals was to get Esurance to operate and think of itself more as an e-commerce company and less as a traditional insurance company.

The notion was interesting to me because, at a macro level, I was easily able to wrap my head around the differences between the two approaches. However, I had trouble when I searched for specifics. In my head, there were differences between an e-commerce company and a traditional insurance company and the way each operates and approaches technology, but the differences were visceral. When it came down to details such as how each handled business models, project management, IT decision making and establishing business goals, I found it difficult to put the approaches of insurance companies in one column and the approaches of e-commerce companies in another.

In their presentation, entitled "Customers Versus Costs: Negotiating the Balance Between Service and Efficiency," Swift and Srinivasan laid out Esurance's approach to technology and innovation. Based on their presentation, I'd have to say that the most important technology virtue at the San Francisco-based carrier is flexibility. Swift described the carrier's project management strategy as a flexible process and one that allowed high-impact projects to jump to the top of the queue as priorities shifted.

This was most evident when the economic crisis hit last fall and Esurance's business goals shifted from growth to loss ratios, profitability and conversion rates, Swift said.

In addition, Srinivasan noted how the company was flexible and able to move quickly when it discovered in 2008 that its JD Power customer service rankings compared unfavorably to its competitors. The carrier responded quickly by prioritizing several customer service-related IT projects. By April 2009, those projects were delivered. In the most recent JD Power report, Esurance showed marked improved, moving to the middle of rankings with regard to its competition.

The question that I have is: Is flexibility and the value a company places upon it what differentiates an e-commerce company from an insurance company? It seems to be something that Esurance, an organization that fashions itself as an e-commerce company, values highly. However, it's also something that most traditional insurance carrier CIOs value as well. Perhaps what we're really talking about here isn't a specific e-commerce strategy compared to a specific insurance carrier strategy. Maybe this is just a case of two different states of mind.

November 11, 2009

Executive Summit Report: Controlling Your Destiny During Organizational Change

Among all the advice I've heard about how to undertake a successful merger, one of the most unusual recommendations comes from Russ Bostick, EVP, Technology & Operations, Conseco Services LLC.

In a presentation on “Controlling Your Destiny: Navigating Change from a Position of Strength” at last week’s Insurance & Technology Executive Summit, Bostick confessed, “I hang out with the smokers,” noting that this practice is an effective way to hear rumors and gauge what employees are thinking during times of turmoil. In fact, making sure that people don’t have too much time on their hands to gossip and speculate is critical, according to Bostick. “Keep idle hands busy,” he emphasized.

While cultural and workforce issues are among the most challenging aspects of a merger that the CIO must address, they are among many potential hurdles IT executives will have to address in the course of a merger, Bostick pointed out. Ultimately, whether an executive is on the acquiring or to-be-acquired side of the deal, it’s important to “be a leader,” rather than a follower, Bostick stressed. Essential capabilities include “flexibility, resiliency and [being] adaptable,” he said. “As CIO, you have to become Machiavellian” as IT often must “reorganize to prepare for a merger.”

If a CIO doesn’t have these skills, “you won’t be involved -– you will be marginalized,” Bostick said. “The CIO should have a strong role in negotiating outcomes –- that forms a common language to talk to the [people] you’re acquiring or being acquired by.”

The importance of shedding distractions when it comes to successful completion of a merger was also stressed by Mark Esposito, CIO, Hartford Life, who used the phrase “focusing forward” in describing IT’s role -– not only in a merger but also in today’s more difficult business environment. “Focusing forward means spending more time on delivering business value [versus] delivering technology services,” he said. The leadership team needs to refocus on growth, Esposito added, which includes “looking for differentiators and aligning innovation” as well as looking to “drive different business models and partnerships.”

At the same time, in an M&A situation technology leadership needs to be opportunistic, Esposito told the Executive Summit audience. Among his recommendations: Have a pre- and post-sale “playbook”; have clarity on the deal’s objectives and key performance indicators; set up a “disciplined” integration office that can handle “end to end” requirements; and, perhaps most importantly, “Finish the job.”

Esposito was equally emphatic about the need for CIOs and other technology executives to proactively face the requirements and risks of the current business environment. In fact, he suggested that the turmoil the industry has faced actually has created favorable conditions to “present business ideas and options,” adding that senior management and business executives “are more open to listening” as opposed to the “don’t mess with success -– my business is growing” attitude of more stable times.

Esposito challenged the Executive Summit attendees with this question: “How opportunistic have you been?” and exhorted them to “unlock areas that deliver value.”

AIG's Benmosche Threatens to Quit

Today's Wall Street Journal reports that AIG CEO Bob Benmosche told board members that he was "done," having reached a high pitch of frustration over government constraints, and in particular compensation limits. After shocking the board, he said he would think it over but doubts remain as to his continued tenure. The article reports:

Last week, Mr. Benmosche and other AIG board members met with [federal "pay czar"] Mr. Feinberg in New York. During the three-hour meeting, board members discussed difficulties of complying with pay policies and retaining talent at the company. Mr. Benmosche's frustrations "hit a crescendo," said a person familiar with the matter. "Bob feels he is in an impossible situation," the person added. Mr. Benmosche didn't respond to a request for comment.

The article also notes that this isn't the first time Benmosche has threatened to quit, and that he has a reputation for making incendiary remarks calculated to motivate others to adopt his recommendations.

That may be, but this is surely the Mother of All Incendiary Remarks, the "nuclear option" of threats. A correspondent of mine argues that one "can't shake the devil's hand and then say you're kidding." Another argued that perhaps the meaning of the story is that Benmosche is a big personality chafing at what he should have known: that this situation requires a kind of submission to a higher authority that previous positions have not. Some question whether Benmosche is just in it for the money.

