The world of health and life insurance is not based in a few huge corporations as some believe. At a level equal, and possibly above, are those involved in the captive insurance industry. And for many large and small corporations, this form of insurance can simultaneously save and earn money for employees and owners.
What is Captive Insurance?
It allows employees to become investors and help direct the policies and premiums contained in the captive. When companies cannot inject the initial funds required to run such a program, they can setup micro captives. These require annual written premiums of less than $2.2 million.
Many organization, such as Captive Resources, assist companies in the setup of these insurance programs. They believe it’s a complete solution which can benefit both employees and management.
Here are three reasons why you should establish a micro captive.
Savings and Earning
Instead of giving enormous sums of money to larger insurance corporations, captives save money since the investors are also the participants. Furthermore, as premiums are paid, investors receive dividends which can be put back in the company.
Insurance programs such as whole life say you have control over certain company decisions. However, this is through a proxy. With captive insurance, investors have true control over the additions and deletions to the program. In addition, they determine the premiums they and others will pay for needed services.
Captive insurance is not a flash in the pan concept. It has been part of the corporate world since the 1950s. It came into prominence during the 1970s during a severe healthcare premium crisis. Since then, captive insurance has become an alternative norm for many organizations looking to take control of their insurance interests.
Those interested in more information on captive insurance, especially micro captives, should do their research. Look into captive companies with a long-standing history. Check out their other clients and see how they have done in their programs. And don’t commit to anything without detailed data on initial investments, programs, and eventual payouts.