What happens if my application is declined?

If your insurance application is declined, the insurer will provide a reason based on their risk assessment. You may be able to appeal the decision, apply with another insurer, or take steps to improve your risk profile, such as improving your health or addressing financial issues, before reapplying.

What is a guaranty fund in insurance?

A guaranty fund is a state-regulated safety net that protects policyholders by covering claims and benefits if an insurance company becomes insolvent or financially unable to meet its obligations.

What are "catastrophe bonds," and how do they relate to climate change?

Catastrophe bonds are a type of risk-linked security that allows insurers to transfer the risk of catastrophic events to investors. They are used to manage climate-related risks.

How does the NAIC monitor insurance company solvency?

The NAIC uses financial analysis tools, stress tests, and risk-based capital (RBC) requirements to ensure insurers have enough capital to pay claims. It also collects financial data to identify troubled companies and recommend regulatory interventions.

How much does long-term disability insurance cost?

Costs vary based on age, occupation, income, and policy terms, but typically range from 1% to 3% of your annual salary.

Can PPOs cover mental health services?

Yes, most PPO plans include mental health coverage for therapy, counseling, and psychiatric services. Coverage levels and provider networks vary, so it is important to check whether a specific mental health professional is in-network and what costs apply for sessions and treatments.

What is the difference between loss ratio and combined ratio?

The loss ratio only measures the ratio of claims paid to premiums earned, while the combined ratio includes both the loss ratio and the expense ratio (which accounts for operating costs). The combined ratio provides a broader view of an insurer’s financial health.

How do insurers mitigate the effects of adverse selection?

Insurers use underwriting, risk classification, waiting periods, and premium differentiation to balance risk exposure and reduce the impact of adverse selection.