No doubt an ego such as Benmosche's chafes at having to submit to AIG's new federal overlords. But maybe he is sincere in his complaint that he's been put in an impossible situation. And even if the threat is a maneuver to trigger a policy change, surely we can appreciate that he is earnestly worried about the effects the policy may have on AIG's chances for success. The charge that Benmosche's antics reflect that he's in it for the money strikes me as absurd. Even if he were just in it for the money, then his behavior would indicate his genuine belief that government policy was going to undermine AIG's, and therefore his, success.

Let's say your brother-in-law nearly drove his business into the ground. You step in as an investor for the sake of the family, pouring in a significant portion of your own money into the enterprise. To punish your B-in-L for being such a good-for-nothing, you proceed cut the salaries of all the company's sales reps, even though they can command a better salary at competitors. No one in his right mind would do this, including the decision-makers of the federal government. But then they're not investing their own money in AIG.

November 09, 2009

J.D. Power: Insurers' Service Can Trump Price

Like the children of Lake Wobegon, it turns out that P&C call centers as a class are above average. That piece of information was shared by Jeremy Bowler, senior director, insurance practice, J.D. Power & Associates, speaking at Insurance & Technology's 11th annual Executive Summit in Phoenix last week. That level of performance is just as well, given that a slight edge in customer satisfaction can make a significant impact on a company's bottom line, according to Bowler.

Customer service expectations are "industry neutral," Bowler noted, saying that as a consumer "every service experience informs your expectation of the next one." That being the case, it has become common practice for companies to closely track customer experience across other industries. That means that insurers wishing to increase customer sat need to keep a close eye on the best practitioners of customer service, regardless of industry.

These insights constitute reinforcement rather than news, when bolstered by survey data from J.D. Power, but Bowler shared further insights, some counterintuitive. Providing customer service has a defensive aspect, especially for an industry as challenged in its public image as insurance. However, good customer service can give a significant edge to companies in the areas of retention, reduced acquisition costs and increased pricing power, according to Bowler.

High customer satisfaction is a critical brand-builder for an industry that depends on a perception of trust. Brand perception drives customer acquisition and ensures high rates of retention. For example, Bowler noted that nearly half (46 percent) of customers reporting high levels of satisfaction will not switch their company for any price. Critically, Bowler observed, a relatively minor improvement in service, such as a tweak to a Web site or call center, can drive an improvement in an insurer's overall customer sat score.

Happy customers are more likely to stick around, and when insurers take trouble to communicate their value proposition, those customers are more likely to stay customers even when premium prices are raised, Bowler reported.

November 06, 2009

Best Practices: Replacing Legacy Policy Production Systems

By Jerry Driscoll, HP Exstream

Insurance companies are inherently dependent on document-intensive processes. From quotes and policies to billing statements and claims, it is easy to see why it is so crucial for insurers to have the most reliable and efficient document automation solutions to streamline these processes. The recent announcements regarding some of the older policy production systems being discontinued has flooded the market with conflicting messages concerning next steps and which document solution is best. Whether your current policy production solution is outdated, inefficient or sun-setting, there are a number of factors to consider before replacing it.

Reasons to Change

Before you decide to change to a new document automation solution, it is important to evaluate the drivers within your organization for making such a change. Key drivers include:

• Risks to mission-critical functions. Policy issuance is a fundamental function for insurance carriers and any disruption would be considered, by any CIO, to be a catastrophe. This risk has greatly increased in the last 12 months with the announcement that many popular solutions will no longer be supported or enhanced in the near future. Without someone to call when the system goes down, organizations are exposed to significant operational and financial risk.

• Pressure to reduce operational costs. Insurance companies incur significant costs associated with customer communications and policy production, including document development time. By continuing to utilize a legacy system, tasks ranging from integrating, extracting and normalizing data from back-end systems to implementing new lines of business are time-intensive and expensive. Adopting a modern enterprise document automation solution allows you to streamline processes and significantly reduce document management and development time so you can focus on capturing more business rather than operations that support the business.

• Need to simplify the IT environment. Using one system to produce policies, another to generate claims correspondence and yet another to deliver annual statements is an inefficient use of IT and financial resources, and prevents consistent communications to members. When evaluating new document automation solutions, find one that supports policy production as well as member communication needs from a single platform, scales for future business requirements, and supports collaboration on document creation.

• Market pressures to become more competitive. By upgrading legacy policy production and member correspondence systems, insurers can eliminate bottlenecks, reducing costs and enhancing the member experience. An effective enterprise document automation solution allows insurers to create policies and other member communications that are relevant and personalized to their needs, consistent in look and feel, and easier to understand, allowing insurers to more effectively combat competitive pressures.

Finding the Right Solution

Now that we have established the drivers which necessitate upgrading your policy production systems, knowing what to look for in a new solution is vital.

1) A reputable supplier. North American insurers need to look beyond the software itself and select a technology partner who is reliable and committed to continued innovation. Consider factors such as the size of the vendor, how long they have been in business and their presence worldwide.

2) An enterprise platform, not just a point solution. Look for an enterprise platform that supports design, creation, delivery, and management of all member communications, regardless of type (e.g., billing notices, claims, quotes, proposals, etc.), complexity, or delivery channel.

3) Compatibility with your environment. A solution that fits well into your existing IT environment is a must for any solution that you consider. It should allow you to utilize your existing hardware, printers and data files, and should not force you to change these. Often, companies can get bogged down with simply converting their data to make it ready for the new system. Insurers should look for a solution that can easily access and leverage existing content in its native format without having to transform or manipulate it.

A Strategy for Conversion

Much like a new homebuyer can get lost in the excitement of the new features and amenities of their future home, overlooking the necessary steps they must take in order to actually make the move, it is important for insurers replacing legacy policy production systems to consider vendors with a proven conversion strategy in addition to attractive software features. Insurers should also look to peers who have already made a conversion to better understand what they can expect. Lastly, insurance companies should look for a document automation solution with features that promote ease-of-use (backed by industry analysts), minimal IT support, higher productivity, and the ability to create complex documents.

