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How long does the insurer pay a life insurance claim?

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How long does the insurer pay a life insurance claim?

The regulatory agency establishes a maximum payment period of 30 days after receiving the documentation, but insurers can pay much earlier

An inventory process can drag on for months and even years until the heirs are able to receive the inheritance to which they are entitled, and this has made it increasingly common to look for solutions that speed up the receipt of values ​​with much less bureaucracy.

This search for liquidity has been fulfilled by individual life insurance, as it does not qualify as an inheritance in the inventory processes. Thus, the payment of the indemnity must be made within a maximum of 30 days after the insurer receives all the necessary documents.

In practice, insurers can pay well before 30 days – in several cases, the insurer’s payment to policy beneficiaries takes up to five business days.

It is important to remember, however, that the term only begins to count after the delivery of all documentation provided by the insurer.

The first step when making the claim is to inform the insurer in writing as soon as an event occurs that qualifies for the benefit. This step can be done by the insured or by the beneficiaries, depending on the situation.

Then, it is necessary to prove the occurrence of the fact that generated the right to benefit and all related circumstances.

For this reason, insurers usually require some documents before making payment, such as, in cases involving death, the death certificate of the insured, the identity document of the insured and the beneficiaries, a document signed and stamped by a doctor describing the occurrence of the claim and relevant medical history, among others.

The deadline is the same for accidental disability and serious illness payments. What can change, however, are the documents required by the insurer. In cases of serious illness, for example, it is necessary to provide copies of tests that prove the insured person’s special conditions.

Therefore, to expedite the receipt of the benefit, it is important to carefully read the general conditions for delivering all the necessary documents on each occasion.

Prior risk analysis

Another differential offered by some insurance companies, mainly independent ones, is the prior risk analysis. This is a step in contracting the policy that may involve carrying out various health tests, usually paid for by the insurer itself.

With the prior analysis process, it is possible to expedite the payment of the benefit more quickly and provide peace of mind for the client or its beneficiaries. This is because the insurer already has the data of the insured, since it has health information provided – that is, respecting the general conditions of the insurance, the insurance will be paid.

It is worth mentioning that, regardless of previous examinations, it is essential that policyholders complete the health questionnaire sincerely, without omitting any information, so that there is no problem in paying the benefit and it is carried out more quickly.

Serious illness insurance: Why you should buy one as an extra protection measure?

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Serious illness insurance

Unforeseen events happen at any time. Because of this, it is important to have serious illness insurance to be financially prepared.

Unforeseen events can happen to anyone, at any time – especially concerning health problems. Because of this, it is important to have serious illness insurance to be financially prepared in case you face any of them.

This modality has even won more and more fans.

What does serious illness insurance cover?

This coverage is not a basic item in insurance, but additional protection.

To be entitled to benefit from the indemnity, you must be diagnosed with a serious illness after the grace period of the plan.

See below which situations are part of the policy.

Cancer

Several different types of cancer are covered by this insurance modality, such as leukemia and malignant diseases in the lymphatic system.

On the other hand, there are some exceptions in non-invasive diagnoses, among them tumors described as premalignant, prostate cancer in primary stages, malignant melanoma with a low degree of tissue invasion, and malignant tumor in the presence of any human immunodeficiency virus.

Stroke

Also known as a stroke, this is another type of disease covered by disease insurance.

It is worth mentioning, however, that the neurological symptoms cannot have been caused by migraines or the hemorrhage caused by accidents, brain tumors, obstruction of the ophthalmic artery, or brain surgery.

Acute myocardial infarction

If you suffer a heart attack, you will be entitled to receive the insurance claim.

Only in the diagnoses of angina pectoris (caused by the low supply of oxygen and nutrients to the muscle), decubitus angina (usually considered as a heart failure process), and other acute coronary syndromes that this benefit is not granted.

Bypass surgery

This is a procedure used in bariatric surgery, in which gastric stapling is performed to restrict food intake.

It is covered by insurance, as long as it is not caused by surgery with closed-trunk surgical catheters, angioplasty, and other intra-arterial procedures or non-surgical techniques.

