BeNew Insurance

Actuary A business professional who analyzes probabilities of risk and risk management, calculates premiums, dividends. Actuaries are highly sought-after professionals who develop and communicate solutions for complex financial issues. They analyze the financial costs of risk and uncertainty. They use mathematics, statistics, and financial theory to assess the risk of potential events, and they help businesses and clients develop policies that minimize the cost of that risk. Actuaries' work is essential to the insurance industry. Actuaries use database software to compile information. They use statistical and modeling software to forecast the probability of an event occurring, the potential costs of the event if it does occur, and whether the insurance company has enough money to pay future claims. Most actuaries work for insurance companies, Some actuaries work as consultants, where they help design policies and determine the premiums that should be charged for each policy. Th

Physical Hazard Hazard is a condition or situation that increases the chance of loss in an insured risk. Physical Hazards are physical conditions that increase the possibility of a loss. They indicate the dangers of the subject of insurance which can be identified by inspection of the risk. For example: fire, burglary, liability. Physical hazard relates to the subject-matter of insurance. It can be seen, assessed and rated. It can be dealt with by applying excesses, loading premium, cover exclusions or other conditions. The hazards are apparent in the subject- matter itself. The dangers are visible from the very nature, construction and situation of the subject-matter. Insurance companies needs to have detailed knowledge of the physical Hazard while underwriting the policy and decides whether to accept the policy or not. This helps them to determine the insurance terms, rates, nature, premium, and other conditions for the policy. Physical hazards are taken into account by

Loss Adjuster vs Loss Assessor These are specialist who investigates claims and recommends settlement options based on estimates and insurance policies held. The Loss Adjuster's job is to investigate insurance claims on behalf of the insurer once they reach a certain size. Loss Assessors are appointed by policyholders to manage a claim on their behalf. They can be called on to help with all manner of loss-related insurance claims. The Loss Adjusters/Assessors plays a crucial role in the insurance claims process and are usually the first persons you will come into contact with during the claim process. Since Loss Adjusters are in the payroll of insurance companies, they might actively work to secure the lowest possible settlement. They are ostensibly hired to find evidence that could negate your claim. For that reason, it is important to have a qualified loss assessor fight for you. Unfortunately many people make the mistake of only appointing loss assessors when they need t

Advance Premiums Also, known as pre-paid premiums It is an initial premium paid to bind an insurance policy before the specific date of payment, when a policy has been processed, prior to the effective date. If you make advance payments, you won't have the problem of delayed payments, and that means you avoid policy lapses. Advance premium is done to bind the insurer to the insured. The adjustments or the actual premium value comes out in the notice for the second premium payment. This is also called as the deposit premium. Paying premiums in advance helps the customer plan and budget accordingly for this purpose. Setting aside premiums in advance ensures that the policy remains active due to the timely payment of the premium. Paying your premium in advance can help you avoid this problem altogether. Simply put, this is how it goes. You could enjoy discounts on advance payments. You may be in for some great discounted benefits. Some insurance regulators proposed that insur

Cover Note Also, known as an interim receipt, is a document issued as evidence that Insurance had been granted, pending, until a final insurance policy can be issued. Cover note carries the name of the insured, the Insurer, the coverage, and wha t is being cover by the insurance. A cover note remains valid for 30 or 60 days from the date of issuance depending on the jurisdiction. It serves all the purpose during this period be it insurance claim or to be presented to the traffic police, if asked. If you do not receive a policy certificate in a few weeks after the cover note being issued, contact your agent or customer care. Ideally, you should start following up at least couple of weeks in advance and shouldn't wait till the cover note turns invalid. During the time the insured uses the cover note, the insurer may continue to evaluate the risks associated with insuring the holder of the cover note. The cover note will continue to serve as the insured’s proof that coverage

Deductible OR Excess Deductible is the amount paid out of pocket by the policy holder before an insurance provider will pay any expenses. The advantage of a deductible is that it mitigates the risk. The policyholder is responsible for a portion of the costs. In effect, deductibles serve to align the interests of the insurer and the insured so that both parties seek to mitigate the risk of catastrophic loss. Property insurance has two types of deductibles: lump sum and the percentage of the insured property. -A lump-sum deductible is a specific amount, such as the $500 deductible that is common for car insurance. -A percentage deductible on the other hand is a specified percentage for example; 10% 20%, common in health insurance. Generally speaking, the larger the deductible, the less you pay in premiums for an insurance policy. One way to save money on a homeowners or auto insurance policy is to raise the deductible. Therefore, if you are shopping for insurance, ask about the opt