It can seem overwhelming to consider migrating to a new document automation solution; however, selecting the vendor with the right solution and notable experience in conversion can alleviate this anxiety. After you have made the move to your new document automation platform, the ease of use, increased productivity and agility it provides will ensure you are well prepared for the future.

About the Author:Jerry Driscoll is Sales Director, Financial Services and Insurance Division, HP Exstream. He is responsible for directing HP Exstream’s business development for all North American financial services and insurance markets.

Celent Research Finds Carriers Optimistic

As ominous economic indicators continue to financial services horizon, insurance technology officers remain remarkably optimistic, as measured by recent Celent research findings shared by Craig Weber, senior vice president of the analyst firm's insurance group, at Insurance & Technology's Executive Summit earlier this week during a session entitled "Taking Stock: Coping with the Crisis and Looking Ahead."

Celent surveyed several hundred respondents across different insurance sectors during the first, second and third quarters of 2009. When asked to assess their company's outlook from present to third quarter to a year from responding, respondents consistently reported a stable outlook growing rosier with time. While enthusiasm for the future moderated somewhat by the third quarter survey, optimism remained intact.

Similarly, when asked how the financial crisis would affect IT projects, only small percentage thought the impact would be high, while roughly half saw a moderate to low impact over the three quarter iterations of the survey. Drilling down into areas of investment, Weber reported that there was high activity in a number of areas, including analytics. That area, he remarked, "is hot, hot hot. People seem to be investing in this area up to 20 percent more than a year ago, and about 45 percent said it was an area of high investment."

These recent findings more or less confirm the outlook that has prevailed since budget season 2008: the insurance industry hasn't been hit as hard as other financial services sectors, and despite a very uncertain economic outlook, well-capitalized insurers are moving forward with transformational initiatives.

Weber's presentation also inadvertently called out the differences between the insurance sectors. During the question and answer period, the CIO of a major life insurer expressed skepticism about optimistic budget predictions. Weber explained that he was averaging the results of all responses, a significant proportion of which were from P&C insurers.

As bad economic news continues to arrive — such as unemployment cracking 10 percent — its understandable that optimism faded in Celent survey respondents, if only a small amount. No one knows what the future will bring, but as insurers finalize their budgets, Celent's information confirms the pattern set last year: insurers remain cautious about discretionary spending, they are exercising greater financial diligence and slowing their technology investment decision-making, but in terms of larger modernization efforts, they are staying the course.

November 05, 2009

Honor Roll: This Week's Top Insurance Blogs (Nov. 1-7)

Our favorite insurance technology-related blog posts from around the Web (November 1-7, 2009):

The CIAB/LexisNexis Insurance Exchange: Who Owns The Data?

AgencyPort's Mason Power takes a closer look at the CIAB/LexisNexis insurance exchange. "...carriers must sign an agreement to be part of the exchange. A pivotal part of the agreement is data ownership," Power writes.
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Lightyear Capital buys 3 ING Broker-Dealers

Novarica's Robert Ellis provides some perspective on Lightyear Capital's acquisition of three ING broker-dealers. "Even without the urgency of having to raise the cash, this deal makes sense as product manufacturers continue to separate themselves from their captive distribution channels to avoid any perceived bias toward proprietary products," Ellis writes.
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Infuse Emotion Into Experience Design

Forrester's Bruce Temkin suggests that it's time for companies to make emotional connections with customers and potential customers online. In this post, he shares bits of a report he worked on with primary author Ron Rogowski, comparing the virtues of functional Web site design with those of Emotional Experience Design.
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The Brittle Nature of Data Warehouses

"I think you'll agree that, for many reasons and by many measures, data warehouses haven't fully delivered on their promise. Let's examine the four main issues that traditional data warehouse ecosystems have struggled with," begins Marty Moseley of Initiate's Mastering Data Management blog.
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Customer Service and the Economic Crisis: What Changed?

During his presentation at the 2009 Insurance & Technology Executive Summit, AXA Equitable EVP and CIO Kevin Murray discussed the major impacts of the economic crisis on his organization.

In the presentation, "Managing in Crisis: Adapting to Changing Enterprise Priorities," the 2009 Elite 8 honoree recalled that, as a result of the crisis, AXA Equitable was impacted in three way main ways: products (especially those that had annuity guarantees), capital constraints and customer service.

The customer service impact was felt almost immediately. When the financial news really started to sound ominous last fall, AXA Equitable's customer service areas experienced increased call volumes and calls that lasted two to three times as long as usual. To get a better idea of what was happening, Murray used the carrier's call center technology capabilities to listen in on incoming calls. What had changed, he discovered, wasn't simply that more people were calling in or that people were staying on the phone longer. The nature of the calls had changed.

Here are some examples of what customers were saying, according to Murray:

"Oh good, you answered the phone. My money is still there."

"Thanks for talking to me. Would it be OK if I called back tomorrow?"

"I'm driving down there. I'm going to take my money and put it in my mattress."

The crisis had significantly changed the kinds of customer service interactions the carrier was having. AXA Equitable's customer service team, temporarily at least, had to change its approach. Problem solving wasn't as important as reassuring customers, on a very basic level, that the company was stable and that their money was safe.

Carrier Opportunities

2009-11-30T20:52:00.000-08:00

1) Insurance companies is committed to a policy of equal employment opportunities and welcomes people irrespective of their race or gender. All appointments are made on the basis of merit and candidates are placed in jobs for which they are best suited.

2) They provide their employees with life-long employment and career growth. Their employee development and qualification enhancement program provides opportunity to talented people to grow and rise to the highest levels of management through a policy of promotion from within and continuous development. In return they ask for dedication, hard work and professionalism

3) They hold their employees in the highest esteem and they do all they can to increase their self-worth so that the employee can achieve fulfillment and full potential. Pay and performance are linked and rewards and recognition go to those who consistently outperform.