Other diseases

The insurance also guarantees the payment of compensation in other serious cases, such as:

  • Alzheimer’s disease ;
  • limb paralysis;
  • organ transplant (heart, marrow, liver, kidneys, pancreas or lung);
  • partial or temporary disability;
  • special anticipation for incurable disease;
  • personal accidents and medical, hospital, and dental expenses.

Why you should buy serious illness insurance?

This is the first type of insurance you can count on to help pay for treatments, transportation, and medications that not even health plans cover.

It is interesting because it has a low monthly fee and guarantees financial protection in several complicated situations.

Why worry about unforeseen events if you can prevent them? Take a good look at the coverage offered by serious illness insurance and choose your policy.

Insurance industry: career for those who like to deal with risks

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Insurance industry: career for those who like to deal with risks

Understand how the insurance industry works and the challenge of protecting your customers from unpredictable events by turning this into a profitable activity

The insurance market constitutes a multi-million dollar industry worldwide, made up of companies and people who develop insurance policies and work in the sale, administration, and regulation of these services.

Today, there are very few items of value that cannot be insured, although the most common types of insurance involve business, vehicles, real estate, rent, and health problems.

What is behind the success of this industry is the risk management activity. This is because insurance is nothing more than a risk transfer service, in which the insurance company protects people and companies against the risk of unpredictable events occurring and which would represent great financial losses for them.

To offer this guarantee, the company receives a fee from all its customers, charged from time to time. In industry jargon, this fee is called a ‘premium’, while the customer is treated as a ‘policyholder’ (the document that formalizes the contract between the insurer and insured). If the event specified in the policy occurs, the customer receives compensation from the insurer.

To be successful, the insurer must make sure that it has earned enough money from the premiums to offset the expenses it will have to reimburse customers for damages and losses while maintaining a profit. It may seem like a simple procedure, but it is an extremely sophisticated analysis and calculation mechanism.

Calculation of risks The final account only closes when the risk that each individual or company represents is calculated with great precision. A banal example: wooden houses, for example, have a greater risk of fire than those made of bricks, in the same way, that a customer’s history of fines says a lot about the chances of him getting involved in an automobile accident.

This process of analyzing whether the risk is worth it or not is called underwriting and is one of the most crucial activities within an insurance company. This is an in-depth study, which takes into account several factors to try to establish what are the chances of this client needing to call the insurance company to reimburse losses in a certain type of insurance.

It is the analysis made by the underwriting team that will determine whether or not the insurance company will close the contract, and under what price plan. The lower the risk, the lower the premium.

If the risks are poorly calculated, the value of the premiums will not be sufficient to cover the company’s expenses. In other words, if underwriters (also called underwriters) assume that the probability of an event happening is very low, the fee charged to each customer will also below. If the event, contrary to what was predicted, occurs for many customers, the insurer comes out at a loss.

Crisis situations: scenario that took insurers by surprise occurred during the 2008 financial crisis. The American International Group (AIG), the largest insurance company in the United States, recorded a loss of more than $ 99 billion in the year and needed financial support from the Federal Reserve (FED – kind of central bank of the United States) to not go bankrupt.

To understand what happened, an initial explanation is worth: AIG’s main business is selling insurance, but not just the more traditional types, such as real estate or health insurance. The company also provides more complex services to meet the demand for large companies, especially banks.

To protect their large operations, banks often hire insurance companies to help them in case their business goes wrong, and they pay a high price for it. In this way, AIG insures financial institutions worldwide against risks.

Virtually no insurance company was able to predict the risks behind subprime real estate loans, a type of loan practiced by several banks that were AIG customers. When this type of credit triggered the financial crisis, the banks lost a lot of money and started to activate the contracts they had signed with AIG, forcing the insurance company to pay huge refunds. The account, in this case, clearly did not close, leading the company to a state of technical bankruptcy that was only overcome through government aid through the FED.

Industry workers, It’s not just underwriters who deal with risk management within an insurance company. In the company, professionals are known as actuaries also play an important role in this activity.

