A fiscal or monetary policy designed to be an economic goal or target of a government. A fixed-rule policy, by definition, is pursued no matter the condition of the economy, and is considered independent of the current economic state.For example, a fixed-rule policy of any government could be that the maximum target level of inflation must be less then 5% for any given year, as measured by the consumer price index (CPI). By creating a fixed-rule policy, a government can focus on longer term goals for an economy, and provide economic direction.
Saturday, February 28, 2009
Term Life Insurance
A policy with a set duration limit on the coverage period. Once the policy is expired, it is up to the policy owner to decide whether to renew the term life insurance policy or to let the coverage end. This type of insurance policy contrasts with permanent life insurance, in which duration extends until the policy owner reaches 100 years of age.These types of policies provide a stated benefit upon the death of the policy owner, provided that the death occurs within a specific time period. However, the policy does not provide any returns beyond the stated benefit, unlike permanent life insurance policies, which have a savings component that can be used for wealth accumulation.
Named Perils Insurance Policy
A home insurance policy that only provides coverage on losses incurred to your property from hazards or events named on the policy. Named peril policies may be purchased as a less expensive alternative to a comprehensive coverage or broad policies, which are policies that tend to offer coverage to most perils.
Suppose a homeowner doesn't live in an earthquake and flooding prone area, but is still concerned about fire, theft and hail damage. The homeowner may elect to get a named perils policy and only declare coverage against fire, theft and hail, while leaving the earthquake and flooding coverage off the policy.
Keep in mind that a broad coverage policy does not necessarily guarantee your property will be covered against all forms of perils. These policies contain conditions that cover what the insurer thinks are the most likely perils. Therefore it's a good idea for homeowners to check their broad coverage policies to make sure they do cover all the perils that they are concerned about. If the broad policy isn't sufficient, homeowners should buy a named peril policy to fill that hole in their coverage.
Suppose a homeowner doesn't live in an earthquake and flooding prone area, but is still concerned about fire, theft and hail damage. The homeowner may elect to get a named perils policy and only declare coverage against fire, theft and hail, while leaving the earthquake and flooding coverage off the policy.
Keep in mind that a broad coverage policy does not necessarily guarantee your property will be covered against all forms of perils. These policies contain conditions that cover what the insurer thinks are the most likely perils. Therefore it's a good idea for homeowners to check their broad coverage policies to make sure they do cover all the perils that they are concerned about. If the broad policy isn't sufficient, homeowners should buy a named peril policy to fill that hole in their coverage.
Monday, February 23, 2009
Hazard Insurance
Insurance that protects a property owner against damage caused by fires, severe storms, earthquakes or other natural events. As long as the specific event is covered within the policy, the property owner will receive compensation to cover the cost of any damage incurred. Typically, the property owner will be required to pay for a year's worth of premiums at the time of closing, but this will depend on the exact details of the policy.
A typical property or homeowners' insurance policy usually won't cover all events that could do damage to your property. Some events will definitely be excluded from homeowners' insurance in high-risk areas. For example, Florida is prone to hurricanes and is, therefore, considered high risk. If the homeowner lives in a high-risk area, he or she may need a separate policy - such as a flood insurance policy.
A typical property or homeowners' insurance policy usually won't cover all events that could do damage to your property. Some events will definitely be excluded from homeowners' insurance in high-risk areas. For example, Florida is prone to hurricanes and is, therefore, considered high risk. If the homeowner lives in a high-risk area, he or she may need a separate policy - such as a flood insurance policy.
High-Deductible Health Plan - HDHP
A health insurance plan that has a high minimum deductible, which does not cover the initial costs or all of the costs of medical expenses. The deductible forces the insurance holder to pay the first portion of a medical expense before the insurance coverage kicks in. The minimum deductible for a plan to fall into the category of an HDHP varies each year. In 2006, it was more than $1,000 for individuals and $2,000 for families.
These health plans became more common when the new health savings account (HSA) legislation was signed into law in 2003. In order to open an HSA account, an individual must first have an HDHP. These high-deductible health plans are thought to lower overall healthcare costs by forcing individuals to be more conscious of medical expenses. The higher deductible also lowers insurance premiums, making health coverage more affordable.
These health plans became more common when the new health savings account (HSA) legislation was signed into law in 2003. In order to open an HSA account, an individual must first have an HDHP. These high-deductible health plans are thought to lower overall healthcare costs by forcing individuals to be more conscious of medical expenses. The higher deductible also lowers insurance premiums, making health coverage more affordable.
Casualty Insurance
A broad category of coverage against loss of property, damage or other liabilities. Casualty insurance includes vehicle insurance, liability insurance, theft insurance and elevator insurance.
An important type of casualty insurance for businesses is workers' compensation insurance, which protects a company from liabilities that arise when a worker is injured on the job. For homeowners or car owners, it's important to have casualty insurance as damage can end up being a large expense.
An important type of casualty insurance for businesses is workers' compensation insurance, which protects a company from liabilities that arise when a worker is injured on the job. For homeowners or car owners, it's important to have casualty insurance as damage can end up being a large expense.
Universal Life Insurance
A type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance) which is invested to provide a cash value buildup. The death benefit, savings element and premiums can be reviewed and altered as a policyholder's circumstances change. In addition, unlike whole life insurance, universal life insurance allows the policyholder to use the interest from his or her accumulated savings to help pay premiums.
Universal life insurance was created to provide more flexibility than whole life insurance by allowing the policy owner to shift money between the insurance and savings components of the policy. Premiums, which are variable, are broken down by the insurance company into insurance and savings, allowing the policy owner to make adjustments based on their individual circumstances. For example, if the savings portion is earning a low return, it can be used instead of external funds to pay the premiums. Unlike whole life insurance, universal life allows the cash value of investments to grow at a variable rate that is adjusted monthly.
Universal life insurance was created to provide more flexibility than whole life insurance by allowing the policy owner to shift money between the insurance and savings components of the policy. Premiums, which are variable, are broken down by the insurance company into insurance and savings, allowing the policy owner to make adjustments based on their individual circumstances. For example, if the savings portion is earning a low return, it can be used instead of external funds to pay the premiums. Unlike whole life insurance, universal life allows the cash value of investments to grow at a variable rate that is adjusted monthly.
Homeowners Insurance
A form of property insurance designed to protect an individual's home against damages to the house itself, or to possessions in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.
In the U.S. there are seven forms of homeowners insurance that have become standardized in the industry; they range in name from HO-1 through HO-8 and offer various levels of protection depending on the needs of the homeowner.
While homeowners insurance covers most scenarios where loss could occur, some events are typically excluded from policies, namely: earthquakes, floods or other "acts of God" and acts of war.
For people who live in certain parts of the country, adding an extra policy for earthquake insurance or flood insurance can be a good idea to offer further home protection and peace of mind. Some homeowners insurance is designed for renters, typically HO-4 or "renters insurance", and only covers possessions within the home and isolated events not covered in the property insurance held by the owner.
In the U.S. there are seven forms of homeowners insurance that have become standardized in the industry; they range in name from HO-1 through HO-8 and offer various levels of protection depending on the needs of the homeowner.
While homeowners insurance covers most scenarios where loss could occur, some events are typically excluded from policies, namely: earthquakes, floods or other "acts of God" and acts of war.
For people who live in certain parts of the country, adding an extra policy for earthquake insurance or flood insurance can be a good idea to offer further home protection and peace of mind. Some homeowners insurance is designed for renters, typically HO-4 or "renters insurance", and only covers possessions within the home and isolated events not covered in the property insurance held by the owner.
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