How does reinsurance affect an insurer’s balance sheet?

Reinsurance reduces an insurer’s liabilities by transferring risks, thereby strengthening its balance sheet. By ceding risks to reinsurers, insurers lower their reserve requirements, improve capital efficiency, and maintain a stable financial position while continuing to underwrite policies.

What is the difference between individual and group claim settlement ratios?

The individual CSR applies to personal policies like term life insurance, while the group CSR applies to employer-provided or group insurance policies, which may have different settlement trends.

Can policyholders choose their own TPA?

In some cases, policyholders can select a preferred TPA from an insurer’s list, but usually, insurers assign a TPA based on agreements.

How do I know which deductible amount is best for me?

The best deductible for you depends on your budget, how much you can afford to pay upfront, and how often you anticipate making claims. A financial advisor can help determine the optimal deductible for your situation.

What perils are covered under renters insurance?

Common perils covered include fire, smoke damage, theft, vandalism, water damage from plumbing issues, and certain natural disasters, depending on the policy.

What is variable universal life (VUL) insurance?

VUL policies allow policyholders to invest cash value in sub-accounts like mutual funds, offering higher growth potential but also increased risk.

Who administers the Guaranty Fund?

Guaranty Funds are typically administered by state-run organizations or commissions, with each state having its own fund managed by a designated agency.

Are renters covered for climate disasters under standard policies?

Standard renters' insurance covers fire and wind damage but excludes flood and earthquake damage, requiring separate policies for full climate disaster protection.