It is up to them to look at the latest trends and statistics for a specific occurrence (be it fire, theft, death, car accidents, etc.) and use this information to build probability and risk prediction tables. These professionals, who constantly calculate risks, are involved in several processes in the insurance company, including the subscription itself, but also the definition of pricing policies, product development, investments, and customer claims.

Professionals in the actuarial field must appreciate solving problems through data analysis and modeling and are often motivated by working with computers and formulas.

The truth is that, in an industry built around the idea of ​​risk, all professionals must have an affinity with this theme. From executives in managerial positions, such as directors and presidents, to the other end of the organization chart, where sales agents are located – the objective, in the latter case, is to sell insurance policies, and these professionals must know how to assess risk associated with each customer and recommend a product that adapts to their needs, while at the same time not making the insurer take unnecessary risks.

Is it possible to use redeemable life insurance as a financial reserve?

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redeemable life insurance

Life insurance goes beyond death coverage: it all depends on the profile of the insured.

The mentality about insurance is still evolving. For a long time, the idea spread that the applied resource would only be useful for the family in the event of the death of the insured. However, there are insurances with life coverage and even redeemable insurance.

What is redeemable life insurance?

Redeemable life insurance consists of the merger of two products into one: life insurance and a financial reserve. In this sense, each insurer presents the insurance with its own characteristics, which must be researched by the interested party before making the contract.

What is the difference between redeemable insurance and normal insurance?

First, it is worth emphasizing that redeemable insurance has all the characteristics of traditional life insurance. In this modality, the objectives of life insurance are maintained, ensuring that the security and protection needed by the family are safeguarded.

The difference is that redeemable life insurance makes an application of the premium (monthly insurance amount) that you pay. Thus, it is like a capitalization bond with monthly investments. This nature of the application allows part of the amount to be redeemed later, after a certain grace period, enabling the use of life insurance by the contractor.

How to use redeemable insurance as a financial reserve?

Redeemable life insurance is purchased like any other. Once the policy is consolidated, part of the amount paid monthly is applied to a financial reserve.

However, there are some variations in hiring. It is possible to obtain a plan with a validity period for receiving the capital or to join lifetime protection, in which the customer defines when to redeem the value of the reservation.

In the second case, it may happen that the customer never requests redemption. With this, the plan will continue to be valid as traditional life insurance and the contractor will be able to continue with the tranquility of his protection and protection. On the other hand, it can be maintained only until a contingency situation arises or when coverage is no longer needed.

In both forms of acquisition, the insurance is extinguished as soon as the withdrawal of funds is made. The accumulated amount can be redeemed in part or in full, due to the conditions contracted and provided for in the policy. It is important to note that the redemption occurs at the initiative of the insured and not by the beneficiaries indicated.

So, redeemable life insurance is a mix between a family protection instrument and an investment for the insured. In addition, it can be obtained according to your prospects of redeeming the accumulated financial reserve.

What is the difference between individual and group life insurance?

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difference between individual and group life insurance

Check the differences between these two products and which one best suits your needs.

The big difference between individual and group life insurance is the level of personalization. In general, group life insurance meets basic needs, common to a group of people, linked together by a bond or common interest.

Individual life insurance is a product adjusted to the needs of each client. This type of insurance is contracted directly by the insured, who receives his policy according to the chosen plan. In order to personalize the product, in general, a complete analysis of the insured is made considering a series of factors such as profession, financial responsibilities to the family, sports practices, and health history, for example.

Individual life insurance offers specific and adjustable protections, according to the style, age, and standard of living of each client. In these cases, depending on the insurance company, it is also possible to opt for complementary coverages such as funeral assistance and receipt of insured rates for periods of hospitalization.

But, after all, how does group life insurance work?

Group life insurance is generally used by companies to ensure the safety of their employees and, thus, demonstrate commitment. Offering this benefit is quite common among companies today. Thus, group life insurance is a product that serves employees and/or business owners.

