Spreading Risk Makes for Affordable Insurance

The insurance industry has been around for hundreds of years. Many moons ago, some forward thinker figured out that if the risk of loss was spread among many different people, that losses wouldn't be so devastating to one particular individual. If each individual paid in a small amount to a pool of money in exchange for protection from huge losses, then a certain level of assurance and certainty would be received by each individual. No single individual would be completely wiped out if a disaster occurred. Thus, the idea of insurance was born. Affordable insurance is available today due to this idea.

With insurance, individuals seeking coverage pay an annual premium to a third party, the insurance company in this case, in exchange for a promise of protection. Mathematical geniuses known as actuaries estimate the approximate cost that each person should chip in so that the company can afford to meet its obligations. Actuaries are able to make these calculations by estimating the anticipated losses based on historical experience. Investment experts take into account the investment returns that the insurance company can receive from holding millions of dollars of customer premium payments. Marketers can assess the number of customers that can be expected to do business with the company. Together, affordable insurance can be achieved when all of the elements work effectively.

Today's insurance companies operate in an environment rich in data. Property and casualty loss rates have been tracked for decades, so companies today can estimate with tremendous accuracy the likelihood of any given building to go up in flames. Companies understand what hazards can increase the probability that a loss will incur. Insurance companies are also heavily involved in risk management, which involves actively reducing the risk that losses may happen. Risk management can involve offering incentives for usage of smoke detectors and sprinkler systems, performing professional inspections of properties, and conducting educational sessions on how to prevent fires. On the life insurance side, actuaries can estimate with great certainty the lifespan of any given individual. Actuaries understand what health factors to look for that influence a person's number of years on the Earth. These health factors can include smoking, family history, health symptoms, and engaging in risky behavior such as motorcycle riding or certain water sports. The result of all of this knowledge is much cheaper life insurance. Insurance companies know how to earn just enough profit to keep the company earning an above average return, while also competing with other companies in terms of price. In the past 10 years due to the Internet, many traditional agents have been cut out of the picture, which has further reduced the cost of insurance. Agent commissions on insurance are typically extremely high, sometimes reaching as high as 50%. Companies like Geico allow consumers to communicate directly with the insurer, thus drastically reducing commission costs and therefore the total cost of insurance.

Affordable insurance is possible today more than ever. If you think you're paying too much for your insurance, you probably are. It's advisable to compare insurance costs and make the switch if a cheaper policy is available.

Bristy Voelkel has been an insurance specialist for the past 4 years. She has worked with several top insurance carriers, saving individuals shopping for free insurance quotes. Bristy is standing by waiting to assist you in comparing affordable insurance quotes & saving you hundreds. Get started today!

Business Insurance - Convictions, Criminal Records and Bankruptcy

When starting a new company or commercial venture, business insurance can be a source of confusion. There are various types available, and it is imperative that you obtain the most appropriate type in order to fully protect your company.

Getting the right type of business insurance at a good price can be a hurdle in itself, but what if you have a previous bankruptcy, IVA or criminal conviction to your name? In cases such as these, obtaining business insurance can suddenly become very difficult indeed, and it may seem that your attempts to make a new start in your life are hindered whichever way you turn.

If this sounds familiar, you are not alone. There are over 8 million ex-offenders and ex-bankrupts within the UK who are experiencing difficulty in obtaining basic insurance policies because of a prior bankruptcy or an existing criminal record. Unfortunately, many insurance companies refuse to provide cover once criminal records, convictions or bankruptcies are disclosed. It is therefore understandably tempting for applicants to fail to disclose these facts when applying for business insurance. However, this will result in your insurance policy becoming void, leaving you open to extreme financial damage in the unfortunate event of a claim against your business.

So what course of action can ex-offenders and ex-bankrupts take to ensure they are treated fairly and are eligible to receive the necessary insurance policies essential to making a fresh start?

Specialist insurance providers may hold the key.