4) Work of all employees is directed through a comprehensive performance management system which interlocks business objective with individual goals, targets and work plans; evaluates results and achievements; provides feedback and counseling; and forms the basis for performance and potential review, merit, increases, salary position, career plans, training and development.

LIFE INSURANCE

2009-11-30T20:50:00.002-08:00

For most people, the purpose of life insurance should be to replace the financial contribution made by a family member.
Life insurance can be pure insurance, which pays only on the death of the insured, or cash value insurance, which also has a savings vehicle. Most people who need life insurance are better off with pure insurance and saving for retirement through other vehicles.
Proceeds from life insurance cover three types of expenses: replacement of the policyholder's income or work, estate taxes, and burial costs. When you consider the amount of insurance to buy, consider the following:

1. Most of the life insurance should be on a family member whose salary is important to the family budget.

2. Consider a relatively small life insurance policy on a stay-at-home parent to cover child care and other expenses.

3. Don't buy life insurance on children. Instead, buy life insurance on other family members for the benefit of children.

4. Consider reducing the amount of life insurance you have as you build more financial assets.

5. Pass on credit life insurance and mortgage life insurance if you can. These plans are restrictive and expensive. Buy more general life insurance instead if you feel a need.

6. Pass on life insurance altogether if you are single and don't have anyone depending on you. At most, get a small policy to spare your family burial expenses.

You should buy about 12 times the amount of money you would need annually to replace what the family member is contributing. For example, if you would need $40,000 a year to replace the death of an employed member, you would need a $480,000 (rounded to $500,000) policy.

Car Insurance

2009-11-30T20:50:00.001-08:00

Your auto insurance protects you from economic losses if you ever meet with a vehicle accident or some other unforeseen event. Auto insurance is basically an agreement with the insurance company and you. You make a premium payment to the insurance company and in return the company agrees to pay for your losses as promised in the insurance policy.

Travel Insurance

2009-11-30T20:48:00.000-08:00

f you are planning to travel outside the country may be for a business trip or just for leisure time, having a travel insurance plan will be an intelligent choice. In the earlier times making a choice for the travel insurance was a costly affair. But now, with the changing times, it has become a necessity. Usually full travel insurance will cost you around a maximum of six to seven percent of your travel cost.

When you are deciding for a travel insurance plan you are looking at two major points:

- Coverage for the abandonment or interrupted of your travel due to some particular reasons.

- Due to some medical reasons.

Coverage for the loss of personal belongings is not a good choice as the medical evacuation in some emergency and a trip interruption. Medical expenses are very high in some country and if you had to make payments by yourself then you can be in serious financial botherations. So it is better to review your insurance policy regarding health again.

Travel insurance plan makes coverage for the unexpected events for example- some natural calamity, the hijacking of the airplane, an accident while you were on the way to the airport, or fire. If you make any alterations in your plans, if you have to make a stay due to your professional reasons, or you don’t have enough monetary funds then the insurance company won’t cover you. The insurance companies don’t accept the injuries made by yourself and if you have used some drugs.

Your travel insurance will cover your damages just incase the travel agency due to some reasons closes their business and if you have made a purchase of the travel insurance plan from the traveling company itself then it is very difficult to get your losses covered. The coverage entirely depends on the policy statement and only some of the companies make a payment if the company is not functional for a maximum number of ten days or more than that if a case of bankruptcy is filed. But there are some travel companies they do not file any bankruptcy case they just flee away. It can really ruin away your plans if your traveling company or agent closes down their business unexpectedly.

Usually the traveling companies charge a maximum amount of seven percent of your travel cost for the following- medical assistance, abandonment of the travel. The cost depends on your age, your travel cost and the medical coverage. There are some travel companies and agents those are engaged in providing you the travel insurance straightway but it is not the best way to own it.

It is always best to review other rates to have a suitable deal. If you are planning to make a purchase from the travel agency then you would be in a loss as you never know when they will be closing their business. So you should always prefer to buy a travel insurance plan from a registered or a famous insurance company or agency.

Like the usual process of insurance you should be definite that you have enough coverage for the fulfillment of your requirements. If you have any valuable item then make sure to get it included in the policy statement. It is unimportant to calculate the price for the travel insurance with the condition where you don’t have travel insurance and might have to face some losses.

Health Insurance

2009-11-30T20:46:00.000-08:00

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Indemnification

2009-11-30T20:45:00.000-08:00

The technical definition of "indemnity" means to make whole again. There are two types of insurance contracts;

1. an "indemnity" policy and
2. a "pay on behalf" or "on behalf of"[3] policy.

The difference is significant on paper, but rarely material in practice.

An "indemnity" policy will never pay claims until the insured has paid out of pocket to some third party; for example, a visitor to your home slips on a floor that you left wet and sues you for $10,000 and wins. Under an "indemnity" policy the homeowner would have to come up with the $10,000 to pay for the visitor's fall and then would be "indemnified" by the insurance carrier for the out of pocket costs (the $10,000)[4].

Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured (the homeowner) would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language[5].

An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, called an insurance 'policy'. Generally, an insurance contract includes, at a minimum, the following elements: the parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss covered in the policy.

When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a 'claim' against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the 'premium'. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims—in theory for a relatively few claimants—and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (i.e., reserves), the remaining margin is an insurer's

Insurance companies

2009-11-30T20:44:00.000-08:00

Insurance companies may be classified into two groups:

Life insurance companies, which sell life insurance, annuities and pensions products.
Non-life, General, or Property/Casualty insurance companies, which sell other types of insurance.

General insurance companies can be further divided into these sub categories.

Standard Lines
Excess Lines

In most countries, life and non-life insurers are subject to different regulatory regimes and different tax and accounting rules. The main reason for the distinction between the two types of company is that life, annuity, and pension business is very long-term in nature — coverage for life assurance or a pension can cover risks over many decades. By contrast, non-life insurance cover usually covers a shorter period, such as one year.

