Have You Considered Income Protection Insurance?

While we all like to think that our jobs are safe, the truth is that anything can happen in the future. Being made redundant is just one of the problems that could crop up along with suffering illness or being unfortunate enough to have an accident. If any of these kept you from earning an income then you would struggle to maintain your lifestyle. However income protection insurance could provide you with a lump sum income each month which would be tax free.

As with all insurance policies, certain conditions do apply to all cover, so you do have to ensure meets your circumstances before buying. Exclusions which exist in all include being in part time employment, suffering from a pre-existing or ongoing medical condition, being retired or self-employed. Providers can put others in so you have to read and compare the wording of any insurance you are considering.

A standalone provider of income protection is the obvious choice when buying the cover. They will offer the terms and conditions in easy to understand plain English which makes deciding if you could benefit easy. As they do specialise in selling policies of this nature the provider will be able to back up their products with experience.

Income protection insurance would provide you with the money needed each month to continue living your current lifestyle if you did become unable to work. A policy would cover suffering from an illness or accident which would incapacitate you or if you should become unemployed through no fault of your own such as redundancy. Cover would begin after you had been incapable of working for a certain period of time. With the majority of policies this can be anytime from the 30th and up to the 90th day. Once a policy has commenced it would then continue to give you security of an income for between 12 and 24 months depending on the provider.

The cost of the premium for income protection insurance will vary and it can be quite a lot. This is why it is essential to get quotes from independent providers for the cover. Along with getting the cheapest quotes from a specialist you will also get access to the information you need to ascertain whether cover would be suitable.

It is a lack of information at the time of taking out a policy that has led to many buying cover that they could not claim on. This was highlighted in 2005 when the Office of Fair Trading received a super complaint from the Citizens Advice. High street lenders were handed fines and the Financial Services Authority made suggestions when it came to improving the sales techniques. While some changes for the better have been seen many more need to be made in the future and some firms sadly still continue to mis-sell.

It is important to remember that income protection insurance as a product is not at fault. The insurance itself provides invaluable protection - you just need to buy it wisely.

Why Home Owner Flood Insurance Makes Sense

Usually an after thought when purchasing property, homeowner flood insurance may be the best investment you can make to protect your home and possessions. Misunderstood or not available in the past people now have no excuse for not insuring that when tragedy strikes they are protected. Mandated by Congress in 1968 the National Flood Insurance Program made it possible for protection from floods and their devastation.

There are different levels of protection, as with all insurance policies, that you can select for this insurance. One option is called the Preferred Risk Policy (PRP). This type of policy has a lower cost and is aimed at homeowners who have property in "low" to "moderate" flood risk areas. The property covered can be classified as residential or business. Statistics from FEMA state that, a whopping ninety percent of all natural disasters in the US involve flooding and twenty five to thirty percent of flood insurance claims are from regions designated as "low-risk."

Flood insurance is sold as a separate policy and will have to be added to your existing home insurance coverage. Even though you may not live in a flood zone, natural disasters and accidents do occur so it is prudent to have at least the minimum coverage to protect your possessions and home. Make absolutely sure that you know what is covered in any policy you are considering. You want no surprises when your stuff is swimming in water.

If you are purchasing homeowners flood insurance for the first time there is a standard waiting period before the policy is active. This is important. The waiting period is usually thirty days, however, if you are adding this coverage to an existing policy the waiting period is often waived. It depends on the terms and conditions of your policy and insurance company.

When the National Flood Insurance Program was introduced, insurance companies made special provisions to its policyholders. The biggest benefit to this type of policy is that it also covers what is termed "Acts of God", which means that not only is your home insured for flood damage, it is covered for a number of different natural disasters. It is important that you discuss which disasters are covered with your insurance provider.

Researching on the internet will allow you to do some comparisons to see what is being offered by different companies and get the best quote online. This is a quick and painless way to find the highest amount of coverage for the lowest premiums. You can also learn a lot about the different levels of home insurance coverage available.

Whether it is a natural disaster or some other unforeseen event you must take into account the cost of replacing and/or repairing your possessions and even the structure of your home. If you can afford to do this without insurance, great. If not, it will be like being in a row boat with no paddle. Of course adding flood protection to your existing home insurance policy is going to mean higher premiums, it is worth it. If a flood or other disaster should occur would you want to be denied a claim for not having it? The peace of mind that you can recover from a flood or disaster is why an investment in affordable homeowner flood insurance makes sense.

An Overview of Social Security Disability Insurance

Two programs are being enacted by the federal government, which provides benefits for individuals with disability. Collectively, these programs are being referred to as "Social Security disability benefits."

• Social Security Disability Insurance Benefits Program or SSDI Benefits - authorized by the Social Security Act, Title II and is geared towards providing benefits to workers with disability and / or their dependents and surviving spouses or children.

• Supplemental Security Income program or SSI - authorized by the Social Security Act, Title XVI and aimed at giving benefits to individuals with disability whose assets and income are below a particular level.

