Critical illness cover ? a wider scope
Critical illness insurance offers cover for certain specified conditions such as cancer, heart problems, kidney failure, loss of limbs, etc., The cover is quite simple and straightforward, in that if you are diagnosed with one of the severe illnesses listed in your policy a payment is made. On average 35 conditions would be considered as falling into this category with most companies. There is just one company, Virgin, who vary the cover by offering severity-based payments when cancer is diagnosed. Obviously with an illness such as cancer, there are various degrees of severity and with increasing success rates in the treatment of this disease; this seems a fair way of dealing with the situation.
The Financial Services Authority are not certain that people realize the limitations on the number of severe medical conditions covered by their policies and that they could be in for a nasty awakening if they assume that every serious illness will be covered.
With this in mind, the Prudential have brought out a policy which lists 140 severe conditions, which will be covered by their plan. Rather than the ?black and white? decision made on diagnosis, this promises a grading of the payout according to the severity of the condition. A spokesman for the Prudential says the policy, named the Prudential?s Flexible Protection Plan, will mean that more payments will be made to insurers with debilitating illnesses, whose illnesses would otherwise be outside the scope of the insurance and who would then get nothing at all.
An improvement then on ?black and white?, but could this leave a ?grey? area instead? Apart from knowing that they are, in fact, likely to be paid out, the decision could be left open to argument regarding the grading of the level of severity of the condition: therefore consumers could be worried and confused about the final amount agreed. What insurers would grade as relatively minor may appear very different to someone newly diagnosed with a condition. It could be a case of accepting the fact that a smaller payment is better than nothing at all, but it could also be that the payment doesn?t match expectations. It would be advisable to make sure that you thoroughly understand the full implications and terms of the policy before considering taking cover.
Conventional critical illness cover, for a typical 30 year old family man, who doesn?t smoke would be around ?24 per month, whereas it could more than double with this new plan.
It may be that critical illness cover is not the product for you. For financial security for your family, in the event of your death, life insurance would be the most important planning tool. To cover outgoings if you are incapable to working, income protection insurance could be useful. This offers cover for common ailments too, and not just the critical ones.
For advice and help on the type of insurances available, the easiest course of action is to find an internet broker, who?ll be able to answer your questions and come up with a range of quotes with a minimum of trouble to you and ensure that you arrange the insurance cover which is right for you and your family.
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Selasa, 05 Agustus 2008
Health Insurance - how to search for affordable options
Health Insurance - how to search for affordable options
Everyone admits that health insurance is a helpful thing that makes our lives easier. But it is also a costly thing and this fact doesn?t make our lives happier. Some people think they are in a good health condition and do not need to spend their money on health insurance. But this is not the correct way of thinking. No one knows what will happen in the future and one day you may become in need of health care service. And if you have no health insurance policy, you will have to pay all medical bills on your own, which may become burdensome.
Many people think they are not able to afford health insurance. However, there are different ways to reduce health insurance cost and get an affordable policy for you and your family. All you need is to arm yourself with patience and learn about the methods that will allow you purchase health insurance policy at an affordable price.
Every state offers a Medical program for people with low income and you can be qualified for it. You may think you have no chance, but the surprising thing is that lots of people that think the same way can find themselves as an ideal candidate for these programs. All you need to do is go to the local Division of Family Services office and obtain an application form. You?ll be also asked to provide some documentation about your financial state. The program provides insurance not only for you, but also for your entire family. It includes doctor visits, prescriptions, emergency care, dental and eye care, as well as other covers. If you do not participate in your employer?s group health insurance program, this would be an interesting option for you.
Another way to lower your insurance costs is to use the Internet. This is the place where hundreds and thousands of insurance companies, brokers and agencies offer their services and compete with each other for the every single client. From the standpoint of an average customer it is a perfect condition to look for a cheap health insurance. However, to choose the right insurance plan that fits all your needs, you need to do a thorough research of the insurance market. Do not confine your searches to one company. Get insurance quotes from several insurers and compare them. Additionally, you can always call or visit an insurance broker and the broker will get even more options to choose from. Plus, you can ask your friends about any particular insurance company. May be, they know something about it and can give you a valuable advice. It is also not a bad idea to check the credibility history of the insurance company you got interested in. Bear in mind that old companies with a strong and long presence on the insurance market should always be a preferable choice for you. And when you have selected the plan that best meets your requirements, make sure the company providing insurance is licensed to operate in your state, otherwise there may be no use in such a choice.
Watch press and TV for alternative health care plans. It may happen that you?ll find a suitable plan for you. You have to put some effort to find a suitable insurance plan.
For more information about health insurance visit Wawanesa.
Tim Baker is the founder of several online resources about insurance and financial services.
Everyone admits that health insurance is a helpful thing that makes our lives easier. But it is also a costly thing and this fact doesn?t make our lives happier. Some people think they are in a good health condition and do not need to spend their money on health insurance. But this is not the correct way of thinking. No one knows what will happen in the future and one day you may become in need of health care service. And if you have no health insurance policy, you will have to pay all medical bills on your own, which may become burdensome.
Many people think they are not able to afford health insurance. However, there are different ways to reduce health insurance cost and get an affordable policy for you and your family. All you need is to arm yourself with patience and learn about the methods that will allow you purchase health insurance policy at an affordable price.
Every state offers a Medical program for people with low income and you can be qualified for it. You may think you have no chance, but the surprising thing is that lots of people that think the same way can find themselves as an ideal candidate for these programs. All you need to do is go to the local Division of Family Services office and obtain an application form. You?ll be also asked to provide some documentation about your financial state. The program provides insurance not only for you, but also for your entire family. It includes doctor visits, prescriptions, emergency care, dental and eye care, as well as other covers. If you do not participate in your employer?s group health insurance program, this would be an interesting option for you.
Another way to lower your insurance costs is to use the Internet. This is the place where hundreds and thousands of insurance companies, brokers and agencies offer their services and compete with each other for the every single client. From the standpoint of an average customer it is a perfect condition to look for a cheap health insurance. However, to choose the right insurance plan that fits all your needs, you need to do a thorough research of the insurance market. Do not confine your searches to one company. Get insurance quotes from several insurers and compare them. Additionally, you can always call or visit an insurance broker and the broker will get even more options to choose from. Plus, you can ask your friends about any particular insurance company. May be, they know something about it and can give you a valuable advice. It is also not a bad idea to check the credibility history of the insurance company you got interested in. Bear in mind that old companies with a strong and long presence on the insurance market should always be a preferable choice for you. And when you have selected the plan that best meets your requirements, make sure the company providing insurance is licensed to operate in your state, otherwise there may be no use in such a choice.
Watch press and TV for alternative health care plans. It may happen that you?ll find a suitable plan for you. You have to put some effort to find a suitable insurance plan.
For more information about health insurance visit Wawanesa.
Tim Baker is the founder of several online resources about insurance and financial services.
Three Ways to Buy Long Term Care Without Paying Premiums Out of Your Pocket
Three Ways to Buy Long Term Care Without Paying Premiums Out of Your Pocket
Stop 100 people over 65 on the street and ask them if they will ever need to go to a nursing home and 99 will say, ?No!? Folks tend to equate long term care insurance with nursing homes, but there are other aspects of long term care. Home care, assisted living, adult day care and hospice care are all forms of long term care which cost money where the person never sees the inside of a nursing home.
Planning for the many types of long term care just makes good financial planning sense.
However, long term care can be expensive, especially if a person waits too long to buy it. Age and health problems could make premiums prohibitive or even render the coverage unattainable.
What if there was a way to make sure you had long term care coverage if you ever needed it, but never had to take premiums to pay for it out of your income? Actually, there are quite a few. Let?s look at three of them?
1. Sell a life insurance policy.
Unbeknownst to many people, there is an ?after market? for life insurance policies that have served their purpose and are no longer needed. There are companies that will buy policies on behalf of pension and institutional funds which hold them as part of their investment portfolio. The best part is that they will buy them for more than the cash value.
Other insurance policies that may be a candidate are those where the premium takes a huge hike because of the drop in interest rates, policies with maximum loans about ready to collapse and create a taxable gain but with no money to pay the tax or even term insurance policies that are nearing the end of their term.
When a policy is sold, one option would be to transfer all, or a portion, of the proceeds into an ?asset based? long term care plan. Done deal. Ask your financial planner about asset based LTC plans.
2. Withdraw money from an annuity.
Over 90% of the people who own a non-qualified deferred annuity die owning it. It is never converted to a life income. Essentially it serves as a longer term ?rainy day? fund than a CD. The fact that the interest earned is not currently taxable is an attractive feature and makes the money grow faster than a taxable CD.
However, at some point the piper must be paid. When someone dies holding an annuity and leave it to their children, the children are required to pay the tax on the gain. You may have heard this referred to as the annuity ?ticking time bomb?.
There is a way to avert this time bomb tax, provide long term care for yourself and not take any money out of your budget. There are several ways to skin this cat?
a. If your annuity is large enough, simply take the 10% penalty-free withdrawals each year and move them into a 10-pay long term care plan.
b. The only mental deterrent that comes up on this suggestion is that there may be remaining surrender charges on the annuity. No problem. Most companies allow you to annuitize. If the annuity pay-out period is at least 10 years, most of them waive any surrender charges.
3. Exchange all or a portion of a CD, non-qualified deferred annuity, variable annuity or IRA for an annuity/long term care combination plan.
This entails simply moving money ?from one of your pockets to another?. The difference is that the pocket to which the money is moved has long term care benefits in it as well. This technique also uses the ?asset based? long term care plan approach.
So there you have it. Three ways to get long term care without a premium coming out of your pocket.
Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, ?The Estate Preservation Advisor?. To subscribe and get the free video, ?How to Sell Your Life Insurance Policy for More Than the Cash Value?, go to http://theestatepreservationadvisor.com/freevideo.htm
Stop 100 people over 65 on the street and ask them if they will ever need to go to a nursing home and 99 will say, ?No!? Folks tend to equate long term care insurance with nursing homes, but there are other aspects of long term care. Home care, assisted living, adult day care and hospice care are all forms of long term care which cost money where the person never sees the inside of a nursing home.
Planning for the many types of long term care just makes good financial planning sense.
However, long term care can be expensive, especially if a person waits too long to buy it. Age and health problems could make premiums prohibitive or even render the coverage unattainable.
What if there was a way to make sure you had long term care coverage if you ever needed it, but never had to take premiums to pay for it out of your income? Actually, there are quite a few. Let?s look at three of them?
1. Sell a life insurance policy.
Unbeknownst to many people, there is an ?after market? for life insurance policies that have served their purpose and are no longer needed. There are companies that will buy policies on behalf of pension and institutional funds which hold them as part of their investment portfolio. The best part is that they will buy them for more than the cash value.
Other insurance policies that may be a candidate are those where the premium takes a huge hike because of the drop in interest rates, policies with maximum loans about ready to collapse and create a taxable gain but with no money to pay the tax or even term insurance policies that are nearing the end of their term.
When a policy is sold, one option would be to transfer all, or a portion, of the proceeds into an ?asset based? long term care plan. Done deal. Ask your financial planner about asset based LTC plans.
2. Withdraw money from an annuity.
Over 90% of the people who own a non-qualified deferred annuity die owning it. It is never converted to a life income. Essentially it serves as a longer term ?rainy day? fund than a CD. The fact that the interest earned is not currently taxable is an attractive feature and makes the money grow faster than a taxable CD.
However, at some point the piper must be paid. When someone dies holding an annuity and leave it to their children, the children are required to pay the tax on the gain. You may have heard this referred to as the annuity ?ticking time bomb?.
There is a way to avert this time bomb tax, provide long term care for yourself and not take any money out of your budget. There are several ways to skin this cat?
a. If your annuity is large enough, simply take the 10% penalty-free withdrawals each year and move them into a 10-pay long term care plan.
b. The only mental deterrent that comes up on this suggestion is that there may be remaining surrender charges on the annuity. No problem. Most companies allow you to annuitize. If the annuity pay-out period is at least 10 years, most of them waive any surrender charges.
3. Exchange all or a portion of a CD, non-qualified deferred annuity, variable annuity or IRA for an annuity/long term care combination plan.
This entails simply moving money ?from one of your pockets to another?. The difference is that the pocket to which the money is moved has long term care benefits in it as well. This technique also uses the ?asset based? long term care plan approach.
So there you have it. Three ways to get long term care without a premium coming out of your pocket.
Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, ?The Estate Preservation Advisor?. To subscribe and get the free video, ?How to Sell Your Life Insurance Policy for More Than the Cash Value?, go to http://theestatepreservationadvisor.com/freevideo.htm
How to buy health insurance - brief overview
How to buy health insurance - brief overview
Unless you want to pay money for your medical treatment out of your pocket, you?ve got to buy a health insurance policy. There are lots of health insurance options out there and for many people it may be a little bit complicated to make a decision. Everyone wants to get health insurance at the cheapest possible price, provided that the policy a person gets meets all his or her medical needs. But keep in mind that cheap insurance plan isn?t always the best one. Most likely, you may need to compare different options and take into consideration various variables, before you opt for a certain type of coverage. So, let?s take a look at some key points of this topic.
The first thing you should do is to estimate your specific health insurance needs. You may want to get insurance not only for yourself, but also for your family members. Some of them may be in a good health condition, while others may need specific medical services. You have to take into consideration these and other circumstances, before selecting a health insurance plan. But once you have figured out your all the details, you are on the right way.
Once you have determined your insurance requirements, you?ve got to decide which insurance plan is the most suitable for you. There are numerous types of coverage, both individual and group insurance plans. And it is hardly possible to describe all of them, but we?ll try to go through the main points, so you won?t overlook something in the future.
The cheapest possible coverage is a catastrophic insurance plan. As the name implies, this plan covers you in case something unprecedented happens to you, like you get injured in a car accident or you suddenly discovered yourself to have cancer. In any other, non-catastrophic case you have to fork out your own money for a visit to a doctor. So, if you are healthy, young and confident in your organism, this plan is right for you. Otherwise, you have to think about more expensive insurance plans.
There are two basic plans: a Managed Care Insurance Plan and an Indemnity Plan. The first one has several variants and it is less flexible. If you choose it then you are restricted with a specific network of doctors and hospitals. The good point is that this type of coverage is less expensive and for many people it is a fair trade-off. But if you visit a doctor elsewhere then you have to pay for the visit on your own.
The second type of insurance plan - an Indemnity Plan is more flexible and gives you more freedom when choosing a doctor. With this plan you are not limited to a specific network of doctors and you are able to go wherever you want, but you have to pay more for the freedom and your monthly premiums will be higher.
