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Archive for the ‘Credit Insurance’ Category

A few days ago, a customer came into my office and file a complain. Here is the story, Mr. Smith (name has been changed to protect the innocent) got his credit card a couple years ago. Three months after he received his credit card, he received a call from the credit card company offering to enroll in the company’s credit shield program; basically, he was told that it is a life and disability insurance. He was told that in case of death, critical illness or disability, his credit card payments will be taken care of by an insurance company, relieving him and his family of an additional burden. All he needed to do was to pay an insurance fee which is a certain percentage of his monthly balance.

To cut it short he, decided to enroll because of the benefit the telemarketer told him. About six months ago, he had an accident; he was hospitalized for about 5 months. So he called the insurance company and filled out all the paper works. When he received his billing statement the next month, he was so surprised that the insurance company only pays the minimum payment of his balance. What happened to the rest of the balance? It was charged with interest, and will continue to do so until he pay the full amount.

Let’s take a closer look. The insurance only cover your whole balance if you are dead, if you are still alive, they will pay only the minimum payment. Did the telemarketer tell you about this? Yes, they did, most of the telemarketer read from a script prepared by the company, this is to ensure that they inform all the necessary terms from the customer. The only thing is that the script have been prepared professionally inserting those terms in such a way that we do not pay attention and the telemarketer has been professionally train that they emphasize only the most lucrative offer.

So the next time the credit card company offers you additional life and disability insurance, make sure you ask them about the coverage policy for temporary disability and permanent disability. If they tell you that the marketer might not tell you the truth, ask them to send you the term and policy, say that you will discuss it with your lawyer before making a decision. This will help you unnecessary problem in the future.

Most of us are aware that our driving history impacts not only our ability to get auto
insurance but the rates we pay as well. These days there is also another and equally
critical factor insurance companies use, our credit report.

Insurance companies consider your credit report and credit score as a valuable tool to
assess the risk in insuring you. A higher credit score reflects responsibility and
makes it less likely you will make claims against your policy.

A poor credit score may disqualify you from getting insurance with some companies. More
likely it will put you into an upper rate category with higher premiums for the duration
of that policy.

A recent study by the Federal Trade Commission concluded that “Credit based insurance
scores are effective predictors of risk under automobile policies. They are predictive
of the number of claims consumers file and the total cost of those claims. The use of
scores is therefore likely to make the price of insurance better match the risk of loss
posed by the consumer. Thus, on average, higher-risk consumers will pay higher premiums
and lower-risk consumers will pay lower premiums.”

According to a recent industry survey over 90% of the top auto insurance companies use
credit data to evaluate new and renewing clients. Almost all insurance applications
now require you give permission to check your credit report. The insurance company
will request a report from one or more of the credit reporting bureaus; Equifax, Experian
or TransUnion.

The score used is created by a company named Fair Isaac and Company and is referred to
by different names at the different credit bureaus ; InScore at Equifax, the
Experian/Fair Isaac Insurance Score at Experian, and the Fair Isaac Insurance Risk
Score at TransUnion.

Credit scores range from 300 to 850 with the higher score being best. If your score is
below 620 to 650, you may have trouble getting insurance or may have to pay a higher
premium.

You can take steps to improve your score;

Payment history: One of the largest factors is your account payment history. Delinquent payments and collections have a very negative effect on your score. While a steady record of on-time payments, the longer the better, shows responsibility. Amounts owed: You will be judged on the number, type and balances of accounts you already have. Try to keep balances low on credit cards and other revolving type accounts. Do not close unused credit card accounts and do not open too many new ones. Length of credit history: Nothing you can do to improve this other than wait, the longer your credit history, the better.
There are also consumer benefits to insurance scoring;

Lower premiums: A good insurance score can show you are responsible and therefore qualify you for lower rates. Get insured faster: Insurance scoring can be obtained almost instantly allowing policies to be approved quickly. This also helps promote internet access to insurance for the ultimate in shopping around. Impartial decision making: Insurance scoring is intended to take gender, race, nationality, religion and other factors out of the consideration process and focus on the facts related to your insurance risk. More insurance products available: Using insurance scoring has allowed more companies to offer more products to a wider audience. This has lead to more competition which lowers rates overall and gives greater choices to us all. The practice of using your credit report and insurance scoring looks like it is here to
stay and will likely be used by all companies in the near future. Some industry studies
even claim that credit based insurance scores are a better predictor of future claims
than driving records.

Almost every time you try to buy a financial product someone tries to sell you an add-on. It doesn’t seem to matter whether you are signing up for a mortgage, loan, credit card or store card. Most lenders try to get borrowers to sign up for payment protection insurance but do they really need it? Here is what you need to know about payment protection insurance.

