There are many ways to obtain a Credit Insurance policy, but there is no such thing as a basic Credit Insurance policy. The most important step is getting a policy that is designed specifically for your business.
| Type of Provider | Benefits |
|---|---|
| Specialty Broker/Expert selling only Credit Insurance | Has access to all Credit Insurance providers and works for you |
| Insurance Company Sales Agent | Works for the insurance company. Only has access to thier employer's Credit Insurance |
| General Property & Casualty Broker | Generally has access to all Credit Insurance providers |
While the ultimate driver for pricing credit insurance is based on assessment of risk, there are a variety of methods to calculate the annual premium. The following are the most common:
Many insurance carriers will rate the underlying debtors to come up with a financial stress score on the risk of the pool.
Other factors come into play, as well, such as:
In summary, the industry has moved toward pricing based on sales (basis points), inasmuch as it is a more familiar methodology for the policy holder. Know, however, that it may not be the best solution for you, so ask many questions.
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