Advantages of a captive insurance policy

Today, we want to discuss the advantages of a captive insurance policy and how it can help your business grow. It’s true you may see increased revenues as of late. However, a spike in healthcare premiums or multiple claim payouts can severely cut into them.

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The Potential Effects

Any number of scenarios can occur if your profits are reduced by healthcare costs. The best outcome is they’re shrugged off as you continue to sell your products. On the other side, you may consider increasing the employee’s premiums or eliminate some programs. This could lead to unhappy workers and a reduction in retention. In turn, profits could go down.

The Captive Solution

There is a way to counteract this — captive insurance. This is not a policy that you can’t get rid of. Rather, it’s an internal form of insurance run by a captive company. Decisions on premiums and policies are made by those who invest in the captive. Consequently, the investor also have policies within the insurance program. Overall, a captive can be an advantage to a company who invests in the program. Here are three reasons why. Less need for Third-Party Companies In many cases, the only outside source in a captive is a company like Captive Resources that specializes in the management of this insurance program. Other than that, there is a very good chance you won’t need to seek the services of third-party underwriters or other organizations. Increased Profits for Employees Each investor in a captive receives a profit dividend. How much depends on the initial amount invested. Therefore, they will work to maximize policy programs while maintaining lower premiums. Happier Workers and Better Retention A captive is more flexible than standard insurance policies, so there’s greater stability in costs. Thus, employees can remove that worry from their mind. This increases the happiness of the worker and encourages them to remain with the company. Start thinking about captive insurance now. Consult with a management firm to learn how to take the first steps.