History of Social Security Disability Insurance (SSDI) Benefits

It was in the year 1935 when the U.S. federal government set up a program geared towards providing elderly employees of commercial and industrial sectors with retirement benefits. The scheme of this program is enacted through the Federal Insurance Contributions Act or FICA, setting up a federal retirement fund that the employees are required to pay into. The employees remit into this fund through a regular deduction on their salary.

It is the Social Security and the Medicare programs that are funded after the withdrawal of FICA tax from the employees' salaries. Meanwhile, self-employed citizens can contribute to the FICA because of the federal tax returns.

By 1956, some protection policies covering the "involuntary retirement" options on the basis of disability were established. An individual, even if he / she has been forced to stop working because of a disability may still have access to the disability insurance. It would depend, however, on the period he / she have paid FICA taxes.

Objectives of SSDI

The main objective of the SSDI is to replace the regular income being received by people who have acquired a disability and can no longer work at all or hold down his/her present work, provided that he / she has remitted adequate FICA taxes.

Under the SSDI, different kinds of benefits are provided for family members when their major wage earner have acquired a disability or died.

The SSDI program is being financed by the Social Security taxes being paid by employees, employers and self-employed individuals. SSDI benefits can be paid to workers with disability, widows or widowers, and children or disabled since childhood adults if they are eligible.

Availing SSDI benefits

The Social Security has a particular definition of disability that need to be met in order to become eligible to receive SSDI benefits. The main requirement to gain medical eligibility under the SSDI program is the inability by an individual to perform any kind of Substantial Gainful Activity or SGA for 12 months or more.

This medical definition of disability is also the requirements used to become eligible under the Supplemental Security Income (SSI) program.

Determining disability

The person with disability should have been unable to perform SGA due to an impairment affecting the physical or mental capacity and is medically determinable. The impairment can also either be expected to last continuously for at least 12 months or result in death.

Receiving benefits

After meeting the requirements given by the disability evaluation and the disability is already proven, the payments of SSDI benefits will commence. The beneficiary needs to wait for a period of 5 months since it is during the sixth month after the disability began that benefits payment start. It will continue up to the second month's end of the disability.

Cheap Mortgage Protection Needs Careful Consideration Before You Buy

When you take out a mortgage you are usually offered protection for the amount you are borrowing in case you should become unable to work after suffering from an accident, sickness that renders you unable to work, or unemployment. While no one likes to consider the possibility that the worst might happen, when it comes to the roof over your head you do need to give it careful consideration and consider taking out the cover. However a policy can be expensive and finding cheap mortgage protection can be difficult.

Mortgage payment protection insurance taken from the high street lender can work out expensive and a better way to get cheap cover is to choose to buy it independently. By choosing to take out your mortgage cover this way you can make huge savings on a policy and be sure of getting all the information needed to determine if it is suitable. Mortgage protection is not suitable for all circumstances and there are universal exclusions such as if you are self-employed, suffering from a pre-existing medical condition, are retired or only working in a part time position. However it is worthwhile checking the terms and conditions because there are variations on all exclusions.

Having mortgage protection insurance can mean the difference between you losing your home or keeping it. Many homeowners are under the impression that the State would step in and provide the money needed to allow them to service their mortgage repayments. While you could get help, financial assistance is only available to those homeowners who meet the right criteria. Another downside is that you have to wait months for any help that you do qualify for. This means that you can still suffer stress and anxiety whilst waiting.

Cheap mortgage protection taken independently could begin to give that much needed income which would be tax free between day 31 and 90 of being out of work. With the majority of providers a policy will be backdated to the first day of finding yourself unfit for work. Once a policy has started it would then continue providing benefit between 12 and 24 months which is usually enough time to recover and get back on your feet again.

Protection for the amount you borrow is usually offered at the time of taking out the mortgage, however historically with the high street lenders very often little or no information will be given regarding the exclusions and total cost of the cover. In some cases the cost can be enormous and boost up the amount you are borrowing considerably. In the worst cases individuals have bought a policy this way that has not been suitable. Those who are self-employed, suffering an ongoing illness, are of retirement age or who only work part time would not benefit from the cover. It is essential that you read the wording of any policy you are considering before purchasing. However all ethical specialists will make the key facts available alongside cheap mortgage protection and will explain them in plain English.

Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of cheap mortgage protection insurance, income protection insurance and loan protection insurance.

Dental Insurance Cover - Why It Saves You Money

First of all, if you really want to save yourself a lot of money in the future, you must take preventative care with your teeth and gums.

Preventative Dental Care Works Best

Having a simple and regular routine for brushing and flossing is required to keep your mouth in its best state. This alone will keep your costs down, so get the information you need and make sure your routine includes dental health.

If you have dental insurance cover, then you will be well placed to discuss a suitable regime with your dentist as part of what you pay for. Whilst this in itself isn't a good enough reason to take out a dental plan, it is a great opportunity for your overall health if you get what's inside your mouth just right!

