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Insurance is an arrangement with an insurance firm under which you pay them regular amounts of money and they agree to cover your costs if a certain unfortunate event occurs, for example a traffic accident, damage to property or illness. Insurance, however, may also be arranged for a common event, e.g. if you reach a certain age. An event covered by insurance is referred to as an insurance event. The person to whom such an event occurs or may occur is called the person insured. When an insurance event occurs (you get ill, suffer an accident, reach a certain age), the insurer will pay you a certain amount of money referred to as an insurance benefit / claim paid. The insurance benefit / claim paid will help you or your family to overcome the financial difficulties or increased costs that may arise from an insurance event. This means that by arranging insurance you obtain insurance cover against a certain risk.
As any other service, insurance is not provided free of charge. The insurer promises to pay you a benefit / claim amount as agreed in the insurance contract, upon the occurrence of an insurance event. The price you are to pay for this service is the insurance premium. The person who takes out an insurance policy and pays insurance premiums is called the policyholder. The insurance premium is payable in monthly, quarterly or annual instalments as a rule, but it may also be paid in a single payment.
In addition, the insurer may charge you various fees. Hence, ask the insurer how much you will be required to pay in fees and other costs. This is particularly important in the case of life assurance. Are you aware of the fact that life assurance fees are rather high, especially in the first few years?
Insurance is available to help you pay for damage to your property or to pay others on your behalf when you injure someone or damage their property. Insurance is a contract that transfers the risk of financial loss from an individual or business to an insurance company. The company collects small amounts of money from its clients and pools that money together to pay for losses.
Insurance is divided into two major categories:
Property and casualty insurance provides protection to businesses and individuals for losses related to their belongings or assets, both physical and financial. Life and health insurance protects people from financial loss due to premature death, sickness or disease.
Insurance uses probability and the law of large numbers to determine the cost of insurance premiums it charges its clients based on various risk factors. The rate must be sufficient for the company to pay claims in the future, pay its expenses, and make a reasonable profit, but not so much it turns away customers.
The more likely an event will occur for a given client (ie a house near the water flooding when the area has a high history of flooding), the more insurance companies will need to collect to pay the anticipated claims.
Insurance companies market their products and services to consumers in different ways. The price companies charge for insurance coverage is subject to government regulation. Insurance companies may not discriminate against applicants or insureds based on a factor that does not directly relate to the chance of a loss occurring.
When choosing a policy, it is important to understand how insurance works.
[Important: Three crucial components of insurance policies are the premium, policy limit, and deductible.]
A firm understanding of these concepts goes a long way in helping you choose the policy that best suits your needs.
A policy’s premium is its price, typically expressed as a monthly cost. The premium is determined by the insurer based on your or your business’s risk profile, which may include creditworthiness. For example, if you own several expensive automobiles and have a history of reckless driving, you will likely pay more for an auto policy than someone with a single mid-range sedan and a perfect driving record. However, different insurers may charge different premiums for similar policies. So finding the price that is right for you requires some legwork.
The policy limit is the maximum amount an insurer will pay under a policy for a covered loss. Maximums may be set per period (e.g., annual or policy term), per loss or injury, or over the life of the policy, also known as the lifetime maximum.
Typically, higher limits carry higher premiums. For a general life insurance policy, the maximum amount the insurer will pay is referred to as the face value, which is the amount paid to a beneficiary upon the death of the insured.
The deductible is a specific amount the policy-holder must pay out-of-pocket before the insurer pays a claim. Deductibles serve as deterrents to large volumes of small and insignificant claims. Deductibles can apply per-policy or per-claim depending on the insurer and the type of policy. Policies with very high deductibles are typically less expensive because the high out-of-pocket expense generally results in fewer small claims.
With regard to health insurance, people who have chronic health issues or need regular medical attention should look for policies with lower deductibles. Though the annual premium is higher than a comparable policy with a higher deductible, less expensive access to medical care throughout the year may be worth the trade-off.
Insurance is a contract (policy) in which an insurer indemnifies another against losses from specific contingencies and/or perils.
There many types of insurance policies. Life, health, homeowners, and auto are the most common forms of insurance.
The components that make up most insurance policies are the deductible, policy limit, and premium.
Reinsurance is insurance for insurers. It is an agreement between an insurer (cedent) and a reinsurer: the reinsurer agrees to indemnify the cedent against all or part of a loss which the ceding company may incur under certain policies of insurance that it has issued. In turn, the cedent pays a consideration, typically a premium, and discloses information needed to assess, price and manage the risks covered by the reinsurance contract
Facultative coverage protects an insurer for an individual or a specified risk or contract. If several risks or contracts need reinsurance, they a renegotiated separately. The reinsurer holds all rights for accepting or denying a facultative reinsurance proposal.
