A health care system which attempts to enhance the quality and cost-effectiveness of medical care using an organized group of doctors, hospitals and other health providers. Managed care plans offer comprehensive care to policyholders by making arrangements between employers or insurers and select providers to provide care at a discount and coordinate medical financing to … Read more
The financial resources an insurance company holds in reserve to ensure it can honor any and all claims presented by customers. The loss reserve represents a liability for the insurer, and is an amount periodically readjusted as the insurer seeks to calculate and project the number and size of claims expected within a given period … Read more
The ratio between the premiums received by an insurance company and the expenses it incurs in settled claims, expressed as a percentage. For example, if an insurer pays out $50 in claims for every $100 it collects in premiums, its loss ratio is 50 percent (formula = losses divided by earned premiums). The lower the … Read more
The practice of reducing an insurer’s exposure to risk based on predictions of future loss. Loss control includes situations such as risk management, claims management, business interruption, insurance fraud, product liability and catastrophe. Sometimes involving reinsurers, insurance loss control helps ensure that monies remain available to pay claims without the threat of bankruptcy or insolvency. … Read more
The amount of money paid by an insurance company to investigate and settle insurance claims and/or defend lawsuits in court. Loss adjustment expenses must be taken into account when the insured is quoted a premium price and subsequently files a claim. At that point, the insurer must adjust for these losses in order to meet … Read more
Also known as accelerated death benefits, living benefits are insurance riders added to life insurance policies to allow terminally ill patients or those with certain medical conditions access to a portion of their life insurance benefits before they die. Typically paying out 50 to 80 percent of a policy’s face value, these funds are distributed … Read more
Measures the extent to which an insurer can quickly liquidate assets and cover short-term liabilities. Also known as cash asset ratio or cash ratio. Liquidity ratios measure a business’s ability to meet payment obligations by comparing cash and near-cash with payment obligations. If the coverage of the latter by the former is insufficient, it indicates … Read more
Home insurance protection that guards homeowners and members of their family from financial loss if someone claims injury on their property. In case of lawsuit, liability coverage helps counteract claims for bodily injury and property damage by providing monies needed for lawyers, expert witnesses and other legal fees required by the courts and legal system. … Read more
Auto insurance that pays for bodily injury (BI)??or property damage (PD)??you cause another person. A popular type of insurance protection, liability insurance is required in all states. But it usually costs much less than other types of coverage because it pays only for the damage you cause others, not for those you suffer yourself. Because … Read more
A method of staggering the maturity dates and the mix of different types of bonds. Investors use laddering to reinvest in new bonds as the old ones are redeemed, extending the life of their portfolios and maintaining a steady, five-year maturity rate. This strategy also provides the investor regular income with minimal interest rate fluctuation, … Read more