Paying For Your Dental Treatment - The Best Deals?

The important thing with dental costs is to ensure that you get the best dental insurance cover deal. For some, the small amount of treatment they need (being blessed with excellent teeth and gums), may mean that a dental insurance cover plan isn't that good value.

Unless, of course, they can get a deal that reflects the minimal needs they have (and plans are usually scored to ensure this is still great value).

For those lucky folk, even 'pay as you go' might work well. These people are lucky indeed! For the rest of us, we need to consider whether we take pot-luck and find the cash when we need it, or we plan ahead, make regular payments and rest assured that we are covered.

There is a third way as well. In this form of dental plan, costs are either capped or alternatively, you get a payment towards your total costs, thus taking the sting out of it. As you see, there are a lot of different options and finding one that suits you personally will be your biggest challenge!

When To Buy Your Dental Insurance Cover

You should not wait until dental treatment is absolutely necessary - or you really will pay through the nose. You must get yourself into some form of regular attendance at your dental office so that you can ensure that you start off on the right foot, thus preventing extra expense later on.

For those with kids, it's never to soon to have them visit with their dentist, as early preventative treatment for them can make all the difference to their dental health through their whole life.

This really is when dental insurance cover might seem to come at the most costly time for a family, yet it's so valuable in the years to come.

Dental Insurance Cover - When It Really Pays Its Way

Whilst an early start will help your dental health overall, there may be a time, if you have teeth like most folk, that you need dental treatment for a particular problem.

On these occasions, your attendance will be deemed acute and, as well as the occasional check-up, you will show up at your dental office when something falls out, or starts to decay. This is a real bonus as you sometimes even get cover abroad, when you may be faced with unknown circumstances and something oral that needs urgent attention.

Starting dental insurance earlier rather than later will also keep premiums down. Remember that the monthly costs you may have can depend on an assessment of your dental health, so if you've let things drift, your monthly costs will start from a higher level.

Dental Treatment Costs - Bottom Line, Are They Worth It?

The truth is that your teeth and mouth hygiene are vital to you. In fact, it is well known that the health of your mouth is relevant to the whole of your body. So, taking care of it is a vital step to take.

If you are worried about costs, then it is surely better to be able to pay regularly from as soon as you can to keep healthy and keep those big bills down.

Dental insurance cover really will help you do that.

(c) 2008 Dental Insurance Guidance If you want to find the right deal for your dental insurance, there are lots of great value options. You can find out how, right here, on Martin Haworth's fascinating website at http://www.DentalInsuranceGuidance.com

Insurance for the Construction Industry - An Insiders Guide to Getting the Best Rates

Next to the cost of labor or materials, insurance premiums often represent the single largest business expense for a construction contractor. It only stands to reason then that successful contractors should seek to take advantage of all available means to minimize insurance costs. The good news is that there are many ways to effectively do so. Some methods are fairly simple, for example price shopping when looking for a policy. Others techniques, such as applying for credits and reviewing modifier rates are a bit more involved. In either case, most construction related businesses will find that the effort is well worth the reward in the end. When efficiently managed, even small contractors can realize a significant reduction in premiums. Here's a few tips on how you can save money from an insurance professional that specializes in writing polices for the construction industry.

My first piece of advice is to always shop around for the best price and get several quotes from multiple agents. The difference in price between the lowest quote and the highest quote can be substantial. This is especially true of general liability, commercial auto and commercial property coverage. Shopping around also means shopping for the agent that is the best fit for you. Make sure you are using an agent that has experience writing insurance for the construction industry. As someone who specializes in working with construction clients, I can tell you that I might not be the best person to come to if you were looking at liability coverage for a doctors office or a property policy for a manufacturing plant. Construction insurance represents a specialized area of insurance. Just as lawyers or doctors specialize in a particular area of their trade, so do many insurance agents. Not all agents posses the specific industry knowledge that is required to get you the best rates or have access to carriers that offer the most favorable prices for construction businesses. The additional tips that I will give in the following paragraphs are important methods to controlling your insurance costs. With that in mind, don't be afraid to test your potential agents knowledge of these concepts. Ask what advice he or she can give you on how to lower your rates. Ask for references from other construction clients that they work with and don't be shy about calling those references. Lastly, make sure your agent knows that simply renewing the same policy every year is not sufficient. In many cases renewing the same policy is the best way to go, but not always. It is easy for an agent to get comfortable and stop working hard to earn your business. Don't let that happen.