In the United States, standard line insurance companies are "mainstream" insurers. These are the companies that typically insure autos, homes or businesses. They use pattern or "cookie-cutter" policies without variation from one person to the next. They usually have lower premiums than excess lines and can sell directly to individuals. They are regulated by state laws that can restrict the amount they can charge for insurance policies.

Excess line insurance companies (aka Excess and Surplus) typically insure risks not covered by the standard lines market. They are broadly referred as being all insurance placed with non-admitted insurers. Non-admitted insurers are not licensed in the states where the risks are located. These companies have more flexibility and can react faster than standard insurance companies because they are not required to file rates and forms as the "admitted" carriers do. However, they still have substantial regulatory requirements placed upon them. State laws generally require insurance placed with surplus line agents and brokers not to be available through standard licensed insurers.

Insurance companies are generally classified as either mutual or stock companies. Mutual companies are owned by the policyholders, while stockholders (who may or may not own policies) own stock insurance companies. Demutualization of mutual insurers to form stock companies, as well as the formation of a hybrid known as a mutual holding company, became common in some countries, such as the United States, in the late 20th century. Other possible forms for an insurance company include reciprocals, in which policyholders 'reciprocate' in sharing risks, and Lloyds organizations.

Insurance companies are rated by various agencies such as A. M. Best. The ratings include the company's financial strength, which measures its ability to pay claims. It also rates financial instruments issued by the insurance company, such as bonds, notes, and securitization products.

Reinsurance companies are insurance companies that sell policies to other insurance companies, allowing them to reduce their risks and protect themselves from very large losses. The reinsurance market is dominated by a few very large companies, with huge reserves. A reinsurer may also be a direct writer of insurance risks as well.

Captive insurance companies may be defined as limited-purpose insurance companies established with the specific objective of financing risks emanating from their parent group or groups. This definition can sometimes be extended to include some of the risks of the parent company's customers. In short, it is an in-house self-insurance vehicle. Captives may take the form of a "pure" entity (which is a 100% subsidiary of the self-insured parent company); of a "mutual" captive (which insures the collective risks of members of an industry); and of an "association" captive (which self-insures individual risks of the members of a professional, commercial or industrial association). Captives represent commercial, economic and tax advantages to their sponsors because of the reductions in costs they help create and for the ease of insurance risk management and the flexibility for cash flows they generate. Additionally, they may provide coverage of risks which is neither available nor offered in the traditional insurance market at reasonable prices.

The types of risk that a captive can underwrite for their parents include property damage, public and product liability, professional indemnity, employee benefits, employers' liability, motor and medical aid expenses. The captive's exposure to such risks may be limited by the use of reinsurance.

Captives are becoming an increasingly important component of the risk management and risk financing strategy of their parent. This can be understood against the following background:

heavy and increasing premium costs in almost every line of coverage;
difficulties in insuring certain types of fortuitous risk;
differential coverage standards in various parts of the world;
rating structures which reflect market trends rather than individual loss experience;
insufficient credit for deductibles and/or loss control efforts.

There are also companies known as 'insurance consultants'. Like a mortgage broker, these companies are paid a fee by the customer to shop around for the best insurance policy amongst many companies. Similar to an insurance consultant, an 'insurance broker' also shops around for the best insurance policy amongst many companies. However, with insurance brokers, the fee is usually paid in the form of commission from the insurer that is selected rather than directly from the client.

Neither insurance consultants nor insurance brokers are insurance companies and no risks are transferred to them in insurance transactions. Third party administrators are companies that perform underwriting and sometimes claims handling services for insurance companies. These companies often have special expertise that the insurance companies do not have.

The financial stability and strength of an insurance company should be a major consideration when buying an insurance contract. An insurance premium paid currently provides coverage for losses that might arise many years in the future.

Types of insurance

2009-11-30T20:41:00.000-08:00

Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as "perils". An insurance policy will set out in detail which perils are covered by the policy and which are not. Below are (non-exhaustive) lists of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set out below. For example, auto insurance would typically cover both property risk (covering the risk of theft or damage to the car) and liability risk (covering legal claims from causing an accident). A homeowner's insurance policy in the U.S. typically includes property insurance covering damage to the home and the owner's belongings, liability insurance covering certain legal claims against the owner, and even a small amount of coverage for medical expenses of guests who are injured on the owner's property.

Business insurance can be any kind of insurance that protects businesses against risks. Some principal subtypes of business insurance are (a) the various kinds of professional liability insurance, also called professional indemnity insurance, which are discussed below under that name; and (b) the business owner's policy (BOP), which bundles into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners insurance bundles the coverages that a homeowner needs.

Auto insurance

A wrecked vehicle

Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Auto insurance provides property, liability and medical coverage:

Property coverage pays for damage to or theft of your car.
Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

An auto insurance policy is comprised of six different kinds of coverage. Most countries require you to buy some, but not all, of these coverages. If you're financing a car, your lender may also have requirements. Most auto policies are for six months to a year.

In the United States, your insurance company should notify you by mail when it’s time to renew the policy and to pay your premium.

Home insurance

Home insurance provides compensation for damage or destruction of a home from disasters. In some geographical areas, the standard insurances excludes certain types of disasters, such as flood and earthquakes, that require additional coverage. Maintenance-related problems are the homeowners' responsibility. The policy may include inventory, or this can be bought as a separate policy, especially for people who rent housing. In some countries, insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household, including pets.

Health

Main articles: Health insurance and Dental insurance

NHS Facility

Health insurance policies by the National Health Service in the United Kingdom (NHS) or other publicly-funded health programs will cover the cost of medical treatments. Dental insurance, like medical insurance, is coverage for individuals to protect them against dental costs. In the U.S., dental insurance is often part of an employer's benefits package, along with health insurance.