What Is Payment Protection Insurance?

Payment protection insurance (PPI) is a form of insurance to make sure that borrowers can keep up repayments on mortgages, loans, credit card, store cards and other financial products if they face financial hardship.

Why Would I Need PPI?

1. If they have an accident that prevents them from working

2. If there is an illness that prevents them from working and earning

3. If they are made redundant or become unemployed

Any or all of these situations could make it difficult to keep up repayments. Payment protection insurance could cover repayments for up to 12 months in these cases, depending on the policy taken out.

People in the UK are borrowing more and saving less and redundancies are often in the news. It takes longer and longer to qualify for state benefits, so without some form of insurance people might end up in court and might even lose their homes if they were unable to keep up repayments for long periods. These are many of the reasons that sales people use to persuade borrowers to get PPI.

It is worth noting that most policies have exclusions relating to medical conditions and drug and alcohol abuse. There is also usually a period of 60 to 120 days after taking out the policy during which time borrowers cannot make a claim.

What To Look For With PPI

Payment protection insurance has often been slated for being unfair to consumers and there are some issues that borrowers should pay attention to. For example, it is worth checking whether the cost of the insurance will be added to the amount borrowed. This would mean that you pay interest on the insurance as well.

It is also worth paying attention to the actual cost of the insurance. This can vary quite widely, so borrowers should look beyond the low interest rate on a loan or credit card to see what the total cost of borrowing will be.

Alternatives To PPI

Although PPI has been criticised for being no more than a money-making scheme for lenders (it is currently under investigation by the Office of Fair Trading), there are very good reasons to take out some form of insurance against ill health, accident or unemployment.

What most borrowers don’t know is that they can take out separate insurance policies which will cover not just the particular financial product, but a substantial part of their income. This type of income protection policy may be a better bet if you usually make debt repayments from your earnings.

One of the most challenging issues that businesses face, regardless of their size, is ensuring payment for their goods and services. Despite this, many are unaware of trade credit insurance and how it can assist businesses by minimising exposure and risk.

Credit insurance protects the money due for goods and services that have already been supplied to a customer. As highlighted in the recent recession, declining sales and unforeseen circumstances can mean that even good customers with the best of intentions can struggle to meet their previously agreed payment terms. As a result, customers’ cashflow problems are passed on to their creditors, which in turn means that they may also struggle to meet their payment commitments.

This acts as a cushion against the impact of defaulting customers and the bad debts that would otherwise arise when a customer is unable to meet their payment terms (or in situations where the customer goes bankrupt). Effectively any payment risk is passed on to the insurer. This means that with a trade credit insurance policy in place, a large percentage (often up to 90%) of the outstanding debt will be covered.

Credit insurance providers can also help businesses plan ahead by alerting their clients to potential risks, should a particular company become uninsurable. In some cases cover may be withdrawn but the insurer will honour the cover provided up until a given date when the insurance was withdrawn. This helps prevent a domino effect of bad debt where one company cannot pay its debts which then has a knock on effect to their suppliers, and their suppliers in turn.

Credit insurance providers can also assist businesses in decisions about who to trade with, therefore helping them to trade more securely and reducing potential trading risks.

Furthermore, businesses that have a clearly defined credit insurance policy in place are often able to benefit from more favourable finance terms and funding requests from banks.

The growing number of cancellations and nonpayment cases is leading many China suppliers to protect themselves from potential losses.

The financial squeeze in global markets is pushing an increasing number of China exporters to require risk-free payment methods or apply for credit insurance. The latter is gaining ground particularly for suppliers of high-value products.

Many small and midsize operations now specify TT as their preferred mode of payment. Compared with an L/C, TT is the fastest and most secure option for exporters. With this method, manufacturers ship out goods only after the money has been credited to their bank accounts.

Small household appliance maker Foshan Shunde Qifei Electric Co. Ltd and freezer producer Foshan Shunde Weili Kitchen Equipment Co. Ltd accept only TT as a form of payment.

Admittedly, TT is only completely risk-free for manufacturers. On the buyers’ side, it requires trust that their suppliers will deliver on time and follow specifications. This is not a chance most customers are willing to take and businesses that refuse to accept other forms of payment inadvertently limit their export opportunities. Some companies, however, allow for mixed modes, receiving 50 percent or less of total purchase price via TT.