Another important aspect of controlling insurance costs is to minimize claims. One of the most efficient ways to accomplish this is to implement a formal safety program. This actually has a dual effect in reducing costs. The first is to raise awareness of safety issues at your company and to involve employees in pro actively working to prevent injuries. Research conclusively shows businesses that maintain a safety program are statically much less likely to file an injury related claim. It is a fact that claims frequency and the dollar amount of claims you have filed are two of the largest factors used by insurance companies in calculating your rates. A good claims history can drastically decrease the price you pay, while a poor claims history can send your premiums through the roof. This is true of virtually all lines of insurance including workers' compensation, liability, property and auto. A safety program also helps to reduce costs because many carriers offer an extra discount to businesses just for having one. Many workers' compensation polices offer a safety dividend return that will return a percentage of your premium to you if you are able to complete the policy with little or no claims. This safety dividend can be quite substantial. One company that I work with offers upwards of 30% back on your policy if you go without claims. Discounts are available on auto polices for safety measures such as air bags, anti-lock brakes, having drivers with safe driving records and even for such items as establishing and maintaining a regular maintenance schedule for your vehicles. While not necessarily safety related, you can also receive auto insurance discounts for anti-theft devices such as alarms and gps tracking systems.

The last tip deals specifically with workers' compensation. Your workers' comp. policy is based on a percentage of annual gross payroll. Each job classification pays a different rate based on the risk associated with that particular class code. For example a roofer would pay a much higher rate than a plumber. In most cases the percentage of payroll charged for a particular job class is assigned and approved by the state in which you do business. California may charge a different rate for trim carpenters than Maryland, which may charge a different rate than Montana. Insurance carriers doing business in a state must base their fee for workers' compensation coverage on the percentage that has been assigned by that state. There are however several ways to manipulate that percentage. I've already discussed one way, which is to maintain a good claims history. Another method is to take advantage of contractors insurance credits offered by many states. The credit amount varies by state and is not offered by all states. However, if you do qualify this is one of the most effective tools you have at your disposal to reduce workers' compensation costs. In general terms, the contractors credit program offers a premium refund for construction industry employers who pay their workers an average wage that is above a certain bench mark amount. As an example, the minimum amount to be eligible in Florida is $10 per hour or higher. Employers in that state can receive a maximum credit amount of up to 25% of the total policy premium. In Missouri the credit starts when an employer pays an average wage of $16 or more and the maximum credit amount is up to 34.4% of the total policy premium. That can add up to thousands of dollars for even small contractors. The contractors credit is easy to apply for. In fact, your insurance carrier is required to provide you with the form needed to file. The form is just 1-2 pages long and is fairly simple to complete if you keep accurate payroll records for your business. Check with your agent for the specific details of your states contractors credit program.

There are several other techniques that you may have heard about with respect to reducing your insurance premiums. One is to raise your deductible to a higher amount. I am not going to recommend that here because there are more factors to consider when choosing a deductible than just price. For starters you need to make sure you have a deductible that you can afford to pay if it ever comes down to that. There are several other reasons that I am not recommending a higher deductible as a standard cost cutting tool, but the bottom line is that I don't feel it is necessarily a good solution for everyone. Another cost saving measure you may have heard of is to become self insured. While this can certainly be extremely effective in reducing premiums, only very large employers can choose to self insure. I have not discussed this here simply because it does not apply to most construction businesses.

In closing, remember that while you will never be able to entirely eliminate insurance premiums as a cost of doing business, you can certainly reduce the financial burden that they have on your company. Shopping for the best price and the right agent, minimizing claims, emphasizing a safe workplace, taking advantage of safety dividend programs and applying for contractors credits are a few of the most effective methods at your disposal.

James Agee is the Vice President of Florida Roofers and Construction Insurance, a company that specializes in writing Florida construction insurance such as Florida workers compensation and other Florida contractor insurance policies. Florida Roofers and Construction Insurance is also a great resource for information on construction industry insurance topics including free safety training courses, a sample written safety program and a construction industry blog. Online quotes are also available.

Do You Really Need Skiing Insurance?

Do you get travel insurance when you go on vacation? Most people do because their travel agent advises them to do this. In most cases travel insurance is a prudent move but the truth is that travel agents get good commission on travel insurance and thus they are motivated to recommend it. I would guess that the number of people getting travel insurance when they book their vacations over the internet (or certainly their flights) is a lot lower than dealing with a travel agent. I think this is low because most people don't think anything will happen to them. And in 99% of the time they would be right.

Have you ever claimed on your travel insurance ? I haven't. Having said this, I have always taken out skiing travel insurance. I've been on quite a lot of ski trips and vacations now and fortunately nothing has happened to me. I haven't broken my leg or even had any serious injury. I haven't lost equipment, had it stolen or broken it and my hotel booking has never been screwed up. Maybe I've just been lucky but I imagine most people are fortunate enough to have had this experience of their ski vacations. So why bother with the ski insurance ?

Well, in my mind, if something is going to happen on a vacation, a ski vacation must be one of the prime candidates. Although I've never had a serious injury it seems that I have witnessed at least one accident during each trip. I have also seen people being taken down the slope on a ski bed and in a few cases being taken down by helicopter. I don't know how expensive these kinds of operations would be but I would be far happier if somebody else was paying for them - notably my insurance company. So it does happen, and medical costs could really mount up depending on how serious the injury is. If you have to spend a few days in hospital this would prove expensive. This is the major cause for concern on a ski vacation however you could also guard against things like theft or breaking or losing equipment.