It is entirely up to you which type of insurance plan to choose. Do you want to pay less for your insurance or you need more flexibility? You have to answer this question. But do not make decision in a hurry. Ask for advice your family members and discuss the issue before taking further steps.
There are some ways to reduce your insurance costs. One of them is a group insurance plan, which is usually offered through employers to employees. With this type of insurance your insurance expenses will be partially paid by your employer. In addition, insurance companies make discounts for group plans as the risks are distributed among the group members. This option may be a good deal for you from the financial point of view, although the coverage you get may not be as comprehensive as you would wish. But you can always fix it and buy add-ons later.
Another way to reduce the price of an insurance policy is to include your spouse, or maybe other family members, into your policy, especially if it is a group insurance plan. With this scheme you will be able to save more money.
Once you have determined what type of insurance policy you need, you?ve got to choose an insurance company to deal with. And this can be a tricky thing, because there are many health insurance carriers out there. There is a wide spectrum of companies - from established insurance leaders to newly born companies. Don?t get confused, use some proved methods to figure out, which company is perfect for you. Use the Internet; spend a few hours to compare several companies. Ask your relatives and friends about their experience with a particular insurer. Approach insurance brokers, they will help you greatly. Call the customer service of the insurer and try to find out about their company as much as it is possible. You have to make a comprehensive research of the insurance market to find the right insurer for you. Otherwise, you risk paying extra money for nothing.
To get more information about health insurance visit our website dedicated to Wawanesa.
Tim Baker is the owner of several insurance related websites. He is a professional insurance agent and works in insurance business for many years. Tim lives in California. He likes golf and sports cars.
Unless you want to pay money for your medical treatment out of your pocket, you?ve got to buy a health insurance policy. There are lots of health insurance options out there and for many people it may be a little bit complicated to make a decision. Everyone wants to get health insurance at the cheapest possible price, provided that the policy a person gets meets all his or her medical needs. But keep in mind that cheap insurance plan isn?t always the best one. Most likely, you may need to compare different options and take into consideration various variables, before you opt for a certain type of coverage. So, let?s take a look at some key points of this topic.
The first thing you should do is to estimate your specific health insurance needs. You may want to get insurance not only for yourself, but also for your family members. Some of them may be in a good health condition, while others may need specific medical services. You have to take into consideration these and other circumstances, before selecting a health insurance plan. But once you have figured out your all the details, you are on the right way.
Once you have determined your insurance requirements, you?ve got to decide which insurance plan is the most suitable for you. There are numerous types of coverage, both individual and group insurance plans. And it is hardly possible to describe all of them, but we?ll try to go through the main points, so you won?t overlook something in the future.
The cheapest possible coverage is a catastrophic insurance plan. As the name implies, this plan covers you in case something unprecedented happens to you, like you get injured in a car accident or you suddenly discovered yourself to have cancer. In any other, non-catastrophic case you have to fork out your own money for a visit to a doctor. So, if you are healthy, young and confident in your organism, this plan is right for you. Otherwise, you have to think about more expensive insurance plans.
There are two basic plans: a Managed Care Insurance Plan and an Indemnity Plan. The first one has several variants and it is less flexible. If you choose it then you are restricted with a specific network of doctors and hospitals. The good point is that this type of coverage is less expensive and for many people it is a fair trade-off. But if you visit a doctor elsewhere then you have to pay for the visit on your own.
The second type of insurance plan - an Indemnity Plan is more flexible and gives you more freedom when choosing a doctor. With this plan you are not limited to a specific network of doctors and you are able to go wherever you want, but you have to pay more for the freedom and your monthly premiums will be higher.
It is entirely up to you which type of insurance plan to choose. Do you want to pay less for your insurance or you need more flexibility? You have to answer this question. But do not make decision in a hurry. Ask for advice your family members and discuss the issue before taking further steps.
There are some ways to reduce your insurance costs. One of them is a group insurance plan, which is usually offered through employers to employees. With this type of insurance your insurance expenses will be partially paid by your employer. In addition, insurance companies make discounts for group plans as the risks are distributed among the group members. This option may be a good deal for you from the financial point of view, although the coverage you get may not be as comprehensive as you would wish. But you can always fix it and buy add-ons later.
Another way to reduce the price of an insurance policy is to include your spouse, or maybe other family members, into your policy, especially if it is a group insurance plan. With this scheme you will be able to save more money.
Once you have determined what type of insurance policy you need, you?ve got to choose an insurance company to deal with. And this can be a tricky thing, because there are many health insurance carriers out there. There is a wide spectrum of companies - from established insurance leaders to newly born companies. Don?t get confused, use some proved methods to figure out, which company is perfect for you. Use the Internet; spend a few hours to compare several companies. Ask your relatives and friends about their experience with a particular insurer. Approach insurance brokers, they will help you greatly. Call the customer service of the insurer and try to find out about their company as much as it is possible. You have to make a comprehensive research of the insurance market to find the right insurer for you. Otherwise, you risk paying extra money for nothing.
To get more information about health insurance visit our website dedicated to Wawanesa.
Tim Baker is the owner of several insurance related websites. He is a professional insurance agent and works in insurance business for many years. Tim lives in California. He likes golf and sports cars.
How to find cheap auto insurance - guidlines and tips
How to find cheap auto insurance - guidlines and tips
If you are a resident of the United Kingdom and drive a car, then you certainly have to buy auto insurance policy, because no one is allowed to drive a car in Britain without having his car insured. For someone auto insurance might seem an awesome burden, and they hate paying money for it having no other choice. However, there are some ways to reduce car insurance costs and some of us really need to know about these insurance tricks.
Before going further we have to mention that cheapest car insurance is not the best car insurance. You should always bear in mind it. When selecting an insurer, try to find out more about the company, its history and credentials. Ask your friends and relatives about it, may be they can suggest you something you are not aware of. Make a thorough research, which most likely will take several days to complete.
But where are you supposed to get started with the research? The bets place to look in is the Internet. There plenty of web sites out there offering car insurance quotes online. It may take you a day or two to understand what is going on and how to deal with the whole information offered through the web, but it is worth of spending your time, because it?s going to pay off. Do not focus on a single insurance company, search for several insurers to compare their quotes.
But your research won?t be comprehensive, if you limit its area only with the Internet. Get your local phone directory and call to insurance brokers. They will assist you in a great deal. Insurance brokers will make their own research and suggest you several options to choose from. At least, they are professionals and their advice can be definitely of some use to you.
Now, let?s look through some of the factors influencing on the price of your car insurance policy.
Gender and age ? these are the factors you cannot influence much on, but should be aware of their role. If you are a male driver under the age of 25, then you should forget about cheap insurance, because you belong to the most risky category of drivers. On the other hand, female drivers are considered to be the most careful drivers and they pay fewer premiums then men. It should be mentioned that the difference between premium levels for men and women gradually melts down as the age of car drivers increases. For example, 50-year-old men drivers pay almost the same level premiums as the female drivers of the same age.
Now, there are some factors you can manipulate in some extent to reduce your car insurance premiums. For instance, if you own an old car that is worth of $1000 and you?ve got to pay half of this amount for full coverage as you did many years ago, then consider to give up paying for comprehensive coverage.
Another way to reduce car insurance costs is to combine different types of coverage, like homeowners and auto insurance. You can also include a family member in your policy, so you?ll get insurance for two persons save money. If you own several vehicles, most of insurers will also offer you a discount.
Auto insurance companies offer cheaper insurance rates for the vehicles that are less risky to be stolen. If you install an anti-theft device on your car, insurance companies would most likely consider your car less risky to be stolen and you can expect to get a reduced auto insurance rate.
These are some, but not the all ways to reduce your car insurance premiums. Before buying insurance policy learn as much as you can about car insurance offers on the market. There are always discounts out there and you can change your insurer every year to get the best deal.
You can learn more about car insurance if you visit a website dedicated to Sheilas Wheels.
Fred Miller lives in California. He is a professional insurance agent and works in insurance business for many years.
If you are a resident of the United Kingdom and drive a car, then you certainly have to buy auto insurance policy, because no one is allowed to drive a car in Britain without having his car insured. For someone auto insurance might seem an awesome burden, and they hate paying money for it having no other choice. However, there are some ways to reduce car insurance costs and some of us really need to know about these insurance tricks.
Before going further we have to mention that cheapest car insurance is not the best car insurance. You should always bear in mind it. When selecting an insurer, try to find out more about the company, its history and credentials. Ask your friends and relatives about it, may be they can suggest you something you are not aware of. Make a thorough research, which most likely will take several days to complete.
But where are you supposed to get started with the research? The bets place to look in is the Internet. There plenty of web sites out there offering car insurance quotes online. It may take you a day or two to understand what is going on and how to deal with the whole information offered through the web, but it is worth of spending your time, because it?s going to pay off. Do not focus on a single insurance company, search for several insurers to compare their quotes.
But your research won?t be comprehensive, if you limit its area only with the Internet. Get your local phone directory and call to insurance brokers. They will assist you in a great deal. Insurance brokers will make their own research and suggest you several options to choose from. At least, they are professionals and their advice can be definitely of some use to you.
Now, let?s look through some of the factors influencing on the price of your car insurance policy.
Gender and age ? these are the factors you cannot influence much on, but should be aware of their role. If you are a male driver under the age of 25, then you should forget about cheap insurance, because you belong to the most risky category of drivers. On the other hand, female drivers are considered to be the most careful drivers and they pay fewer premiums then men. It should be mentioned that the difference between premium levels for men and women gradually melts down as the age of car drivers increases. For example, 50-year-old men drivers pay almost the same level premiums as the female drivers of the same age.
Now, there are some factors you can manipulate in some extent to reduce your car insurance premiums. For instance, if you own an old car that is worth of $1000 and you?ve got to pay half of this amount for full coverage as you did many years ago, then consider to give up paying for comprehensive coverage.
Another way to reduce car insurance costs is to combine different types of coverage, like homeowners and auto insurance. You can also include a family member in your policy, so you?ll get insurance for two persons save money. If you own several vehicles, most of insurers will also offer you a discount.
Auto insurance companies offer cheaper insurance rates for the vehicles that are less risky to be stolen. If you install an anti-theft device on your car, insurance companies would most likely consider your car less risky to be stolen and you can expect to get a reduced auto insurance rate.
These are some, but not the all ways to reduce your car insurance premiums. Before buying insurance policy learn as much as you can about car insurance offers on the market. There are always discounts out there and you can change your insurer every year to get the best deal.
You can learn more about car insurance if you visit a website dedicated to Sheilas Wheels.
Fred Miller lives in California. He is a professional insurance agent and works in insurance business for many years.
Surety Bond Benefits
Surety Bond Benefits
Bonds play a major role in today?s market. Bonds become more essential in construction industry for completion of their construction projects. Underwriting bonds involve great risk. But the surety company will write these bonds for the benefit of their customers. If bonds have been underwritten, it has following benefits.
? The obligee gets a guaranteed performance of the contract from the principal and the surety.
? These bonds enforce the contractor to complete the contract with in the stipulated time and contract money.
? This bond guarantees the payment from the obligee to the contractor and from the principal to the subcontractor.
? This bond ensures that the supplier will furnish the material and labor to the principal as signed in the contract.
? In default of the contract, the obligee can sue the principal i.e. the obligator and the also the surety.
? The obligee can enforce the surety to complete the contract with in the stipulated time and contract money in failure of the principal for completion.
? The underwriter of the surety company can provide financial, technical assistance to the contractor.
Contractor
A contractor is a person who undertakes the risk of completion of contract with in stipulated time and contract price. The contractor performs a contract for a price consideration. The contractor guarantees the owner that he will finish the contract with in stipulated time and contract value, through issuance of the bond. In default of the contractor, the obligee will sue him against the court of law. This bond ensures the contractor has guaranteed performance of the contract.
Bonds play a major role in today?s market. Bonds become more essential in construction industry for completion of their construction projects. Underwriting bonds involve great risk. But the surety company will write these bonds for the benefit of their customers. If bonds have been underwritten, it has following benefits.
? The obligee gets a guaranteed performance of the contract from the principal and the surety.
? These bonds enforce the contractor to complete the contract with in the stipulated time and contract money.
? This bond guarantees the payment from the obligee to the contractor and from the principal to the subcontractor.
? This bond ensures that the supplier will furnish the material and labor to the principal as signed in the contract.
? In default of the contract, the obligee can sue the principal i.e. the obligator and the also the surety.
? The obligee can enforce the surety to complete the contract with in the stipulated time and contract money in failure of the principal for completion.
? The underwriter of the surety company can provide financial, technical assistance to the contractor.
Contractor
A contractor is a person who undertakes the risk of completion of contract with in stipulated time and contract price. The contractor performs a contract for a price consideration. The contractor guarantees the owner that he will finish the contract with in stipulated time and contract value, through issuance of the bond. In default of the contractor, the obligee will sue him against the court of law. This bond ensures the contractor has guaranteed performance of the contract.
Bonding Companies Contractor Criterion
Bonding Companies Contractor Criterion
Bonding companies generally looks for the obligee financial position. This process has been reviewed when the owner wants to take bond from the surety company for more than $100,000. The surety should also have confidence in the bonding company. The bonding company should also give guarantee to the surety prior to his approval. The contractor has to follow many steps to gain confidence from the bonding company. He should be organized and practiced in a trusted manner.
The best way to run your company is to
? Employ professionals, who assist while taking a decision for the bonding company. These employees will be much useful while involving in the process of decision making.
? Top priority should be given to the bond producers who are well versed regarding the contract.
? If the agent does not suit for your company?s needs or does not fit for your company then you can change the professional who suits for you.
? The most important person needed for bonding company is an accountant. Accountants are those who reveal the financial position of your bonding company. Choose the right most accountants for your company.
? The other important point a bonding company should look at is a reliable banker. The banker is a person who helps you in financial aspect of your company.
? Bonding companies can make use of variety of professional for development of the company like legal adviser, good controller and marketer.
Surety underwriters should meet the contractors based on their profession. These Small and medium contractors has to be properly maintained by the underwriters. The underwriter has to see the cash flow statement of the contractor. The surety should make hold that the contractor will know the terms regarding his construction company. The surety should clarify whether the contractor knows every thing about the company.
The contractor must practice self-control while dealing in Construction Company. They should feel restraints regarding profits and while taking risk beyond their factor. The underwriter will not approve the bond twice the size of any previous bond work of a new company. If underwriter is not satisfied with the contract for any reason, they will unqualified the contract.