A reinsurance treaty is for a set period rather than on a per-risk or contract basis. The reinsurer covers all or a portion of the risks that the insurer may incur.
Reinsurance allows insurers to remain solvent by recovering some or all amounts paid to claimants. Reinsurance reduces the net liability on individual risks and catastrophe protection from large or multiple losses. The practice also provides ceding companies, those that seek reinsurance, the capacity to increase their underwriting capabilities in terms of the number and size of risks. According to the Insurance Information Institute, Hurricane Andrew caused $15.5 billion in damage in Florida in 1992, causing seven U.S. insurance companies to become insolvent.
By covering the insurer against accumulated individual commitments, reinsurance gives the insurer more security for its equity and solvency by increasing its ability to withstand the financial burden when unusual and major events occur.
Through reinsurance, insurers may underwrite policies covering a larger quantity or volume of risk without excessively raising administrative costs to cover their solvency margins. In addition, reinsurance makes substantial liquid assets available to insurers in case of exceptional losses.
An insurance claim is a formal request by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event. The insurance company validates the claim and, once approved, issues payment to the insured or an approved interested party on behalf of the insured.
Insurance claims cover everything from death benefits on life insurance policies to routine and comprehensive medical exams. In many cases, third-parties file claims on behalf of the insured person, but usually, only the person(s) listed on the policy is entitled to claim payments.
A paid insurance claim serves to indemnify a policyholder against financial loss. An individual or group pays premiums as consideration for completion of an insurance contract between the insured party and an insurance carrier. The most common insurance claims involve costs for medical goods and services, physical damage and liability resulting from the operation of automobiles, property damage and liability for dwellings (homeowners, landlords, and renters), and the loss of life.
For property and causality insurance policies, regardless of the scope of an accident or who was at fault, the number of insurance claims you file has a direct impact on your rates. The greater the number of claims filed, the greater the likelihood of a rate hike. File too many claims and the insurance company may not renew your policy.
If the claim is being filed based on the damage you caused, your rates will almost surely rise. On the other hand, if you aren’t at fault, your rates may or may not increase. Getting hit from behind when your car is parked or having siding blow off your house during a storm are clearly not your fault and may not result in rate hikes, but this isn’t always the case. Mitigating circumstances, such as the number of previous claims you have filed, the number of speeding tickets you have received, the frequency of natural disasters in your area (earthquakes, hurricanes, floods) and even a low credit rating can all cause your rates to go up, even if the latest claim was made for damage you didn’t cause.
When it comes to rate hikes, not all claims are created equal. Dog bites, slip-and-fall personal injury claims, water damage, and mold are red flag items to insurers. These items tend to have a negative impact on your rates and on your insurer’s willingness to continue providing coverage. Surprisingly, the much-dreaded speeding ticket may not cause a rate hike at all. Many companies forgive the first ticket. The same goes for a minor automobile accident or a small claim against your homeowner’s insurance policy.
Costs for surgical procedures or inpatient hospital stays remain prohibitively expensive. In 2014, the US average cost for a one-day hospital stay was $2,212. Individual or group health policies indemnify patients against financial burdens that may otherwise cause crippling financial damage. Health insurance claims filed with carriers by providers on behalf of policyholders require little effort from patients; 94% of medical claims were adjudicated electronically in 2011, representing a 19% increase from 2006.
Policyholders must file paper claims when medical providers do not participate in electronic transmittals but charges result from rendered covered services. Ultimately, an insurance claim protects an individual from the prospect of large financial burdens resulting from an accident or illness.
A house is typically one of the largest assets an individual will purchase in his/her lifetime. A claim filed for damage from covered perils is initially routed via phone or the internet to a representative of an insurer, commonly referred to as an agent or claims adjuster.
Unlike health insurance claims, the onus is on the policyholder to report damage of a deeded property he owns. An adjuster, depending on the type of claim, inspects and assesses damage to property for payment to the insured. Upon verification of the damage, the adjuster initiates the process of compensating or reimbursing the insured.
Life insurance claims require the submission of a claim form, a death certificate, and oftentimes the original policy. The process, especially for large face value policies, may require in-depth examination by the carrier to ensure that the death of the insured did not fall under a contract exclusion, such as suicide (usually excluded for the first few years after policy inception) or death resulting from a criminal act.
Generally, the process takes approximately 30 to 60 days without extenuating circumstances, affording beneficiaries the financial wherewithal to replace the income of the deceased or simply cover the burden of final expenses.
Filing an insurance claim may raise future insurance premiums.
To File or Not to File an Insurance Claim?
There are no hard-and-fast rules around rate hikes. What one company forgives, another won’t forget. Because any claim at all may pose a risk to your rates, understanding your policy is the first step toward protecting your wallet. If you know your first accident is forgiven or a previously filed claim won’t count against you after a certain number of years, the decision of whether or not to file a claim can be made with advance knowledge of the impact it will or won’t have on your rates.