In my experience, ski resorts are generally pretty honest places. People leave their equipment outside at lunch or apres ski and it is always there when they come to pick it up. However I'm sure theft does happen from time to time. Ski insurance can also protect you from breaking or losing things like cameras or sunglasses which are easier to do on a ski vacation than many other trips away.

Thus I think you would be mad not to get ski insurance. Too much could happen to turn your vacation from just bad to financially devastating. And this burden should be considered in the context that many insurance packages are not that expensive. However you should shop around before you get any insurance as they vary in terms of price and what they cover. Understand the terms and conditions because they can vary in terms of the benefits they give and make sure that they fit into what you will be doing over the vacation.

For the latest on resort news, skiing and snowboarding tips and reviews of equipment then visit http://www.snowboardnskiing.com - The site gives advice on types of snow skiing and some more reasons to take out skiing travel insurance. Adrian Whittle writes on skiing and snowboarding.

Life Insurance Agents & the WOW Experience!

How many times have you found yourself saying WOW due to an experience provided through a business?

And think about this, many times the "WOW" is caused by something little. Sometimes, it's the "little" things and the attention to details that can really separate one company from another.

- At a hotel, it may be that there are cookies at the checkout counter for you in the morning, or that the cleaning service leaves a chocolate on your pillow.
- In a restaurant, it may be that the waitress always refills your drink without you having to ask or that you didn't have to wait forever for your food.
- At the local coffee shop or diner, maybe it's that the person behind the counter remembers that you like your sandwich with mustard not mayo.
- At the local cleaners, maybe it's that they always send you a birthday card with a gift certificate for $10 of free cleaning services.

Think about it ... sometime it's the minor conveniences or the little extras that a company does that really separates them from everyone else. And many times...it's those little things that keep you coming back and that get you talking.

You see, if a company "WOWs" you even with little things, you are more likely to tell other people how great they are and that they should try them out.

I got to thinking about this because of a trip I took this past weekend. I took my children to a resort in the Pocono Mountains of Pennsylvania called The Great Wolf Lodge. Not only were my children amazed from the moment they walked in the lobby, but that feeling continued throughout our entire stay.

I have to admit, I was blown away by the conveniences provided by the Lodge. Ya see, it's mostly known for its indoor water park... So you spend a lot of time in your bathing suit (okay, okay - hold the visual there).

I'm sure you've been to a water park before where you have to keep going back to some dirty locker every time you need to get money or you have to figure out how to carry it with you without getting it soaked. Anyway, this place gave us wrist bands for the rides that doubled as credit. So, we could use the wrist band to get on rides, as our room key, and to purchase just about anything on the premises. It's a very simple concept, and probably very cheap since the park is giving out wrist bands for the rides anyway but it does create that "WOW" experience.

Obviously, the kids loved the park. But, this company did "little" things to keep it enjoyable for the parents too. For one, there was a Starbucks in the lobby ... need I say more. Plus we never waited more than 5 minutes for any slide or ride, so we didn't have to listen to the kids whining and complaining all day.

The great thing about creating a "WOW" experience is that it makes people want to continue to do business with you. And it also makes you want to tell all of your friends about it. In fact, the day we got back, my daughter spent half the day calling all of her girlfriends to tell them about what a great time she had.

Keep in mind that it doesn't take much to create a "WOW" experience.

So, what can you, as a life insurance agent, do to set yourself aside from your competition and create a "WOW" experience for your clients, prospects and leads?

It can be something cheap and little, but just remember; sometimes those little things can make a world of difference between you and another life insurance agent.

Dean Cipriano is the founder and president of Insurance Selling Systems. Dean is a life lead generation expert and has helped thousands of agents get more life insurance leads then they ever though possible. Dean offers all life insurance agents a free report to rev

Takaful

Takaful is an Islamic insurance concept which is grounded in Islamic muamalat (banking transactions), observing the rules and regulations of Islamic law. This concept has been practised in various forms for over 1400 years. It originates from Arabic word Kafalah, which means "guaranteeing each other" or "joint guarantee". In principle, the Takaful system is based on mutual co-operation, responsibility, assurance, protection and assistance between groups of participants. It is a form of mutual insurance.

Islamic References to Takaful

These fundamentals are based on the sayings of Prophet Mohammed. Based on the hadith and Quranic verses mentioned below, Islamic scholars had decided that there should be a concerted effort to implement the Takaful concept as the best way to resolve these needs. Some of the examples are:

• Basis of Co-operation Help one another in al-Birr and in al-Taqwa (virtue, righteousness and piety): but do not help one another in sin and transgression. (Surah Al-Maidah, Verse 2)^[1]

• Allah will always help His servant for as long as he helps others. (Narrated by Imam Ahmad bin Hanbal and Imam Abu Daud)

• Basis of Responsibility The place of relationships and feelings of people with faith, between each other, is just like the body; when one of its parts is afflicted with pain, then the rest of the body will be affected. (Narrated by Imam al-Bukhari and Imam Muslim)

• One true Muslim (Mu’min) and another true Muslim (Mu’min) is just like a building whereby every part in it strengthens the other part. (Narrated by Imam al-Bukhari and Imam Muslim)

• Basis of Mutual Protection By my life, which is in Allah’s power, nobody will enter Paradise if he does not protect his neighbour who is in distress. (Narrated by Imam Ahmad bin Hanbal)

“The basic fundamentals underlying the Takaful concept are very similar to co-operative and mutual principles, to the extent that the co-operative and mutual model is one that is accepted under Islamic Law."

