General Account

General Account — is an account where the owner holds all their money and uses it for daily financial operations. The insurance company places all collected funds here. Using the general account, the client pays the insurance company for taking all risks. These risks can be related to financial operations, payment of penalties, and investment in risky assets. Insurers can cover the assets with different policies, but most clients choose to cover all by one policy. 

What is General Account

When the insurance company creates a new policy, it provides the premium to the client. This money goes to their general account. The client can invest in them or save to cover the losses and daily expenses. 

A general account provides a sense of security to businesses and families. If the business has a certain sum of savings, it is free to effectuate different operations. The premiums will increase the initial amount of money and can be used for the payments of penalties or the basic expenses (rent, business needs, hospitality expenditures).  

Besides the general account, the client can open a separate account. In a separate account, all assets are divided. Also, this account is managed by professional advisors.

Difference between separate and general accounts:

Numerous banks offer to open general accounts. To select the appropriate bank the client should watch the various ratings on the internet, and study the conditions of opening and the comments of clients. Most users are used to paying attention only to the negative comments. However, it is better to read all opinions. 

If the client has several questions, they should consult the bank support service. You contact it via the site or call on the hotline. The customer relations specialist will consult the client and help them solve the problem. 

The client may use the general account solely or give it to a third party. Before selecting the asset for investment, it is necessary to study the profitability of this asset for a long period and choose the investing strategy. The conservative investing strategy implies the selection of an asset with stable profitability. The risky strategy tends to select volatile assets with a high level of profitability.

How to Use General Account 

General account has significant advantages for customers who have just begun to invest. Let’s examine them.

Benefits of general account:

• Stability. A general account is an appropriate solution for individuals and companies which prioritize stability over risks because these accounts work with less risky ventures. It happens because, in case of money loss, they will have to pay a significant payout to the clients. 
• Easy to manage. It is much easier to manage one account than two or three. The different assets have different levels of profitability and react to market fluctuation in different ways. 
• Various types of assets. With a general account, the insurer can invest in different types of assets (bonds, stocks, securities, indices, mutual funds) without limitations.

Opening the general account is quite simple. You need to take some easy steps. But first, you need to define the goal for which you want to save the money (investment, savings for travel, rainy day fund, savings for children). This goal will help to filter the offerings of banks according to your criteria.

How to open a general account: 

1. Before opening the general account, study the offers of banks and select the most suitable one. Be careful, and avoid fraud. Many dubious organizations send the offers via emails or SMS. Be careful and check these offers. The fraudulent organizations usually don’t have a site, or their design is low-quality. Also, there is no information about them on the internet. If you get a call from an organization that introduces itself as a bank and asks for your data to offer you a certain service, hang up. 
2. Open the account online (if there is such a possibility) or offline. If you plan to visit the bank office, take the necessary documents to identify your personality (passport, identification card).
3. Read the conditions of the usage of the account attentively to avoid unnecessary payments. Remember, that the most important information is indicated in small print.  
4. Indicate the third-party person which also can use the account, if there are any.
5. Get familiar with the options for money withdrawal and use the account. 
6. Remember that the bank can check your account. If you use your money for illegal activity, the bank can freeze your account and give all information to the law enforcement authorities.