Talking to your agent about the insurance company’s policies long before you need to file a claim is also important. Some agents are obligated to report you to the company if you even discuss a potential claim and choose not to file. For this reason, you also don’t want to wait until you need to file a claim to inquire about your insurer’s policy regarding consultation with your agent.
Regardless of your situation, minimizing the number of claims you file is the key to protecting your insurance rates from a substantial increase. A good rule to follow is to only file a claim in the event of catastrophic loss. If your car gets a dent on the bumper or a few shingles blow off of the roof on your house, you may be better off if you take care of the expense on your own.
If your car is totaled in an accident or the entire roof of your house caves in, filing a claim becomes a more economically feasible exercise. Just keep in mind that even though you have coverage and have paid your premiums on time for years, your insurance company can still decline to renew your coverage when your policy expires.
Almost people can insure themselves in developed countries because most of the insurance companies are there and they will protect your life and things. if we look at developing countries then you will find less of insurance companies. So, before you get to know about top insurance companies, make your mind what kind of insurance you want.
Because you will have Life insurance, Health insurance, Car insurance, and many others, Although I have mentioned above. Anyway, the below companies are best in all criteria. therefore, have a look.
Firstly, take a look at the largest insurance company which found in 1890 in Germany and the chairman of this company is Oliver Bate. However, according to my search, Allianz ranked among the top Forbes Global list and it operates more than 70 countries with having more than 85 million customers. Allianz is nominated in the top 3 insurance companies this year and its revenues stood at 145.7 billion.
Allianz has been very competitive in the insurance industry and asset management. Although this company has become in the top 5 in the Life and Health insurance business, Moreover, Allianz corporate with customers in many criteria such as motor, accidents, property, general liability, travel insurance and assistance services.
The second top insurance company in the world is AXA and it found 1816 in France and the headquarter is located in Paris. the chairman of AXA is Thomas Buberl. the company gives the services and offers life insurance, property and casualty insurance, retirement products, and asset management. So, this company has more than 102 million customers in over the world and it is located in more than 60 countries. AXA company has $1,034.5 billion in assets.
The United Health Group found in 1977 in the USA and the chairman is Dave Wichmann. this company is located in over 50 states and more than 130 countries. the company has $158.5 billion assets. mostly it offers life insurance, health insurance and many more in the world. So, the united stated people mostly insure themselves with (UHGI) and so far this company is on the top among all companies.
However, Chine is one of the top countries among all and it developed many new things and produces new technology that all countries used the product of china. Therefore, China Life Insurance company is the largest company in 2020 even it is so far and china’s life insurance company is focusing on the life and health insurance. this company was found in 1949 in Beijing China and the chairman is Dairen Lin. So, the current asset of chine life insurance is $97.6 billion with 13 subsidiaries, 3 transactions available for CSV export.
Ping insurance group company is also developed by china and it is the largest life and health insurance company moreover Ping insurance is the personal financial services provider and it mostly provides banking, investment, and internet finance products. So, Ping insurance company was found in china in 1988 and the chairman is Ma Mingzhe. However, the Ping insurance has divided into four parts which are life insurance, property insurance, whole-life insurance, endowment, annuity, automobile.
Metlife has more than 90 million customers in over 60 countries and it was founded in 1868. However, this company is the largest and oldest provider of insurance, annuities, and employee benefit programs. Metlife has the largest market cap of $4.65 billion. Although it is one of the top insurers and best over the world.
Most people want to deal with health and life insurance company and you get a 70% idea about top insurance companies but the biggest life and health insurance company is Anthem, Inc over the world. Anthem, Inc is located in the United States and now it has a branch in California too because it has more than 40 million customers and people like the way it serves and helps the customers. However, Anthem, Inc was founded in the USA in 2004 and the chairman is Gail Koziara Boudreaux.
The ING Group is a Dutch multinational and founded in 1991 with having $52.33 billion market cap. ING Group has more than 37 million customers in over 40 countries. This company provides a large of services like commercial, and investment banking, insurance, and asset management. However, in 2018 ING Group announced a partnership with another member of AXA. Now, they both serve the clients and product’s best insurance overall.
The first name of Aviva was CGNU but in 2002 the company changed the name to Aviva and it was found in the United Kingdom. However, Aviva is the largest general insurer in the world and it is the biggest insurance company in Canada. Aviva offers life insurance, health insurance, general insurance, and asset management. Moreover, it has $533.3 billion in assets. So, Aviva serves more than 33 million customers in 16 countries.
The United States has many largest insurance companies but one of the top 10 companies is Prudential Financial. this company has $815.1 billion and it provides insurance, annuities, retirement products, and investment management services to clients in over 40 countries. So, Prudential Financial has a market capitalization of $42.4 billion.