Principles of Takaful

The principles of Takaful are as follows:

• Policyholders co-operate among themselves for their common good.
• Every policyholder pays his subscription to help those that need assistance.
• Losses are divided and liabilities spread according to the community pooling system.
• Uncertainty is eliminated in respect of subscription and compensation.
• It does not derive advantage at the cost of others.

Theoretically, Takaful is perceived as cooperative insurance, where members contribute a certain sum of money to a common pool. The purpose of this system is not profits but to uphold the principle of "bear ye one anothers burden." Commercial insurance is strictly not allowed for Muslim as agreed upon by most contemporary scholars because it contains the following elements: i) Al-Gharar (Uncertainty) ii) Al-Maisir (Gambling) iii) Riba (Interest)

There are three (3) models and several variations on how takaful can be implemented.

1. Mudharabah Model
2. Wakalah Model
3. Combination of both

The Mudharabah Model (Profit Sharing)

By this principle, the entrepreneur or al-Mudharib (takaful operator) will accept payment of the takaful installments or takaful contributions (premium) termed as Ra's-ul-Mal from investors or providers of capital or fund (takaful participants) acting as Sahib-ul-Mal. The contract specifies how the profit (surplus) from the operations of takaful managed by the takaful operator is to be shared, in accordance with the principle of al-Mudharabah, between the participants as the providers of capital and the takaful operator as the entrepreneur. The sharing of such profit may be in a ratio 5:5, 6:4, 7:3, etc. as mutually agreed between the contracting parties.

In order to eliminate the element of uncertainty in the takaful contract, the concept of tabarru (to donate, to contribute, to give away) is incorporated. In relation to this a participant shall agree to relinquish as tabarru, certain proportion of his takaful installments or takaful contributions that he agrees or undertakes to pay thus enabling him to fulfill his obligation of mutual help and joint guarantee should any of his fellow participants suffer a defined loss.

In essence, tabarru would enable the participants to perform their deeds in sincerely assisting fellow participants who might suffer a loss or damage due to a catastrophe or disaster. The sharing of profit or surplus that may emerge from the operations of takaful, is made only after the obligation of assisting the fellow participants has been fulfilled. It is imperative, therefore, for a takaful operator to maintain adequate assets of the defined funds under its care whilst simultaneously striving prudently to ensure the funds are sufficiently protected against undue over-exposure. Therefore the provision of insurance cover as a form of business in conformity with Shariah is based on the Islamic principles of al-Takaful and al-Mudharabah.

Al-Takaful is the pact among a group of people, called participants, reciprocally guaranteeing each other; while Al-Mudharabah is the commercial profit-sharing contract between the provider or providers of funds for a business venture and the entrepreneur who actually conducts the business. The operation of takaful may thus be envisaged as the profit-sharing business venture between the takaful operator and the individual members of a group of participants who desire to reciprocally guarantee each other against a certain loss or damage that may be inflicted upon any one of them.

Home Insurance - Security Ensured

Home insurance, without any doubt, can be termed as the most important service for the mankind. It is not difficult to understand why. One of the desires of people that has always made them restless has been to own a house. A desire that always existed in all times and ages but was so difficult to realise. Not anymore though for emergence of several financial institutions have ensured that people are never short of a housing loan and that too at a very friendly rate to realise this ultimate dream of theirs. No wonder modern times have seen quite a few people who have realised their dream of owning a house at an incredibly young age then their counterparts couple of decades earlier. However, if by owning a house one thought that he has tided all the uncertain times then he is in for a shock. For one major issue is still left to be tackled. The protection of the house.

Yes, your dream possession faces threat from some very potent enemies like fire, earthquake, storm, lightning, flood, theft, burglary, riots, vandalism, fire, explosion, subsidence, burst pipes, civil upheaval, water leakage, oil leakage, impact from vehicles, falling trees, air crafts etc. These are very potent threats and can really damage your house. And one would agree that in this era it is extremely expensive to spend even slightly on unplanned expenditure. And when one has to spend on the repair of the house then the expense involved can be easily understood. It would not be an overstatement to say that such and expenditure can be ruinous for middle class families. It is here that home insurance comes for one's rescue and ensures that one is spared from the trauma of arranging money for the repair as it would be the insurance companies that would be doing that.

