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Friday, November 25, 2011

Who is an Insurance Broker?

An Insurance broker is a person who simultaneously deals with several insurance companies on behalf of his/ her clients. There main difference between an insurance broker and an insurance agent is that insurance broker does not work for insurance companies while the insurance agent works for insurance companies. The similarities are that both work for commission, prepare and negotiate insurance policies and settle the claims.

Every businessman is well aware of importance of insurance to mitigate various business risks. A variety of insurance contracts with slight variations in their coverage and premiums are available in market. So it is not an easy job to select the right policy with right premium and sometimes on right time. To ease the process of selecting an insurance policy with right premium from right insurance company, the concept of an insurance broker emerged.

Insurance Broker

An insurance broker is an insurance consultant who at a time deals with various insurance companies and finds best insurance solutions for his/her client according to or near to his tailor made requirements. Normally he possesses the market knowledge of the existing policies the different insurance companies are currently offering. He/she maintains very close relationships with different insurance companies. Matches the requirements of his/her clients with the insurance policies and strikes the deal. The insurance broker off course, perform all these functions for brokerage or commission.

Insurance Brokers and Insurance Agents Compared

The fundamental difference between the both, the insurance broker and the insurance agent is that the former is not associated with a specific insurance company, while the later is closely related and some times employed with the insurance company. The functions of both resemble in the sense that both tailor insurance policies, normally work on a commission and settle the claims.

Insurance Industry in United States

Insurance brokerage industry is properly regulated in the United States. All the insurance agents are required to get licenses in almost all the states of United States. Majority of the states have bilateral agreements with each other under which the brokers registered with one state can be easily licensed with another state. There is an exception to this, the state of Hawaii. The registration of insurance broker laws in this state, require that all the licensed brokers must be resident to the state of Hawaii.

To become a licensed insurance broker one has to pass an insurance exam. Although it is not mandatory for an insurance agent or an insurance broker to enroll for classes but it could be more beneficial. For professional grooming it is not mandatory for further improvement in qualification, however, managerial experience and additional educational carrier improves the carrier.

As the industry is closely regulated, there could be tough competition amongst the small brokerage firms and the larger firms. This is because of restriction of any rebate or any sort of discounts on the policy prices of insurance companies.

The regularization of the industry invites specialization like auto, health, home, life and other types of insurance. For dealing in insurance of investment, special licenses are required by SEC (Securities and Exchange Commission).

Research study shows brokers play important role in to help small businesses to find competitive health insurance. Brokers not only assist in insurance sales, but also they assist in employee enrollment and resolve benefit issues.

Friday, November 18, 2011

5 Steps to Get your Health Insurance License

It is somewhat difficult to decide about getting the license by selling health insurance. Once you first decide for it, it really becomes difficult for you to figure out how to apply for it, where to take the classes and things of this sort. In this article, we have described about the life and health insurance license, and the steps that would definitely help you out in getting started up with all this. All you need to do is, just follow them up in the sequence.

1. First Priority

Selling a license to health insurance is similar as selling a license to life insurance. If you are planned at selling other types of insurance that can be your property, casualty, or things of this sort, it requires a separate kind of training. It is a bit different. This type of license is known as “separate agent license”.

Most of the state laws are basic and similar. There is too much common in them. But you need to know about the specific rules and laws that your state has. It is also of extreme importance. For this purpose, a 40 hour class is held. If you attend that class, a completion certificate is given to you. This certificate grants you the access for taking the state licensing exam.

2. Get Registered for Class

Normally, it is too difficult for the people to search for the classes. They don’t get to find how and where they have to go for taking their class. There is no proper guidance for these people. Therefore, it is suggested to the companies to have better marketing strategies. It would really become easier for the people then, to know about the classes and things of this sort.

3. Be Punctual in Class

Be punctual. Always be on time. Never be late. You must manage your time. Financial industry has strict government regulation and thus the professors can punish the late comers and non serious people. Prior to the class it is extremely useful to do home assignments and reviewing. You can also bring your business cards in order to get socialized and make your social circle vaster. Make new friends there and know about other people who are studying with you. There is a variety of professions and life styles of the people who study with you there. It thus, also helps you in becoming social.

4. Complete the Exam Properly

A certificate of completion is given to those who complete the course properly. You have to attend the classes regularly and must be very attentive while taking them. This actually acts as a gatekeeper for taking the exam and getting your license. Some of the states also offer online schedule. This is much comparatively easier and simple to adopt. That’s up to you what you chose for yourself.

5. Pass the Exam

A score of at least 70% is required to pass the exam. Work hard to achieve this particular score because passing this is really important for you. Once you pass it, you are legally allowed for selling life and health insurance. This is the one of the important most steps.

Saturday, November 12, 2011

Corporate Owned Life Insurance

The life insurance policies are generally for safeguarding the financial interest of a family, in case of death or their bread earner. However, you employer can also take these policies in your name. Your employer gets the return and also tax benefits against these policies. These policies are also a big source of income for insurance companies, so it’s not easy to eradicate this practice.

By and large individuals buy insurance policies for the security of their loved ones that monetarily rely on them. It is certainly not easy to envisage this state of affairs, however, if the main source of income for a family expires; the family can come across a grave financial dilemma. If your family is dependent upon your earning, it is therefore, of vital importance to take life insurance policy.

