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Kidnap & Ransom Insurance (K&R) A coverage for ransom or extortion costs and related expenses. K&R insurance policies typically cover the perils of kidnap, extortion, wrongful detention, and hijacking. K&R policies are indemnity policies they reimburse a loss incurred by the insured. Typically, the insured must first pay the ransom, thus incurring the loss, and then seek reimbursement under the policy. Covered Expenses; -Ransom/extortion Consulting -Judgements, settlements and defense costs -Death and dismemberment -Personal financial loss, medical, rest and rehabilitation and travel Additional Extensions: -Active shooter and workplace -violence (assault) -Threat -Disappearance -Child abduction -Evacuation and repatriation -Express kidnapping -Stalking The question is who Needs K&R Insurance; -High-net-worth individuals. -Executives and employees of multinational corporations. -Individuals and organizations working in high-risk countries Benefits of K&R I

Freemium Insurance A combination of the words "free" and "premium," Freemium insurance is a pricing model that offers basic insurance coverage for free, with the option to upgrade to a premium plan for more comprehensive coverage. This model is often used by insurance companies to attract new customers and to encourage them to try their products. In a freemium insurance model, customers are typically able to sign up for a free plan online or through a mobile app. The free plan will typically provide basic coverage for a limited number of events or risks. For example, a freemium health insurance plan might cover only doctor visits and generic drugs. If customers want more comprehensive coverage, they can upgrade to a premium plan. Premium plans typically offer a wider range of benefits, such as coverage for hospitalization, specialist care, and brand-name drugs. Customers can usually upgrade to a premium plan at any time. Whether or not freemium insurance is rig

Net Premiums Earned When a policyholder pays a premium, the insurer does not immediately consider it as an earning. This is because the insurer has not fulfilled their obligation to pay for potential claims upon receiving a premium. The coverage has just started. Thus, only over time as the policy gets closer to its end date, does the premiums paid incrementally become premiums earned. The full premium is considered earned only when a policy reaches it end date. Net premiums earned (NPE) is a measure of an insurance company's revenue. It represents the portion of premiums that the company has earned, based on the amount of time that the policies have been in effect. NPE is calculated by taking the gross premiums written (GPW) and subtracting the unearned premium reserve (UPR) Formula: NPE = GPW - UPR Example: An insurance company writes a $1,000 policy for a one-year term. The company collects the entire premium upfront. At the end of the first six months, the NPE would be $

Fraternal Insurance A form of group coverage or disability insurance available to members of a fraternal organization. Fraternal life insurance is a contract where a fraternal benefit society insures the lives of members who, in exchange, pays monthly contributions to the group policy. Fraternal insurers are primarily life insurance, and many are church related. Their insureds are typically members of the society or religious body. Benefits of fraternal insurance: Lower premiums: Fraternal benefit societies typically have lower premiums than traditional insurance companies. This is because they are not-for-profit and they have a lower overhead cost. Strong focus on community service: Fraternal benefit societies are committed to giving back to their communities. This means that your premiums are not only helping to protect your family, but they are also helping to make your community a better place. Sense of belonging: Fraternal benefit societies offer a sense of belonging and

Group Accident and Health Group Accident and Health (A&H) insurance is a type of insurance that provides coverage for employees, their spouses, and dependents against accidental injuries and illnesses. It is typically offered by employers as a benefit to their employees. Group A&H insurance typically covers a wide range of events, including: accidental death and dismemberment, hospitalization, surgical expenses, emergency medical care, disability. Excludes amounts attributable to uninsured accidents and health plans and the uninsured portion of partially insured accident and health plans. Group Accident and Health may either be; 1- Group Personal Accident (PA) insurance covers employees for accidents only. It typically provides benefits for accidental death, dismemberment, and medical expenses. 2- Group Personal Accident and Sickness (PAS) insurance covers employees for both accidents and illnesses. It typically provides benefits for accidental death, dismemberment, med

