Insurance safeguards your business, family, and personal welfare in case something bad happens. And most would agree that the worst event that can occur is the loss of life. Having insurance policies in place that can protect your employees, their families, and your business at these unfortunate times can become a little solace in a tragic situation that makes the event a bit less damaging for all.
As a business owner, you have options when it comes to purchasing life insurance. You can provide policies to all employees, but there is more you can do. But what policies should you get key man insurance vs life insurance?
Key person insurance, previously referred to as key man insurance–snaps for the insurance industry’s wokeness–is a special kind of insurance that can be purchased for select individuals. We’ll break down the differences between traditional life insurance and this specified kind of coverage. Let’s start with the kind you likely already know something about:
What is Life Insurance?
A standard life insurance policy is something that practically all employers offer. Life insurance is a contract between a person and an insurance company. If an employer offers life insurance, it is seen as an employee benefit, as policies may be available at a lesser rate when purchased in bulk as opposed to when bought as a single entity.
If death occurs, the insurance company will pay beneficiaries a lump sum known as a death benefit. There are two primary kinds of classifications of life insurance:
- Term life insurance: This kind of life insurance provides coverage for a specific period of time, usually between 10-40 years, the term is typically tied to the anticipated date of retirement.
- Permanent or whole life insurance: Permanent policies provide coverage for the lifetime of the insured and accumulate in value as a portion of the premiums is deposited into a cash-value account overtime.
What Does Life Insurance Cover?
Life insurance usually covers most causes of death, including: natural causes, accidents, homicide and suicide. In the event of death, money will be paid directly to beneficiaries. They can use the money how they like, but common uses include things like:
- Estate taxes and funeral expenses
- Covering basic living expenses
- Paying household debts
- Replacing lost income
- Funding a child’s education
- Supplementing retirement savings
What Doesn’t Life Insurance Cover?
Under some circumstances, life insurance policies will withhold a payout to beneficiaries. Reasons may include things like:
- A life insurance policy is expired
- There was fraudulent or criminal activity committed on behalf of the policy holder
- The policy holder’s death involved risky behavior, like partaking in extreme sports
What is Key Person Insurance?
Somewhat similar to life insurance in practice–it’s a policy that is paid out at the time of an employee’s death–key person insurance is paid out to the business–as they are the policy holder in this case. It is a form of company-owned life insurance (COLI). There are times though, when both the business and the family members receive a pay out.
Plainly put, the business owns the policy, pays the premiums and is the beneficiary. Key person insurance is a life insurance policy that a business takes out on its most valuable employee or employees.
The employee does have to provide consent. In addition to coverage in case of a death, a policy can also include a rider for disability coverage. If a key person dies, the business then collects a death benefit. The purpose of this kind of insurance protects a business in the event that they lose an invaluable person to their business due to death–and not a termination or voluntary exit.
What Does Key Person Insurance Cover?
Key person insurance can be used by a business to rebound after the loss of a key contributor. This individual had a direct line to the company’s overall success and therefore the funds can be used to:
- Ramp up recruitment of high-performing and competitive candidates to fill the vacant role
- Make up for lost sales, productivity and operational disruption costs
- Aid in funding rebranding efforts if the individual had a consumer-facing role
- Provide money to the family of the deceased
What Doesn’t Key Person Insurance Cover?
These policies will not cover contractors or freelancers and payouts are only made when the person dies and will not provide funds in the event of a retirement or termination.
What Does a Key Person Look Like?
A key person is an employee that is considered irreplaceable. In some cases, it can be a business owner, especially if the business or brand is named after that person. Policies can also be taken out for C-suite individuals or niche product developers. Those in highly specialized roles or those who are superior in their field and drive revenue in exceptional capacities can also be considered key people.
What’s the Cost of Life and Key Person Insurance?
While any cost of an insurance plan will take certain factors into consideration, typically, insurance companies base group life premiums on the overall risk of the company or group. Term life insurance is typically less costly than permanent or whole insurance. Generally, a good rule of thumb is that the higher the death benefit, the higher the cost of the policy.