Disability

Disability insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgages and credit cards.
Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work.
Total permanent disability insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance.
Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expenses incurred because of a job-related injury.

Casualty

Casualty insurance insures against accidents, not necessarily tied to any specific property.

Main article: Casualty insurance

Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.
Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss.

Life

Main article: Life insurance

Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity.

Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies and regulated as insurance and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance.

Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed.

In many countries, such as the U.S. and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death.

In U.S., the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles (e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation. A combination of low-cost term life insurance and a higher-return tax-efficient retirement account may achieve better investment return.

Property

Main article: Property insurance

This tornado damage to an Illinois home would be considered an "Act of God" for insurance purposes

Property insurance provides protection against risks to property, such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.

Automobile insurance, known in the UK as motor insurance, is probably the most common form of insurance and may cover both legal liability claims against the driver and loss of or damage to the insured's vehicle itself. Throughout the United States an auto insurance policy is required to legally operate a motor vehicle on public roads. In some jurisdictions, bodily injury compensation for automobile accident victims has been changed to a no-fault system, which reduces or eliminates the ability to sue for compensation but provides automatic eligibility for benefits. Credit card companies insure against damage on rented cars.
- Driving School Insurance insurance provides cover for any authorized driver whilst undergoing tuition, cover also unlike other motor policies provides cover for instructor liability where both the pupil and driving instructor are equally liable in the event of a claim.
Aviation insurance insures against hull, spares, deductibles, hull wear and liability risks.
Boiler insurance (also known as boiler and machinery insurance or equipment breakdown insurance) insures against accidental physical damage to equipment or machinery.
Builder's risk insurance insures against the risk of physical loss or damage to property during construction. Builder's risk insurance is typically written on an "all risk" basis covering damage due to any cause (including the negligence of the insured) not otherwise expressly excluded.
Crop insurance "Farmers use crop insurance to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, insects, or disease, for instance."^[12]
Earthquake insurance 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 damage. Most earthquake insurance policies feature a high deductible. Rates depend on location and the probability of an earthquake, as well as the construction of the home.
A fidelity bond is a form of casualty insurance that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees.
Flood insurance protects against property loss due to flooding. Many insurers in the U.S. do not provide flood insurance in some portions of the country. In response to this, the federal government created the National Flood Insurance Program which serves as the insurer of last resort.
Home insurance or homeowners' insurance: See "Property insurance".
Landlord insurance is specifically designed for people who own properties which they rent out. Most house insurance cover in the U.K will not be valid if the property is rented out therefore landlords must take out this specialist form of home insurance.
Marine insurance and marine cargo insurance cover the loss or damage of ships at sea or on inland waterways, and of the cargo that may be on them. When the owner of the cargo and the carrier are separate corporations, marine cargo insurance typically compensates the owner of cargo for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier or the carrier's insurance. Many marine insurance underwriters will include "time element" coverage in such policies, which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss.
Surety bond insurance is a three party insurance guaranteeing the performance of the principal.
Terrorism insurance provides protection against any loss or damage caused by terrorist activities.
Volcano insurance is an insurance that covers volcano damage in Hawaii.
Windstorm insurance is an insurance covering the damage that can be caused by hurricanes and tropical cyclones.

Liability

Main article: Liability insurance

Liability insurance is a very broad superset that covers legal claims against the insured. Many types of insurance include an aspect of liability coverage. For example, a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property; automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others' lives, health, or property. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. Liability policies typically cover only the negligence of the insured, and will not apply to results of wilful or intentional acts by the insured.

Directors and officers liability insurance protects an organization (usually a corporation) from costs associated with litigation resulting from mistakes made by directors and officers for which they are liable. In the industry, it is usually called "D&O" for short.
Environmental liability insurance protects the insured from bodily injury, property damage and cleanup costs as a result of the dispersal, release or escape of pollutants.
Errors and omissions insurance: See "Professional liability insurance" under "Liability insurance".
Prize indemnity insurance protects the insured from giving away a large prize at a specific event. Examples would include offering prizes to contestants who can make a half-court shot at a basketball game, or a hole-in-one at a golf tournament.
Professional liability insurance, also called professional indemnity insurance, protects insured professionals such as architectural corporation and medical practice against potential negligence claims made by their patients/clients. Professional liability insurance may take on different names depending on the profession. For example, professional liability insurance in reference to the medical profession may be called malpractice insurance. Notaries public may take out errors and omissions insurance (E&O). Other potential E&O policyholders include, for example, real estate brokers, Insurance agents, home inspectors, appraisers, and website developers.

Credit

Main article: Credit insurance

Credit insurance repays some or all of a loan when certain things happen to the borrower such as unemployment, disability, or death.

Mortgage insurance insures the lender against default by the borrower. Mortgage insurance is a form of credit insurance, although the name credit insurance more often is used to refer to policies that cover other kinds of debt.

