Month: November 2019

What is Experience Rating for Workers Compensation?

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Experience Rating is a method to tailor the characteristics of a specific employer when determining costs associated with their workers compensation insurance premiums.

The National Council on Compensation Insurance, (NCCI), is the experienced provider of workers compensation insurance information, gathering data and preparing industry trends to help prepare objective insurance rates and loss cost recommendations.  The Plan helps develop loss experience where it can predict whether loss to a specific employer will be better or worse that average risks with the same industry classification.  The main objective of the Plan is to provide an in incentive for employers to reduce their frequency of claims and to encourage the injured employee to return to work within a reasonable time frame.

The Plan modifies the employer’s workers’ compensation premium by a factor developed from the employer’s past loss experience in an effort to project future losses.

The factor can be both a debit or a credit modification to the employer.  This rating gives employers an incentive to implement loss control measures to help eliminate or reduce injured employees, and develop return-to-work programs to reduce their costs and additional exposures to loss.

Risks in the same industry utilizing the same classification will experience a reduction in workers compensation premium for better than average claims experience.  Those employers in the same group experiencing debit modifications for worse than average loss have an opportunity to work towards improving their risk management programs to help control these costs in the future.

There are premium eligibility requirements developed by each State.  Depending upon these requirements will determine if the employer will be eligible for the experience modification rating factors.  The other factors to be considered are the employer’s past payroll and individual loss experience.  Keep in mind a risk that has one large loss in a three-year period may yield a better modification than an employer that has five or ten much smaller claims.  Claims frequency will usually generate a higher modification over the employer that has suffered only one large loss in that same experience period.

While the qualification factors will vary by state, usually the employer must meet the state’s established premium by one or two methods.  One is to have enough premiums in the most recent 24 months, or to achieve the state’s established premium threshold on average over the entire experience period.

Insurance is the spread of risk and costs associated with the loss from specific groups will most likely incur similar losses.  Perhaps the costs associated with a group can have some predictability of injuries, while it is not possible to determine which employer in this group will actually incur these costs.

Identify your potential exposures to loss, implement a good risk management program for your employees, and continuously monitor the performance and programs you have developed to control loss.  While loss cannot always be avoided, reducing the costs associated with the loss and reducing the number of losses within an employer organization will benefit the employer in the application of the experience modification.

If you would like further information or would like to discuss this important topic, please feel
free to contact Roseanne Gedman at 908-598-7853 or 
Roseanneg@slcinsure.com

Stay Up To Date With These Life Insurance Facts

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Are You Well-Versed On These Life Insurance Facts?

Life insurance is misunderstood by many people, whether that’s because it’s a complicated topic or because it’s neither easy nor fun to think about. However, it’s crucial to you and your family that you have the right type of life insurance policies to fit your needs.

To help you along the way, we recommend that you make sure you’re up to date on these five critical life insurance facts:

Choosing the right plan isn’t a one-time activity

It’s tempting to choose a life insurance plan one time and then assume that you’re done with it, but the truth is that you and your family’s needs may evolve over time. Whether it’s because of a change in financial situation, a growing family, a change in marital status, or the death of a family member, there are many reasons you should be sure to continuously review your life insurance needs.

Not all life insurance plans are the same

No life insurance plans are one-size-fits-all, and your needs and financial situation will dictate the important decision you’ll make on which policy is right for you. Choosing between term and whole life insurance is one such critical fork in the road, as term life insurance provides coverage for a set period of time (typically your main working years) whereas whole life insurance lasts your whole life. Knowing which is the right move for you is imperative, so don’t assume the first plan you see is the only type of plan available.

Life insurance doesn’t cost an arm and a leg

Far too many people fail to get proper life insurance, and one of the primary reasons for this is the misconception that it is too expensive for their budget. However, life insurance is typically affordable for most families, especially when you contact a professional in the industry to walk you through your options.

It pays off not to wait

Young and healthy people might too often opt to delay purchasing life insurance policies, thinking that with less financial obligations and lower budgets that they can afford to wait until they’re older. The truth is that if you lock in a life insurance policy when you are young and healthy will typically require a lower monthly payment than if you wait until later. Life insurance policy costs only rise over your lifetime.

If you want to get in touch with experts and discuss your life insurance needs, contact Schechner Lifson Corporation today to see how we help.

Deciding on a Beneficiary

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Considerations For Choosing A Beneficiary For Your Life Insurance Policy

Buying life insurance is a critical and responsible action to take, requiring careful consideration of your loved ones’ needs should something happen to you. Making sure they’re taken care of is very important, and consequently so is choosing the right life insurance policy. But the key decisions don’t stop there, as you’ll have to know who to designate as the beneficiary of the policy.

What does that mean and how do you choose the right beneficiary for your life insurance plan?

Beneficiaries: what are they and how do you choose?

If you’re buying a life insurance policy for the first time, or if you’ve just never paid close attention to this type of coverage, you might not be aware of what a beneficiary is or why it’s important. A beneficiary that you name on your life insurance plan is the person or institution that will receive the monetary payout from your policy should something happen to you. The whole point of life insurance policies is to ensure that those who are important to you are taken care of financially in your absence, so naming a beneficiary is the first step in allocating those ultimate funds.

Choosing the right beneficiary matters because it will determine the person or entity responsible for making sure those funds are properly used. They will be able to carry out the use of those funds in whichever way you wanted.

Who can be your beneficiary?

When choosing your beneficiary, you should consider who would be the most financially strained in the event of your death, such as your spouse or family. These are the most common selections of beneficiaries, as your insurance policy will make sure they aren’t financially burdened by paying for funeral costs, by any outstanding debts you left, by meeting payments on loans and mortgages if you were the primary family earner, or by future college and living costs for children that you would have paid for.

Beyond that, however, some people go a different route for their beneficiary. You can designate a trust as your beneficiary, which assigns the long-term responsibility of handling your money to a financial and legal institution. Using a trust allows you to plan for specific payments to your children at designated ages or for certain pre-determined purposes, like paying for education or purchasing a house.

Another less common option is to name a given charity or organization as your beneficiary. This is a common option for those who perhaps may not have family, or the family they do have is already financially taken care of, and so a preferred charitable organization can be a suitable payee.

Updating your beneficiary

When you first purchase your life insurance plan, you’ll be required to select a beneficiary, but keep in mind that you can change it as time goes on. In the event of major life events, it may be appropriate to reevaluate your choice of beneficiary. Such events include marriages, births, deaths, divorces, and more.

If you find yourself purchasing a life insurance policy and wondering what the right beneficiary to select is, contact Schechner Lifson today to discuss your options.

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