Saturday, October 23, 2010


In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the insurance; an insured or policyholder is the person or entity buying the insurance policy. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

The transaction involves the insured assuming a guaranteed and known relatively small loss in the form of payment to the insurer in exchange for the insurer's promise to compensate (indemnify) the insured in the case of a large, possibly devastating loss. The insured receives a contract called the insurance policy which details the conditions and circumstances under which the insured will be compensated.

1. Health insurance

Health insurance, like other forms of insurance, is a form of collectivism by means of which people collectively pool their risk, in this case the risk of incurring medical expenses. The collective is usually publicly owned or else is organized on a non-profit basis for the members of the pool, though in some countries health insurance pools may also be managed by for-profit companies. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs. It may be provided through a government-sponsored social insurance program, or from private insurance companies. It may be purchased on a group basis (e.g., by a firm to cover its employees) or purchased by an individual. In each case, the covered groups or individuals pay a fee, premium, or tax---to help protect themselves from unexpected healthcare expenses. Similar benefits paying for medical expenses may also be provided through social welfare programs funded by the government.

By estimating the overall risk of healthcare expenses, a routine finance structure (such as a monthly premium or annual tax) can be developed, ensuring that money is available to pay for the healthcare benefits specified in the insurance agreement. The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity.

2. Accidental death and dismemberment insurance

Accidental Death and Dismemberment (also known as AD&D) is a term used to describe a policy that pays benefits to the beneficiary if the cause of death is due to an accident.

In the event of an accidental death, this insurance will pay benefits in addition to any life insurance held. Some of the covered accidents include traffic accidents, exposure, homicide, falls, heavy equipment accidents, and drowning. Accidental deaths are the fifth leading cause of death in the US[2]. Death by illness, suicide, or natural causes are generally not covered by AD&D. Some insurers will even cover an accidental death caused from war or terrorism.

3. Dismemberment
Fractional amounts of the policy will be paid out if the covered employee loses a bodily appendage or sight because of an accident. Additionally, AD&D generally pays benefits for the loss of limbs, fingers, sight and permanent paralysis. The types of injuries covered and the amount paid vary by insurer and package, and are explicitly enumerated in the insurance policy.

4. Coverage Types

There are four common types of group AD&D plans offered in the United States:
  • Group Life Supplement - the AD&D benefit is included as part of a group life insurance contract, and the benefit amount is usually the same as that of the group life benefit;
  • Voluntary - the AD&D is offered to members of a group as a separate, elective benefit, and premiums are generally paid as a payroll deduction;
  • Travel Accident (Business Trip) - the AD&D benefit is provided through an employee benefit plan and provides supplemental accident protection to workers while they are traveling on company business (the entire premium is usually paid by the employer);
  • Dependents - Some group AD&D plans also provide coverage for dependents.
General information
American General Life and Accident Insurance Company

1. History of American General Life and Accident Insurance Company
American General Life and Accident Insurance Company (AGLA) is committed to serving the needs of today's middle market. We offer a focused, supported approach to provide a secure future for our customers through affordable solutions that help meet a lifetime of financial needs–solutions such as protecting loved ones, bringing college dreams to life and providing for retirement.
We back these solutions with personal customer service, an increasingly sought-after service in the middle-market segment. Competitively priced life insurance, annuity and accident and health products are available to satisfy the financial needs and risk tolerance of our customer base.
2. Our History
American General Life and Accident Insurance Company was incorporated February 28, 1900 under the laws of the State of Tennessee as “The National Sick and Accident Association of Nashville.” The Company became a wholly owned subsidiary of NLT Corporation (NLT) in 1968. In 1982, American General Corporation (AGC), based in Houston, Texas, acquired NLT and its subsidiaries. The Company adopted its current name in 1984.
In 1991, Gulf Life Insurance Company was merged into American General Life and Accident. In 1997, The Independent Life and Accident Insurance Company merged into American General Life and Accident. Also in 1997, Home Beneficial Insurance Company merged into American General Life and Accident.

3. Contact
Questions? Need Help?

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American General Life and Accident Insurance Company
American General Center
MC 338N

Nashville TN 37250

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