Companies and brokers offering specialist insurance understand the problems faced by people with a previous conviction or bankruptcy. They are dedicated to finding competitive business insurance quotes, even upon disclosure of your criminal record or financial history. This will ensure that your business is paid in the event of a claim. There are many different types of business insurance available such as public liability insurance, professional indemnity insurance, employers liability insurance and product liability insurance, to name a few. Don't worry if you are unsure as to which type of business insurance your company needs. Your chosen specialist insurance company will be able to advise you and make sure you choose the most suitable cover for your line of business and get the best deal possible.

With a past conviction or bankruptcy, starting afresh may feel like a daunting task, especially if you have spent some time in prison. Knowing where or who to turn to in order to get the help you need can make all the difference and can give you the confidence you need to pick yourself up and get on with your life.

Remember, your past does not have to be a guide for your future.

Sale Insurance Services (SIS) are specialist insurance brokers, dedicated to providing competitive insurance quotes to people with criminal convictions and previous bankruptcies. SIS provide an honest and open service, the company's mission being to aid those who are being unfairly denied basic financial services, simply because of their past. SIS offer many types of insurance, including car, home and business insurance.

Insurance Law Affects Everyone

Although some people may regard insurance cover as optional, and choose to self-insure for minor risks, insurance is nonetheless a cornerstone of modern commerce. Without insurance, banks would be reluctant to lend against the security of buildings and other property, and many business projects would never see the light of day. In Australia, the role of insurance companies is regarded as so important that they are regulated by APRA (the Australian Prudential Regulation Authority), which is the same government institution responsible for overseeing banks, credit unions, building societies and members of the superannuation industry.

Insurance law defines the establishment and registration of insurance companies, relevant capital and operational obligations, and many aspects of their interaction with policyholders. When you receive a policy document or product disclosure statement, from an insurer, you should be able to regard that as an honest statement of your rights and obligations, and to expect the insurer to have the ability to meet a valid claim. Without insurance law, we could not have confidence in the financial viability and behaviour of insurers, which would affect us all in one way or another.

However, this backdrop of legislation and government regulation does not entirely eliminate the scope for disputes between insurers and their clients. In relation to personal and property claims, insurance companies and policyholders are frequently at loggerheads regarding policy conditions (terms which must be satisfied before an insurance company is liable to meet claims), exceptions (an insurance company may be able to avoid paying a claim falling within the policy exceptions), and quantum (the amount of an insurance company's liability).

On the positive side, the relevant legislation in Australia, the Insurance Contracts Act (Cth), has some consumer-friendly provisions. For example, an insurance company may not be able to rely upon a condition not having been fulfilled, to decline a claim, unless that condition is relevant to the claim. However, other jurisdictions operate under different rules, and reference should be made to the specific legislation affecting insurance coverage in the country or state where the insurance is arranged.

In all cases, it is very important to truthfully answer questions asked by a prospective insurer, provide all material information about the risk, and read policy documents and disclosure statements carefully. It is also important to investigate an insurer's refusal to pay a claim, or an attempt to pay only part of a claim. In such cases, it is usually up to the insurer to show it has good grounds for its position, and legal advice may be necessary to interpret the policy terms, and to ensure they are correctly applied in accordance with insurance law.

Stephen Bourne is a lawyer in Australia (see profile ), and also contributes articles and case summaries to the Ekupu Law Library website. Stephen has law and business qualifications, and is a Fellow of the Australian and New Zealand Institute of Insurance and Finance.

The Difference Between Income Protection and Critical Illness Insurance

During a recent financial review with a new client, something I carry out with all new clients, I asked the question as to whether he had any income protection in place. I was quite surprised and impressed when he told me he had. It's not usually the first thing young people think about and this guy in his late twenties had it sorted...or so I thought. He quickly followed this with "I think I have that with my mortgage protection". Ah ha. It wasn't the first time I had heard this and I'm sure it won't be the last. Indeed perhaps we as Financial Advisors and whoever sold him the initial policy are to blame. And so I embark on my task for today to educate the general population or at least anyone reading this on the difference between Income Protection and Serious illness.