The number of employees required for hiring varies with insurers. But in general, collective plans are offered, with coverage from three or even two employees and minimum ages, usually between 14 and 60 years old.

As it is not a product with a high level of personalization and, in general, it meets the basic needs of the customer, the values ​​of these insurances are usually lower and cease to exist when the company leaves the company. Therefore, for more specific and long-term protection, it is interesting to seek qualified advice and individual insurance.

Impact of Life Insurance on Income Tax

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Impact of Life Insurance on Income Tax

Because it is a thorough process, many people are in doubt as to whether income tax is impacted by the purchase of life insurance.

In summary, we can say that life insurance does not influence on the income tax return. But some products represent an exception

Impact of Life Insurance on Income Tax

As we said, in most situations, the contracting of life insurance does not impact the Income Tax. This is because it is not necessary to inform you about insurance in the tax declaration.

There is not even space available to fill this information in the field “Goods and Rights” – which would be the appropriate place to inform the IRS regarding the existence of insurance.

Therefore, the insurance payment is not an expense that can be deducted from the income tax calculation basis. In addition, the purchase of the product generally does not generate an abatement in the amount to be paid.

Whoever receives the benefit should also not pay income tax on the amount. However, it is necessary to declare the receipt of capital.

The only exception in this context are products that have survival coverage clauses that generate income. Next, we will better address this modality.

Insurance with survival coverage clause 

The insurances that have this clause are the only exceptions because they are considered a financial investment and, like a private pension plan, they must be declared to the tax authorities. One example is redeemable life insurance.

In this situation, the income tax will only be charged on income. The rate can be fixed at 15% of insurance gains or it can follow a regressive table, with the fluctuation of rates according to the asset accumulation terms, as indicated below:

  • 35%: term less than or equal to 2 years;
  • 30%: between 2 and 4 years;
  • 25%: between 4 and 6 years;
  • 20%: between 6 and 8 years;
  • 15%: between 8 and 10 years;
  • 10%: term over 10 years.

It is also worth noting that the choice between the fixed and variable rates is made when contracting life insurance. Therefore, if you are interested in making redemptions in the short term (less than 10 years), prefer the fixed rate. Otherwise, choose the variable alternative. If you do not make any choice, the collection of the fixed 15% will automatically be valid.

Declaration of insurance premium in Income Tax

There are not many secrets regarding this topic. The capital value of the product as compensation must be made within “Exempt and Non-Taxable Income”. This is because the amounts received as indemnity do not cause an increase in equity, but rather an asset recovery.

As we have seen, life insurance does not impact the income tax return, except in one situation. It is important to know these issues so that you are not surprised at the time of filing and do good tax planning – which will help you pay fewer taxes legally.

Guide on electrical damage in Home Insurance

Electrical damage represents 11% of the coverage granted by insurers. © iStock

Domestic accidents caused by electrical failures represent the third cause of loss in Home Insurance. The companies have reacted by including in their policies a special guarantee for this type of breakdown. Let’s review what your coverages are and the exclusions they may include.

Everything works fine and, from one moment to another, something happens in the electrical system of your home and one or another device is affected.

Indeed, and despite what happened some time ago, today electrical damage claims have grown significantly, reaching 11% of all domestic accidents that insurance companies must reimburse.

In this sense, the electrical appliances most affected by this type of breakdown are washing machines, refrigerators, and televisions.

How does Home Insurance work in the event of a claim of this type? Let’s review everything you need to know about this coverage in the following article.

Electrical damage: definition

Electrical damage is the damage that your electronic equipment can suffer as a result of a breakdown or accident in the home system.

Generally, these damages are caused by voltage spikes and drops, short circuits, lightning strikes, electrical storms, abnormal current, or arcing.

Electrical damage coverage

If you already have a multi-peril policy , you may not have even realized that it includes special coverage against electrical damage. However, you must be careful, as this guarantee is not always contracted automatically.

Generally, electrical damage coverage covers the damages that your installations and electrical appliances may suffer as a result of the claims that we have mentioned above.

