Life Insurance Companies & Policy Terms

Life Insurance Companies & Policy Terms

Life Insurance companies

There are several large and high rating insurance companies in the world. Here brief introduction of a few of those will be discussed so that you can understand more about life insurance and to see how they are structured to facilitate and for the comfort of their customers. These are given below:-

1: stock life companies

2: Mutual companies

3: reciprocal insurer

4: Lloyds of London

5: reinsurers

6: Risk retention group

7: assessment mutual insurers

8: Fraternal benefit societies

9: service insurer

10: Home service insurer

1: stock life companies:-

As the name shows it has stock holders. These type of people can be the policy owners but it is not necessary for them. Each have their own shares in the company and they have a board of directors to guide the company. If the company succeeds in its business the stock holders recieve dividends and these are payed per share stock of the owners.

A stock life insurance company is in business to make profit for the stock holders like other companies and corporations.

2: mutual insurance companies:-

It is also a type of corporation. It’s name is derived from its basic ownership characteristics. In this company many people control the company mutually who are the owners. They elect a board of directors and the funds are returned as dividends to the policy owners and they are in the form of reduced costs for insurance.

For example:

A mutual insurance company may sell the life insurance policy at a specific age for $,15 per $1000 for face amount. When a dividend is declared then in this case the each policy owner recieve the premium statement in the amount of $2 per $1000. Thus the final cost is $13 per $1000 of face amount in the life insurance policy.

3: reciprocal insurers:-

It is the group of people who insure each other in a group and definitely every person is both insurer and insured at the same time. In this type of arrangement the liability of each person is limited.

In this type every person gets insured by the help of another who is the part of that group or company. That group of people develop their insurance company at a small level in this way.

4: Lloyds of London:-

It is an association of companies and individuals who usually underwrite insurance. They are also not an insurer.

5: reinsurers:-

The company who transfers the risk from insurers to the company is called reinsurer company and the company taking risk is called the ceding company. The company then handles all the risks and problems that the insurer faces in his life. If the insured person dies then the company gives funds to the family of that insured person.

6:Risk retention group:-

The mutual insurance company that is made by a group of people who have same line of business or have same type of profession is called the risk retention group.

7: Fraternal benefit societies:-

These type of societies are the non profit lodge systems. It’s products are only sold to its members and are similar to commercial insurers.

8: Service insurers:-

These type of companies are blue cross, blue shield, HMO,and PPO health carriers.

9: Home service insurers:-

These insurers sell the smaller face amount policies, known as industrial policies. These are called as debit insurers.

10: Others:-

Other entities include government insurance programs. These programs are created to cover basic risks and to distribute the funds among the people living in those areas where they face the shortage of society’s needs. By virtue of sponsoring programs like medicare,  social security and also the unemployment programs. Due to these reasons the US government helped Pakistan in this matter.

 

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