An insurance program primer.Your association can expand its appeal to members by offering them insurance coverage they want and need. As a service to its members, an additional means of member retention, and an alternative source of nondues revenue, an association may sponsor or endorse a wide variety of insurance products. Here is a list of the most common products offered by associations. Annuities Annuities are insurance contracts tied to investment vehicles that provide for tax deferral tax deferral The delay of a tax liability until a future date. For example, an IRA may result in a tax deferral on the amount contributed to the IRA and on any income earned on funds in the IRA until withdrawals are made. of investment earnings and a guaranteed payment of benefits in the event of the death of the contract holder. Two basic options exist: * A fixed annuity Fixed Annuity An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal. is one for which a guaranteed rate of interest is paid based on the portfolio of income investments selected. * A variable annuity Variable Annuity An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio. is one for which investment earnings are derived from the performance of separate accounts based on specially created investment portfolios. Business property and casualty plans Business property and casualty plans can include various property and liability coverages: * A package policy provides coverage for direct loss to real and business property, loss of income, and legal liability for bodily injury or property damage. * Workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. provides coverage to employees for work-related injuries or illness as prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by workers' compensation law. * Commercial umbrella coverage, a broad-form (covering a wide variety of liabilities) policy, provides high-limit coverage beyond commercial policy limits. Comprehensive medical programs Comprehensive medical programs provide for payment of medical, surgical, and hospital expenses incurred by the insured and come in a variety of options: * A health maintenance organization (HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, ) provides health care for a geographic area that accepts responsibility for delivering an agreed-upon set of services to a voluntarily enrolled individual or group. * An indemnity program provides for payment for services rendered to a third-party provider selected by the insured. * Through a preferred provider organization pre·ferred provider organization n. Abbr. PPO A medical insurance plan in which members receive more coverage if they choose health care providers approved by or affiliated with the plan. (PPO PPO abbr. preferred provider organization PPO Managed care Preferred provider organization, see there Infectious disease Pleuropneumonia-like organism, see there ), a third-party payer contracts with a group of medical care providers who furnish fur·nish tr.v. fur·nished, fur·nish·ing, fur·nish·es 1. To equip with what is needed, especially to provide furniture for. 2. services at lower-than-usual fees to insureds. * Small-group insurance provides coverage for a group of people under one contract (where individual group members are not party to the contract), as opposed to insurance issued directly to an individual. Supplemental medical insurance Supplemental medical insurance coverage can include these categories: * A cancer expense indemnity policy pays benefits if an insured is diagnosed and treated for cancer. * Excess coverage is designed to pay benefits after a basic medical policy has paid its maximum benefits. * In-hospital coverage pays a specific amount of benefits whenever the insured is hospitalized, regardless of any other insurance coverages. * Long-term care long-term care (LTC), n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. insurance pays benefits to help cover the expenses an insured incurs if confined con·fine v. con·fined, con·fin·ing, con·fines v.tr. 1. To keep within bounds; restrict: Please confine your remarks to the issues at hand. See Synonyms at limit. to nursing-home care for an extended period. * Medicare supplemental coverage is designed to pay benefits to insureds covered under Medicare for expenses not paid by Medicare. * Short-term insurance provides comprehensive medical coverage for a specified period, usually less than one year. * Travel insurance is an indemnity policy for accidents that occur while an insured is traveling, usually by common carrier. Disability coverage Disability insurance, which provides benefits payable to the insured if the insured is unable to work because of an accident or sickness SICKNESS. By sickness is understood any affection of the body which deprives it temporarily of the power to fulfill its usual functions. 2. Sickness is either such as affects the body generally, or only some parts of it. , can include a number of options: * Business overhead/office overhead coverage provides benefits to help cover business overhead expenses during a disability of an insured owner or manager. * Long-term coverage covers an insured's inability to perform any of the duties of his or her occupation, any occupation, or complete loss of earning power Earning power Earnings before interest and taxes (EBIT) divided by total assets. earning power 1. The earnings that an asset could produce under optimal conditions. For example, AT&T may currently be earning $2. . * Short-term coverage covers disabilities from which the person with a disability is expected to recover. Life insurance Life insurance provides for payment of a specific amount on the insured's death, either to the insured's estate or to a designated beneficiary beneficiary Person or entity (e.g., a charity or estate) that receives a benefit from something (e.g., a trust, life-insurance policy, or contract). A primary beneficiary receives proceeds from a trust or insurance policy before any other. . * Term life insurance provides for payment of benefits if the insured dies within a specific period (provides pure protection with no accumulation of cash value). * Universal/whole life insurance provides for periodic payment of premium for life or a specific period of time (payment is made to a beneficiary at the death of the policyholder Policyholder An individual who owns an insurance policy. ). * Variable life insurance benefits relate to the value of assets behind the contract at the time the benefit is paid. Personal lines of insurance Personal lines of insurance include a variety of products that cover the personal property of insureds against loss or damage. * Automobile coverage insures against loss from damage to automobiles or claims for damages arising out of the ownership, maintenance, or use of automobiles. * Homeowner's insurance is a package policy for dwellings combining real and personal property, loss of use, and legal liability for injury to others and damage to property of others. * Umbrella insurance refers to insuring more than one property as opposed to insuring only one. For example the owner might get a discount for insuring both his house and car rather than insuring them with separate policies because it might cost more. is a broad-form liability policy providing high-limit excess coverage. Professional liability insurance Professional liability insurance provides coverage for loss arising from alleged misconduct MISCONDUCT. Unlawful behaviour by a person entrusted in any degree: with the administration of justice, by which the rights of the parties and the justice of the, case may have been affected. 2. or error in the performance of professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. . As you explore the possibility of offering any of these insurance products to your members, you may find it helpful to discuss your options in advance with one or more insurance brokers/administrators who meet the criteria outlined in the sidebar (1) A Windows Vista desktop panel that holds mini applications (gadgets) such as a calendar, calculator, stock ticker and Vonage phone dialer. It is the Windows counterpart to the Dashboard in the Mac. See Windows Vista and gadget. that accompanies this article. Experienced brokers should be an invaluable resource for information and advice about putting together a successful association insurance program. RELATED ARTICLE: Tips for Partnering With an Insurance Broker Most associations offering group insurance programs for their members elect to work with an insurance broker and administrator as a partner in providing all or part of the services and expertise required for such a program. As you search for a broker/administrator for your association's insurance program, here are a few things to keep in mind to help you identify the right company with which to form this partnership. * Look for an administrator with a proven track record of successful experience dealing with the type of program or programs your association wants to offer. * Ensure that the administrator will allow your association to choose its desired level of involvement with the program and provides a level of program control with which your association is comfortable. * Select a full-service broker/administrator - one that can effectively provide all of the support and service your association will require, both in types of insurance programs offered and range of function support. * Choose an administrator with a commitment to strategic marketing based on market research and test marketing. * Consider a broker/administrator who has a high volume of like business placed with major insurance carriers, which allows the administrator to arrange for suitable product features and attractive premium rates. * Decide whether or not to sponsor or endorse the insurance program. Seek input from colleagues with regard to their experiences, and work with your administrator to structure the program accordingly. * Choose a broker/administrator who will provide proper management information reports. Jeffrey Ray is vice president and Shannon Warner is manager, direct response services, for Seabury & Smith, Washington, D.C. |
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