As for determining the cost of key person insurance, cost will also differ case by base, but to get an idea of the expense you can add the person’s salary to their direct financial contribution to your company’s bottom line per year, then multiply the result by five. Insurance companies will also consider additional factors like: the time and effort it will take to find and recruit a replacement, the cost of recruitment, operational disruption costs, lost productivity and lost sales.
Should Your Business Get Key Man Insurance vs Life Insurance?
Outside of having the assurance that your company won’t incur great financial loss concurrent with the loss of a human life, another reason you may be interested in key person insurance could be because you are applying for a business loan or other financing. In these cases, a lender or investor may require a key person policy as collateral.
But ultimately, when deciding between the two kinds of insurance, you may find that you’ll end up with both. As noted earlier, key person insurance doesn’t cover all employees–so even if you do have a person in mind, it won’t cover all of your staff. Group life insurance is a type of personal life insurance employers can offer to all their workers at lesser rates and can be available to the entire company.
Source: https://www.embroker.com/blog/key-man-insurance-vs-life-insurance/
Summer Travel Safety: Tips for Staying Safe and Secure While Traveling
Summer is a popular time for travel, whether it’s a road trip, a beach vacation, or an international adventure. It’s important to prioritize safety and security during your travels to ensure a smooth and enjoyable trip. Here are some tips for staying safe and secure while traveling during the summer:
Remember that safety should always be a top priority while traveling. By being prepared, vigilant, and using common sense, you can have a safe and enjoyable summer travel experience.
Auto Insurers Contend With Rising Auto Costs
Auto premiums continue to increase as rising labor and material prices, alongside natural disasters, are forcing insurers to contend with significant losses.
As Triple-I previously found in its January report, Insurance Economics and Underwriting Projections: A Forward View, “commercial auto underwriting losses continue, with a projected 2023 net combined ratio of 110.2, the highest since 2017,” according to Jason B. Kurtz, FCAS, MAAA, a Principal and Consulting Actuary at Milliman. Combined ratio is a standard measure of underwriting profitability, in which a result below 100 represents a profit and one above 100 represents a loss.
Insurers are now having to increase rates in response to losses that are expected to keep rising.
“Nobody wants to have that higher-price bill,” said Sean Kevelighan, Triple-I’s CEO. However, he added companies “need to price insurance according to the risk level that’s out there.”
While inflation is partially to blame for these increases, natural disasters are also contributing to rising costs—and not only in traditionally disaster-prone areas like Florida and California.
As the overall P&C industry has struggled with severe convective storms, hurricanes, and other natural disasters, these losses have also been felt in commercial auto. In fact, 2023 witnessed around two dozen U.S. storms, each with losses of around a billion dollars or more. This included major lightning, hail, and damaging winds around many areas of the U.S.
“While a lot of these storms don’t make national headlines, they do tend to be very costly at the local level,” says Tim Zawacki, principal research analyst for insurance at S&P Global Market Intelligence. “And the breadth of where these storms are occurring is something that I think the industry is quite concerned about.”
While disasters and economic inflation continue to roil commercial auto, so too does social inflation. As the Triple-I previously reported, “social inflation,” which is the presence of inflation in excess of economic inflation, has also significantly contributed to increases in commercial auto premiums.
Triple-I found that “from 2013 to 2022, increasing inflation drove losses up by between $35 billion and $44 billion, or between 19 percent and 24 percent. The pandemic brought significant change to commercial auto liability, decreasing claim frequency while increasing claim severity more dramatically.”
This increased claim severity is at least partially due to changing driving patterns since the pandemic, including distracted driving, which involves behaviors like cellphone use while behind the wheel. A Triple-I Issues Brief, Distracted Driving: State of the Risk, enumerated these concerns, which have undoubtedly played a role in rising commercial auto premiums.
Indeed, a confluence of issues are playing into rising auto premiums. While natural disasters are out of the control of insurance providers and their policyholders, other factors must be addressed to steady the cost of this line of insurance. This includes telematics and usage-based insurance, which has gained more acceptance since the pandemic.
