Accident and health insurance

This is an insurance policy which provides protection against morbidity or ill health risk. It protects for more wanting to have expenses covered at reasonable costs. This covers medical expenses insurance and disability income insurance.

The most popular act known as Mc-Carren Ferguson act of 1945 regulate the life insurance companies. This is the primacy of the state over Federal commissions that supervises and examines the life insurance companies under a coordinated system. Regulation focuses basically on matters relating to insurance premiums, insurance commission charges, investment portfolio holding, sales practices and so on. Regulatory actions were taken against deceptive sales practices if found on investigation. In order to make life insurance regulation effective, various regulatory measures were desired to promote life insurance guaranteed funds to compensate policyholders in the event of failure.

Life insurance companies because of their long-term nature of liabilities resulting from future policyholder’s claims, they are able to invest in assets that have longer term maturity characteristics. These include corporate securities like bonds, stocks, mortgages and also in government securities and policy loans. Looking of the liabilities side, life insurance companies have a major capital reflecting policy reserves covering future expected liabilities, death benefit, maturing endowment policies as well as cash surrender values.

The more important types of annuities can be described very briefly. A single premium annuity is purchased by the payment of one lump sun amount. The payments being at stipulated a age for the life of the annuitant. But instalment payment annuities call for premiums periodically over a period of years to the date of retirement, after which the annuity received a fixed income for continuing his life. A life insurance annuity is purchased by the proceeds of life insurance policy that are distributed as an annuity in lieu of a lump sum payment. The life annuity is simply a means of assuring a certain income, which cannot be outlived. Since a part of the principal in addition to the interest earned, is returned each year, the return to the annuity is larger than that which would be produced by interest income alone. Most life insurance policies provide for this type of settlement option.