A contractor should consider that the above factors are essential while obtaining surety credit. Surety Underwriters must use the financial documents provided and personal credit to decide the risk on a particular account. A contractor with a team of well organized professionals helps to create a great deal of confidence in a surety's underwriters.
Bonding companies generally looks for the obligee financial position. This process has been reviewed when the owner wants to take bond from the surety company for more than $100,000. The surety should also have confidence in the bonding company. The bonding company should also give guarantee to the surety prior to his approval. The contractor has to follow many steps to gain confidence from the bonding company. He should be organized and practiced in a trusted manner.
The best way to run your company is to
? Employ professionals, who assist while taking a decision for the bonding company. These employees will be much useful while involving in the process of decision making.
? Top priority should be given to the bond producers who are well versed regarding the contract.
? If the agent does not suit for your company?s needs or does not fit for your company then you can change the professional who suits for you.
? The most important person needed for bonding company is an accountant. Accountants are those who reveal the financial position of your bonding company. Choose the right most accountants for your company.
? The other important point a bonding company should look at is a reliable banker. The banker is a person who helps you in financial aspect of your company.
? Bonding companies can make use of variety of professional for development of the company like legal adviser, good controller and marketer.
Surety underwriters should meet the contractors based on their profession. These Small and medium contractors has to be properly maintained by the underwriters. The underwriter has to see the cash flow statement of the contractor. The surety should make hold that the contractor will know the terms regarding his construction company. The surety should clarify whether the contractor knows every thing about the company.
The contractor must practice self-control while dealing in Construction Company. They should feel restraints regarding profits and while taking risk beyond their factor. The underwriter will not approve the bond twice the size of any previous bond work of a new company. If underwriter is not satisfied with the contract for any reason, they will unqualified the contract.
A contractor should consider that the above factors are essential while obtaining surety credit. Surety Underwriters must use the financial documents provided and personal credit to decide the risk on a particular account. A contractor with a team of well organized professionals helps to create a great deal of confidence in a surety's underwriters.
How to Supplement an Existing Long Term Care Policy Without Paying Premiums
How to Supplement an Existing Long Term Care Policy Without Paying Premiums
Quite a few people may find themselves in this situation?
They had the foresight to buy a long term care policy 5-10 years ago. My first comment is: good for them. When you sit down and take a look at the premium for long term care at various ages, you quickly see that the younger you buy it the better. This seems obvious, but I am here to tell you that the premium differences are extreme. Take a look at the premium at age 45, for example, and compare it to age 65, the age where most people even start thinking about long term care.
However, (using Arizona as an example) 5-6 years ago nursing home expenses were about $120 a day. This works out to around $43,000 a year. Today, the average is $70,000 a year.
Upon becoming aware of this fact, many people want to take the steps necessary to get their coverage more in line with current costs. When they start looking around, they discover two things?
Because they are older, the premium is substantially greater. A lot of times, it is so high that it?s not even affordable.
Looking at similar coverage at an older age and seeing a higher premium makes sense, but there is another historical factor as well. Over the last five years, long term care premiums have increased about 40%. A lot of this had to do with initial insurance company pricing. The actuaries began their mathematical assumptions using statistics for the general population. In many ways, this was a stab in the dark. But they had to start somewhere. As time went on, they discovered that claims were much higher than their original projections. After an insurance company has enough business on the books for it to be statistically relevant, they start using actual experience.
So the people who want to bump their coverage up are generally looking at off-the-chart premiums-- both because they are older and the insurance companies have modified their pricing.
But depending on the situation, there may be a solution?
Many people have CDs and annuities. In most cases, the CD is considered ?rainy day? or ?emergency? money. The annuities are ?non-qualified deferred annuities?. Most of the time, they are just sitting there, like the CD, but with a longer holding period in mind. Over 90% of people die holding the annuity ?as is?; they are never converted to some kind of an income.
There are a few insurance companies that will allow you to transfer a CD or an annuity into a special combination annuity/long term care product.
It functions like an annuity in that it grows tax-deferred at an annually-set interest rate. However, if the person ever has long term care needs of any type (adult day care, respite care, hospice care, assisted living or a full blown nursing home) withdrawals can be made from the annuity. Generally funds can be withdrawn over a three year period. Keep this three year time frame in your mind?it will become very relevant in a minute.
So far, this doesn?t sound too much different than just withdrawing funds from an existing CD or annuity. But there is one key reason to make the exchange to an annuity/long term care plan. Some insurance companies will allow you to add a rider which provides lifetime coverage. This is a huge benefit for a couple of reasons?
First, most people have a 3 year or 5 year long term care plan. When the three or five years are up, that?s it. Second, medical advances are prolonging life. Is one kidney on the blink? No problem, a medical team will just insert a new one. Third, the biggest issue is not about general health, but just the opposite. A person could be blessed with good health, develop Alzheimer?s, live for many, many years and exhaust their entire estate on health care.
Now, let?s get back to the three years. The person has an (inadequate) long term care policy which is good for three years. They move their CD or annuity to this combination annuity/long term care plan which is good for three years as well.
Here is the key point. If they added the lifetime rider which kicks in after three years, they are good for the duration.
Last, let?s cover the ?without paying premiums? part?
By moving a CD or annuity into this combination plan, the person has created another three year long term care plan. No outlay required here.
Adding the lifetime rider has a cost. But since it doesn?t start for three years, it?s like having a 3 year ?waiting period? on a traditional long term care plan, as opposed to the typical 60, 90, 180 day wait. So the premium is quite low.
Second, the premium can be paid by withdrawing from the annuity itself. Today, a person would have to pay tax on the withdrawal (assuming there was a gain in the annuity), but after 12/31/09 withdrawals such as this will be tax free. This is a new provision in the Pension Protection Act of 2006.
If you find yourself underinsured and concerned, take a look at your situation and see if this approach may solve your problem.
Quite a few people may find themselves in this situation?
They had the foresight to buy a long term care policy 5-10 years ago. My first comment is: good for them. When you sit down and take a look at the premium for long term care at various ages, you quickly see that the younger you buy it the better. This seems obvious, but I am here to tell you that the premium differences are extreme. Take a look at the premium at age 45, for example, and compare it to age 65, the age where most people even start thinking about long term care.
However, (using Arizona as an example) 5-6 years ago nursing home expenses were about $120 a day. This works out to around $43,000 a year. Today, the average is $70,000 a year.
Upon becoming aware of this fact, many people want to take the steps necessary to get their coverage more in line with current costs. When they start looking around, they discover two things?
Because they are older, the premium is substantially greater. A lot of times, it is so high that it?s not even affordable.
Looking at similar coverage at an older age and seeing a higher premium makes sense, but there is another historical factor as well. Over the last five years, long term care premiums have increased about 40%. A lot of this had to do with initial insurance company pricing. The actuaries began their mathematical assumptions using statistics for the general population. In many ways, this was a stab in the dark. But they had to start somewhere. As time went on, they discovered that claims were much higher than their original projections. After an insurance company has enough business on the books for it to be statistically relevant, they start using actual experience.
So the people who want to bump their coverage up are generally looking at off-the-chart premiums-- both because they are older and the insurance companies have modified their pricing.
But depending on the situation, there may be a solution?
Many people have CDs and annuities. In most cases, the CD is considered ?rainy day? or ?emergency? money. The annuities are ?non-qualified deferred annuities?. Most of the time, they are just sitting there, like the CD, but with a longer holding period in mind. Over 90% of people die holding the annuity ?as is?; they are never converted to some kind of an income.
There are a few insurance companies that will allow you to transfer a CD or an annuity into a special combination annuity/long term care product.
It functions like an annuity in that it grows tax-deferred at an annually-set interest rate. However, if the person ever has long term care needs of any type (adult day care, respite care, hospice care, assisted living or a full blown nursing home) withdrawals can be made from the annuity. Generally funds can be withdrawn over a three year period. Keep this three year time frame in your mind?it will become very relevant in a minute.
So far, this doesn?t sound too much different than just withdrawing funds from an existing CD or annuity. But there is one key reason to make the exchange to an annuity/long term care plan. Some insurance companies will allow you to add a rider which provides lifetime coverage. This is a huge benefit for a couple of reasons?
First, most people have a 3 year or 5 year long term care plan. When the three or five years are up, that?s it. Second, medical advances are prolonging life. Is one kidney on the blink? No problem, a medical team will just insert a new one. Third, the biggest issue is not about general health, but just the opposite. A person could be blessed with good health, develop Alzheimer?s, live for many, many years and exhaust their entire estate on health care.
Now, let?s get back to the three years. The person has an (inadequate) long term care policy which is good for three years. They move their CD or annuity to this combination annuity/long term care plan which is good for three years as well.
Here is the key point. If they added the lifetime rider which kicks in after three years, they are good for the duration.
Last, let?s cover the ?without paying premiums? part?
By moving a CD or annuity into this combination plan, the person has created another three year long term care plan. No outlay required here.
Adding the lifetime rider has a cost. But since it doesn?t start for three years, it?s like having a 3 year ?waiting period? on a traditional long term care plan, as opposed to the typical 60, 90, 180 day wait. So the premium is quite low.
Second, the premium can be paid by withdrawing from the annuity itself. Today, a person would have to pay tax on the withdrawal (assuming there was a gain in the annuity), but after 12/31/09 withdrawals such as this will be tax free. This is a new provision in the Pension Protection Act of 2006.
If you find yourself underinsured and concerned, take a look at your situation and see if this approach may solve your problem.
How to Guarantee a Lifetime of Long Term Care Benefits for Half the Cost
How to Guarantee a Lifetime of Long Term Care Benefits for Half the Cost
Here?s how to make sure your long term care is taken care of for the rest of your life, guarantee that you will never run out of money and not disinherit your kids.
A tall order, you say. Yes, but in certain situations all three of these can have a happy ending. Here?s a more than typical scenario?
Ruth is 88. She has been diagnosed with moderate Alzheimer?s. Other than that, she is in pretty good health for an 88 year old. Her doctor tells her she?ll live to 100.
Ruth has two children. Ben is an attorney and lives way across the country. Ruth has been living with Karen, her daughter, and Karen?s husband and three grandchildren.
Ben has already set up the paperwork and has power of attorney over his mom?s affairs. He has been handling her finances for the last couple of years from afar and that has worked out fine.
Ruth has become more forgetful recently and that has become more of a concern for Karen. On top of that, Karen just got a promotion that will entail her traveling out of town one or two days a week. She doesn?t feel it is right to shift the rising care needs of her mom to her husband while she is gone.
Bottom line: Everyone feels it would be better to move Ruth into a health care facility where she can be effectively cared for. Even Ruth agrees as the last thing she wants to do is be a burden on her family.
So Ben puts a pencil to Ruth?s financial situation. Here?s what he comes up with?
Ruth has about $450,000 of assets. Most of it came from the sale of her home which she lived in for 45 years. She has $800 a month coming in from Social Security and $1,200 a month from the telephone company pension where she was an operator for 35 years.
Karen has found the ideal care facility for her mom. It is close to their home and it provides all the care Ruth would ever need for the rest of her life. The problem is that it cost $5,000 a month. So she is short to the tune of $3,000 a month.
But the problem goes deeper than that.
Even though Ruth has assets totally $450,000, it?s possible that she could eventually exhaust these funds. After all, other than Alzheimer?s, she has no major problems. What if her doctor is right and she does live to 100?
Karen and Ben love their mother and hope she lives to be 120, but these are simply the economic realities. However, there is another problem. Ruth?s life-long goal has been to be the one that educates her three grandchildren. It?s pretty easy for her to see that dipping into her estate at the rate of $36,000 a year is not only flirting with her ability to educate the grandchildren, but it is affecting her other goal of leaving her estate to Karen and Ben.
Ben schedules an appointment with his personal financial advisor and explains the dilemma. The first thing they look at is an immediate annuity. Ruth?s age would give her a good rate of return. The best quote to provide the $3,000 a month short fall for as long as Ruth lives comes back at $215,000.
The good news is that Ruth could live to be as old as Methuselah and the insurance company would send her a check for three grand a month. And $36,000 a year on a $215,000 ?investment? is a 16.7% return on the money. Second, this preserves the balance of Ruth?s estate for her wishes. $450,000 less $215,000 is $235,000. That should educate the grandchildren and leave a little left over for Ben and Karen.
The bad news is that is quite a chunk out of the total estate. And if Ruth falls and breaks a hip and dies next year, the insurance company keeps the $215,000. Ben?s financial advisor tells him there are ways to set up different types of refund arrangements with the insurance company so the whole $215,000 doesn?t go down the drain, but these options cost more.
Is there a more efficient way? Maybe, read on?
Insurance companies issue what are called ?medically underwritten? annuities. Generally there is no physical exam required, but the insurance company does take a look at the person?s medical history. The theory here is that people with health impairments have a life expectancy lower than the average for the entire population of people the same age. So providing the same monthly benefit can be provided with less money.
That?s exactly what happened when Ben?s financial advisor put in an inquiry on Ruth?s situation. $3,000 a month for life would take only $130,000.
So the shortage of $3,000 a month was taken care of. Ruth won?t ever run out of money. Now there is $320,000 to educate the grand kids and leave the rest to Karen and Ben. Nobody gets disinherited and Karen and Ben heave a sigh of relief knowing they will never have to use their own money to provide for Ruth is she lives as long as they hope.
Here?s how to make sure your long term care is taken care of for the rest of your life, guarantee that you will never run out of money and not disinherit your kids.
A tall order, you say. Yes, but in certain situations all three of these can have a happy ending. Here?s a more than typical scenario?
Ruth is 88. She has been diagnosed with moderate Alzheimer?s. Other than that, she is in pretty good health for an 88 year old. Her doctor tells her she?ll live to 100.
Ruth has two children. Ben is an attorney and lives way across the country. Ruth has been living with Karen, her daughter, and Karen?s husband and three grandchildren.
Ben has already set up the paperwork and has power of attorney over his mom?s affairs. He has been handling her finances for the last couple of years from afar and that has worked out fine.
Ruth has become more forgetful recently and that has become more of a concern for Karen. On top of that, Karen just got a promotion that will entail her traveling out of town one or two days a week. She doesn?t feel it is right to shift the rising care needs of her mom to her husband while she is gone.
Bottom line: Everyone feels it would be better to move Ruth into a health care facility where she can be effectively cared for. Even Ruth agrees as the last thing she wants to do is be a burden on her family.
So Ben puts a pencil to Ruth?s financial situation. Here?s what he comes up with?