However, to gain from home insurance one would do well to take care of a few things. First of all one must ensure that the policy comes to life as soon as it is signed. Then it should also be ensured that the house is priced fairly. In addition to this one should also ensure that no wrong information is provided to the insurance company as well as the fact that there is no default on monthly premiums.

These precautions would go a long way in ensuring that one's decision to opt for home insurance reap rich dividends.

About the author: The author is an expert in home insurance, car insurance, van insurance UK, breakdown cover and has written a number of authoritative articles on this subject. His articles are widely read because of the clever tips and valuable advices he provides in them.

Term Insurance - More Cover At Affordable Rates

One may wonder whether there is anything cheap in these days, that too, Insurance. Insurance is an option for individuals to provide their beloved family with the chosen amount on the happening of any unfortunate event to the individual even if the event happens after one day of taking the policy.

So, a compensation paid for the bereaved family need not necessarily be cheap taking into consideration the high amount of compensation that would be required by the family to reset in to their normal chore of activities less the breadwinners earnings every month.

But, strangely, we try to educate just that. As people belonging predominantly to a family set up, it is essential that at least the earning member of the family has sufficient Insurance on his / her life. This is the most basic coverage that could be endowed to a family against any unforeseen loss.

The Marketing philosophers of Insurance companies have their imaginations and brains put to utmost use to spell out catchy names of a variety of schemes with a combo of a limited type of insurance methodologies to add a magic touch to grab the attention of the prospects or customers to select their products. I do understand it as a great work done by great people. But, to say the least, it all waters down to typical marketing strategies and nothing else.

Truly there are only 2 types of insurance that life insurance could offer. One is the Insurance that pays on the death of the policyholder which is called as Risk Insurance or Term Insurance. The other is that Insurance which pays on the survival of the policyholder to the stated term, which is called as Pure Endowment Insurance. So, Term Insurance and Pure Endowment are the two basic forms of Life Insurance philosophy. All the modern day Life Insurance schemes are only extensions or combination of these theories in some measure.

Term Insurance, as the name suggests is an Insurance that remains in force up to the term selected. In any case, when the life assured or the policyholder dies during the term of the policy, the policy amount or Sum Assured becomes payable to the heir apparent or the nominee of the policy as per the terms of the contract signed between the Insurer and the Insured. In case the policyholder stays alive or survives the stated term of the policy, he can forget any returns on the policy because the policy is purely risk based and payable only if the unforeseen event happens. If the event does not happen, the insured loses control over the policy or better said as - the policy becomes NULL and VOID.

So, the maintenance of the policy is very much easy to the insurer as well as the insured person. Once the insurer assesses the risk of the person, he decides the quantum of premium to be collected for covering the risk and issues the policy. After this the job of the underwriter is over. The policyholder, once he accepts the policy, should keep paying the premiums regularly for the selected term. The benefits under this policy becomes payable only on the death of the insured during the term of the policy, else, nothing is payable.

Such is the concept of Term Insurance. Term Insurance products can be combined with added features like -

Riders or add-on benefits.
Double Accident Benefit.

Riders are add-on features over and above the general policy conditions. Double accident benefit is the benefit of getting an additional amount equal to the Sum Assured or twice the Sum Assured on his death due to accident. To avail this benefit, the insured has to pay a small amount as premium in addition to the normal premium.

Benefits of Term Insurance:

Need for the family

Term Insurance being a Risk Insurance Scheme is designed to cater to the family as the utmost beneficiary. Though we talk about the benefits on the loss of the earning person, the emotional loss could not be replaced at any cost. That is why it is said that Life Insurance does not strictly follow the principle of INDEMNITY which is true only to Non-Life Insurance.

Low Cost High Sum

Since the Insurance premium goes only for the purpose of covering of risk for the life, the premium is very less and affordable compared to other forms of Insurance Schemes. Complementing to the less premium the purchase value of the Sum Assured or the amount of insurance can be higher at the lower ages when the earning capacity, health conditions are at its best. The approximate annual premium for a standard life aged 25 years for a Risk Sum Assured of Rs.1 Million works out to Rs.2500 to Rs.2700 or around $60 to $70 in almost all the Life Insurance Companies around the globe.

Earlier the better

In Insurance, we always stress that earlier we go in for insurance, the premium is lesser. As age advances, the purchase value of the policy becomes all the more high. The simple reason is that as age advances, normal life has to undergo various health hazards like cardio, respiratory problems that are rampant in modern times. Hence, the premium are arrived by actuaries considering the general average of human life. If we take the present average as around 70 years, the premium keeps rising from around 25 years and touches the maximum at around 70 years. So, the decision of opting for insurance at an early age is advisable.

Tax Benefits

The reduced cost of Insurance premium supplemented by the high sum assured that becomes affordable can actually contribute to a savings in the annual income by way of gaining income tax holidays to a certain amount of the premiums paid annually. Insurance premium comes in handy every year to reduce your tax liabilities.