Larger manufacturers usually accept various types of payment methods, including via an L/C or an O/A. In such cases, many also buy export credit insurance to offset risk, including nonpayment. Similar to international credit rating companies such as Moody’s, China has a number of watchdog organizations that analyze the risk of doing business with different countries. Among them are Dagong and China Export & Credit Insurance Corp. (Sinosure). It is these credit reports that big companies look at to determine whether to insure an order or not.

Home appliance maker Guangdong Galanz Enterprise Group Co. Ltd buys short-term export credit insurance for all orders to be paid via an O/A and for some L/C transactions. This proved to be a valuable investment because the company was able to receive compensation from Sinosure against two nonpayment cases from an EU customer. The entire process took no more than three months.

Breathalyzers manufacturer Henan Hanwei Electronics Co. Ltd, on the other hand, evaluates a client’s credit history and payment capability before insuring an order. Among the factors it looks at is the credit rating of the country where the buyer is based and if the customer tends to request payment deadline extensions. Although the company has purchased credit insurance for a few orders, so far none of its clients has defaulted on their payments.

Carpets and rugs exporter Shenzhen Dotcom Houseware Products Co. Ltd tries to gauge from e-mail communications and business meetings whether credit insurance is needed for a particular buyer’s order or not. The company has not yet insured any order.

But the growing number of nonpayment cases, which came first as a result of the global economic downturn and now due to the ongoing debt crisis in the EU, is encouraging more suppliers to apply for export credit insurance. This is particularly true for those offering high-value products.

Sun Fenix Intl Trading Co. Ltd was burned once. Its customer from South America drafted an L/C, but the issuing bank then closed down so Sun Fenix was unable to receive the payment. The company was able to sell the order of electric home appliances to other clients.

Shenzhen Hali-Power Industrial Co. Ltd, a maker of battery packs for digital products, plans to buy credit insurance for orders exceeding $100,000. Transactions below that amount have to be settled via TT.

Export credit insurance

How much a supplier will pay to insure an order depends on a number of factors, including the destination country’s credit rating, payment terms, total purchase price, duration and buyer’s credit status. There is no hard and fast rule, but most makers will include a portion of insurance fees in the transaction value if the cost is too high.

Once the exporter’s sales team finds out that a client cannot pay for an insured order, the insurance company is informed so that it can carry out its own investigation before claims can be settled.

For the first half of 2010, total short-term export credit insurance purchases increased 180 percent year on year to reach $67.62 billion. Premiums for high-value products in the same period totaled $14.84 billion.

To extend its reach, Sinosure recently launched new policies that can provide comprehensive insurance coverage even for small and midsize operations. The company mainly offers domestic trade, and short-, medium- and long-term export credit insurance.

Incoming search terms:

Bad credit drivers insurance is still possible to get, but it is becoming more difficult. Getting drivers insurance is one of the things that is required by your state. All people who want to drive with or without a car must get driver insurance. This is to protect them as well as the vehicle they are using, along with any other parties that might be involved if there is ever an accident.

This type of insurance is required by every state. It will help cover the insured party in case of accidents. Yet, the help insurance gives will depend on the coverage purchased. Getting insurance can be a pain in your budget for they are expensive that’s why some people do not follow the rules and drive even without an insurance.

When you are caught they will confiscate your license and give you a warning but they won’t be that lenient with you when they caught you a second time. People have different reasons why they do not get drivers insurance such as it won’t fit their budget or they don’t want to pay for something they don’t need.

But there are also those people who believe that getting drivers insurance can be of help or an assurance in their part. Here are tips for people with bad credit who wanted to get drivers insurance.

First, you need to do some research for you might have a hard time finding an affordable insurance because of your bad credit record. For even if you are a good driver you could get penalized by the insurance company because of your bad credit. So do some research and see if there are ways that your rate would not go high.

The next thing is you have to know the coverage under this insurance and know the benefits you can get out of them you also need to understand this coverage so you can identify those coverage that you need and you do not need.

You then get the required You then get the drivers insurance that are required in your state and see if you need to add some coverage. Also do not be fooled by some agents who will offer you coverage that you won’t need.

Your credit is one of the factors that insurance company take into consideration when they determining your premium rate aside from your age, your marital status and other more.

The only thing for you to do is to start cleaning your bad credit bit by bit for you can’t clean your credit over night. So if you don’t want that your being a good driver will be affected by your bad credit you should be careful and take good care of your credit record as well as your driving record.

You should also learn how to ask question, you could ask your agent if there are ways that you could do or discounts that you could avail to help you lower your rate.

Before you go and get insurance doing research ahead of time will put you in an advantage for you will know the requirements and the things you need to help you get an affordable and a lower premium rate and having a bad credit is not one of them.