Limited Policies A limited policy is a type of insurance policy that provides a restricted range of coverage or benefits compared to standard or comprehensive policies. These policies are often designed to supplement existing coverage or provide coverage for specific risks that may not be covered by standard policies. Types of Limited Policies Limited benefit plans: These plans typically offer lower premiums in exchange for limited coverage, such as specific medical services or a fixed cash payout for certain events. Gap insurance: This type of policy fills in coverage gaps between primary insurance and secondary insurance, such as Medicare and Medicare Supplement plans. Critical illness plans: These plans provide coverage for specific critical illnesses, such as cancer or heart attack, and offer a lump-sum payment upon diagnosis. Accident-only plans: These plans provide coverage for injuries resulting from accidents but do not cover other medical expenses. Hospital indemnity

Provider Sponsored Network (PSN) A formal affiliations of providers, sometimes called "integrated delivery systems", organized and operated to provide an integrated network of health care providers with which third parties, such as insurance companies, HMOs, or other Health Plan Companies, may contract for health care services to covered individuals. Some models of integration include Physician Hospital Organizations, Management Service Organizations, Group Practices Without Walls, Medical Foundations, and Health Provider Cooperatives. PSNs contract with health plans, employers, and other group purchasers to provide healthcare services to their members. PSNs typically assume some level of financial risk for the care they provide, which means that they are responsible for making sure that their members receive high-quality care at a reasonable cost. PSNs are not the same as accountable care organizations (ACOs). ACOs are a type of healthcare provider organization tha

Direct Writer A direct writer is a captive agent that only issues insurance policies from a specific company that it is employed to represent, without the intermediary of a broker or agent or a reinsurance companies that deal directly with ceding companies instead of using brokers. Direct writers typically have their own sales force and customer service department, and they may offer a variety of insurance products, such as auto insurance, homeowners insurance, and life insurance. Brokers are independent agents who work with multiple insurance companies to find the best policies for their clients. Direct writers, on the other hand, are affiliated with a single insurance company and sell its policies directly to consumers. Advantages of Direct Writers: -Lower premiums: Direct writers typically offer lower premiums than brokers because they do not have to pay commissions to agents. -Personalized service: Direct writers can offer more personalized service to their customers becaus

Retrocession retrocession is the transfer of risk from one reinsurer to another reinsurer. This means that a reinsurer that has accepted a large amount of risk from a primary insurer can then transfer some of that risk to another reinsurer in order to spread out the potential liability. Retrocession is a common practice in the insurance industry, as it allows reinsurers to manage their risk exposure and protect themselves from potential losses. Usually there is a Retrocession Agreement which is any agreement, treaty, certificate or other arrangement whereby any Insurance Subsidiary cedes to another insurer all or part of such Insurance Subsidiary's liability under a policy or policies of insurance reinsured by such Insurance Subsidiary. The retrocession process typically involves the following steps: 1-The primary insurer cedes risk to a reinsurer. This means that the primary insurer transfers a portion of the risk it has assumed from its policyholders to the reinsurer. 2-T

RENEWAL Continuation of a policy beyond its original term. Renewing an insurance policy is an important decision that should not be taken lightly. Policyholders should carefully consider their needs, compare options, and seek guidance from their insurance agent or broker to make an informed decision that protects their interests. The renewal process typically involves the following steps: 1-Notification from the insurance company: The insurance company will send a notice to the policyholder informing them that their policy is up for renewal. The notice will typically include information about the new premium, any changes to the policy terms and conditions, and the deadline for renewing the policy. 2-Review of policy terms and conditions: The policyholder should carefully review the renewal notice to ensure that they understand the new premium, any changes to the policy terms and conditions, and the deadline for renewing the policy. 3-Decision to renew or switch: The policyholder