Still, it is incumbent on insurers, policyholders, and policymakers to create a more sustainable market for auto insurance, working together to tackle the challenges of both climate risk and dangerous driving behavior.
Source: https://insuranceindustryblog.iii.org/category/auto-insurance/
Common Roofing Problems and Their Solutions
Your roof is your home’s first line of defense against the elements, and it’s essential to keep it in good condition to ensure the safety and longevity of your property. Over time, various roofing problems can arise, but the good news is that most of these issues can be addressed with timely repairs. In this blog post, we will discuss some of the most common roofing problems homeowners encounter and the solutions to resolve them effectively.
Leaky Roof:
Shingle Damage:
Moss and Algae Growth:
Ice Dams:
Roof Ventilation Issues:
Flashing Problems:
Sagging Roof:
Gutter Clogs:
Regular roof inspections and maintenance are vital for identifying and addressing common roofing problems before they escalate. Whether it’s a minor repair or a more extensive renovation, acting promptly can extend the life of your roof and protect your home from costly damage. If you encounter any of these issues, don’t hesitate to consult a professional roofing contractor for expert solutions.
The Sobering Stats: Drunk Driving and Its Impact on Insurance Premiums
Drunk driving is a pervasive issue that not only poses significant risks to road safety but also has lasting consequences on individuals’ financial well-being. The following show sobering statistics of drunk driving and how they correlate with increases in auto insurance premiums.
The Alarming Statistics
The numbers are stark and alarming. According to the National Highway Traffic Safety Administration (NHTSA), alcohol-impaired driving contributes to a considerable portion of road accidents. In recent years, nearly 10,000 people lost their lives in crashes involving alcohol-impaired drivers, accounting for nearly 28% of all traffic-related fatalities.
Impact on Insurance Premiums
For those caught driving under the influence, the financial impact goes beyond legal fines and court fees. Insurance premiums take a substantial hit. On average, a DUI conviction can result in a staggering 80% increase in auto insurance premiums. This spike in costs is attributed to the heightened risk that insurers associate with drivers who have a history of impaired driving.
Risk Assessment by Insurers
Insurance providers meticulously assess risk when determining premiums. A driver with a DUI is statistically considered a high-risk individual due to the increased likelihood of accidents and claims. This risk assessment translates directly into higher insurance premiums, reflecting the potential financial exposure that comes with covering a driver prone to impaired decision-making behind the wheel.
Regional Variances
Statistics also highlight regional variations in the prevalence of drunk driving and its impact on insurance premiums. States with stricter DUI penalties and enforcement tend to have lower instances of drunk driving accidents and may see comparatively lower insurance premium increases for those convicted.
Age and Gender Disparities
Studies show that certain demographic factors, such as age and gender, play a role in drunk driving statistics. Younger drivers and males are more likely to engage in risky behavior, including driving under the influence. Consequently, this demographic may experience more substantial increases in insurance premiums following a DUI conviction.
Repeat Offenders
Another concerning statistic is the rate of repeat DUI offenses. A significant number of individuals who have been convicted of driving under the influence continue to engage in risky behavior. Repeat offenses not only result in more severe legal consequences but also lead to higher insurance premiums, as insurers perceive an elevated level of risk.
The statistics surrounding drunk driving and its impact on insurance premiums underscore the importance of responsible decision-making behind the wheel. The financial ramifications of a DUI go beyond the initial legal penalties, affecting individuals’ ability to secure affordable auto insurance for years. By understanding these statistics, individuals can make informed choices, prioritize responsible driving, and contribute to safer roads for everyone.
AC Marmo & Sons, Inc. LOVES Insuring Your Life!