A large part of the insurance companies offer a guarantee for damages that occur both in the container and in the content of the home.

Regarding the content, if you have this type of coverage, your insurer should be responsible for the damages caused to your electronic devices.

Some insurers include in their coverage of electrical damage the reimbursement for the loss of power supplies stored in the refrigerator at the time of the accident.

Exclusions in electrical damage coverage

As with the vast majority of coverage in Home insurance, the electrical damage guarantee includes some exclusions where the insurer will not grant any type of reimbursement in the event of a claim.

Among the most common are:

  1. Age of appliances: generally, all electrical appliances and electronic appliances that are more than 10 years old will be excluded from the coverage. In the case of computer equipment, this time will be reduced to five years. The insurer will have, in most cases, an expert to determine if the breakdown was caused by electrical failure or due to the age of the device.
  2. Cover cap: not all insurance companies establish the same caps for compensation for electrical damage.
  3. Appliances with a valid warranty: in the event that the loss has caused damage to an appliance that is under warranty, the cost of repair or replacement will be borne by the manufacturer.

Electrical damage? Learn what to do

© iStock

If after a strong storm some of your devices are damaged and you don’t know what to do, we advise you to follow the following steps:

  1. Take a count of damaged electrical appliances.
  2. Make sure it is not a fault caused by the poor condition of an appliance or its age.
  3. Contact your insurance company to inform them of the situation. It may be that the company directly sends an expert or other professional to assess the nature of the damage.
  4. If the insurance company enforces the coverage, it will compensate you for the value of the devices or replace them with another model with similar characteristics.

Insurance fraud: a common practice

For some time now, insurance companies have been the victims of a fairly common type of fraud when it comes to claiming reimbursement for an appliance for electrical damage.

Unfortunately, many people apply to their respective insurers for repair or compensation for an appliance damaged by misuse, arguing a different cause such as a short circuit or a lightning strike.

This situation has given rise to the fact that each day insurance companies have more experts specialized in electrical damage to analyze each case and resolve whether it is a fraud or not.

However, and despite the fact that it is a preventive measure on the part of the companies, this only delays the reimbursement of damages from those who have acted honestly.

See what criteria to adopt to choose your life insurance

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See what criteria to adopt to choose your life insurance

All coverages have exclusions and specific conditions that you must carefully analyze.

To purchase life insurance, you must assess your real needs so as not to hire complementary coverage that will not be used. It is a survey that takes time, moves emotions, because nobody, in fact, would like to use this insurance.

But it is important to do so even so as not to underestimate the financial needs of you or your dependents if they can no longer count on your support. It is good to remember that all coverages have exclusions and specific conditions that you must carefully analyze. If the insured is a self-employed professional, for example, it may be important to hire coverage known as the Temporary Disability Rate (DIT), which guarantees payment of the contracted rate for the period when he is unable to work due to sick leave or covered accident for insurance.

The main one, which is mandatory, is death coverage, which will pay the insured capital (indemnity) defined in the policy to the beneficiaries, in the event of the death of the insured (natural or accidental).

The life insurance structure can distinguish between basic and additional coverages, and the insurance must contain at least one of the basic coverages (natural or accidental death). However, instead of approving insurance plans with basic and additional coverage, many insurers have chosen to offer independent insurance plans for each coverage.

Thus, it is possible to contract an insurance plan only for death coverage (natural or accidental), only for accidental death, just for accident disability, only for functional disability due to illness, only for work disability due to illness, etc. It is very important that all situations that you want to be compensated to your beneficiaries are clearly provided for in the contract you sign with the insurer.

The most common coverages are:

• Death
• Accidental death
• Total or partial permanent disability due to an accident
• Total permanent disability due to an accident
• Major permanent disability due to an accident
• Total permanent functional disability due to illness
• Total permanent working disability for Illness
• Medical, Hospital and Dental Expenses
• Temporary Disability
Fees • Hospital Admission
Fees • Serious Diseases

Based on the combination of these coverings, there are specific products, among which insurance: credit life, education, travel, housing, and endowment stand out.

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