The US insurance market is the largest globally by premium size, revenues, and the number of employees. In 2021, this industry wrote over one trillion dollars of net premiums, with property/casualty insurance accounting for 53 percent and life/annuity plans contributing 47 percent.
Insurance plans promote efficient resource utilization by policyholders. There is no need to set aside significant finances to cover risks and unforeseen events. Policyholders only pay manageable monthly premiums, and they can invest the rest of their money.
Insurers also enhance the policyholder’s credit profiles. They guarantee lenders they will receive their money if uninsured events damage the borrowers’ collaterals. Lenders’ uncertainty over default reduces and becomes flexible with the borrower’s financing requests.
Insurance plans help policyholders comply with the law. Insurers advise clients on obligations, statutory changes, and policy alterations directly affecting them. Policyholders can avert legal punishments when they understand how these factors affect their liability.
Home, life, and auto insurance are popular plans in the insurance market. Home insurance covers properties against damages. Homeowners relying on mortgages require this policy because it guarantees lenders they will keep receiving interest payments after property damage or destruction. These borrowers have the support to rebuild their homes instead of walking away.
Policyholders can choose dwelling coverage, personal property coverage, or liability coverage to insure their homes. Dwelling coverage protects a house and its structure from unforeseen events, including fire, theft, vandalism, and wind. Insurers support clients in repairing and replacing the houses’ structures, such as decks and garages.
Personal property coverage insures a client’s belongings, such as furniture, clothing, and home appliances, against damage, theft, and fire. Liability coverage helps policyholders pay for injuries or property damage they inflict on others. This plan covers attorney fees in case of litigation and compensates the affected person. Insurers consider the policyholder’s net worth and litigation costs when selling this plan to clients.
Life insurance is suitable for people hoping to protect their family or those that rely on them financially. Policyholders pay premiums, and after death, insurers support beneficiaries depending on the contract terms. Life insurance is available in two packages, term, and permanent life insurance.
Term life insurance specifies the rates beneficiaries receive for a certain period. Policyholders pay fixed premiums and can renew the plan after its expiry, though it attracts different charges. This plan is suitable for covering beneficiaries’ financial needs, mostly college fees.
On the other hand, permanent life insurance offers lifelong coverage plus a savings option. Beneficiaries receive a death benefit and can borrow funds using the plan’s cash value. Alternatively, policyholders or beneficiaries can withdraw the savings.
Permanent life insurance can also be a supplementary retirement plan. Policyholders can utilize its savings component in retirement to invest since they pay no taxes on earnings, provided the plan is active. This plan’s premiums, however, are higher than those in term life insurance.
Lastly, auto insurance covers the risks of owning, driving or leasing a vehicle. Insurers can choose liability coverage, uninsured motorist (UM) coverage, personal injury protection (PIP), or medical payment coverage. Liability coverage pays for property damages and injuries policyholders cause to others. This plan covers the client’s legal defense and settlements.
UM coverage pays for a client’s damages and medical expenses when uninsured drivers damage their insured vehicle. PIP reimburses a client and their passengers during accidents and can cover other related needs, including lost wages and rehabilitation services. Medical payment coverage pays a client’s medical bills after an accident regardless of who was at fault.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.