Life is the most precious gift, and we love insuring yours! AC Marmo & Sons, Inc. values every single one of our loyal clients, and this month, we are sending you love and gratitude for welcoming us into your families and homes. It is our pleasure and honor to provide you with protection and assurance in these times of uncertainty. Some of the most impactful services we proudly provide are:
Auto Insurance
Homeowners Insurance
Flood Insurance
Commercial Auto Insurance
Workers Compensation Insurance
https://www.acmarmo.com/ Fairfield Office (973) 340-9100 Lavallette Office (732) 793-7530 Fairfield Location: 350 Passaic Avenue PO Box 11115 Fairfield, NJ 07004 Lavallette Location:1605 Grand Central Avenue, Suite #3 Lavallette, New Jersey 08735
Hypothermia – Prevention Tips
Preventing hypothermia is important because it can be a life-threatening condition. Hypothermia occurs when your body loses heat faster than it can produce it, causing your core body temperature to drop below the normal range (around 98.6°F or 37°C). Preventing hypothermia involves taking measures to stay warm, dry, and protected in cold environments. Take proactive steps to avoid hypothermia.
Dress in Layers
Stay Dry
Protect Extremities
Stay Active
Seek Shelter
Stay Hydrated and Well-Fed
Know the Signs
Avoid Alcohol and Tobacco
Stay Informed
Remember that the severity of hypothermia can vary, and individual susceptibility may depend on factors such as age, health condition, and environmental conditions. Taking preventive measures is essential for maintaining overall well-being and reducing the risk of serious health complications associated with hypothermia.
Mastering Your Ceiling Fan: Seasonal Comfort Hacks
Ceiling fans are not only functional but also play a significant role in maintaining comfort and energy efficiency in our homes. Depending on the season, the direction in which your ceiling fan blades spin can make a significant difference in the way you feel and your energy bills. In this blog, we’ll explore the optimal ceiling fan settings for both summer and winter to help you make the most of this essential home appliance.
Summer: Cooling Down
During the sweltering summer months, the primary goal is to keep your living spaces cooler without cranking up the air conditioning and running up your electricity bill. To achieve this, your ceiling fan should spin counterclockwise when looking up at it from below. Here’s why:
Winter: Warming Up
In the colder winter months, the goal is to keep your living spaces warm without overworking your heating system. To achieve this, your ceiling fan should spin clockwise when looking up at it from below. Here’s why:
Adjusting Your Ceiling Fan
Switching the direction of your ceiling fan is typically done through a switch on the fan’s motor housing. Some newer models even come with remote controls, making it easy to change the fan’s direction at the push of a button.
Remember to turn off the fan before adjusting its direction to avoid damaging the motor or blades. Once the season changes, simply reverse the direction to match the recommended settings.
Ceiling fans are versatile and valuable assets for maintaining comfort and reducing energy costs in your home. By adjusting the direction of your ceiling fan blades according to the season, you can maximize its benefits. During the summer, set it to counterclockwise to cool down, and in the winter, set it to clockwise to warm up. This simple adjustment can help you stay comfortable year-round while saving on your energy bills.
CRASH-AVOIDANCE FEATURES COMPLICATE AUTO REPAIRS BUT STILL ARE VALUED
As more new vehicles become equipped with crash-avoidance features, some owners report significant issues with the technologies after repairs, according to a recent report from the Insurance Institute of Highway Safety (IIHS).
In the survey, approximately half of those who reported an issue with equipped front crash prevention, blind-spot detection, or rearview or other visibility-enhancing cameras said at least one of those systems presented problems after the repair job was completed.
Nevertheless, many owners remained eager to have a vehicle with these features and were pleased with the out-of-pocket cost, according to Alexandra Mueller, IIHS senior research scientist.
“These technologies have been proven to reduce crashes and related injuries,” Mueller said. “Our goal is that they continue to deliver those benefits after repairs and for owners to be confident that they’re working properly.”
Still, as problems with these technologies persist, the study notes that it is important to track repair issues to further the adoption of crash avoidance features. IIHS research has shown that front-crash prevention, blind-spot detection, and rearview cameras all substantially reduce the types of crashes they are designed to address. For example, IIHS said, automatic emergency braking reduces police-reported rear-end crashes by 50 percent.
