Insurance World

There has been a noticeable change in homeowner rates in Pennsylvania. The natural disasters of recent years have caused some shortages in the necessary supplies and materials to repair homes. The homeowner rates in Pennsylvania are affected because there is a higher demand for these materials and so the rates have increased. The homeowner policy was at one time one of the most affordable insurance policies on the market. In fact, it may have been under priced.

The increase in rates can be offset if you use the concept of self-insuring. Self insuring is nothing more than assuming more of the risk on your homeowner policy by taking a higher deductible. The lower deductibles no longer justify the higher premiums. There are a lot fewer claims submitted on a homeowner policy as compared to the auto policy. You will save thousands of dollars over the life of your homeowner policy by using a higher deductible.

When shopping for homeowner policy rates be sure and understand the difference between replacement cost and actual cash value. The insurance companies settle their claims on an actual cash value or replacement cost basis. The actual cash value settlement will estimate the replacement cost and them subtract any depreciation because of age or use. The actual cash value policies are generally written on older homes that depreciate in market value. The replacement cost policy will repair or replace damage with like kind and quality material without depreciation. The replacement cost policy is more appropriate for the newer home.

It’s a good idea when shopping for homeowner insurance rates to combine your auto policy in the quote. The multi-policy discounts are significant and the multi-policy applicants are often more liberally underwritten. There are excellent discounts for burglar and fire alarm systems that have a direct connection to the police department and local fire station. Use all available discounts and be sure and compare rates with different deductibles.

The study of the human history and civilization reveals a universal desire for security, and it indicates that the need for security has been one of the most powerful motivating forces in the material and cultural growth.

Early societes relied on family and tribe cohesiveness for their security. With economic progress, however, this security source weakens. Insurance, in some form, has been a universal response to societies’ request for security.

Life insurers sell today policies that permit policyowners the felxibility of deciding the amount of the premium he or she would like to pay. Whole life policies are examples of such flexible plans because they are a function of the amount of the policyowner’s past and present premium payments.

Subject to company rules regarding minimums and maximums, the policyowner may pay whatever premium during a policy year that she or he wishes. An amount to cover the insurer’s expenses and mortality charges is subtracted from the cash value and a penalty for early policy termination, called a surrender charge, may be assessed against the policy’s cash value.

Many life insurance policies have cash values. Conceptually, all life insurance policy cash values can be derived in the same way and all evolve for the same basic reason: prefunding of future mortality charges. As a practical matter, however, policies are usually viewed in different ways.

The savings element is considered a by-product of the level premium method of payment. With universal life and some other newer forms of life insurance policies, the savings element is usually considered to be a more independent part of the policy, specifically designed to build a savings fund from which mortality and expense charges are withdrawn.

Economists and marketing personnel tend to view a level-premium whole life contract as a divisible contract providing financial protection to the policyowner’s beneficiaries, with other contract benefits available, including cash surrender and loan values. A policyowner may discontinue the insurance and surrender the policy for its cash values.

Alternatively, a policyowner may borrow from the insurer an amount up to the cash value, at a contractually stated rate of interest, using the cash value as collateral.

The distinguishing features of universal life policies are:

1- their flexibility
2- their transparency.

These policies are flexible in that they permit policyowners, within limits, to increase or decrease premium payments as they wish also to increase or decrease the policy face amount.

The transparency means that the three elements of life insurance ( mortality, interest, expenses ) are identified and disclosed to the customers.
The savings component of the life insurance policies is a direct function of the premium payments made by policyowners.