Other types

Collateral protection insurance or CPI, insures property (primarily vehicles) held as collateral for loans made by lending institutions.
Defense Base Act Workers' compensation or DBA Insurance provides coverage for civilian workers hired by the government to perform contracts outside the U.S. and Canada. DBA is required for all U.S. citizens, U.S. residents, U.S. Green Card holders, and all employees or subcontractors hired on overseas government contracts. Depending on the country, Foreign Nationals must also be covered under DBA. This coverage typically includes expenses related to medical treatment and loss of wages, as well as disability and death benefits.
Expatriate insurance provides individuals and organizations operating outside of their home country with protection for automobiles, property, health, liability and business pursuits.
Financial loss insurance protects individuals and companies against various financial risks. For example, a business might purchase coverage to protect it from loss of sales if a fire in a factory prevented it from carrying out its business for a time. Insurance might also cover the failure of a creditor to pay money it owes to the insured. This type of insurance is frequently referred to as "business interruption insurance." Fidelity bonds and surety bonds are included in this category, although these products provide a benefit to a third party (the "obligee") in the event the insured party (usually referred to as the "obligor") fails to perform its obligations under a contract with the obligee.
Kidnap and ransom insurance
Locked funds insurance is a little-known hybrid insurance policy jointly issued by governments and banks. It is used to protect public funds from tamper by unauthorized parties. In special cases, a government may authorize its use in protecting semi-private funds which are liable to tamper. The terms of this type of insurance are usually very strict. Therefore it is used only in extreme cases where maximum security of funds is required.
Nuclear incident insurance covers damages resulting from an incident involving radioactive materials and is generally arranged at the national level. See the Nuclear exclusion clause and for the United States the Price-Anderson Nuclear Industries Indemnity Act)
Pet insurance insures pets against accidents and illnesses - some companies cover routine/wellness care and burial, as well.
Pollution Insurance, which consists of first-party coverage for contamination of insured property either by external or on-site sources. Coverage for liability to third parties arising from contamination of air, water, or land due to the sudden and accidental release of hazardous materials from the insured site. The policy usually covers the costs of cleanup and may include coverage for releases from underground storage tanks. Intentional acts are specifically excluded.
Purchase insurance is aimed at providing protection on the products people purchase. Purchase insurance can cover individual purchase protection, warranties, guarantees, care plans and even mobile phone insurance. Such insurance is normally very limited in the scope of problems that are covered by the policy.
Title insurance provides a guarantee that title to real property is vested in the purchaser and/or mortgagee, free and clear of liens or encumbrances. It is usually issued in conjunction with a search of the public records performed at the time of a real estate transaction.
Travel insurance is an insurance cover taken by those who travel abroad, which covers certain losses such as medical expenses, loss of personal belongings, travel delay, personal liabilities, etc.

Insurance financing vehicles

Fraternal insurance is provided on a cooperative basis by fraternal benefit societies or other social organizations.^[13]
No-fault insurance is a type of insurance policy (typically automobile insurance) where insureds are indemnified by their own insurer regardless of fault in the incident.
Protected Self-Insurance is an alternative risk financing mechanism in which an organization retains the mathematically calculated cost of risk within the organization and transfers the catastrophic risk with specific and aggregate limits to an insurer so the maximum total cost of the program is known. A properly designed and underwritten Protected Self-Insurance Program reduces and stabilizes the cost of insurance and provides valuable risk management information.
Retrospectively Rated Insurance is a method of establishing a premium on large commercial accounts. The final premium is based on the insured's actual loss experience during the policy term, sometimes subject to a minimum and maximum premium, with the final premium determined by a formula. Under this plan, the current year's premium is based partially (or wholly) on the current year's losses, although the premium adjustments may take months or years beyond the current year's expiration date. The rating formula is guaranteed in the insurance contract. Formula: retrospective premium = converted loss + basic premium × tax multiplier. Numerous variations of this formula have been developed and are in use.
Formal self insurance is the deliberate decision to pay for otherwise insurable losses out of one's own money. This can be done on a formal basis by establishing a separate fund into which funds are deposited on a periodic basis, or by simply forgoing the purchase of available insurance and paying out-of-pocket. Self insurance is usually used to pay for high-frequency, low-severity losses. Such losses, if covered by conventional insurance, mean having to pay a premium that includes loadings for the company's general expenses, cost of putting the policy on the books, acquisition expenses, premium taxes, and contingencies. While this is true for all insurance, for small, frequent losses the transaction costs may exceed the benefit of volatility reduction that insurance otherwise affords.
Reinsurance is a type of insurance purchased by insurance companies or self-insured employers to protect against unexpected losses. Financial reinsurance is a form of reinsurance that is primarily used for capital management rather than to transfer insurance risk.
Social insurance can be many things to many people in many countries. But a summary of its essence is that it is a collection of insurance coverages (including components of life insurance, disability income insurance, unemployment insurance, health insurance, and others), plus retirement savings, that requires participation by all citizens. By forcing everyone in society to be a policyholder and pay premiums, it ensures that everyone can become a claimant when or if he/she needs to. Along the way this inevitably becomes related to other concepts such as the justice system and the welfare state. This is a large, complicated topic that engenders tremendous debate, which can be further studied in the following articles (and others):

Closed community self-insurance

Some communities prefer to create virtual insurance amongst themselves by other means than contractual risk transfer, which assigns explicit numerical values to risk. A number of religious groups, including the Amish and some Muslim groups, depend on support provided by their communities when disasters strike. The risk presented by any given person is assumed collectively by the community who all bear the cost of rebuilding lost property and supporting people whose needs are suddenly greater after a loss of some kind. In supportive communities where others can be trusted to follow community leaders, this tacit form of insurance can work. In this manner the community can even out the extreme differences in insurability that exist among its members. Some further justification is also provided by invoking the moral hazard of explicit insurance contracts.

In the United Kingdom, The Crown (which, for practical purposes, meant the Civil service) did not insure property such as government buildings. If a government building was damaged, the cost of repair would be met from public funds because, in the long run, this was cheaper than paying insurance premiums. Since many UK government buildings have been sold to property companies, and rented back, this arrangement is now less common and may have disappeared altogether.