Ruth has about $450,000 of assets. Most of it came from the sale of her home which she lived in for 45 years. She has $800 a month coming in from Social Security and $1,200 a month from the telephone company pension where she was an operator for 35 years.
Karen has found the ideal care facility for her mom. It is close to their home and it provides all the care Ruth would ever need for the rest of her life. The problem is that it cost $5,000 a month. So she is short to the tune of $3,000 a month.
But the problem goes deeper than that.
Even though Ruth has assets totally $450,000, it?s possible that she could eventually exhaust these funds. After all, other than Alzheimer?s, she has no major problems. What if her doctor is right and she does live to 100?
Karen and Ben love their mother and hope she lives to be 120, but these are simply the economic realities. However, there is another problem. Ruth?s life-long goal has been to be the one that educates her three grandchildren. It?s pretty easy for her to see that dipping into her estate at the rate of $36,000 a year is not only flirting with her ability to educate the grandchildren, but it is affecting her other goal of leaving her estate to Karen and Ben.
Ben schedules an appointment with his personal financial advisor and explains the dilemma. The first thing they look at is an immediate annuity. Ruth?s age would give her a good rate of return. The best quote to provide the $3,000 a month short fall for as long as Ruth lives comes back at $215,000.
The good news is that Ruth could live to be as old as Methuselah and the insurance company would send her a check for three grand a month. And $36,000 a year on a $215,000 ?investment? is a 16.7% return on the money. Second, this preserves the balance of Ruth?s estate for her wishes. $450,000 less $215,000 is $235,000. That should educate the grandchildren and leave a little left over for Ben and Karen.
The bad news is that is quite a chunk out of the total estate. And if Ruth falls and breaks a hip and dies next year, the insurance company keeps the $215,000. Ben?s financial advisor tells him there are ways to set up different types of refund arrangements with the insurance company so the whole $215,000 doesn?t go down the drain, but these options cost more.
Is there a more efficient way? Maybe, read on?
Insurance companies issue what are called ?medically underwritten? annuities. Generally there is no physical exam required, but the insurance company does take a look at the person?s medical history. The theory here is that people with health impairments have a life expectancy lower than the average for the entire population of people the same age. So providing the same monthly benefit can be provided with less money.
That?s exactly what happened when Ben?s financial advisor put in an inquiry on Ruth?s situation. $3,000 a month for life would take only $130,000.
So the shortage of $3,000 a month was taken care of. Ruth won?t ever run out of money. Now there is $320,000 to educate the grand kids and leave the rest to Karen and Ben. Nobody gets disinherited and Karen and Ben heave a sigh of relief knowing they will never have to use their own money to provide for Ruth is she lives as long as they hope.
Discover Benefits of Travel Accident Insurance
Discover Benefits of Travel Accident Insurance
Nowadays people visit other county more often than early. You can buy a ticket and begin your travel to nice place in this world. But you should be sure to have some foundation for your tour. And this one will be travel accident insurance.
Any experienced traveler can tell you that travel is full of uncertainties... But it is not possible to sit at home afraid of calamities. Travel accident insurance is one way of mitigating the financial risk of such unforeseen events or calamities.
Man cannot stop traveling because of the unforeseen events. All these unforeseen events can be reduced by getting a good travel accident insurance policy. Travel insurance is most indispensable for the people who travel very frequently to different parts of world. The concept of travel accident insurance is very simple. The insured pays a premium; the company in turn pays any costs involved in case of accidents or other types of eventualities.
There are a variety of travel accident insurance policies available today on the internet or the market. It is easy to get confused with so many offers. However most travel accident insurance policies have certain basic benefits which are common. They usually provide coverage for:
Trip cancellation/interruptions. This can happen everywhere you trip. This due to a variety of reasons like terrorist activities or sudden illness, for instance.
Medical costs. Costs incurred for doctor visits, medicines, treatment, surgery etc and some policies even provide coverage for costs of medical evacuation to nearest medical facility.
Accidents. Accidents or calamities like earthquakes, tsunami, storms etc and the related costs. Some policies also provide vehicle accident costs. These are especially useful when going for a driving holiday to a foreign country. Most of your regular policies for auto insurance only provide insurance within the United States and do not provide for accidents out of the US.
Baggage Loss. Costs incurred for loss of baggage and valuable is also covered by most travel insurance policies. These are especially useful when going out for a shopping holiday for antiques, valuables, jewelry or electronics.
Whatever your main holiday concerns, travel accident insurance companies are sure to offer you comprehensive advice on what your greatest risks are, depending on your particular holiday location and the type of lifestyle and holiday pursuits you enjoy most. After all, if you can't swim and you're scared of heights, you're not likely to require anything more than the basic travel accident insurance package!
Kirill Karpovich makes easy for understanding travel insurance. To read more about travel accident insurance visit http://www.my-travel-accident-insurance.blogspot.com
Nowadays people visit other county more often than early. You can buy a ticket and begin your travel to nice place in this world. But you should be sure to have some foundation for your tour. And this one will be travel accident insurance.
Any experienced traveler can tell you that travel is full of uncertainties... But it is not possible to sit at home afraid of calamities. Travel accident insurance is one way of mitigating the financial risk of such unforeseen events or calamities.
Man cannot stop traveling because of the unforeseen events. All these unforeseen events can be reduced by getting a good travel accident insurance policy. Travel insurance is most indispensable for the people who travel very frequently to different parts of world. The concept of travel accident insurance is very simple. The insured pays a premium; the company in turn pays any costs involved in case of accidents or other types of eventualities.
There are a variety of travel accident insurance policies available today on the internet or the market. It is easy to get confused with so many offers. However most travel accident insurance policies have certain basic benefits which are common. They usually provide coverage for:
Trip cancellation/interruptions. This can happen everywhere you trip. This due to a variety of reasons like terrorist activities or sudden illness, for instance.
Medical costs. Costs incurred for doctor visits, medicines, treatment, surgery etc and some policies even provide coverage for costs of medical evacuation to nearest medical facility.
Accidents. Accidents or calamities like earthquakes, tsunami, storms etc and the related costs. Some policies also provide vehicle accident costs. These are especially useful when going for a driving holiday to a foreign country. Most of your regular policies for auto insurance only provide insurance within the United States and do not provide for accidents out of the US.
Baggage Loss. Costs incurred for loss of baggage and valuable is also covered by most travel insurance policies. These are especially useful when going out for a shopping holiday for antiques, valuables, jewelry or electronics.
Whatever your main holiday concerns, travel accident insurance companies are sure to offer you comprehensive advice on what your greatest risks are, depending on your particular holiday location and the type of lifestyle and holiday pursuits you enjoy most. After all, if you can't swim and you're scared of heights, you're not likely to require anything more than the basic travel accident insurance package!
Kirill Karpovich makes easy for understanding travel insurance. To read more about travel accident insurance visit http://www.my-travel-accident-insurance.blogspot.com
Your Homeowner's Insurance Policy - Dissected: Part 1 of 5
Your Homeowner's Insurance Policy - Dissected: Part 1 of 5
By Krista Farmer
If your homeowner?s insurance policy has been stuck in a drawer, cabinet or just tucked mindlessly away somewhere, it is probably about time to pull it out, shake off the dust and make sure it?s still up-to-date. This article is the first in a series of five articles that will help you decipher your homeowner?s insurance policy.
Who has time to labor through deciphering an insurance policy when the house needs cleaning, the fence needs mending, Fido needs a feeding and the kids need to be driven to soccer practice?
Let?s face it. At the end of the day, the only thing a person wants to read is the newspaper or a good book. Reading one?s insurance policy is surely the last thing on the list of ?hot reads.?
While keeping your homeowner?s insurance updated is a dismal task, it is of utmost importance. As discussed in a previous article, not only is it important to purchase homeowner?s insurance, it is just as important to know what that policy covers.
Homeowner?s insurance policies contain several different coverage areas.
This article, and some of the next few that follow, will help you make sense of the different sections within your homeowner?s insurance policy.
RESIDENTIAL COVERAGE
The most obvious coverage is protection against damage to or destruction of your residential structure. In other words, if your home is destroyed by a tornado, fire, or whatever your policy covers, the insurance company completely replaces or repairs your home.
In this section of coverage, the most important reason to keep your homeowner?s insurance policy updated is because, in the event of disaster, the insurance company will only reimburse you for what your home is insured for.
For example, you purchased your home and homeowner?s insurance five years ago. It is very likely the value of your home has increased since the purchase date. If you purchased the home insurance policy five years ago and have not updated the policy to the home?s current cost to rebuild, the insurance company will only reimburse you for the price you paid five years ago. So, if you purchased the home for $300,000 and the value has increased to $500,000, you?re losing $200,000 ? quite a large sum.
In the end, it is essential to keep your homeowner?s insurance policy updated because you want to be sure your home is insured for 100 percent of the replacement cost. (Some policies automatically update to your home?s current value. Does yours?) While it is easy to let that dust settle over your policy from year to year, keep in mind that putting it aside could cost you much more in the end. Your homeowner?s insurance policy may make heavy reading, but it will be even more burdensome should it be out-of-date.
To read more articles about health, auto, life and homeowner?s insurance, check out http://www.hometownquotes.com/insurance-articles.html.
By Krista Farmer
If your homeowner?s insurance policy has been stuck in a drawer, cabinet or just tucked mindlessly away somewhere, it is probably about time to pull it out, shake off the dust and make sure it?s still up-to-date. This article is the first in a series of five articles that will help you decipher your homeowner?s insurance policy.
Who has time to labor through deciphering an insurance policy when the house needs cleaning, the fence needs mending, Fido needs a feeding and the kids need to be driven to soccer practice?
Let?s face it. At the end of the day, the only thing a person wants to read is the newspaper or a good book. Reading one?s insurance policy is surely the last thing on the list of ?hot reads.?
While keeping your homeowner?s insurance updated is a dismal task, it is of utmost importance. As discussed in a previous article, not only is it important to purchase homeowner?s insurance, it is just as important to know what that policy covers.
Homeowner?s insurance policies contain several different coverage areas.
This article, and some of the next few that follow, will help you make sense of the different sections within your homeowner?s insurance policy.
RESIDENTIAL COVERAGE
The most obvious coverage is protection against damage to or destruction of your residential structure. In other words, if your home is destroyed by a tornado, fire, or whatever your policy covers, the insurance company completely replaces or repairs your home.
In this section of coverage, the most important reason to keep your homeowner?s insurance policy updated is because, in the event of disaster, the insurance company will only reimburse you for what your home is insured for.
For example, you purchased your home and homeowner?s insurance five years ago. It is very likely the value of your home has increased since the purchase date. If you purchased the home insurance policy five years ago and have not updated the policy to the home?s current cost to rebuild, the insurance company will only reimburse you for the price you paid five years ago. So, if you purchased the home for $300,000 and the value has increased to $500,000, you?re losing $200,000 ? quite a large sum.
In the end, it is essential to keep your homeowner?s insurance policy updated because you want to be sure your home is insured for 100 percent of the replacement cost. (Some policies automatically update to your home?s current value. Does yours?) While it is easy to let that dust settle over your policy from year to year, keep in mind that putting it aside could cost you much more in the end. Your homeowner?s insurance policy may make heavy reading, but it will be even more burdensome should it be out-of-date.
To read more articles about health, auto, life and homeowner?s insurance, check out http://www.hometownquotes.com/insurance-articles.html.
Your Homeowner?s Insurance Policy - Dissected: Part 2 of 5
Your Homeowner?s Insurance Policy - Dissected: Part 2 of 5
By Krista Farmer
If your homeowner?s insurance policy has been stuck in a drawer, cabinet or just tucked mindlessly away somewhere, it is probably about time to pull it out, shake off the dust and make sure it?s still up-to-date. This article is the second in a series of five articles that will help you decipher your homeowner?s insurance policy.
You?ve cleaned the house, mended the fence, fed Fido and shipped the kids off to soccer practice, but don?t get too comfortable yet. Have you looked at your homeowner?s insurance policy lately? It needs your attention.
While keeping your homeowner?s insurance updated is a dismal task, it is of utmost importance. As discussed in a previous article, not only is it important to purchase homeowner?s insurance, it is just as important to know what that policy covers.
Homeowner?s insurance policies contain several different coverage areas.
The topic of the previous article, Part 1 of this series, discussed insuring your residential structure. This article will explain how to insure the other buildings on your property ? the detached structures.
COVERAGE FOR DETACHED STRUCTURES
In addition to covering your residence, your homeowner?s insurance also includes compensation for damage to detached structures on your property. Whether you have a detached garage, gazebo, tool shed or fancy doghouse, your homeowner?s policy should cover those structures in some form or fashion.
Because every single homeowner?s policy is unique, you need to know what your policy?s coverage limit is. For detached structures, the average homeowner?s policy includes compensation for up to ten percent of your home?s coverage cost. Confused? Don?t fret.
In a nutshell, if your house is insured for $450,000, your detached structures are automatically covered for $45,000. Again, however, your policy may be different.
A few stumbling blocks accompany this ten percent detached structure coverage. First, what if your detached structure is somewhat used for business purposes?
Unfortunately if your detached structure is even partly used for business, your claim can be denied. That?s just the way insurance works. If you have a structure on your property that you must use for business, you absolutely have to ask for approval in your homeowner?s policy that permits business use.
Second, what if your detached structures cost more than $45,000 to rebuild? Because the typical homeowner?s insurance policy automatically covers ten percent of the cost to rebuild for detached structures you must purchase additional detached structure coverage. So in this case, because your garage, gazebo or high-tech tool shed costs $60,000 to rebuild, you will need to purchase $15,000 in additional coverage.
In the end, it is essential to know what you?re covered for because each homeowner?s insurance policy is different. You need to know what is limited or excluded.
Is your homeowner?s insurance policy up-to-date? (Some policies automatically update to your home?s current value. Does yours?) While it is easy to let that dust settle over your policy from year to year, keep in mind that putting it aside could cost you much more in the end. Your homeowner?s insurance policy may make heavy reading, but it will be even more burdensome should you not know what is covered in it.
To read more articles about health, auto, life and homeowner?s insurance, check out http://www.hometownquotes.com/insurance-articles.html.
*Please note that this article is not a professional consultation. This article is for general information only. Always seek specific information from a licensed insurance professional.*
By Krista Farmer
If your homeowner?s insurance policy has been stuck in a drawer, cabinet or just tucked mindlessly away somewhere, it is probably about time to pull it out, shake off the dust and make sure it?s still up-to-date. This article is the second in a series of five articles that will help you decipher your homeowner?s insurance policy.
