What are Life and Health (L&H) Insurers?
Life and health (L&H) insurers are companies that provide coverage on the risk of life and medical expenses incurred from illness or injuries.
- Life and health (L&H) insurers are companies that provide coverage on the risk of life and medical expenses that arise from health issues.
- L&H insurers cover mainly life and health insurance.
- Customers pay L&H insurers an insurance premium for their desired coverage.
Coverage for Life and Health Insurers
Indicated by the name, life and health insurers provide life and health insurance.
Life insurance offers coverage for the risk of life. In other words, life insurance pays out an assured sum of money if an insured individual passes away. The amount of money paid goes to the recipient indicated in the policy. To be insured, an individual pays an insurance premium, which can be a lump sum amount or in installments. On the maturity of life insurance, the money invested is typically recovered.
Health insurance offers coverage up to an amount for medical expenses arising from illness or injuries. To be insured, an individual pays a lump sum insurance premium. On maturity of the health insurance, the money invested cannot be recovered.
Scenarios that Life and Health Insurers Cover
The following are several scenarios covered by life and health insurance:
1. An individual pass away
John, an insured individual, passes away. The life and health insurer would pay out a monetary amount to the recipient that John initially indicated on his insurance.
2. An individual suffers an illness
Josh, an insured individual, was recently diagnosed with an illness. The life and health insurer would cover medical expenses up to an amount.
How Does Life and Health Insurance Work?
Life and health insurers offer life and health insurance to customers for risk of life and medical expenses arising from health issues up to a certain coverage amount in exchange for insurance premiums. Insurance premiums are cash outflows made by the customer in exchange for insurance.
Similar to other insurers, when L&H insurers offer coverage to a customer, they must determine an insurance premium the customer will pay by looking at the riskiness of the customer. An insurer would commonly look at the likelihood of the customer making a claim and the likely amount of the claim when determining the amount of insurance premium they should charge. A diagram is provided below to outline the process:
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