Income protection is in general a standalone policy. It is not usually linked to your mortgage although it can be used as a payment protection policy in some cases. Serious illness cover or critical illness cover as it's also know can be either standalone or incorporated into a life policy or mortgage protection policy. This is where the confusion above often arises. This client in particular had taken out a mortgage protection policy some years ago through the bank where he got his mortgage and at the time he was also offered serious illness cover as an option. This type of policy is also a lot cheaper when you are younger and so he opted to go with this for a relatively low premium.

Serious illness cover will pay out a lump sum on diagnosis of one of a list of serious/ critical illnesses. Each company has their own list and they differ slightly so you should always check that you are getting the best cover. The main illnesses that they would all cover would be cancer, heart attack and stroke but most list around 40 or so different conditions. In the event of a claim the insurance company would pay out a lump sum payment. You could use this to clear some money off your mortgage, clear loans, fund necessary treatment you may require or for general living expenses if you are unable to work for a period of time. In general this cover is excellent if you need money quickly to clear a loan or your mortgage or if the illness is only short-term and you are able to return to work soon after but if you were unable to work ever again the lump sum is probably not going to last very long.

Income protection on the other hand provides you with a regular income in the event of you being out of work for a long period of time. It would cover any illness or injury which leaves you unable to work. Yes any illness or injury including those covered by serious illness cover. It will pay you right up to retirement or until you return to work. In some cases your employer may pay sick pay for a given period although there's no obligation in law. Seriously worth considering is Income Protection insurance. Cover kicks in once you're out of work for more than the specified period which can be 8 weeks, 13 weeks, 26 weeks or 52 weeks. The longer waiting periods are ideal for anyone who may be paid for 6-12 months by their employer. You could have the income protection coincide with this so that it would kick in then ensuring no gap in your income. The maximum amount you can claim is 75% of your regular salary - This can add up quite quickly and could potentially account for 2 to 3 million if you were never able to work again.

Company Directors Insurance - Can You Do Without It?

The untimely death of a Company Director is undoubtedly an extremely harrowing and emotional time for their family and friends but also their colleagues in business.

From a business perspective, the death of a Director or a large shareholder can cause major financial problems for;

1. The surviving Directors and the company at large, and
2. The deceased's next of kin.

1. Surviving Directors and the company at large

As well as the personal tragedy of the death of a Director, the surviving Directors and the company face a number of serious financial challenges.

Following the premature death of a Director their company shares will normally become part of their estate. For example, they could become the property of the deceased's spouse or one of their children. This can cause problems for the organisation, particularly if the deceased shareholder owns a large percentage of the organisation.

The new shareholder may have little business knowledge or indeed may wish to move the company in new and unwelcome directions. If for instance, the deceased shareholder owned more than 50% of the company, their next of kin would become the majority shareholder. This individual may be someone the existing Directors do not wish to have the final or indeed any say in the firms decision making process.

2. Next of kin

As well as the death of a loved one, their next of kin could face some very difficult decisions. They may be in full time employment in a different organisation and may not be interested in taking up the Director's role and prefer to take the shareholding's cash value. However, the company may not have the money readily available to buy out the deceased Director's shareholding from them.

As such, both parties are placed in a very unsatisfactory position.

Co-Directors insurance:

A simple solution to the business problems caused by the death of a Director is an easily available and relatively inexpensive insurance product: Co-Directors insurance.

Of course the upset and anguish caused by the death of a colleague can never be compensated for, but by taking out a Co-Directors insurance policy you can limit the financial damage and disruption caused by the untimely death of a Company Director.

The ultimate aim of a Co-Directors insurance policy is that it allows you to put the structures, processes and monetary agreements in place now, to protect your business financially in the face of a premature death of a Director in your organisation.

The main benefits of a Co-Directors insurance policy include:

1. The surviving Directors remain in full control of the business.

The policy proceeds from the Co-Directors insurance policy are used by the surviving Directors to purchase the deceased Director's shareholding from their estate. This ensures the continuation of the company's operations with the minimum disruption.