You may be aware of the fact, it is not mandatory that recipient of a policy should be an immediate family member. It is also not necessary that you must be the one to purchase insurance policy on your life. Your company can also do it.

Moral Values Related to Corporate-Owned Life Insurance

The term COLI (Corporate-owned life assurance) is also known as ‘dead peasant life insurance’. It means that an organization takes a policy for his worker. This has also been highlighted in a movie, “Capitalism a Love Story”. The organizations are still maintaining this practice, though it has caused a fury not only amongst the members of family, but also in other individuals.

Capitalism a Love Story

In this movie, Michael Moore plays the role of a public prosecutor who has unearthed many cases of “dead peasant insurance” claims. These policies which are purchased to protect the financial interests of the families of expired employees- are actually for investment purposes (a racket). The companies that seize such policies take loan against these and also have tax relaxation. These ultimately enhance the profit of company, but not give any benefit to an expired worker.

You must be thinking, how does it matter to you that you employer has bought a policy for you or not. It is true that a dead peasant policy will not cost you anything, but ethically it is wrong on account of certain grounds.

Zero Monetary Benefit to Your Family

With your death, your organization has nothing to lose; but certainly your family members will suffer a lot by not having your earnings anymore. Actually, they are the people who must be befitted with life insurance policy.

Infringement of Conviction

On ethical grounds, it is mandatory that the company must acquire formal approval of workers prior to purchasing life insurance policies for them. Still, many of the personnel and their families have no idea that their company seizes a policy on them.

Business over Your Dead Body

It is really a spine-chilling contemplation; is not it?

No Change is Anticipated in Dead Peasants Insurance Policies

Despite all the above mentioned, still these type of policies have not been sacked. In this regard Internal Revenue Service (IRS) is taking some action and inspects those policies that seems fake to them. Nonetheless, a large number of big business concerns are still maintaining this practice. In fact the corporate owned life insurance policies make a lot of money for them. In this regard, note the following facts:

The share of such policies comprise of twenty percent of the total life insurance plies sold on yearly basis.

It is anticipated that such type of policies will offer the organizations more than $9 billion in terms of tax relaxation for the next five years.

For purchasing these policies the business concerns pay $8 billion to insurance companies in a year.  

The dead peasant life insurance is therefore, a huge source of income for the insurance companies. Until or unless, Govt. passes a decree against these policies, this practice will continue and your company may hold a policy on you. You must therefore, carefully go through the papers before signing these, so that consciously you don’t become part of this business.

Sunday, November 6, 2011

10 Simple Ways to Save On Renters Insurance

Insurance Research Council survey in 2006 revealed that 96% of the people who own their own homes have a homeowner’s insurance policy, on other side the people who live in rented homes from them only 43% people have a renter’s insurance policy.  Renters insurance is so much less expensive than homeowners insurance. Renter’s insurance policy only cost $16.26 per month and it is one of the greatest values on the insurance market today. But still there are many ways to make a renter’s insurance policy more affordable.

Here are the 10 ways from which you can save on renters insurance:

1 – Make a Comparison of Renters Insurance Quotes

The best to find a affordable renters insurance policy is to compare their quotes and coverage. You can get renters insurance policy quotes online, compare them, and determine which is most suitable for you in terms of cost.

2 – Higher Deductible Will Lower Your Renters Insurance Premium

A deductible is the amount, which you have to pay before the insurance provider will make payments on claim. It’s the rule, the more the deductible will be higher, the lower the premium will be.  Its good for you to determine the deductible, renters insurance deductible usually start at $ 250 and go up from there.

3 – Your Good Credit Rating Can Lower Renters Insurance Costs

Good credit rating always counts a lot and its easiest way to lower insurance costs. Your good credit rating will show the insurance company that you pay your bills on time. From your credit rating insurance company will determine that you’re less risky to insure. Less risk leads to lower premiums.

4 – Get Multi-Discounts by Buying Renters & Auto Policies from the Same Company

Most of insurance companies offer multi-line discounts if you combine renters insurance with auto coverage. If you have both policies with same company then it will be convenient and will save you money also.

5 – Safety and Security Devices Can Save You on Renters Insurance

The preventive measures for potential losses and damage, because this is another way to save money on renters insurance.  The installation of security devices makes it of fewer security risks and it leads you saving money on your renters insurance.

6 – Lower Premiums for Non-Smokers

One of the leading causes of residential fires is smoking. That’s why insurance providers offer reduced premiums to non-smokers.

7 – Senior Discounts on Renters Insurance

It’s proven by a research that retired individuals are less risky to insure. 55 years old or older renters can save up to 10% on their renters insurance.

8 – Group Coverage Can Save On Renters Insurance

If your employer or association offers affordable group coverage then grab it.  There are always discounts on group insurances.

9 – You Can Have Lower Renters Premiums by Staying With the Insurer

There are many insurance companies who reward lower premiums to their loyal clients. This is an incentive given to their customers to keep them happy. So you can take advantage of such offers. There is a possibility that you can save up to 5% if you stay with same insurance company for three or five years. This discount can go up to 10% after the six-year mark.

10 – Keep Check & Balance of Your Renters Insurance Policy Annually

After one year of having renters insurance policy you possibly will sell items in your possession or acquire new belongings. The annual review of your renters policy will enable you to adjust your coverage amounts, potentially saving you money.

Though renters insurance is not as expensive like home owners insurance but still you can find different ways to save.