You?ve cleaned the house, mended the fence, fed Fido and shipped the kids off to soccer practice, but don?t get too comfortable yet. Have you looked at your homeowner?s insurance policy lately? It needs your attention.
While keeping your homeowner?s insurance updated is a dismal task, it is of utmost importance. As discussed in a previous article, not only is it important to purchase homeowner?s insurance, it is just as important to know what that policy covers.
Homeowner?s insurance policies contain several different coverage areas.
The topic of the previous article, Part 1 of this series, discussed insuring your residential structure. This article will explain how to insure the other buildings on your property ? the detached structures.
COVERAGE FOR DETACHED STRUCTURES
In addition to covering your residence, your homeowner?s insurance also includes compensation for damage to detached structures on your property. Whether you have a detached garage, gazebo, tool shed or fancy doghouse, your homeowner?s policy should cover those structures in some form or fashion.
Because every single homeowner?s policy is unique, you need to know what your policy?s coverage limit is. For detached structures, the average homeowner?s policy includes compensation for up to ten percent of your home?s coverage cost. Confused? Don?t fret.
In a nutshell, if your house is insured for $450,000, your detached structures are automatically covered for $45,000. Again, however, your policy may be different.
A few stumbling blocks accompany this ten percent detached structure coverage. First, what if your detached structure is somewhat used for business purposes?
Unfortunately if your detached structure is even partly used for business, your claim can be denied. That?s just the way insurance works. If you have a structure on your property that you must use for business, you absolutely have to ask for approval in your homeowner?s policy that permits business use.
Second, what if your detached structures cost more than $45,000 to rebuild? Because the typical homeowner?s insurance policy automatically covers ten percent of the cost to rebuild for detached structures you must purchase additional detached structure coverage. So in this case, because your garage, gazebo or high-tech tool shed costs $60,000 to rebuild, you will need to purchase $15,000 in additional coverage.
In the end, it is essential to know what you?re covered for because each homeowner?s insurance policy is different. You need to know what is limited or excluded.
Is your homeowner?s insurance policy up-to-date? (Some policies automatically update to your home?s current value. Does yours?) While it is easy to let that dust settle over your policy from year to year, keep in mind that putting it aside could cost you much more in the end. Your homeowner?s insurance policy may make heavy reading, but it will be even more burdensome should you not know what is covered in it.
To read more articles about health, auto, life and homeowner?s insurance, check out http://www.hometownquotes.com/insurance-articles.html.
*Please note that this article is not a professional consultation. This article is for general information only. Always seek specific information from a licensed insurance professional.*
Your Homeowner's Insurance Policy - Dissected: Part 4 of 5
Your Homeowner's Insurance Policy - Dissected: Part 4 of 5
Your Homeowner?s Insurance Policy ? Dissected: Part 4 of 5
By Krista Farmer
If your homeowner?s insurance policy has been stuck in a drawer, cabinet or just tucked mindlessly away somewhere, it is probably about time to pull it out, shake off the dust and make sure it?s still up-to-date. This article is the fourth in a series of five articles that will help you decipher your homeowner?s insurance policy.
The rooster is crowing (or the cars are honking, depending on where you live), the coffee pot isn?t working and the kids need to be shuttled off to school. You barely have time to run a brush through your hair, much less worry about your homeowner?s insurance.
While keeping your homeowner?s insurance updated is a dismal task, it is of utmost importance. As discussed in a previous article, not only is it important to purchase homeowner?s insurance, it is just as important to know what that policy covers.
Homeowner?s insurance policies contain several different coverage areas.
The topic of the previous article, Part 3 of this series, discussed insuring your personal items and belongings. This article will explain how to cover additional living expenses incurred in a disaster.
COVERAGE FOR ADDITIONAL LIVING EXPENSES
In addition to covering your personal belongings, your homeowner?s insurance also includes compensation for additional living expenses.
Let?s say, for example, your house is burned down by an electrical fire. You shouldn?t be faced with utility bills, but other costs will assuredly skyrocket.
You won?t have to worry with the water bill or that blasted electricity, but you unfortunately won?t be sleeping in the comforts of your fluffy bed or enjoying fresh fare from your kitchen, either.
This is where additional living expense coverage kicks in. You will need lodging, clothing, food and other items until your home is rebuilt so you will probably have to rely on a few nights? stays in your local motel and enjoy restaurant food for awhile, in addition to other expenses.
Because every single homeowner?s policy is unique, you need to know what your policy?s coverage limit is. This amount will vary from insurer to insurer. Some insurance companies will allow unlimited cash flow in this area of coverage, while others will offer provide coverage for a percentage of your total homeowner?s insurance coverage. This is a very important detail, so be sure to check your policy!
In the end, it is essential to know what you?re covered for because each homeowner?s insurance policy is different. You need to know what yours limits or excludes.
Is your homeowner?s insurance policy up-to-date? (Some policies automatically update your home?s current value. Does yours?) While it is easy to let that dust settle over your policy from year to year, keep in mind that putting it aside could cost you much more in the end. Your homeowner?s insurance policy may make heavy reading, but it will be even more burdensome should you not know what is covered in it.
http://www.hometownquotes.com/HO-Dissected-4.html
To read more articles about health, auto, life and homeowner?s insurance, check out http://www.hometownquotes.com/insurance-articles.html.
*Please note that this article is not a professional consultation. This article is for general information only. Always seek specific information from a licensed insurance professional.*
Your Homeowner?s Insurance Policy ? Dissected: Part 4 of 5
By Krista Farmer
If your homeowner?s insurance policy has been stuck in a drawer, cabinet or just tucked mindlessly away somewhere, it is probably about time to pull it out, shake off the dust and make sure it?s still up-to-date. This article is the fourth in a series of five articles that will help you decipher your homeowner?s insurance policy.
The rooster is crowing (or the cars are honking, depending on where you live), the coffee pot isn?t working and the kids need to be shuttled off to school. You barely have time to run a brush through your hair, much less worry about your homeowner?s insurance.
While keeping your homeowner?s insurance updated is a dismal task, it is of utmost importance. As discussed in a previous article, not only is it important to purchase homeowner?s insurance, it is just as important to know what that policy covers.
Homeowner?s insurance policies contain several different coverage areas.
The topic of the previous article, Part 3 of this series, discussed insuring your personal items and belongings. This article will explain how to cover additional living expenses incurred in a disaster.
COVERAGE FOR ADDITIONAL LIVING EXPENSES
In addition to covering your personal belongings, your homeowner?s insurance also includes compensation for additional living expenses.
Let?s say, for example, your house is burned down by an electrical fire. You shouldn?t be faced with utility bills, but other costs will assuredly skyrocket.
You won?t have to worry with the water bill or that blasted electricity, but you unfortunately won?t be sleeping in the comforts of your fluffy bed or enjoying fresh fare from your kitchen, either.
This is where additional living expense coverage kicks in. You will need lodging, clothing, food and other items until your home is rebuilt so you will probably have to rely on a few nights? stays in your local motel and enjoy restaurant food for awhile, in addition to other expenses.
Because every single homeowner?s policy is unique, you need to know what your policy?s coverage limit is. This amount will vary from insurer to insurer. Some insurance companies will allow unlimited cash flow in this area of coverage, while others will offer provide coverage for a percentage of your total homeowner?s insurance coverage. This is a very important detail, so be sure to check your policy!
In the end, it is essential to know what you?re covered for because each homeowner?s insurance policy is different. You need to know what yours limits or excludes.
Is your homeowner?s insurance policy up-to-date? (Some policies automatically update your home?s current value. Does yours?) While it is easy to let that dust settle over your policy from year to year, keep in mind that putting it aside could cost you much more in the end. Your homeowner?s insurance policy may make heavy reading, but it will be even more burdensome should you not know what is covered in it.
http://www.hometownquotes.com/HO-Dissected-4.html
To read more articles about health, auto, life and homeowner?s insurance, check out http://www.hometownquotes.com/insurance-articles.html.
*Please note that this article is not a professional consultation. This article is for general information only. Always seek specific information from a licensed insurance professional.*
Protect Yourself From Health Insurance Scams
Protect Yourself From Health Insurance Scams
Many thousands of unsuspecting people end up falling victim to health insurance scams every year. Unauthorized insurers are prepared to sell health insurance with a low-cost premium and most people would never think that there are fake insurance companies waiting to steal your money. The current trend of scams is on the increase, spurred on by ever increasing health care costs and rising numbers of people who are uninsured. This results in more individuals looking for the best deal. With so many companies offering health insurance, how do you tell the genuine ones from the scams? There are ways to keep yourself safe from the scammers and still pay a reasonable premium.
The first question you must ask yourself is - does a health insurance company seem to be offering a policy that is too good to be true? This could be the case. You must remember that health insurance is expensive because medical care is also expensive. Victims of health insurance scams are often people who shop around and think they have found a great deal until they have to make a claim and then find they are left without insurance. The phony companies have collected the premiums, but haven't passed them on to the health care providers.
Every state has laws making it an offence to operate an insurance company without a license, but unlicensed plans ignore these regulations, which include solvency standards that ensure a company has the ability to pay the claims of insured individuals. It can be extremely difficult for potential customers to see the red flags to watch out for during the sales pitch of a particular policy.
The con-artists are professionals at what they do because very often it's how they make their entire living. They will have paperwork that looks identical to a real insurer and give the impression that seems to be that of a genuine and legitimate agent. Common scams can include loopholes that make sure what they are selling is not actually insurance. This would mean it is a discount program of some sort. These individuals may contact you by telephone, offering a discount to people who, for one reason or another, do not qualify for real insurance. Also be wary if an agent mentions their plan being "reinsured." It is true that some legitimate insurance companies do have reinsurance to protect themselves, but it is never mentioned when trying to sell insurance to a customer.
If you must save money on insurance, instead of taking out the cheapest policy, raise your deductibles and self-insure items such as dental and vision care. You can also take out a policy that makes you pay for the small stuff yourself, but covers more serious illness and hospitalization.
Health insurance scams are not easily spotted. Insurance is a complicated subject and the scammers may try to take advantage of your ignorance. Therefore, it is important to know all you can about health insurance before purchasing a plan. Do your research. Weiss Ratings, a Florida agency which made its name by being tough on insurance companies can carry out a company search for as little as $15.
If someone calls your home and tries to sell you a form of health care or health insurance, take what knowledge you have and ask as many questions as you can think of. Any indication that this may be a fake insurer should be taken to the state insurance regulators for investigation. You could be saving yourself and others from becoming a victim.
For more articles on health insurance please visit http://healthinsuranceinfo.50webs.com
Many thousands of unsuspecting people end up falling victim to health insurance scams every year. Unauthorized insurers are prepared to sell health insurance with a low-cost premium and most people would never think that there are fake insurance companies waiting to steal your money. The current trend of scams is on the increase, spurred on by ever increasing health care costs and rising numbers of people who are uninsured. This results in more individuals looking for the best deal. With so many companies offering health insurance, how do you tell the genuine ones from the scams? There are ways to keep yourself safe from the scammers and still pay a reasonable premium.
The first question you must ask yourself is - does a health insurance company seem to be offering a policy that is too good to be true? This could be the case. You must remember that health insurance is expensive because medical care is also expensive. Victims of health insurance scams are often people who shop around and think they have found a great deal until they have to make a claim and then find they are left without insurance. The phony companies have collected the premiums, but haven't passed them on to the health care providers.
Every state has laws making it an offence to operate an insurance company without a license, but unlicensed plans ignore these regulations, which include solvency standards that ensure a company has the ability to pay the claims of insured individuals. It can be extremely difficult for potential customers to see the red flags to watch out for during the sales pitch of a particular policy.
The con-artists are professionals at what they do because very often it's how they make their entire living. They will have paperwork that looks identical to a real insurer and give the impression that seems to be that of a genuine and legitimate agent. Common scams can include loopholes that make sure what they are selling is not actually insurance. This would mean it is a discount program of some sort. These individuals may contact you by telephone, offering a discount to people who, for one reason or another, do not qualify for real insurance. Also be wary if an agent mentions their plan being "reinsured." It is true that some legitimate insurance companies do have reinsurance to protect themselves, but it is never mentioned when trying to sell insurance to a customer.
If you must save money on insurance, instead of taking out the cheapest policy, raise your deductibles and self-insure items such as dental and vision care. You can also take out a policy that makes you pay for the small stuff yourself, but covers more serious illness and hospitalization.
Health insurance scams are not easily spotted. Insurance is a complicated subject and the scammers may try to take advantage of your ignorance. Therefore, it is important to know all you can about health insurance before purchasing a plan. Do your research. Weiss Ratings, a Florida agency which made its name by being tough on insurance companies can carry out a company search for as little as $15.
If someone calls your home and tries to sell you a form of health care or health insurance, take what knowledge you have and ask as many questions as you can think of. Any indication that this may be a fake insurer should be taken to the state insurance regulators for investigation. You could be saving yourself and others from becoming a victim.
For more articles on health insurance please visit http://healthinsuranceinfo.50webs.com
Opportunity Cost and Your Long Term Care Decision
Opportunity Cost and Your Long Term Care Decision
If you are out shopping for long term care (commonly abbreviated as LTCI or LTC), I'm going to encourage you to take a look at a way of providing long term care benefits that is probably new to you. On the other hand, if you are in the crowd that thinks they will never need long term care, I would also suggest you evaluate this line of thinking.
Dick and Jane are both age 65, recently retired and models of good health. They have ignored the long term care subject until recently. They just put Jane's mother, who is 88, into a nursing home. Talk about sticker shock! She is in a nice place, but Dick and Jane are not 100% certain that her assets will allow her to stay there for the rest of her life.
Consequently, they have been out looking at long term care for themselves. They figure they can afford to insure a portion of what it might cost them if they ever need some form of LTCI, so they are looking at a benefit of $3,000 a month. The premium is around $4,200 a year.
Here's a new concept that Dick and Jane must become accustomed to now that they are retired. They both had good jobs during their working years. If they ever wanted to buy anything, it was just a question of looking at their income to see if they could swing the purchase. Pretty straightforward.
Now that they are retired, most of their expenditures are going to come from investment returns on the assets they have accumulated, not income from working. So they need to understand the difference between premium cost and opportunity cost. Here's what I mean?
If they elect to buy this $4,200 a year long term care policy, the money has to come from somewhere. Chances are it's coming from the interest earned on perhaps a CD or an annuity. But there is an opportunity cost associated with paying the premiums from earnings on any asset.
