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Medical Insurance Lubbock TX
Like the owners of stock in a stock company, mutual policy owners benefit with the payment of Medical Insurance Lubbock TX when the company does well. Dividends are often credited to the benefit of the policy, either reducing premiums or increasing benefits. Mutuals will also accrue surplus funds to protect against a time of heavy claims activities. When a member withdraws from the mutual by canceling coverage, he or she generally receives none of the surplus that may have accrued during his/her tenure as a Medical Insurance Lubbock TX policyholder. State farm Insurance is one of the better known mutuals.
Another type of cooperative is the reciprocal insurance exchange. Reciprocal exchanges are nonprofit organizations formed and controlled by a large number of people who, in essence, form a group and insure themselves against losses. Participants are both the insured and the insurers. A professional management team is hired to administer the exchange and coordinate collection of premiums and payment of claims. A surplus is usually saved for Medical Insurance Lubbock TX. Some reciprocals pay a withdrawing member’s proportionate share of the surplus; others do not.
Another kind of cooperative is a producer’s cooperative. The most famous producer’s cooperative is Blue Cross/Blue Shield, where doctors and hospitals have formed nonprofit insurance companies that sell health insurance to the public. The real power in these organizations lies with the sellers of the health care, euphemistically known in a trade as “providers.” The Medical Insurance Lubbock TX organizers control the management of the cooperative. Unlike mutual or reciprocal exchanges, policyholders obtain no ownership rights.
The Government as an Insurer
Most people don’t realize how deeply government is involved with insurance. The federal government has several insurance plans ranging from Social Security and Medicare to the Federal Deposit Insurance Corporation and the Veterans Administration. Some states operate Medical Insurance Lubbock TX workers compensation insurance companies, and all offer other programs such as unemployment insurance. Government insurance will be covered in detail in part 6.
The Personal Insurance Marketplace
Insurance can be broken down into two distinct types: personal insurance and commercial insurance. Personal insurance policies, as the name suggests, are those contracts that protect individuals and families from losses. Commercial insurance refers to those policies purchased by business in support of their various enterprises. Since this book is primarily concerned with insurance needs of individuals, commercial insurance will not be discuss, with the exception of workers compensation (see Chapter 37).
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