What is a critical illness rider in life insurance?

A critical illness rider provides a lump sum payout if the insured person is diagnosed with a serious illness such as cancer, heart attack, stroke, or kidney failure. The payout can be used for treatment, income replacement, or other expenses.

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How often should I review my business property insurance?

Review your policy annually or whenever major changes occur, such as renovations, inventory increases, or new equipment purchases, to maintain adequate coverage.

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Who should buy term life insurance?

Term life insurance is ideal for individuals who need coverage for a specific time, such as parents with young children, homeowners with a mortgage, or business owners with financial obligations. It is also suitable for those looking for an affordable insurance option compared to whole or universal life policies.

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How does insurable interest prevent insurance fraud?

Insurable interest ensures that insurance policies are taken out for protection rather than financial gain. Without this requirement, people could take out policies on unrelated individuals or assets, leading to increased fraud, moral hazard, and potential harm.

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How do insurers calculate reserves for claims?

Insurers calculate reserves based on historical data, claim trends, risk exposure, and predictive models to ensure adequate funds for future claims.

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How is insurable interest defined in an insurance contract?

Insurable interest refers to the financial stake a person has in the subject of the insurance. In property insurance, it means the policyholder must suffer financial loss if the insured property is damaged or lost. In life insurance, it typically means that the person purchasing the insurance must have a direct interest in the life of the person being insured, such as a spouse or business partner. Without insurable interest, the contract may be deemed invalid.

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How can I reduce my public liability insurance costs?

Implement safety measures, maintain a good claims history, increase your deductible, shop around for quotes, and bundle with other business insurance policies to lower premium costs.

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Can I take out a loan against my universal life insurance policy?

Yes, policyholders can borrow against their cash value, but unpaid loans reduce the death benefit and may impact policy performance.

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