Let's say they are going to pay this $4,200 from the interest on a CD they own which is earning 5.4% interest. Since interest is taxable, and assuming they are in a 15% tax bracket, they would have to have $91,300 in that CD to produce $4,200 after tax to pay the premium.
They can't spend the $91,300. It can't grow. Basically, they have "committed" $91,300 of their assets to pay the premium on their LTC policy. That's the one "job" of this $91,300. The premium may only be $4,200 a year, but the opportunity cost is $91,300.
Let's take a look at another of their alternatives. It's called asset based long term care. How it works will unfold as I provide the example and contrast below.
One approach to asset based long term care involves re-positioning $91,300 of Dick and Jane's CD to a combination long term care/life insurance policy plan with an insurance company. Here's what moving this money does for them?
The money on deposit with the insurance company grows at interest, but it is tax-deferred interest so the insurance company will not send them 1099s every year for an amount they have to pay tax on like the bank is required to do. In 10 years, assuming current rates, the $91,300 will grow to $127,000; in 20 years $161,000. The CD, remember, does not grow, as its job is to spin off interest to pay the annual $4,200 premium on the traditional LTCI plan.
If either Dick or Jane needs any form of long term care, the insurance company plan will pay them $3,900 a month for 50 months--$900 a month more than the traditional plan.
But here's the real kicker.
If Dick and Jane never need long term care, then the camp that doesn't buy it would have been right. If Dick and Jane bought the traditional long term care plan, in 10 years they would have paid out $42,000 in premiums and about $7,400 in taxes on their CD interest in order to net out the required premium. That's a total of $49,700. The $91,300 portion of their CD would still be $91,300.
However, if Dick and Jane never need long term care, chose the asset based long term care plan and both die, for example in 10 years, the outcome is different. They have paid no annual premiums and the life insurance company will pay about $198,000 tax free to their kids.
Which sounds like a better plan?
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate, go to http://theestatepreservationadvisor.com/freevideo.htm
If you are out shopping for long term care (commonly abbreviated as LTCI or LTC), I'm going to encourage you to take a look at a way of providing long term care benefits that is probably new to you. On the other hand, if you are in the crowd that thinks they will never need long term care, I would also suggest you evaluate this line of thinking.
Dick and Jane are both age 65, recently retired and models of good health. They have ignored the long term care subject until recently. They just put Jane's mother, who is 88, into a nursing home. Talk about sticker shock! She is in a nice place, but Dick and Jane are not 100% certain that her assets will allow her to stay there for the rest of her life.
Consequently, they have been out looking at long term care for themselves. They figure they can afford to insure a portion of what it might cost them if they ever need some form of LTCI, so they are looking at a benefit of $3,000 a month. The premium is around $4,200 a year.
Here's a new concept that Dick and Jane must become accustomed to now that they are retired. They both had good jobs during their working years. If they ever wanted to buy anything, it was just a question of looking at their income to see if they could swing the purchase. Pretty straightforward.
Now that they are retired, most of their expenditures are going to come from investment returns on the assets they have accumulated, not income from working. So they need to understand the difference between premium cost and opportunity cost. Here's what I mean?
If they elect to buy this $4,200 a year long term care policy, the money has to come from somewhere. Chances are it's coming from the interest earned on perhaps a CD or an annuity. But there is an opportunity cost associated with paying the premiums from earnings on any asset.
Let's say they are going to pay this $4,200 from the interest on a CD they own which is earning 5.4% interest. Since interest is taxable, and assuming they are in a 15% tax bracket, they would have to have $91,300 in that CD to produce $4,200 after tax to pay the premium.
They can't spend the $91,300. It can't grow. Basically, they have "committed" $91,300 of their assets to pay the premium on their LTC policy. That's the one "job" of this $91,300. The premium may only be $4,200 a year, but the opportunity cost is $91,300.
Let's take a look at another of their alternatives. It's called asset based long term care. How it works will unfold as I provide the example and contrast below.
One approach to asset based long term care involves re-positioning $91,300 of Dick and Jane's CD to a combination long term care/life insurance policy plan with an insurance company. Here's what moving this money does for them?
The money on deposit with the insurance company grows at interest, but it is tax-deferred interest so the insurance company will not send them 1099s every year for an amount they have to pay tax on like the bank is required to do. In 10 years, assuming current rates, the $91,300 will grow to $127,000; in 20 years $161,000. The CD, remember, does not grow, as its job is to spin off interest to pay the annual $4,200 premium on the traditional LTCI plan.
If either Dick or Jane needs any form of long term care, the insurance company plan will pay them $3,900 a month for 50 months--$900 a month more than the traditional plan.
But here's the real kicker.
If Dick and Jane never need long term care, then the camp that doesn't buy it would have been right. If Dick and Jane bought the traditional long term care plan, in 10 years they would have paid out $42,000 in premiums and about $7,400 in taxes on their CD interest in order to net out the required premium. That's a total of $49,700. The $91,300 portion of their CD would still be $91,300.
However, if Dick and Jane never need long term care, chose the asset based long term care plan and both die, for example in 10 years, the outcome is different. They have paid no annual premiums and the life insurance company will pay about $198,000 tax free to their kids.
Which sounds like a better plan?
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate, go to http://theestatepreservationadvisor.com/freevideo.htm
PHRs model by Blue Cross Insurance
PHRs model by Blue Cross Insurance
High quality health care today simply means having the right information in the right hands and at the right time. You may be an individual or a family, every body need concurrent access to health care information that might be discrete among a number of physicians, hospitals, pharmacies, and other health care providers. But in fact we are many years away from the system that are fully interoperable. Consumers would have superior access to the health care information they require to optimize their health and health care thanks to a new personal health record (PHR) model being urbanized by Blue cross health insurance plans.
America's Health Insurance Plans (AHIP) and the Blue Cross and Blue Shield Association (BCBSA) worked jointly to recognize the core health care information to comprise in PHRs, and have urbanized and pilot tested standards, which allow consumers to move PHR data when they actually change their coverage. This ensures that PHRs would surely be portable from health insurer to health insurer as customers have requested. Members of the two teams cover about 200 million people.
The industry model PHR by Blue cross insurance is in fact private, secure web-based tool preserved by an insurer, which contains a consumer's claims and organizational information. PHRs allow individual patients and their chosen caregivers to look and manage health care information and play a better role in their own health care.
Consequently of health insurance claims filed on behalf of consumers, insurers have most information required to give PHRs, and are in an exclusive position to build them for customers in the near term. PHRs are different from the electronic health records, which providers normally use to store and run detailed clinical information. A projected 75 million people have PHRs throughout health insurers, with millions more planned for the service during 2007.
Physicians tend to encourage insurers to accept a reliable set of core PHR data. Health insurers would carry on innovating in the PHRs they expand, but the aim is to slot in core data elements into every PHR. These elements comprise patient histories, medications, immunizations, allergies, risks, plans of care, and much other information, which physicians recognized as the key data. The health insurance groups of people have set an objective of incorporating the core data elements and implement the standards for portability from a previous insurer to a new insurer by 2008.
High quality health care today simply means having the right information in the right hands and at the right time. You may be an individual or a family, every body need concurrent access to health care information that might be discrete among a number of physicians, hospitals, pharmacies, and other health care providers. But in fact we are many years away from the system that are fully interoperable. Consumers would have superior access to the health care information they require to optimize their health and health care thanks to a new personal health record (PHR) model being urbanized by Blue cross health insurance plans.
America's Health Insurance Plans (AHIP) and the Blue Cross and Blue Shield Association (BCBSA) worked jointly to recognize the core health care information to comprise in PHRs, and have urbanized and pilot tested standards, which allow consumers to move PHR data when they actually change their coverage. This ensures that PHRs would surely be portable from health insurer to health insurer as customers have requested. Members of the two teams cover about 200 million people.
The industry model PHR by Blue cross insurance is in fact private, secure web-based tool preserved by an insurer, which contains a consumer's claims and organizational information. PHRs allow individual patients and their chosen caregivers to look and manage health care information and play a better role in their own health care.
Consequently of health insurance claims filed on behalf of consumers, insurers have most information required to give PHRs, and are in an exclusive position to build them for customers in the near term. PHRs are different from the electronic health records, which providers normally use to store and run detailed clinical information. A projected 75 million people have PHRs throughout health insurers, with millions more planned for the service during 2007.
Physicians tend to encourage insurers to accept a reliable set of core PHR data. Health insurers would carry on innovating in the PHRs they expand, but the aim is to slot in core data elements into every PHR. These elements comprise patient histories, medications, immunizations, allergies, risks, plans of care, and much other information, which physicians recognized as the key data. The health insurance groups of people have set an objective of incorporating the core data elements and implement the standards for portability from a previous insurer to a new insurer by 2008.
Five Uses For Survivorship Life Insurance
Five Uses For Survivorship Life Insurance
Survivorship life insurance is a life insurance policy that insures two people and pays at the second death. Also referred to as second-to-die life insurance, common abbreviations are SWL for survivor whole life and SUL for survivor universal life.
Advantages
Since the insurance company does not have to pay until the second person dies, the premium is lower.
The insurance company could issue a standard policy, even if one person has health issues. In extreme cases where one person is entirely uninsurable, a policy with an acceptable premium is possible.
There are many uses for a survivorship life insurance policy. Let?s look at five.
Estate Taxes
Life insurance is the least expensive method of providing cash for the payment of estate taxes. Since 1981, the law allows one spouse to transfer all their property to the other spouse at death tax free. This is the ?unlimited marital deduction.? If there is an estate tax due, it is not due until the second spouse dies.
In response, life insurance companies designed the survivorship life insurance contract. Since the premium is lower, it is even a better solution than a policy insuring only one person.
Replacing an Asset Given Away
Charitable remainder trusts (CRTs) allow a person to sell a highly appreciated asset (stock, land, a business etc.) without paying a capital gain tax, receive an income tax deduction and convert the asset to an income. At their death, the asset passes to the charity, not to their heirs.
An easy way to circumvent the children?s disinheritance is to insure mom and dad with a survivorship life insurance policy for the value of the asset given to charity. Sometimes premiums can be entirely paid from the income from the charitable remainder trust, which is often found money if the original asset was illiquid. The income tax deduction can be spread over six years if the asset contributed to the CRT is large enough. This is another premium source.
Even Out an Inheritance
A couple has three children and a family business. One of the children is active in the business and the other two have careers of their own. If the bulk of the estate is the business and the plan is to leave the business to the active child, the other two children come up short.
A second-to-die policy on mom and dad can even things out. For example, let?s say the total estate is 6 million and the business represents 4 million. If the parents leave the business to the active child and the remaining 2 million to the other two children and name these children the beneficiary of a 6 million dollar survivorship life policy, everything is equal.
The child active in the business gets the business worth 4 million. The other two children inherit 1 million apiece from the balance of the estate and 3 million apiece from the survivorship life insurance policy.
Post Phone a Buy Sell
If Joe and Bill were equal partners in a business, good planning would have them meet with their attorney and accountant, put a value on the business that each are happy with and have a buy-sell agreement drawn. Fund the agreement with life insurance and the funds are assured for the buy-out.
However, what if Joe?s wife, Ann, is also active in the business? If Joe dies, Ann would inherit Joe?s interest and continue to work in the business as usual. In this case, it would make sense to use a survivorship life insurance policy to insure both Joe and Ann. The buy-sell agreement would be worded to trigger the buy-out at the second of their deaths.
To Pay the Income Tax on an Inherited Qualified Plan
This is the day of mega 401(k) plans. When a 401(k), IRA or other qualified plan is passed, for example, to the children, income tax is required upon a distribution.
Most people do not realize the large potential tax on what may be their largest asset. Let?s look at the worst case. If the qualified plan money is subject to the top estate tax bracket, which is currently 45% and the child is also in the top income tax bracket, currently 35%, the amount left to the child is only a fraction of the total amount. Note there is a deduction against income for estate taxes paid. A good estimate of the net total percentage paid in taxes at the top brackets is 70%.
Use a survivorship life insurance policy to offset the income tax on the distributions, the estate tax or both.
There are many other uses of survivorship life insurance policies. If your situation includes any of these examples, I would recommend looking at the use of a second-to-die policy.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate, go to http://theestatepreservationadvisor.com/rd/subscribe.htm
Survivorship life insurance is a life insurance policy that insures two people and pays at the second death. Also referred to as second-to-die life insurance, common abbreviations are SWL for survivor whole life and SUL for survivor universal life.
Advantages
Since the insurance company does not have to pay until the second person dies, the premium is lower.
The insurance company could issue a standard policy, even if one person has health issues. In extreme cases where one person is entirely uninsurable, a policy with an acceptable premium is possible.
There are many uses for a survivorship life insurance policy. Let?s look at five.
Estate Taxes
Life insurance is the least expensive method of providing cash for the payment of estate taxes. Since 1981, the law allows one spouse to transfer all their property to the other spouse at death tax free. This is the ?unlimited marital deduction.? If there is an estate tax due, it is not due until the second spouse dies.
In response, life insurance companies designed the survivorship life insurance contract. Since the premium is lower, it is even a better solution than a policy insuring only one person.
Replacing an Asset Given Away
Charitable remainder trusts (CRTs) allow a person to sell a highly appreciated asset (stock, land, a business etc.) without paying a capital gain tax, receive an income tax deduction and convert the asset to an income. At their death, the asset passes to the charity, not to their heirs.
An easy way to circumvent the children?s disinheritance is to insure mom and dad with a survivorship life insurance policy for the value of the asset given to charity. Sometimes premiums can be entirely paid from the income from the charitable remainder trust, which is often found money if the original asset was illiquid. The income tax deduction can be spread over six years if the asset contributed to the CRT is large enough. This is another premium source.
Even Out an Inheritance
A couple has three children and a family business. One of the children is active in the business and the other two have careers of their own. If the bulk of the estate is the business and the plan is to leave the business to the active child, the other two children come up short.
A second-to-die policy on mom and dad can even things out. For example, let?s say the total estate is 6 million and the business represents 4 million. If the parents leave the business to the active child and the remaining 2 million to the other two children and name these children the beneficiary of a 6 million dollar survivorship life policy, everything is equal.
The child active in the business gets the business worth 4 million. The other two children inherit 1 million apiece from the balance of the estate and 3 million apiece from the survivorship life insurance policy.
Post Phone a Buy Sell
If Joe and Bill were equal partners in a business, good planning would have them meet with their attorney and accountant, put a value on the business that each are happy with and have a buy-sell agreement drawn. Fund the agreement with life insurance and the funds are assured for the buy-out.
