The insurance industry is a multi-billion dollar industry which has been around for decades in one form or another. Be it auto, life, medical, disability, or one of many others, insurance is a lifeline for many. In many cases, such as obtaining a driver’s license, insurance is mandatory before you can proceed to qualify for certain certifications. Although many complain about it, insurance is nearly as certain as death and taxes.
What consumers may be unfamiliar with are the options they have when it comes to purchasing various insurance policies. And because they’re uninformed, unscrupulous companies may take advantage of them in the end. To minimize this, below are common insurance types to review.
The most common is term insurance. In the most basic definition, think of this as rental insurance. You aren’t making an investment or owning a part of the company. Rather, you are paying an ongoing fee in case something happens. Term insurance is frequently connected to life insurance. Depending on what policy you select, payments for term insurance can be affordably low.
Whole insurance is the next common, although it has fallen out of favor over the last decades. With whole policies you invest in the company and receive quarterly or annual dividends back which can eventually be cashed out. However, while you’re an investor in the insurance company, you do not have any say in what the company does other than voting for changes in the board via proxy. These have fallen out of favor in the industry because so many companies have offered false policies and no return in pay for the investor.
And then there’s the captive insurance industry with long-time companies like Captive Resources. Captive insurance is a level up from whole. Not only do you invest in the insurance but you also have a say as to what the company does when it comes to policies and rate changes. The main difference between term/whole and captive insurance is their regulations. While the first two are regulated under state and federal guidelines, the private status of captive insurance companies means this does not apply.
Needless to say, which type of insurance you choose requires a good deal of study. Don’t go simply by their well-known name or variety of policies they offer. Look into their customer service, their determination to provide full coverage in numerous situations, and, in the case of whole and captive insurance, what their rate of return as been.