Collision Coverage Collision coverage helps pay to repair or replace your vehicle if it's damaged or destroyed in an accident with another car or object, regardless of who is at fault. Collision Coverage is different from liability coverage, which helps pay for damage to another person's car from an accident you cause. Why buy collision coverage? If you owe money on your car, or if you are leasing it, collision coverage usually is not optional; most lenders and lease holders require it. If your car is paid off, however, you can choose whether to buy collision coverage. The question is collision insurance worth it? Yes Consider for example the value of your vehicle: If your vehicle is brand new or still worth a considerable amount, collision may make sense as it can help you pay for expensive repairs or a replacement if it's damaged. This type of insurance is separate from a comprehensive automobile insurance policy but often added as an extension. Collision insuranc

Commission The renumeration paid to an agent or broker for the introduction of business, usually a percentage of the premium. Premium is part of acquisition cost owning a business. Commission caps are standard and fixed by the regulator depending on the jurisdiction. The commission caps or rates may go above that fixed by the regulator if the intermediary (agent) not simply selling business to the Insurer but provides additional services t. For example acting as managing General Agent (MGA) In life insurance there are two forms of commission payments to agent or broker: first year commission payments and renewal commission payment. First year commission payment is usually higher than the renewal commission payment. Commissions are based upon the size of the policy the agent is selling (measured by annual premiums) and by the type of product that is being sold. An insurance agent’s commission percentage tends to change depending on the type of policy they’re selling be it life o

Catastrophe Bonds Or Cat Bonds A catastrophe bond (CAT) is a form of insurance risk-linked securities, high-yield debt instrument that is designed to raise money for companies in the insurance industry in the event of a natural disaster. Since 1997, the catastrophe (CAT) bond market has provided the insurance industry with protections against natural disasters that have grown more frequent and costly. A CAT bond allows the issuer to receive funding from the bond only if specific conditions, such as an earthquake or tornado, hurricane, occur. They were created and first used in the mid-1990s in the aftermath of Hurricane Andrew and the Northridge earthquake. There are three common types of triggers for a CAT bond: indemnity, industry loss, and parametric. Indemnity triggers base CAT bond payouts on the actual insurance losses experienced by the issuer, and function similarly to traditional reinsurance. CAT bonds offer insurers an alternative to traditional reinsurance and allow

Insurance Policy Document It is the proof of insurance. It is a formal legal document that is used as a legal binding for the insurance contract. The policy document is the evidence of the insurance contract and contains all the terms and conditions. Insurance is also a contract of utmost good faith and enforced only in the distant future. It is therefore necessary that the declarations made by both the parties should be put in black and white for future reference. Any suppression, willful and material shall make the contract void. The insured, therefore, has a duty to declare all that he knows answering questions contained in the proposal form and other ancillary documents which may be required by the insurer. The basic four parts of an insurance policy document are; Declaration Page, Insuring Agreement, Exclusions, Conditions. An insurance policy also called a contract of adhesion (yeah, like glue) because you agree to stick to the contract terms and conditions. It is very

Annuity An annuity is a contract between you and an insurance company in which you make a lump-sum payment or series of payments and, in return, receive regular disbursements, beginning either immediately or at some point in the future. The basic idea of an annuity plan is to invest regularly or a lump sum amount and get a regular income for life. Buying the plan early will provide you a higher amount. An annuity can be in the form of a deferred or immediate; -A deferred annuity has an accumulation phase followed by a disbursement (annuitization) phase. -An immediate annuity converts a lump sum into cash flows from day one. When you purchase an annuity, your premium is placed in an investment portfolio called an annuity fund. This portfolio determines the rate of return you will earn on your annuity. Annuities come in three main varieties fixed, variable, and indexed each with its own level of risk and payout potential. People typically buy annuities to help manage their income

Under-Insurance A situation where the sum insured represents less than the total value of the property at risk. Therefore in the case of Under-insurance the amount listed as the maximum an Insurer will pay out if you make a claim is not enough to cover the full cost for example rebuilding, repairing or replacing your home and its contents or paying your medical bills. Under-insurance leaves the policyholder responsible for a large percentage of a total loss or expense and may lead to financial hardship. Practical cases of Under-insurance; -If a homeowner is underinsured and the residence suffers significant damage, then the insurance payout may not be enough to cover repairs or replacement. -Similarly, inadequate health insurance coverage can lead to medical debt and even bankruptcy if a serious illness or accident occurs. Practical example, a slatted shed with a full rebuilding cost of 100,000 is insured for 60,000 i.e. only 60% insured. If there's partial damage to the bui

Policyholder This refers to the person being insured and who can claim an insured benefit under the policy. So, if you buy an insurance policy under your own name, you are the policyholder, and you are protected by all of the details inside. The policyholder is also the person that is responsible for making sure premium payments are up-to-date. Policyholders buy and manage the insurance policy, including adjusting coverage as needed. As a policyholder, you are responsible for making sure your policy offers the protections you need. It is important we know the difference between policyholder, insured and beneficiary; -The policyholder is the person who “owns” the policy. -The insured is the person covered by the insurance policy. -The beneficiary is the recipient of the payout in a life insurance policy. The policy holder can be the beneficiary. For instance, the breadwinner of a family might purchase an insurance policy on their own life to protect their spouse and children if t