However, what if Joe?s wife, Ann, is also active in the business? If Joe dies, Ann would inherit Joe?s interest and continue to work in the business as usual. In this case, it would make sense to use a survivorship life insurance policy to insure both Joe and Ann. The buy-sell agreement would be worded to trigger the buy-out at the second of their deaths.
To Pay the Income Tax on an Inherited Qualified Plan
This is the day of mega 401(k) plans. When a 401(k), IRA or other qualified plan is passed, for example, to the children, income tax is required upon a distribution.
Most people do not realize the large potential tax on what may be their largest asset. Let?s look at the worst case. If the qualified plan money is subject to the top estate tax bracket, which is currently 45% and the child is also in the top income tax bracket, currently 35%, the amount left to the child is only a fraction of the total amount. Note there is a deduction against income for estate taxes paid. A good estimate of the net total percentage paid in taxes at the top brackets is 70%.
Use a survivorship life insurance policy to offset the income tax on the distributions, the estate tax or both.
There are many other uses of survivorship life insurance policies. If your situation includes any of these examples, I would recommend looking at the use of a second-to-die policy.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate, go to http://theestatepreservationadvisor.com/rd/subscribe.htm
Car Insurance Keystones
Car Insurance Keystones
Decisions concerning car insurance should be made based on a thorough study of related key points. Not only the price of the insurance policy is worth of your attention. A whole series of issues like your insurer?s credibility and insurance terms of other companies should be carefully analyzed.
But let?s get started with a question of people who are unclear whether they really need to buy car insurance or not? The question is: why should I buy car insurance? No doubt, only a small number of people would ask such a question, nevertheless, it?d be interesting for anyone to find out the answer.
There are two reasons at least to buy auto insurance. The first one is that almost every state has regulations that require car drivers to buy insurance for their vehicles. So, if you haven?t yet than you are breaking the rules, which may lead to serious legal problems.
The second reason is that if you get involved in a car accident that is your fault, you would most likely have to pay all expenses for the caused damage. And this may be several thousands dollars worth! In addition, you may be claimed for medical expenses, which may lead you to a bankruptcy.
Now that the question ?to be or not to be? for car insurance has been answered, let?s find out more about what type of insurance policy you should buy, what type of insurance company you should deal with and how to get the best possible deal.
Over the last years the Internet has become a popular mean of shopping for car insurance. The whole process of getting insurance quotes takes a few minutes. The benefits are obvious: customers save their precious time and insurance companies save on labor costs and paper expenses. In addition, insurance companies offer discounts to online customers, making the Internet more attractive for prospects looking for an insurance deal.
If you want to get the best deal, spend some time in front of your desktop?s (or laptop?s) monitor. It means you have to do a little research and get quotes from several insurers and compare them. Some companies offer seasonal or other types of discounts, so you?ll be easily able to figure out the lowest price.
However, the price shouldn?t be the main guiding line for you. Pay attention to a company?s credibility history. Old market players are generally more trustworthy then new insurers. Check out independent web resources to find out whether the company is the one you need. People love to share their experience through the web, so you may consider visiting some topic specific online forums.
And the last, but not least: what type of insurance policy you should buy? The answer lies in your intentions. If you don?t wish to spend much on insurance than consider buying basic insurance package. On the other hand, customers wishing to get a full coverage can buy more expensive insurance plans.
Buying car insurance isn?t an easy task. That?s why you should take every step carefully, because you are fully responsible for you decisions.
Tim Baker is the founder of a website devoted to Wawanesa Insurance Company.
Decisions concerning car insurance should be made based on a thorough study of related key points. Not only the price of the insurance policy is worth of your attention. A whole series of issues like your insurer?s credibility and insurance terms of other companies should be carefully analyzed.
But let?s get started with a question of people who are unclear whether they really need to buy car insurance or not? The question is: why should I buy car insurance? No doubt, only a small number of people would ask such a question, nevertheless, it?d be interesting for anyone to find out the answer.
There are two reasons at least to buy auto insurance. The first one is that almost every state has regulations that require car drivers to buy insurance for their vehicles. So, if you haven?t yet than you are breaking the rules, which may lead to serious legal problems.
The second reason is that if you get involved in a car accident that is your fault, you would most likely have to pay all expenses for the caused damage. And this may be several thousands dollars worth! In addition, you may be claimed for medical expenses, which may lead you to a bankruptcy.
Now that the question ?to be or not to be? for car insurance has been answered, let?s find out more about what type of insurance policy you should buy, what type of insurance company you should deal with and how to get the best possible deal.
Over the last years the Internet has become a popular mean of shopping for car insurance. The whole process of getting insurance quotes takes a few minutes. The benefits are obvious: customers save their precious time and insurance companies save on labor costs and paper expenses. In addition, insurance companies offer discounts to online customers, making the Internet more attractive for prospects looking for an insurance deal.
If you want to get the best deal, spend some time in front of your desktop?s (or laptop?s) monitor. It means you have to do a little research and get quotes from several insurers and compare them. Some companies offer seasonal or other types of discounts, so you?ll be easily able to figure out the lowest price.
However, the price shouldn?t be the main guiding line for you. Pay attention to a company?s credibility history. Old market players are generally more trustworthy then new insurers. Check out independent web resources to find out whether the company is the one you need. People love to share their experience through the web, so you may consider visiting some topic specific online forums.
And the last, but not least: what type of insurance policy you should buy? The answer lies in your intentions. If you don?t wish to spend much on insurance than consider buying basic insurance package. On the other hand, customers wishing to get a full coverage can buy more expensive insurance plans.
Buying car insurance isn?t an easy task. That?s why you should take every step carefully, because you are fully responsible for you decisions.
Tim Baker is the founder of a website devoted to Wawanesa Insurance Company.
ILIT - The Irrevocable Life Insurance Trust
ILIT - The Irrevocable Life Insurance Trust
Irrevocable Life Insurance Trusts (ILITs) are planning tools used to keep life insurance proceeds outside of the taxable estate.
For example, if a married couple has an estate of 6 million, they can pass 4 million to the next generation with no tax if they set up the proper trust arrangement to take advantage of the maximum lifetime unified credits. That leaves 2 million still subject to tax under the current law.
The logical thing to do is to purchase a survivorship life insurance policy for the projected tax. However, a policy purchased in the manner most people are familiar with, the problem is not solved; it is compounded.
If the couple has any "incidences of ownership" in the policy, it will be included in the estate. The purchase of a one million dollar policy increases the estate to 7 million. Four million passes tax-free, but now the taxable estate is 3 million. This increases the tax by some $225,000.
Enter the Irrevocable Life Insurance Trust.
Attorneys draft Irrevocable Life Insurance Trusts. The trust will apply for its own Federal Tax ID number. The trust will then apply for the survivorship life insurance policy. It will be the applicant, owner and beneficiary of the policy. Typical wording is "The John and Mary Smith Irrevocable Life Insurance Trust dated April 5, 2007, JPMorgan Chase Bank, trustee."
In this example, since neither John nor Mary has any "incidence of ownership" in the policy, it will not be part of their taxable estate.
The Owner and Beneficiary
As opposed to using an ILIT, I have worked with a few cases where the only child or children are the owner and beneficiary. This may work. However, each year the parents gift the money to pay the premium, there is no assurance that the money will be used to pay the premium. Furthermore, the children, as owners, have access to the cash values. An ILIT has much more assurance.
I have seen the trustee be a child, the couple's attorney, accountant or a long-time family friend. All of these will work, but an un-biased third party, such as a bank, is much better. If an individual is the trustee, name a bank as the successor trustee. Banks don't die.
The Crummey Letter
Typically, the life insurance premiums are paid by the parents in the form of annual gifts to the Irrevocable Life Insurance Trust. Currently (2007) a person can give up to $12,000 each year to as many people as they want without paying gift tax or having the amount subtracted from their lifetime exclusion. However, these gifts must be "present interest" gifts, which mean the recipient must have immediate rights to the gift.
Gifts to an ILIT, for paying premiums on a life insurance policy owned by the ILIT, are not "present interest" gifts. A "Crummey" letter qualifies the gift as a "present interest" gift. The letter is not crummy or poorly written; the letter takes its name from a court case initiated in 1968 by Clifford Crummey, who was trying to do this very same thing: make annual gifts present interest gifts. Ultimately, the outcome of the case required the use of a letter, now known as the "Crummey" letter.
A letter is sent every year to each of the beneficiaries of the ILIT. It simply states that a gift has been made to the ILIT and they can withdraw it if they want within a certain timeframe, usually 30 or 60 days. If they don't exercise this right, the gift becomes a present interest gift.
Obviously, there is an "understanding" between the parents and children to ignore these letters, as it is a part of the overall estate plan. The annual gifts and the ensuing yearly Crummey letters do not have to go to children with a legal capacity, such as age 18. I have seen letters written to 4-month-old babies. In this case, even though the baby was not able to read the letter or understand the estate planning rationale behind it, it did not exercise its right to the gift. Phew, another legal bullet dodged.
As you can see, it is very important to arrange for the annual drafting of these Crummey letters. Some banks' trust departments used to provide this service if they were the trustee of the trust. This was just a courtesy as they never would see or manage any of the life insurance proceeds.
The best bet is to have your attorney do the letters. I have one client whose law firm (under a written set of instructions) has the premium notice from the life insurance company sent to their firm, prepare and send the Crummey letters and then pay the premium. All the client has to do is open a letter each year from the law firm indicating a premium is due and send them a check. Other than that, they don't have to lift a finger. A nice service.
If you have an estate that will be subject to estate taxes and your advisors suggest a life insurance policy to pay the tax at a discount, make sure you evaluate the use of an Irrevocable Life Insurance Trust.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate, go to http://theestatepreservationadvisor.com/rd/subscribe.htm
Irrevocable Life Insurance Trusts (ILITs) are planning tools used to keep life insurance proceeds outside of the taxable estate.
For example, if a married couple has an estate of 6 million, they can pass 4 million to the next generation with no tax if they set up the proper trust arrangement to take advantage of the maximum lifetime unified credits. That leaves 2 million still subject to tax under the current law.
The logical thing to do is to purchase a survivorship life insurance policy for the projected tax. However, a policy purchased in the manner most people are familiar with, the problem is not solved; it is compounded.
If the couple has any "incidences of ownership" in the policy, it will be included in the estate. The purchase of a one million dollar policy increases the estate to 7 million. Four million passes tax-free, but now the taxable estate is 3 million. This increases the tax by some $225,000.
Enter the Irrevocable Life Insurance Trust.
Attorneys draft Irrevocable Life Insurance Trusts. The trust will apply for its own Federal Tax ID number. The trust will then apply for the survivorship life insurance policy. It will be the applicant, owner and beneficiary of the policy. Typical wording is "The John and Mary Smith Irrevocable Life Insurance Trust dated April 5, 2007, JPMorgan Chase Bank, trustee."
In this example, since neither John nor Mary has any "incidence of ownership" in the policy, it will not be part of their taxable estate.
The Owner and Beneficiary
As opposed to using an ILIT, I have worked with a few cases where the only child or children are the owner and beneficiary. This may work. However, each year the parents gift the money to pay the premium, there is no assurance that the money will be used to pay the premium. Furthermore, the children, as owners, have access to the cash values. An ILIT has much more assurance.
I have seen the trustee be a child, the couple's attorney, accountant or a long-time family friend. All of these will work, but an un-biased third party, such as a bank, is much better. If an individual is the trustee, name a bank as the successor trustee. Banks don't die.
The Crummey Letter
Typically, the life insurance premiums are paid by the parents in the form of annual gifts to the Irrevocable Life Insurance Trust. Currently (2007) a person can give up to $12,000 each year to as many people as they want without paying gift tax or having the amount subtracted from their lifetime exclusion. However, these gifts must be "present interest" gifts, which mean the recipient must have immediate rights to the gift.
Gifts to an ILIT, for paying premiums on a life insurance policy owned by the ILIT, are not "present interest" gifts. A "Crummey" letter qualifies the gift as a "present interest" gift. The letter is not crummy or poorly written; the letter takes its name from a court case initiated in 1968 by Clifford Crummey, who was trying to do this very same thing: make annual gifts present interest gifts. Ultimately, the outcome of the case required the use of a letter, now known as the "Crummey" letter.
A letter is sent every year to each of the beneficiaries of the ILIT. It simply states that a gift has been made to the ILIT and they can withdraw it if they want within a certain timeframe, usually 30 or 60 days. If they don't exercise this right, the gift becomes a present interest gift.
Obviously, there is an "understanding" between the parents and children to ignore these letters, as it is a part of the overall estate plan. The annual gifts and the ensuing yearly Crummey letters do not have to go to children with a legal capacity, such as age 18. I have seen letters written to 4-month-old babies. In this case, even though the baby was not able to read the letter or understand the estate planning rationale behind it, it did not exercise its right to the gift. Phew, another legal bullet dodged.
As you can see, it is very important to arrange for the annual drafting of these Crummey letters. Some banks' trust departments used to provide this service if they were the trustee of the trust. This was just a courtesy as they never would see or manage any of the life insurance proceeds.
The best bet is to have your attorney do the letters. I have one client whose law firm (under a written set of instructions) has the premium notice from the life insurance company sent to their firm, prepare and send the Crummey letters and then pay the premium. All the client has to do is open a letter each year from the law firm indicating a premium is due and send them a check. Other than that, they don't have to lift a finger. A nice service.
If you have an estate that will be subject to estate taxes and your advisors suggest a life insurance policy to pay the tax at a discount, make sure you evaluate the use of an Irrevocable Life Insurance Trust.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate, go to http://theestatepreservationadvisor.com/rd/subscribe.htm
Discover Benefits of Travel Accident Insurance
Discover Benefits of Travel Accident Insurance
Nowadays people visit other county more often than early. You can buy a ticket and begin your travel to nice place in this world. But you should be sure to have some foundation for your tour. And this one will be travel accident insurance.
Any experienced traveler can tell you that travel is full of uncertainties... But it is not possible to sit at home afraid of calamities. Travel accident insurance is one way of mitigating the financial risk of such unforeseen events or calamities.
Man cannot stop traveling because of the unforeseen events. All these unforeseen events can be reduced by getting a good travel accident insurance policy. Travel insurance is most indispensable for the people who travel very frequently to different parts of world. The concept of travel accident insurance is very simple. The insured pays a premium; the company in turn pays any costs involved in case of accidents or other types of eventualities.
