What are war and nuclear exclusions in insurance policies?

Most insurance policies exclude damages caused by war, civil unrest, and nuclear hazards. These risks are considered too catastrophic for insurers to cover, and they are generally managed by government entities or special insurance programs.

Are there any limitations to on-demand insurance?

Yes, on-demand insurance may have limitations such as lower coverage limits or fewer options for specific types of coverage, depending on the provider and the policy selected.

Why is insurable interest important in insurance?

Insurable interest prevents moral hazard and ensures that insurance contracts are legally valid. Without it, individuals could take out policies on assets or people in whom they have no financial stake, leading to fraudulent claims or unethical behavior. This requirement aligns insurance with its purpose of risk protection rather than speculation.

What happens when my short-term disability benefits run out?

If you are still unable to work, you may transition to long-term disability insurance if covered, apply for Social Security Disability Insurance (SSDI), or seek other financial assistance.

What is the difference between variable and indexed universal life insurance?

Variable universal life (VUL) allows direct investment in market securities, while indexed universal life (IUL) ties interest earnings to a stock market index with limits.

How is the limit of liability determined?

The limit of liability is determined based on factors such as the type of coverage, policy terms, and the insured’s needs. Policyholders typically choose coverage limits based on potential risks, legal requirements, and the insurer’s underwriting guidelines. Higher limits generally result in higher premiums.

What are smart contracts, and how do they improve insurance?

Smart contracts, powered by blockchain, automate policy execution by triggering payouts based on predefined conditions, reducing fraud, administrative costs, and disputes in claims processing.

What is the NAIC Market Conduct Annual Statement (MCAS)?

The MCAS is a regulatory tool used to analyze insurers’ market conduct and identify potential unfair practices affecting policyholders.