2. The deceased Director's estate will then receive the monetary value of the shareholding.

If you are the director of a limited company with other shareholders then you should really consider taking out a co-directors insurance policy to protect against the above eventualities. The policy itself is a simple life insurance or life assurance policy with a bit of legal structure on it informing of how the funds are to be used and what agreements are put in place should another company director die. Talk to you financial advisor today about Co-Directors Insurance.

Pol O Murchu is a leading Irish Financial Advisor, Insurance Broker and Mortgage Broker. His company Heritage Insurance Brokers provides clients with a range of Insurance and Financial Products to suit their every need. He specialises in Life Insurance, Life Assurance, Mortgage Protection, Pensions, Investments, Mortgages, Health Insurance and a range of both personal and business insurance products. To get more information on any of our products contact us today.

Medical Insurance and What You Will Have to Pay

It's no wonder there are so many billing issues with medical treatments. There are different types of insurance each with their nuances. Below are four common ones:

Health Maintenance Organizations (HMO): With HMOs you pay one amount (maybe $25 or $30) for each doctor visit. You are not billed for anything else and there is no need to submit a claim.

You must use what is called a primary care physician (PCP) who helps you manage your health care. S/he will be the first one you call for any treatment you need. This doctor must be a member of the HMO medical group.

You will need your PCP to provide a referral to see a specialist that also contracts with the HMO.

Preferred Provider Organizations (PPO): With a PPO, you receive the majority of your health care from a provider network like an HMO. But, if you are willing to pay more you can go outside of the network. You can choose to select your primary care doctor from the PPO network.

Health Savings Plans (HSPs): There are two parts you can access with HSA coverage. One is a high-deductible plan and the other is a health savings account. The deductible plan provides basic catastrophic coverage. The HSA operates as a tax-free savings account. You pay for routine medical expenses from this account.

Fee for Service (FFS) or Point of Service (POS) plans: This is a simple plan. You pay for and receive the care you need. Then you are reimbursed for a percentage of the cost.

If selecting from any of these plans, ask the following questions:

• What are the covered health care services?

• What is the yearly premium?

• How are referrals managed?

• How much will it cost for non-network treatment?

• How many in-network doctors are there?

• Where are the network doctors and hospitals located?

• What preventive services are covered?

There are many other factors to consider when you are researching one of these plans.

Deductibles: You will pay a deductible which is part of the insurance coverage that you must pay before the insurance company kicks in their portion. As an example, you might have a family deductible of $5,000 that you will have to satisfy. You insurance company will pay their portion after that.

Copayments: A copayment is an amount you pay at the point of service. You might pay $30 for each doctor's visit but will not be billed for anything else while you are at the doctor's office.

Coinsurance: Coinsurance is expressed as a percentage of the medical bill after you have paid your deductible. For example, if you have a coinsurance rate of 80/20, you will have to pay for 20% of the medical bill while the insurance plan will pay 80%. So, if you have satisfied your deductible and your medical bills over that is $5,000, you will pay $1,000 (20%) and your insurance plan will pay the other $4,000.

Medical billing and claim resolution can get confusing with all of the co-pays, out-of-network providers, deductibles and co-insurance requirements so make sure you understand any medical bills.

Sunni Patterson is an accomplished marketing professional and entrepreneur. She is an expert at developing on and offline marketing strategies.

Expensive City Life: Should You Fork Out for Insurance?

We all know how expensive it is to live in Australia's largest cities. A recent survey by Demographia International found that Sydney, Perth, Melbourne and Adelaide housing is the most unaffordable in the English-speaking world. Amidst all this financial pressure for the average Australian family, one very important expense is often overlooked... insurance. Should you be forking out for the security that life insurance, income protection insurance and mortgage insurance bring? Or will that leave you with nothing to eat but Vegemite, bread and two minute noodles? We examine both sides of the issue today.

Cost of Living Pressures

It isn't difficult to see the cost of living pressures faced in Australia. Expensive land flows onto other purchases, and since employers also face price rises, wages are less likely to go up. The obvious and sensible option is to limit your outgoings, cutting back on unnecessary spending to make the most of what you have.

