Archive for November 15, 2010

Types of Life Insurance Riders

Accidental Death Rider: The rider provides extra benefits equal to the minimum sum assured while taking the base policy. It is applicable only if the insured dies during the policy term due to accident. Since in most cases the rider benefit promises a sum same as the underlying policy assured amount, it is also called Double Indemnity Rider.

Critical Illness Rider: Also known as Accelerated Death benefit, this rider allows an insured who is diagnosed with terminal illness and may require long term medical care or who requires confinement to medical home permanently; to withdraw part or whole amount of death benefit from the basic insurance policy. The basic insurance policy reduces by the amount withdrawn under rider. The rider helps the insured and his family meet immediate financial needs of medical treatment and loss of regular income generated by the insured. The rider generally specifies the amount available to insured in such cases and can be withdrawn by him during term of policy.

Accidental Death, Disability or Dismemberment Rider: The accidental death rider can be sometimes extended to include any permanent or long term disability lasting at least for 6 months or loss of limbs or sight due to accident.

Level Term Rider: With this rider you can attach a fixed amount of term insurance to your basic permanent life insurance policy for a certain period. The amount of benefit assured can be multiple times the basic death benefit from the original policy.

Waiver of Premium Rider: This rider helps the insured to continue with his insurance policy even if he/ she are unable to pay regular premiums due to long term or permanent disability. By default a life insurance policy can expire if the premium is not regularly paid. Incase if the insured suffers from a disability that prevents him from earning a regular source of income, the insurance policy premiums become difficult to bear. This rider allows the insured to take waiver from premium payments until the disability lasts or for the entire policy period in case of permanent disability. The terms of proving disability and its valid duration vary from company to company and across different policies.

Guaranteed Insurability Rider: Also known as Renewal provision, this rider allows you to buy extra insurance at certain periods during the specified term of rider. Without letting your existing policy elapse, you can purchase additional insurance or convert basic term insurance without proving insurability or having to undergo fresh medical examination. The rider is most beneficial to those who may experience major medical illnesses or loss of health due to advancing age, as there is no need for fresh underwriting. It also allows to add more insurance with changing life circumstances like marriage or arrival of newborn.

Family Income Benefit Rider: This rider provides a cushion in case of sudden death of the insured during policy term. While taking the rider, the insured needs to select the time frame for which he wants his family to continue receiving benefits. According to their comfort level, the beneficiaries will have the option of receiving regular monthly income or taking the entire benefit as lump sum after the death of the policy taker. As the insured grows old the duration of rider decreases. This rider is most beneficial to families with single bread winner.

via Types of Life Insurance Riders.

What is Waiver of Premium Insurance Rider?

Most people are aware of the advantages and take out some or other form of insurance policy depending on their needs.  The most basic situation for which a life insurance policy is generally taken is loss of income due to death of bread winner of the family. But many overlook the possibility of a worse situation arising due to permanent disability that could make regular premium payments difficult and result in the termination of the insurance policy.

Definition – The situation is easily remedied by opting for a Waiver of Premium Insurance Rider that can be easily attached to almost any insurance policy. According to the rider, an insured can claim relief from paying future premiums in case he/she becomes permanently disabled or is unable to earn a living due to disability during the term of the policy and the disability lasts for at least 6 months. With this rider, the insured can continue to enjoy the benefits of the base policy without paying any more premiums till the time the disability lasts. Once the insured recovers, he can start paying premium again.

Benefits and Restrictions – The best part of the rider is that since it attaches only to the security part of the total insurance taken, the extra premium to be paid is quite minimal. The rider can be especially useful in case if the premium payments are quite high and will ensure that the policy continues even in case of debilitating illness or accident. To be able to claim premium waiver, the insured must prove that they have been suffering from the disability for atleast 6 months or any other minimum period as mentioned in their rider terms. Also, the rider benefits are available only until a certain age, generally 60 or 65 years. Post the maximum age limit, the insured cannot opt for this rider. The rider is valid only till the term of policy. Once the policy reached term, the rider is terminated. Thus it is beneficial to opt for the rider right at the time of taking out an insurance policy to safeguard your financial investment planning objective.