INDEMNITY PERIOD An indemnity period is the length of time during which an insurance company is obligated to pay claims for losses that are covered under the policy. It is typically specified in the policy documents and may vary depending on the type of insurance and the specific policy terms. The indemnity period starts from the date of the loss or damage, and it ends on a specific date or after a certain number of days or months have passed. For instance, a homeowner's insurance policy might have an indemnity period of 12 months for wind damage, meaning that the insurance company would be liable to pay claims for wind damage that occur within 12 months of the policy's effective date. Health insurance policies typically have an indemnity period of one year for covered medical expenses. This means that the insurance company would be liable to pay for medical expenses that are incurred within one year of the date of service. Auto insurance policies typically have an indem

Limited Payment Life Insurance Limited payment life insurance is a type of life insurance policy that requires you to pay premiums for a limited number of years, but the coverage lasts a lifetime. Typically, an insured person pays premiums for 7, 10, 15, or 20 years, and coverage lasts until the insured's death The advantage of limited premium payments is that it tackles the financial burden of paying premiums for longer durations when you choose longer coverage tenure. The main benefit of limited pay option is that it frees you from paying premiums for your term insurance plan for a long period. A limited pay life policy is differ from a whole life policy in that in whole life premiums are guaranteed to never increase, i.e. the premium is fixed for the life of the policy but with limited pay life, the premiums have an end date. Overall, limited payment life insurance can be a good option for people who want to purchase life insurance but may not be able to afford to pay p

Caveat Emptor "Let the buyer beware" is a Latin phrase that is used in law to refer to the principle that buyers are responsible for doing their own due diligence before entering into a contract. This principle is also applicable to insurance contracts. Always read all terms and conditions of an insurance policy before signing the proposal form. In the context of insurance, caveat emptor means that policyholders are responsible for understanding the terms and conditions of their policy before they purchase it. This includes understanding the types of risks that are covered, the amount of coverage that is provided, and the exclusions and limitations that apply. Policyholders should also be aware that insurance companies may use a variety of marketing tactics to sell policies, and some of these tactics may be misleading or deceptive. It is important for policyholders to be critical of the information that they receive from insurance companies and to ask questions if they d

Gross Profit Gross profit in insurance is the difference between the premiums earned by an insurance company and the losses paid out to policyholders. It is a measure of the company's underwriting profitability. Gross profit is calculated as follows: Gross profit = Premiums earned - Losses paid Premiums earned are the premiums that an insurance company has received on policies that are in force. Losses paid are the amounts that an insurance company has paid out to policyholders for covered claims. Gross profit is an important measure of an insurance company's financial health. A high gross profit margin indicates that the company is underwriting profitable business. A low gross profit margin indicates that the company is underwriting unprofitable business. Insurance companies use gross profit to cover operating expenses, such as salaries, rent, and marketing costs. They also use gross profit to build reserves to cover future losses. Here is an example of how to calcul

Rate A rate is the amount of money that a policyholder pays to an insurance company in exchange for coverage against certain risks. Rates are typically calculated based on a number of factors, including the type of insurance, the policyholder's risk profile, and the insurance company's financial situation. There are two main types of rates in insurance: 1) Policy rates: These are the rates that policyholders pay for their insurance policies. Policy rates are typically determined by the insurance company's underwriting process, which evaluates the policyholder's risk profile. 2) Investment rates: These are the rates that insurance companies earn on their investments. Insurance companies use investment rates to set their policy rates. Insurance rate regulated. In many jurisdictions, insurance rates are regulated by government agencies. These agencies aim to ensure that rates are fair and competitive. There are a number of consumer protections in place to protect po

Difference In Conditions (DIC) Insurance Difference in Conditions (DIC) insurance is a type of insurance that provides additional coverage for perils not covered by standard insurance policies. DIC insurance is designed to fill in gaps in insurance coverage and is most frequently used by larger organizations, looking for protection from catastrophic perils such as flood, earthquake, terrorism. DIC insurance is designed to fill in gaps in insurance coverage and is most frequently used by larger organizations, looking for protection from catastrophic perils some mentioned above. DIC insurance works by providing coverage for the difference in conditions between the local insurance policy and the master insurance policy. The master insurance policy is typically a policy that is purchased by a multinational corporation or an organization with operations in multiple countries. The local insurance policy is a policy that is purchased in each country where the organization has operations.