Are Income Protection and Life Insurance Unnecessary Spending?

These cost of living pressures create an unfortunate catch-22 situation. People 'have' to spend more money on various household expenses, and so choose not to insure their ability to earn an income (either in sickness or in death).

However, the cost of living pressure faced by the average family often mean that 'Plan B', for when one adult cannot work, is radically different to your ordinary life. Kids must change schools. Housing has to shift to the outer suburbs. Sports cannot be played, pets cannot be kept, and various other little luxuries disappear.

Income protection insurance and life insurance are more necessary than ever in a life situation with high financial pressure... if you have little spare cash now, just imagine what would happen if your weekly wage suddenly disappeared!

It becomes clear that cutting spending other than insurance is a smarter option.

What Unnecessary Spending Can Be Cut?

Many of us become trapped in the belief that every cent of our spending is necessary - that we must put petrol in the car, we must eat, we must send the children to school and we must dress ourselves for work.

However, the level of expense that each individual family experiences often has an incredible amount of room for movement! Within 'necessary' expenses are often hidden unnecessary preferences. Consider the following:

    Do you need all the packaged food in your weekly supermarket shop?
    Do you waste food at home?
    Can you combine car trips to cut down petrol costs?
    Can the kids take the bus to school instead of being driven?
    Do you have more pets than you need?
    Do you look first at opportunity shops for clothing... especially kids' clothing?
    Do you always shop around for different quotes on your products and services... even on income protection insurance and life insurance?
    Do you really need your home phone line?
    Do you need to have a post paid mobile, or could you use a prepaid mobile instead?
    Do you sell things you don't need on eBay, instead of just giving them away?
    Do you utilise your network to have your household appliances repaired and serviced?
    Do you smoke cigarettes, or regularly drink alcohol? These increase both your weekly bills and your eventual healthcare bills, as well as causing more time off work.
    Do you utilise your library to its full extent?

There are plenty of ways to save money on your everyday expenses without cutting into the true essentials like income protection insurance and life insurance!

Logistics of a House Fire - Insurance/Contractors/Recovery - What Is It You Need to Know

Statistics say that there are many different possibilities of severe weather in different parts of the country, fire remains the greatest disaster threat to individuals and families. Across every state in this country there families who have been affected by home or apartment fires at an average of 1-2 fires every day. Tragically, every day in our communities at least two families - and in many cases, far more - lose their homes and belongings to a devastating fire.

In 2009 my husband and I woke up to 6 - 7 foot flames outside our bedroom window at 2 a.m. in the morning. It is not something you expect or every want to have to deal with.

Below are a few of the most important things everyone should know and think about before such a life changing event occurs.

The very first thing that you should do before you need your insurance is to video record every single nook and cranny, draws, closets, out building, garage and its contents and I mean every single item, including personal items, electronics with serial numbers down to paper clips. Keep a copy in a safe place off site. All of this trouble will make replacing items so much easier if and when the time comes.

Be sure that you have adequate coverage checking the limits for the Structural and Personal Items. Make sure that you know about any riders that could be attached i.e. limitations for home offices. We were shocked to find out they would only pay $2500 to replace any office equipment. It did not cover even an eighth of the total loss in the office.

Review your coverage every year to make sure to add to your policy anything that you need to add to your policy for coverage. If your family and life style is growing you might need more insurance coverage. Keep a copy of your policy off site maybe in a safety deposit box.

Check to see if your smoke detectors and/or carbon monoxide detectors are up to code and have fresh batteries in them every six months.

Make a list of your credit cards, invoices and bill due dates and telephone number. Two days after our fire I had to start calling all of our creditors to make sure I paid all of them on time. Luckily most of that was fresh on my mind because the day of the fire I had made out all of my bills. Unfortunately I did not mail them so they burnt up in the fire. Keep this list off of site also.