An analysis conducted by the IIHS-affiliated Highway Loss Data Institute (HLDI) showed the reduction in insurance claims associated with Subaru and Honda crash-avoidance systems remained essentially constant, even in vehicles more than five years old. But repairs can make it necessary to calibrate the cameras and sensors that the features rely on to work properly, making repairs complicated and costly.
For example, a simple windshield replacement can cost as little as $250, while a separate HLDI study found vehicles equipped with front crash prevention were much more likely to have glass claims of $1,000 or more. Much of that higher cost is likely related to calibration.
The new IIHS study found that owners often had more than one reason requiring repairs to these safety features. Most had received a vehicle recall or service bulletin about their feature, but that was rarely the sole reason they brought their vehicles in for service or repair.
“Other common reasons — which were not mutually exclusive — included windshield replacement, crash damage, a recommendation from the dealership or repair shop, and a warning light or error message from the vehicle itself,” according to the study.
Repair difficulties could motivate drivers to turn off crash avoidance features, potentially making collisions more likely. But, despite the post-repair issues, the study found that slightly more than 5 percent of owners would opt not to purchase another vehicle with the repaired feature. As reckless driving and traffic fatalities continue to rise, advanced driver-assistance systems will only become more important for the roadway safety, necessitating reliable technology.
Source: Max Dorfman | https://www.iii.org/insuranceindustryblog/crash-avoidance-features-complicate-auto-repairs-but-still-are-valued/
10 Ways Homeowners Can Reduce Insurance Risk on Halloween
Halloween is a time for spooky fun and creative costumes, but it can also pose risks to homeowners. From potential accidents to property damage, it’s essential to take steps to reduce insurance risks during this festive season. Let’s explore ten ways homeowners can protect themselves, their property, and their insurance premiums on Halloween.
Well-Lit Pathways: Ensure your pathways and walkways are well-lit to prevent trips and falls. Adequate lighting not only keeps your trick-or-treaters safe but also reduces the risk of liability claims if someone gets injured on your property.
Clear Walkways: Remove any obstacles or decorations that might obstruct paths and driveways. This will prevent accidents and reduce the likelihood of damage to your property or vehicles.
Secure Decorations: Strong winds can turn your Halloween decorations into projectiles, causing damage to your home or your neighbor’s property. Secure decorations properly to avoid insurance claims for property damage.
Fire Safety: If you use candles or open flames in your decorations, keep them away from flammable materials, and never leave them unattended. Consider using battery-operated candles to reduce the risk of fire.
Pet Safety: Keep your pets safe and secure during Halloween festivities. Excited or scared animals can become unpredictable, potentially leading to bites or other accidents that could result in liability claims.
Costume Safety: If you have young trick-or-treaters, make sure their costumes are safe. Avoid costumes with long, trailing materials that can cause trips or costume components that obscure vision.
Home Security: A well-maintained home security system can deter vandals and protect your property. Make sure it’s in working order and prominently displayed on Halloween night.
Liability Insurance: Check your homeowner’s insurance policy to ensure you have adequate liability coverage. This can protect you in case someone is injured on your property, and you’re held responsible.
Review Your Policy: Take the time to review your homeowner’s insurance policy, including coverage limits and deductibles. Understanding your coverage can help you make informed decisions in case you need to file a claim.
Document Decorations: Before setting up Halloween decorations, document the condition of your property. Take photos or videos to have a record in case any damage occurs. This can be valuable evidence when filing an insurance claim.
Halloween can be a fun and exciting time for homeowners and trick-or-treaters alike. By taking these precautions and reducing insurance risks, you can enjoy the holiday without worrying about potential accidents, property damage, or liability claims. Protect your home, your family, and your peace of mind this Halloween season!
Key Person Insurance vs Life Insurance
Insurance safeguards your business, family, and personal welfare in case something bad happens. And most would agree that the worst event that can occur is the loss of life. Having insurance policies in place that can protect your employees, their families, and your business at these unfortunate times can become a little solace in a tragic situation that makes the event a bit less damaging for all.
