What is a gatekeeper?

June 30, 2024 No Comments

A: There are two definitions of the term “gatekeeper,” one used in relation to health insurance and one regarding long-term care plans. When used in relation to health insurance, gatekeeper describes the person in charge of a patient’s treatment. Anyone who receives health insurance coverage in the form

What is an elimination period?

June 30, 2024 No Comments

A: Elimination period is a term used in insurance to refer to the time period between an injury and the receipt of benefit payments. In other words, it is the length of time between the beginning of an injury or illness and receiving benefit payments

What is authorized stock?

June 30, 2024 No Comments

Authorized stock represents the maximum number of common shares that can be issued legally by the company as stated in the company’s charter. The number of authorized shares that is identified in the company’s charter often greatly exceeds the number of shares that is issued

What is disability-income insurance?

June 30, 2024 No Comments

Disability-income insurance is insurance that provides financial benefits to a policyholder in the event of sickness or injury that inhibits the ability to work. Disability-income insurance is meant as a substitute of no more than 80% of income on a tax-free basis should illness keep

What is happening during a risk repricing?

June 30, 2024 No Comments

During a strong bull market, the market’s overall sense of optimism can often lead to poor estimates about the level of risk that an investment may possess. Unfortunately, once a market correction occurs, investors will often realize that they have been exposed to more risk

What are insurance sector companies usual profit margins?

June 30, 2024 No Comments

A: The insurance industry’s net margin in 2017 ranged between 3 and 10.5%. Life insurance had the widest range between quarters, from 3% to 9.6%; property and casualty insurance were at 3% to 8%; and health insurance had the narrowest range of 4% to 5.25%. The net margin for insurance brokerages

What is moral hazard?

June 30, 2024 No Comments

A: Moral hazard is idea that a party protected in some way from risk will act differently than if they didn’t have that protection. We encounter moral hazard every day—tenured professors becoming indifferent lecturers, people with theft insurance being less vigilant about where they park,

What are the benefits of high net worth insurance?

June 30, 2024 No Comments

A: High-net-worth individuals (HWNI) face unique insurance challenges and tend to gravitate towards different insurance products. Wealthy families have relatively more complicated risk management needs and relatively less obvious needs for catastrophic insurance coverage. The real risk might be overinsuring against minor threats and underinsuring

What is the average price-to-earnings ratio in the insurance sector?

June 30, 2024 No Comments

A: Insurance companies could be an attractive addition to an investment portfolio offering a good balance of capital appreciation and dividends. Similar to other financial services firms, valuing insurance companies poses difficulties to analysts due to small capital expenditures and depreciation that have little effect

What are the most effective ways to reduce moral hazard?

June 30, 2024 No Comments

A: There are a number of ways to reduce moral hazard, including the offering of incentives, policies to prevent immoral behavior and regular monitoring. Moral hazard, essentially, is risk taking. Generally, moral hazard occurs when one party or individual takes risks knowing that, if the

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