Principles of insurance

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A large number of homogeneous exposure units. The vast majority of insurance policies are provided for individual members of very large classes. Automobile insurance, for example, covered about 175 million automobiles in the United States in 2004.^[2] The existence of a large number of homogeneous exposure units allows insurers to benefit from the so-called “law of large numbers,” which in effect states that as the number of exposure units increases, the actual results are increasingly likely to become close to expected results. There are exceptions to this criterion. Lloyd's of London is famous for insuring the life or health of actors, actresses and sports figures. Satellite Launch insurance covers events that are infrequent. Large commercial property policies may insure exceptional properties for which there are no ‘homogeneous’ exposure units. Despite failing on this criterion, many exposures like these are generally considered to be insurable.
Definite Loss. The event that gives rise to the loss that is subject to the insured, at least in principle, take place at a known time, in a known place, and from a known cause. The classic example is death of an insured person on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.
Accidental Loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be ‘pure,’ in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks, are generally not considered insurable.
Large Loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer.
Affordable Premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that anyone will buy insurance, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. (See the U.S. Financial Accounting Standards Board standard number 113)
Calculable Loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.
Limited risk of catastrophically large losses. The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed. Typically, insurers prefer to limit their exposure to a loss from a single event to some small portion of their capital base, on the order of 5 percent. Where the loss can be aggregated, or an individual policy could produce exceptionally large claims, the capital constraint will restrict an insurer's appetite for additional policyholders. The classic example is earthquake insurance, where the ability of an underwriter to issue a new policy depends on the number and size of the policies that it has already underwritten. Wind insurance in hurricane zones, particularly along coast lines, is another example of this phenomenon. In extreme cases, the aggregation can affect the entire industry, since the combined capital of insurers and reinsurers can be small compared to the needs of potential policyholders in areas exposed to aggregation risk. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer’s capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

Global insurance industry

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Global insurance premiums grew by 11% in 2007 (or 3.3% in real terms) to reach $4.1 trillion. The macro-economic environment was characterised by slower economic growth in 2007 and rising inflation. Profitability improved in life insurance and fell slighlty in the non-life sector during the year. Life insurance premiums grew by 12.6%, accelerating in the advanced economies with the exception of Japan and Continental Europe. Non-life insurance premiums grew by 7.6% during the year. Figures for premium income are not yet available for 2008, but the insurance industry is likely to see a slowdown in new business and falling investment revenue.

Advanced economies account for the bulk of global insurance. With premium income of $1,681bn, Europe was the most important region, followed by North America ($1,330bn) and Asia ($814bn). The top four countries accounted for nearly 60% of premiums in 2007. The US and UK alone accounted for 42% of world insurance, much higher than their 7% share of the global population. Emerging markets accounted for over 85% of the world’s population but generated only around 10% of premiums.

Biggest Insurance Company In USA

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State Farm Group
State Farm Mutual Automobile Insurance Company was founded on June 7, 1922, by George J. Mecherle, a retired farmer. It initially concentrated on meeting auto insurance needs of Illinois farmers through a mutual organization owned by the customers. By 1942, the company was the nation's largest auto insurer, a ranking it has held ever since. About one out of every five cars on the road is insured with State Farm®. State Farm Mutual Automobile Insurance Company is a mutual insurance company and as such does not have any shareholders. State Farm Mutual Automobile Insurance Company began marketing health insurance in 1965.

State Farm Mutual Automobile Insurance Company is also the parent company of several wholly-owned subsidiaries that provide property and life insurance, banking products and mutual funds. These entities include:

State Farm Life Insurance Company was founded in 1929. State Farm Life and Accident Assurance Company began operations in 1961 to meet special requirements for life insurance in New York, Connecticut, and Wisconsin. State Farm Life Insurance Company and State Farm Life and Accident Assurance Company have been marketing Variable Products to our customers through State Farm VP Management Corporation since 1998.

State Farm Fire and Casualty Company was formed in 1935 to provide property insurance for State Farm customers in the United States and Canada. The product lines written by State Farm Fire and Casualty Company include homeowners, boat owners and many commercial lines. The company has been the nation's largest insurer of homes since 1964.

State Farm County Mutual Insurance Company of Texas became a part of the State Farm Group in 1961 and protects motorists in Texas . This company cedes most of the risk assumed under its policies to State Farm Mutual Automobile Insurance Company under a quota-share reinsurance arrangement. The company is under common management with State Farm Mutual Automobile Insurance Company

State Farm Indemnity Company commenced business in 1991 and writes auto insurance in the state of New Jersey for the State Farm group. The company was formed to provide more accurate pricing and risk assessment in this unique market. In 2006, State Farm Guaranty Insurance Company, a wholly owned subsidiary of State Farm Indemnity Company, began writing auto insurance business in the state of New Jersey. All business written by State Farm Guaranty Insurance Company is ceded to State Farm Indemnity Company.

State Farm General Insurance Company was organized in 1962 as a property insurance affiliate. This company has evolved into the primary writer of State Farm homeowners and property liability insurance in the state of California.

State Farm Florida Insurance Company commenced business Feb. 1, 1999 and is the primary writer of homeowners and property liability insurance in the state of Florida.

State Farm Lloyds is an association of underwriters operating under the Lloyds Plan as provided in Texas law. It underwrites homeowners and commercial multiple peril insurance in that state. It began writing business in 1983. The association's insurance operations are managed by its attorney in fact, State Farm Lloyds, Inc., as required by law.

State Farm Bank, F.S.B. received formal approval for a thrift charter from the Office of Thrift Supervision (OTS) in November 1998 and is generally referred to as "State Farm Bank®". Its focus is on consumer-oriented financial products, complementing State Farm's insurance focus on personal lines.State Farm Bank is a nontraditional financial institution and does not have branch offices. The bulk of direct customer interaction and product assistance is provided by State Farm® agents, augmented by a telephone call center, mail and the Internet. As of December 31, 2005, the Bank held $12 billion in total assets.

State Farm Investment Management Corp. (SFIMC) serves as the investment advisor for the State Farm Associate and Retail Mutual Funds and the underlying Funds offered in connection with State Farm Variable Products. In addition, SFIMC serves as the transfer agent for the State Farm Associate and Retail Mutual Funds . SFIMC has over 35 years experience managing investment company assets. State Farm VP Management Corp. (SFVPMC) serves as the broker/dealer for the State Farm Associate and Retail Mutual Funds and State Farm Variable Products .

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