As a business owner, you have options when it comes to purchasing life insurance. You can provide policies to all employees, but there is more you can do. But what policies should you get key man insurance vs life insurance?
Key person insurance, previously referred to as key man insurance–snaps for the insurance industry’s wokeness–is a special kind of insurance that can be purchased for select individuals. We’ll break down the differences between traditional life insurance and this specified kind of coverage. Let’s start with the kind you likely already know something about:
What is Life Insurance?
A standard life insurance policy is something that practically all employers offer. Life insurance is a contract between a person and an insurance company. If an employer offers life insurance, it is seen as an employee benefit, as policies may be available at a lesser rate when purchased in bulk as opposed to when bought as a single entity.
If death occurs, the insurance company will pay beneficiaries a lump sum known as a death benefit. There are two primary kinds of classifications of life insurance:
What Does Life Insurance Cover?
Life insurance usually covers most causes of death, including: natural causes, accidents, homicide and suicide. In the event of death, money will be paid directly to beneficiaries. They can use the money how they like, but common uses include things like:
What Doesn’t Life Insurance Cover?
Under some circumstances, life insurance policies will withhold a payout to beneficiaries. Reasons may include things like:
What is Key Person Insurance?
Somewhat similar to life insurance in practice–it’s a policy that is paid out at the time of an employee’s death–key person insurance is paid out to the business–as they are the policy holder in this case. It is a form of company-owned life insurance (COLI). There are times though, when both the business and the family members receive a pay out.
Plainly put, the business owns the policy, pays the premiums and is the beneficiary. Key person insurance is a life insurance policy that a business takes out on its most valuable employee or employees.
The employee does have to provide consent. In addition to coverage in case of a death, a policy can also include a rider for disability coverage. If a key person dies, the business then collects a death benefit. The purpose of this kind of insurance protects a business in the event that they lose an invaluable person to their business due to death–and not a termination or voluntary exit.
What Does Key Person Insurance Cover?
Key person insurance can be used by a business to rebound after the loss of a key contributor. This individual had a direct line to the company’s overall success and therefore the funds can be used to:
What Doesn’t Key Person Insurance Cover?
These policies will not cover contractors or freelancers and payouts are only made when the person dies and will not provide funds in the event of a retirement or termination.
What Does a Key Person Look Like?
A key person is an employee that is considered irreplaceable. In some cases, it can be a business owner, especially if the business or brand is named after that person. Policies can also be taken out for C-suite individuals or niche product developers. Those in highly specialized roles or those who are superior in their field and drive revenue in exceptional capacities can also be considered key people.
What’s the Cost of Life and Key Person Insurance?
While any cost of an insurance plan will take certain factors into consideration, typically, insurance companies base group life premiums on the overall risk of the company or group. Term life insurance is typically less costly than permanent or whole insurance. Generally, a good rule of thumb is that the higher the death benefit, the higher the cost of the policy.
As for determining the cost of key person insurance, cost will also differ case by base, but to get an idea of the expense you can add the person’s salary to their direct financial contribution to your company’s bottom line per year, then multiply the result by five. Insurance companies will also consider additional factors like: the time and effort it will take to find and recruit a replacement, the cost of recruitment, operational disruption costs, lost productivity and lost sales.
Should Your Business Get Key Man Insurance vs Life Insurance?
Outside of having the assurance that your company won’t incur great financial loss concurrent with the loss of a human life, another reason you may be interested in key person insurance could be because you are applying for a business loan or other financing. In these cases, a lender or investor may require a key person policy as collateral.
But ultimately, when deciding between the two kinds of insurance, you may find that you’ll end up with both. As noted earlier, key person insurance doesn’t cover all employees–so even if you do have a person in mind, it won’t cover all of your staff. Group life insurance is a type of personal life insurance employers can offer to all their workers at lesser rates and can be available to the entire company.
Source: https://www.embroker.com/blog/key-man-insurance-vs-life-insurance/