Make sure someone calls the Red Cross Victim Assistance Team in your area. Usually the police or firemen do that for you. Make sure they do that for you. They will help you find a place to stay for a few nights if you do not have a place to go. They are wonderful and very supportive

It takes a few days to make all of the temporary living arrangements and to get the insurance to kick in so plan to have a little extra money and think about temporary living arrangements that you may have available to you. We had to live on-site because of our cattle and horses. But it took six days to make arrangements for and RV and we had to stay in a motel till them. The closest motel was 45 minutes away. Have a trusted family member or friend that could help you sort out all of the arrangements, details and decisions that you will have to make all at once. . It is happening all at once and it is over whelming.

When someone gives you a referral for contract work it does not mean that they are necessarily honest or trustworthy. You need to check them out a bit before you hire them. Everyone deserves honor and respect when they are going through something like that.

Within a couple of days of the fire they will have an investigator on site to determine that cause. They ask lots of questions and had us draw out the lay out of the room where the fire started. It was completely gutted so they wanted to have an idea how the room was used. They wanted every tiny detail of that room and what was in it.

If I every had to do it over again I would ask to see if we could set up some kind of escrow account so that we could review and approve of each payment that went to the contractors making sure that the job was completed to our satisfaction. We had items that were never done but they got paid anyway.

A volunteer firemen told me that she often recommends a fire extinguisher beside the bed in case you have to use it to get out of a room engulfed in flames.

Most of all please take good care of yourself during the recovery. Nurture your mind, body and soul. Recovering from any life changing event can be a daunting task to say the very least.

Women in Canada Pay 5% Less for Auto Insurance and 25% Less for Life Insurance Than Men

There are many rumours about the differences in insurance premiums for men and women. We have analyzed insurance premiums of Canadians across the four most populated provinces. The outcome was quite clear across all major insurance types: Home, Auto, Life. On average, women in Canada pay 5% less than men for Auto insurance, 8% less for Home insurance, and even 25% less for Life insurance. What are the reasons for these differences?

Although there are many criteria considered for the estimation of Auto insurance premiums, it's a fact that women appear to be safer drivers than men, which is reflected in insurance premiums. Women not only have fewer accidents than men, but their claim amounts are lower. The average difference is in Ontario is $5/month and means approximately a 3% difference in premiums.

--Auto insurance, average premiums --

    Canada: Men with $123 vs. Women with $117 results in difference of 5%
    Ontario: Men with $151 vs. Women with $146 results in difference of 3%

Difference in Home insurance premiums is mostly driven by Home value and a number of other aspects that are not affected directly by a consumers' gender. Nevertheless, the premium difference reaches 8% in favour of women on the national level. Interestingly there is virtually no difference between Home insurance rates for men and women in Ontario!

--Home insurance, average premiums--

    Canada: Men with $77 vs. Women with $71 results in difference of 8%
    Ontario: Men with $69 vs. Women with $70 results in difference of -1%

The most significant difference in insurance premiums can be observed in Life insurance: men pay on average 25% more than women. This picture is quite consistent across most provinces analyzed and difference reaches 23% in Ontario.

One of the main factors that drives this difference is the fact that women have a significantly longer life expectancy of 83 years than men with 79 years (according to Statistics Canada, for 2006-2008). Though this gap is closing, and was 7 years a quarter of a century ago, insurance companies see women as a lower-risk customer segment than men.

--Life insurance, average premiums--

    Canada: Men with $71 vs. Women with $57 results in difference of 25%
    Ontario: Men with $81 vs. Women with $66 results in difference of 23%

As our analysis show, women in fact seem to pay less for different insurance types than men. What have your gender experiences shown when buying insurance?

Alex Saltykov is a Co-Founder and CEO of InsurEye Inc http://www.insureye.com. Alex spent years advising insurance clients both in North America and Europe while he was working for one of the leading management consulting companies. His areas of expertise are insurance, innovation, IT and operations.

InsurEye Inc. is a Canadian company that offers people transparency and insights around insurance using modern technology.

Our new tool InsurEye Peer Comparison will show you what your peers across Canada pay for their insurance. This way you understand if you overpay and what insurance providers you should choose to save on insurance!