Collateral Security

In Insurance terms, we call this as mortgage. These days, all purchases, right from houses or flats, consumer goods, education come to us in the form of loans provided by Banks or financial institutions. In addition to the Equated Monthly Installment that becomes payable for the loan outstanding, the banking or finance company also seeks collateral security to the loans advanced in order to have a control over the amount paid as loan to consumers. Term Insurance has been sought after as a very good option in this area because of its high sum assured purchase at a low cost premium. The premium would not actually be a burden on the purse of the insured in addition to the loan EMI.

Conclusion

The Term Insurance scheme has a handful of features to its advantage except that the scheme is a risk method and does not bestow any returns on the premium investment made. So to say, it forfeits even the premium paid regularly or as a one time payment on the expiry of the period of insurance. But, if we consider Insurance as a basic element of need for mankind, without any doubt, Term Insurance would be the best and affordable option.

Satish Kumar SVN,
Senior Software Engineer
3i Infotech Ltd,
Insurance Product & Functional Trainer,
Chennai, INDIA

Indemnification

The technical definition of "indemnity" means to make whole again. There are two types of insurance contracts; 1) an "indemnity" policy and 2) a "pay on behalf" or "on behalf of" policy. The difference is significant on paper, but rarely material in practice.

An "indemnity" policy will never pay claims until the insured has paid out of pocket to some third party; i.e. a visitor to your home slips on a floor that you left wet and sues you for $10,000 and wins. Under an "indemnity" policy the homeowner would have to come up with the $10,000 to pay for the visitors fall and then would be "indemnified" by the insurance carrier for the out of pocket costs (the $10,000)

Under the same situation, a "pay on behalf" policy, the insurance carrier would pay the claim and the insured (the homeowner) would not be out of pocket for anything. Most modern liability insurance is written on the basis of "pay on behalf" language

An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, called an insurance 'policy'. Generally, an insurance contract includes, at a minimum, the following elements: the parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss events covered in the policy.

When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a 'claim' against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the 'premium'. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims—in theory for a relatively few claimants—and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (i.e., reserves), the remaining margin is an insurer's profit.

Principles of insurance

Commercially insurable risks typically share seven common characteristics.

1. A large number of homogeneous exposure units. The vast majority of insurance policies are provided for individual members of very large classes. Automobile insurance, for example, covered about 175 million automobiles in the United States in 2004. The existence of a large number of homogeneous exposure units allows insurers to benefit from the so-called “law of large numbers,” which in effect states that as the number of exposure units increases, the actual results are increasingly likely to become close to expected results. There are exceptions to this criterion. Lloyd's of London is famous for insuring the life or health of actors, actresses and sports figures. Satellite Launch insurance covers events that are infrequent. Large commercial property policies may insure exceptional properties for which there are no ‘homogeneous’ exposure units. Despite failing on this criterion, many exposures like these are generally considered to be insurable.
2. Definite Loss. The event that gives rise to the loss that is subject to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause. The classic example is death of an insured on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a reasonable person, with sufficient information, could objectively verify all three elements.
3. Accidental Loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be ‘pure,’ in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks, are generally not considered insurable.
4. Large Loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer.
5. Affordable Premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that anyone will buy insurance, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards (See FAS 113 for example), the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance.
6. Calculable Loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.
7. Limited risk of catastrophically large losses. The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed. Typically, insurers prefer to limit their exposure to a loss from a single event to some small portion of their capital base, on the order of 5 percent. Where the loss can be aggregated, or an individual policy could produce exceptionally large claims, the capital constraint will restrict an insurers appetite for additional policyholders. The classic example is earthquake insurance, where the ability of an underwriter to issue a new policy depends on the number and size of the policies that it has already underwritten. Wind insurance in hurricane zones, particularly along coast lines, is another example of this phenomenon. In extreme cases, the aggregation can affect the entire industry, since the combined capital of insurers and reinsurers can be small compared to the needs of potential policyholders in areas exposed to aggregation risk. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer’s capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.

Types of Insurance

The concept of insurance may not get your heart racing, but if you ever find yourself looking at a grease spot on the asphalt where you last saw your car, or viewing the smoldering remains of your home, and you're not insured, you'll find your heart racing plenty. Insurance is not a luxury, but a necessity. It's not something to put off thinking about; it's something to deal with now. It's not just for your car and home and health. There are other forms of insurance you should consider, as well. Here are the biggies:

• Life insurance
• Disability insurance
• Long-term care insurance
• Health insurance
• Dental insurance
• Eye/vision insurance
• Renter's insurance
• Homeowner's insurance
• Mortgage insurance
• Auto insurance
• Monster-under-the-bed insurance

OK, we were just kidding about that last one. There's a host of other kinds of insurance, though, such as pet insurance, pre-need (funeral) insurance, and so on. And, within the categories listed above, you'll typically find many subcategories, such as whole life insurance and term life insurance.

For more information on and guidance regarding all kinds of insurance, head to our Insurance Center. Take some time now to learn about a few kinds of insurance unfamiliar to you and consider whether you need to get some. You may thank yourself later.

Insurance

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.