Benefit Percentage A benefit percentage, also known as a benefit ratio, is a term used in insurance to represent the proportion of covered expenses that an insurance policy will pay. It is typically expressed as a percentage of the total cost of the covered expense. For instance, a benefit percentage of 80% indicates that the insurance policy will pay 80% of the covered expense, while the policyholder will be responsible for paying the remaining 20%. The benefit percentage is a crucial factor in determining the overall cost-effectiveness of an insurance policy. A higher benefit percentage generally means that the policy will pay a larger portion of the covered expenses, reducing the financial burden on the policyholder. However, higher benefit percentages often come with higher premiums, so it is important to balance the need for comprehensive coverage with the affordability of the policy. In addition to the overall benefit percentage, some insurance policies may also have differe

Bad Faith (Malae Fidei) Insurance companies are legally bound by a “covenant of good faith and fair dealing” in dealing with their policyholders. When an insurer breaches this covenant, by unreasonably delaying or denying payments, it is acting in bad faith. Bad faity may include actions such as: -Denying a claim without a valid reason -Delaying payments -Offering unreasonably low settlements -Failing to investigate a claim properly -Misrepresenting the terms of a policy. Now Bad Faith Lawsuit comes in when an insurance carrier acts in bad faith, they can be sued for actual and consequential damages as well as punitive damages. If a satisfactory settlement with an insurance company cannot be achieved, bad faith insurance claim litigation becomes necessary to obtain punitive damages for the violated policy holder. Examples of insurers acting in bad faith include misrepresentation of contract terms and language and nondisclosure of policy provisions, exclusions, and terms to avoid

Catastrophic Disability Catastrophic disability is a severe disability that prevents a person from performing basic activities of daily living (ADLs), such as bathing, dressing, eating, toileting, and transferring. It can also be caused by a loss of sight, hearing, speech, or use of both hands, both feet, or one hand and one foot. A catastrophic disability policy is one that pays benefits only if a claimant is so severely impaired by accident or disease, the claimant cannot do even the most basic activities of daily living. Catastrophic disability insurance benefits are typically paid in a lump sum or as a monthly benefit. The amount of the benefit will vary depending on the policy that you purchase. Catastrophic disability can be caused by a variety of factors, including: -Accidents, such as car accidents, falls, and workplace accidents -Illnesses, such as stroke, cancer, and multiple sclerosis -Neurological disorders, such as -Parkinson's disease and Alzheimer's disea

Individual Disability Insurance (IDI) disability insurance is a type of insurance that protects your income if you become disabled and unable to work. It is an important financial safety net that can help you pay your bills and maintain your standard of living if you are unable to earn an income. Individual disability insurance is different from group disability insurance, which is offered by many employers. Group disability insurance is typically less expensive than individual disability insurance, but it may not offer as much coverage or flexibility. Individual disability insurance allows you to customize your coverage to meet your specific needs and budget. There are two main types of individual disability insurance: short-term disability insurance and long-term disability insurance. Short-term disability insurance typically pays benefits for a period of six months to two years, while long-term disability insurance typically pays benefits for a period of two years or until you

Functional Capacity Exam (FCE) A series of physical tests given to determine a claimant’s Residual Functional Capacity, to see if they can return to work. It typically tests how well a person can walk, sit, crawl, lift, bend, stand, climb or carry. It can also focus on a specific function, like use of the hands. The tests used show if the worker can resume normal job activities. Functional capacity exams may be used to make an initial determination about how an illness or injury affects your ability to work. Later, the FCE can be used to analyze whether you are able to return to work, and in what capacity. It may be ordered by your attorney or by the workers' comp insurance company. The insurance company will claim an FCE will help it understand your ability to work in any occupation. If the FCE comes back unfavorable, the insurance company will use its results to terminate or deny your claim even if all of your doctors agree you are disabled. FCEs are performed by trained