Term Life Coverage A type of insurance coverage that lasts for only a specified period of time and has a defined ending date. Term insurance plans offer financial security for the entire family in case of the unfortunate death of the policyholder. Also, you can get optional coverage for critical illnesses or accidental death. You are covered for a long duration, while the premiums are affordable. A term life insurance policy is the simplest, purest form of life insurance: You pay a premium for a period of time typically between 10 and 30 years and if you die during that time a cash benefit is paid to your family (or anyone else you name as your beneficiary). The money can be used to help pay for things like a mortgage, education costs of children or their everyday expense. Term life insurance offer more affordable premium as compared to whole life insurance. Whole Life insurance plans offer maturity values subject to payment of all due premiums of the policy, however, pure term pl

Political Risk Insurance Political risk insurance provides coverage to investors, financial institutions, and businesses that face financial loss due to political events. Political events covered under political risk insurance include expropriation, political violence, sovereign debt default, and acts of terrorism or war. Political risk may also result from events outside of government controls such as war, revolution, terrorism, labor strikes, and extortion. Political risk can adversely affect all aspects of the international business from the right to export or import goods to the right to own or operate a business. For example the Russia-Ukrain war of 2022. Political risks can be divided into two major types; macro risks and micro risks. The macro risk is related to the multinational companies which have businesses in the country and the adverse effects faced by those companies. Micro risks arise from internal conflicts such as corruption, poverty, cynical manipulations, etc. Se

Pain and Suffering Damages Non-economic damages designed to compensate the injured party for the pain endured due to the negligent behaviour of the defendant.Often greater than economic losses, such as loss of income and medical expenses. It is the accumulation of all the pain, anguish, and trauma you suffered. The term “damages” refers to the amount of money you may be awarded in a personal injury claim or lawsuit. Pain and suffering may be caused by: medical malpractice, product liability, car accidents, slip and falls, violent attack. There is no clear pain and suffering calculator, either for a judge and jury or for an insurance company. Typically, pain and suffering get based on a percentage of your special damages: usually between 1.5 and 5 times the special damages from your claim. In most cases, pain and suffering damages are only granted if caused by a significant physical injury disability, loss of bodily function, scarring/disfigurement, or death. These are some the e

Package policy If your company is growing in size and complexity or you face specialized risks due to the nature of your business you may want to consider Package Policy A policy which includes various different types of Insurance covers in one policy, example travel insurance. These policies are often meant for small- to medium-sized businesses. Package Policies are available for a wide range of businesses, and can be better customized to the specific needs of your business. The benefits of purchasing a package policy include lower costs, broader coverage for losses that usually occur together, time efficiency, etc. A package policy can cover you against all sorts of risks under its protective umbrella. What a package policy does not cover; -Directors and Officers (D&O) liability -Health and disability -Life insurance -Workers compensation These coverages must be purchased separately; discuss your additional insurance needs with an insurance intermediary (agent or broker). U

Unspecified Valuables Cover Unspecified Possessions Cover is an umbrella type cover which allows you to select a total amount of cover for valuable items away from your home. This cover is for valuable items such as jewellery, laptops, hearing aid which are individually worth less than a set policy limit. There is no need to list each of the items individually. You can select a set amount for which you would like to insure the unspecified items. When insurers talk about 'valuables', they are generally talking about things like: works of art, jewellery, stamp, coin and medal collections. collections of gold, silver or other precious metals. While your home insurance policy could help recover the financial cost of any lost or stolen valuables, it can be upsetting to lose something that holds sentimental value. That is why it is important to make sure you are fully covered for any high-value possessions you have got. Your expensive jewellery and valuables need cover. If so, it

Bond Financial guaranty by an insurer guaranteeing scheduled payments in an event of default payment by the bond issuer. There are two general categories of bonds; 1) Commercial Bonds: The vast majority of bonds falls under the license and permit surety bond type. This inc ludes businesses such as Auto Dealers, Collection Agencies, Mortgage Brokers and Telemarketers. These bonds are used to guarantee that the individuals or businesses abide by the rules and regulations of their business license. 2) Contract Bonds: Typically used for construction work, these bonds guarantee that the job will be completed as per the terms of the contract and are normally required by law on construction work for public bodies. Being bonded means that an insurance and bonding company has procured funds that are available to the customer contingent upon them filing a claim against the company. If you are a contractor or other type of business owner, you may have good reason to explore what it means to b