Disability – Disability definition as per the waiver of premium rider specifies that the insured must be so disabled that he / she is unable to pursue the profession they were engaged in when they became disabled. It varies from one insurance India company to another whether they consider the person disabled to carry out their particular occupation or unable to pursue any occupation in general. It is thus advisable to expressly clarify the point with the insurance company and read related documents carefully before opting for the rider.

All insurers clearly mention the conditions under which the insured will be considered disabled and eligible for the waiver of premium rider. Where some only accept permanent and irrecoverable disability, others may consider the insured disabled even if they are able to engage in work in some cases. Loss of limbs like hands, legs and eyes generally qualify a person for the rider benefit. Besides, a person who suddenly loses his ability to speak or hear due to illness or accident also sometimes qualifies.

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via What is Waiver of Premium Insurance Rider?.

An Insurance Guide For New Drivers

Cost: Know the cost of the insurance. Most companies do not have cheap rates for new drivers. However, this does not mean all of them charge exorbitant premiums. Do not simply get a cover from the first company you come across. Use auto insurance comparison websites to compare prices from different firms.

Policy Coverage: Find out what the policy will cover. Confirm the claims that you can make and the amount that you will be compensated. Go through the insurance agreement carefully to understand what penalties you can incur and what events can lead to your premiums being adjusted.

Is the Insurer Genuine? Go for an insurer that has a good reputation. Check the company at the BBB to see how it fairs. Also, contact your local insurance complaints center to find out whether there are any complaints lodged against the insurer. Few complains usually indicates the insurer is a trusted one and serves its customers well.

Then, you have to know level of cover you should take. This is very important as it usually determines what you are covered for. You have to consider the type of cover, the features of the policy and any optional extras that come with the policy. There are three types of cover: Comprehensive, Fire & Theft, and Third Party only. Each cover offered different form of protection and thus you should understand them in order to choose the right one for you.

Like the name suggests, Comprehensive Cover offers the most detailed coverage, Fire & Theft covers protects your vehicles from incidences of fire or theft, while Third Party cover protects other people from accidents that are caused by your car. All states require drivers to take at least Third Party insurance cover.

How To Get Cheap Car Insurance

The best way to find car insurance is to research online. Go through various websites of insurance firms and compare their packages. Moreover, you can also use an auto insurance website comparison tool. Insurance companies tailor their premiums based on different considerations such as the age, type of car, driving records, safety features present in the car and so on.

via An Insurance Guide For New Drivers.

How Your Car Quote Is Calculated

There are quite a number of considerations taken to affect premium pricing on new car insurance. Insurance companies vet an individual’s cars to ascertain risk factors which in this case influence the cost of car insurance. Some of the factors taken into when purchasing a new car insurance premium are;

Car insurance group

All cars have a group cluster rating issued by the insuring body; these ratings are normally based on the risk component of the vehicle. Some of the factors used to determine a car’s group ratings are:

The value of the car

Spare parts costs

Availability of spare parts

Engine performance and specifications

Standard security features fitted the car manufacturer

Past insurance history of the model of the car

Cars with low category cluster as per the mentioned points attract less insurance premium.

Driver’s license information

Drivers with clean driving records are seen as less likely to be involved in car accidents. Supporting driving certificates from recognized driving institutions can also help in lowering insurance costs.

Insurance claim history

An applicant with a record of recurring insurance claims is seen as potential high risk to the insurance. Insurance companies quote a higher premium for such new car insurance applicants.

Medical Condition and history

Insurance do not charge extra for individuals with certain medical conditions, however an individual with a restricted license may have the insurance company review the policy hence an adjustment to the car insurance costs. It is very important to reveal any medical condition that may be of concern to your driving abilities.

Car security

Most insurance companies will insist on additional car securities such as car alarms and engine immobilizers. Some insurance companies insist expensive to have cars to have satellite tracking systems. It is very important to have such installation done by professional car security personnel and a certificate issued to that effect.

The applicant occupation

Individual on certain occupation tend be of higher risks than others. For instance, golfers and sportsmen can carry around gadgets which may put the car at potential risk, whereas a college lecturer may not have anything of worth to carry around.

Your address and car parking details

Insurance companies gathers information about the applicant address, this base the risk component influenced by the applicant surrounding. It is very important communicate with your car insurance company whenever you move to a new address. Stating where you park the car at night will also affect the kind of premium charged.

via How Your Car Quote Is Calculated.

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