There are a variety of travel accident insurance policies available today on the internet or the market. It is easy to get confused with so many offers. However most travel accident insurance policies have certain basic benefits which are common. They usually provide coverage for:
Trip cancellation/interruptions. This can happen everywhere you trip. This due to a variety of reasons like terrorist activities or sudden illness, for instance.
Medical costs. Costs incurred for doctor visits, medicines, treatment, surgery etc and some policies even provide coverage for costs of medical evacuation to nearest medical facility.
Accidents. Accidents or calamities like earthquakes, tsunami, storms etc and the related costs. Some policies also provide vehicle accident costs. These are especially useful when going for a driving holiday to a foreign country. Most of your regular policies for auto insurance only provide insurance within the United States and do not provide for accidents out of the US.
Baggage Loss. Costs incurred for loss of baggage and valuable is also covered by most travel insurance policies. These are especially useful when going out for a shopping holiday for antiques, valuables, jewelry or electronics.
Whatever your main holiday concerns, travel accident insurance companies are sure to offer you comprehensive advice on what your greatest risks are, depending on your particular holiday location and the type of lifestyle and holiday pursuits you enjoy most. After all, if you can't swim and you're scared of heights, you're not likely to require anything more than the basic travel accident insurance package!
Kirill Karpovich makes easy for understanding travel insurance. To read more about travel accident insurance visit http://www.my-travel-accident-insurance.blogspot.com
Nowadays people visit other county more often than early. You can buy a ticket and begin your travel to nice place in this world. But you should be sure to have some foundation for your tour. And this one will be travel accident insurance.
Any experienced traveler can tell you that travel is full of uncertainties... But it is not possible to sit at home afraid of calamities. Travel accident insurance is one way of mitigating the financial risk of such unforeseen events or calamities.
Man cannot stop traveling because of the unforeseen events. All these unforeseen events can be reduced by getting a good travel accident insurance policy. Travel insurance is most indispensable for the people who travel very frequently to different parts of world. The concept of travel accident insurance is very simple. The insured pays a premium; the company in turn pays any costs involved in case of accidents or other types of eventualities.
There are a variety of travel accident insurance policies available today on the internet or the market. It is easy to get confused with so many offers. However most travel accident insurance policies have certain basic benefits which are common. They usually provide coverage for:
Trip cancellation/interruptions. This can happen everywhere you trip. This due to a variety of reasons like terrorist activities or sudden illness, for instance.
Medical costs. Costs incurred for doctor visits, medicines, treatment, surgery etc and some policies even provide coverage for costs of medical evacuation to nearest medical facility.
Accidents. Accidents or calamities like earthquakes, tsunami, storms etc and the related costs. Some policies also provide vehicle accident costs. These are especially useful when going for a driving holiday to a foreign country. Most of your regular policies for auto insurance only provide insurance within the United States and do not provide for accidents out of the US.
Baggage Loss. Costs incurred for loss of baggage and valuable is also covered by most travel insurance policies. These are especially useful when going out for a shopping holiday for antiques, valuables, jewelry or electronics.
Whatever your main holiday concerns, travel accident insurance companies are sure to offer you comprehensive advice on what your greatest risks are, depending on your particular holiday location and the type of lifestyle and holiday pursuits you enjoy most. After all, if you can't swim and you're scared of heights, you're not likely to require anything more than the basic travel accident insurance package!
Kirill Karpovich makes easy for understanding travel insurance. To read more about travel accident insurance visit http://www.my-travel-accident-insurance.blogspot.com
Car Insurance - California, Do You Have Auto Coverage?
Car Insurance - California, Do You Have Auto Coverage?
Trying to find an alternate route to work when nearly 280,000 other commuters are scrambling to find their way into the city can definitely increase the odds of getting involved in a fender-bender. San Francisco Bay area interstate travelers will be the first to tell you that you cannot predict accidents or catastrophes. Whether you are involved in a natural disaster, auto accident or other catastrophe, insurance plays an important role in securing your funds for the future. Californian or not, it?s always important to see what auto insurance coverage your state suggests or requires.
There?s a long stretch of road between Redding and San Diego, California ? which means many opportunities for unexpected auto accidents to occur. The Bay Bridge between Oakland and San Francisco, for example, is a hotbed of confusion and congestion that travelers are trying to navigate and conquer.
Between the excitement of summer and trying to secure your vacation plans, preparing for an auto disaster is probably the last thing on your mind. But the summer heat and unexpected bumps in the road can both wreak havoc on your auto and put you in jeopardy if you?re not prepared. If something happens while you?re driving down that long California interstate, are you covered? Let?s sift through your car insurance policy to consider your options:
What coverages are included in an auto insurance package?
When you purchase auto insurance, you usually have several options ? you can purchase medical, liability, property and under/uninsured motorist coverage.
Medical coverage in an auto insurance package will take care of treating injuries to those in the policyholder?s automobile. Medical coverage will be provided if the person is a passenger or hit as a pedestrian.
Liability is your financial responsibility to someone for damage you cause ? whether the damage is to another person or to someone?s property. When you purchase liability coverage, the insurance company agrees to defend you in court and/or reimburse the other party for damages you cause.
California state laws require motorists to purchase the following liability insurance amounts.
$15,000 - bodily injury liability for one person injured in an accident
$30,000 ? bodily injury liability for all injuries in one accident
$5,000 ? property damage liability for one accident
Covering property damage includes comprehensive and collision insurance.
Comprehensive coverage insures accidental damage to the auto including fire, wind, sleet, theft, vandalism and similar damages.
Collision coverage reimburses for damage caused by colliding with another object, regardless of who or what is at fault.
What happens if the person that hits you is uninsured or does not have proper coverage to take care of your entire loss? Purchasing uninsured and/or underinsured motorist coverage will cover both of those situations.
If you have not glanced through your auto insurance policy in awhile, it?s time to consider reviewing it. The warm summer weather means your air conditioning will be running longer and your engine will be working harder. It?s important to take time right now and make sure you will be covered if you find yourself stuck on that long stretch of California road between Redding and San Diego.
*Please note that this article is not a professional consultation. This article is for general information only. Always seek specific information from a licensed insurance professional.*
Publishing Guidelines: This article may be published with permission by sending a request to krista@hometownquotes.com.
HometownQuotes, a Franklin, Tennessee company, provides a quick and easy way for consumers to compare multiple insurance quotes. To learn more, visit http://www.hometownquotes.com.
Trying to find an alternate route to work when nearly 280,000 other commuters are scrambling to find their way into the city can definitely increase the odds of getting involved in a fender-bender. San Francisco Bay area interstate travelers will be the first to tell you that you cannot predict accidents or catastrophes. Whether you are involved in a natural disaster, auto accident or other catastrophe, insurance plays an important role in securing your funds for the future. Californian or not, it?s always important to see what auto insurance coverage your state suggests or requires.
There?s a long stretch of road between Redding and San Diego, California ? which means many opportunities for unexpected auto accidents to occur. The Bay Bridge between Oakland and San Francisco, for example, is a hotbed of confusion and congestion that travelers are trying to navigate and conquer.
Between the excitement of summer and trying to secure your vacation plans, preparing for an auto disaster is probably the last thing on your mind. But the summer heat and unexpected bumps in the road can both wreak havoc on your auto and put you in jeopardy if you?re not prepared. If something happens while you?re driving down that long California interstate, are you covered? Let?s sift through your car insurance policy to consider your options:
What coverages are included in an auto insurance package?
When you purchase auto insurance, you usually have several options ? you can purchase medical, liability, property and under/uninsured motorist coverage.
Medical coverage in an auto insurance package will take care of treating injuries to those in the policyholder?s automobile. Medical coverage will be provided if the person is a passenger or hit as a pedestrian.
Liability is your financial responsibility to someone for damage you cause ? whether the damage is to another person or to someone?s property. When you purchase liability coverage, the insurance company agrees to defend you in court and/or reimburse the other party for damages you cause.
California state laws require motorists to purchase the following liability insurance amounts.
$15,000 - bodily injury liability for one person injured in an accident
$30,000 ? bodily injury liability for all injuries in one accident
$5,000 ? property damage liability for one accident
Covering property damage includes comprehensive and collision insurance.
Comprehensive coverage insures accidental damage to the auto including fire, wind, sleet, theft, vandalism and similar damages.
Collision coverage reimburses for damage caused by colliding with another object, regardless of who or what is at fault.
What happens if the person that hits you is uninsured or does not have proper coverage to take care of your entire loss? Purchasing uninsured and/or underinsured motorist coverage will cover both of those situations.
If you have not glanced through your auto insurance policy in awhile, it?s time to consider reviewing it. The warm summer weather means your air conditioning will be running longer and your engine will be working harder. It?s important to take time right now and make sure you will be covered if you find yourself stuck on that long stretch of California road between Redding and San Diego.
*Please note that this article is not a professional consultation. This article is for general information only. Always seek specific information from a licensed insurance professional.*
Publishing Guidelines: This article may be published with permission by sending a request to krista@hometownquotes.com.
HometownQuotes, a Franklin, Tennessee company, provides a quick and easy way for consumers to compare multiple insurance quotes. To learn more, visit http://www.hometownquotes.com.
Why an Individual Disability Insurance Policy Is Better Than Group LTD
Why an Individual Disability Insurance Policy Is Better Than Group LTD
Millions of people are insured by group long term disability plans. However, there are drawbacks to this coverage and situations where the policies will not pay. Unfortunately, many group plans do not pay for the type of disability that is most likely to occur. Theoretically, you are covered. But are you?
Let's contrast some of the more important contract provisions in a group LTD plan and an individual policy. You can come to your own conclusion.
Can the Coverage Be Cancelled?
Group LTD plans can be cancelled in two ways. First, the insurance company can cancel the plan if their claim experience is bad. Second, your employer could decide to terminate the plan at any time. If a company can downsize, it certainly can curtail benefits.
When you buy an individual disability insurance policy, the insurance company can never cancel the policy. You alone decide when you want to coverage to stop.
Can Premiums Be Increased?
If the insurer sees an increase in claims, it will raise the premium on a group LTD plan. Individual policy premiums are frozen for the duration.
Portability
What if you change employers? You cannot take your group plan with you. By contrast, your individual disability income plan is completely portable since it is not tied to any company employer.
Today, the average person will change jobs 7 times during their career. There is no assurance that each employer will offer a long term disability plan.
Taxation
Group long term disability benefits are taxable just like income. Individual policy benefits are 100% tax-free.
Offsets
Group LTD benefits are reduced by the amount of benefits received from Social Security, Workers Compensation, state cash sickness program, etc. Individual policies have no offsets.
Own Occupation
Individual policies have the ability to protect the individual in his or her "own occupation." Typical wording for the definition of disability for group LTD, as it pertains to occupation, goes something like this: "For the first two years, the inability to perform each and every duty of your occupation; after two years, the inability to engage in any gainful occupation."
This means you are covered in your occupation for two years. After that, if you can sell pencils on the street, the insurance company will not pay.
Certain occupations can be covered forever by individual policies. For example, if a urologist becomes disabled to the extent he or she cannot practice the specialty of urology, but could teach urology at a medical school, the individual policy would continue to pay the disability benefits. Moreover, the doctor would receive both the individual policy disability benefits and the medical school teaching salary.
Presumptive Disability
Disabilities that are "presumptive" are those where the insurance company will pay the full benefit even if the person is fully employed. Examples are the loss of use of two limbs, loss of sight, hearing or speech. A person who is in a wheel chair because they lost the use of their legs in a car accident is a typical example. This is a benefit provided by individual policies, but not by group LTD plans.
Partial Disability
This is the most important distinction because over 70% of the claims filed at insurance company home offices are for partial disability. The person is not completely unable to work. Their disability may only allow them to work a certain number of hours per day and their salary is adjusted downward accordingly.
An individual plan pays a percentage of the total benefit that represents the percentage of income lost. For example, if a person making $5,000 a month with a $3,000 a month individual policy benefit loses 60% of their income due to a disability, the policy would pay 60% of $3,000 or $1,800. Most group plans do not pay for a partial disability.
Conclusion
You have seen that group long term disability income plans can be cancelled, premiums waived and lack portability. Benefits are taxable and are offset by other plans. They posses no ability to protect an occupation and, most important, most do not pay for the type of claim most likely to occur: partial disability.
Individual disability insurance plans do not have these limitations. They cost more, but when it comes to disability coverage, you get what you pay for. If you get in an accident or develop a sickness that inhibits your ability to put food on the table, your thoughts are not focused on what the premium is for your disability income insurance coverage. You simply want to know when your disability check will arrive in the mail.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate and to claim the free video, "How to Sell Your Life Insurance Policy for More than the Cash Value", go to http://theestatepreservationadvisor.com/rd/subscribe.htm
Millions of people are insured by group long term disability plans. However, there are drawbacks to this coverage and situations where the policies will not pay. Unfortunately, many group plans do not pay for the type of disability that is most likely to occur. Theoretically, you are covered. But are you?
Let's contrast some of the more important contract provisions in a group LTD plan and an individual policy. You can come to your own conclusion.
Can the Coverage Be Cancelled?
Group LTD plans can be cancelled in two ways. First, the insurance company can cancel the plan if their claim experience is bad. Second, your employer could decide to terminate the plan at any time. If a company can downsize, it certainly can curtail benefits.
When you buy an individual disability insurance policy, the insurance company can never cancel the policy. You alone decide when you want to coverage to stop.
Can Premiums Be Increased?
If the insurer sees an increase in claims, it will raise the premium on a group LTD plan. Individual policy premiums are frozen for the duration.
Portability
What if you change employers? You cannot take your group plan with you. By contrast, your individual disability income plan is completely portable since it is not tied to any company employer.
Today, the average person will change jobs 7 times during their career. There is no assurance that each employer will offer a long term disability plan.
Taxation
Group long term disability benefits are taxable just like income. Individual policy benefits are 100% tax-free.
Offsets
Group LTD benefits are reduced by the amount of benefits received from Social Security, Workers Compensation, state cash sickness program, etc. Individual policies have no offsets.
Own Occupation
Individual policies have the ability to protect the individual in his or her "own occupation." Typical wording for the definition of disability for group LTD, as it pertains to occupation, goes something like this: "For the first two years, the inability to perform each and every duty of your occupation; after two years, the inability to engage in any gainful occupation."
This means you are covered in your occupation for two years. After that, if you can sell pencils on the street, the insurance company will not pay.
Certain occupations can be covered forever by individual policies. For example, if a urologist becomes disabled to the extent he or she cannot practice the specialty of urology, but could teach urology at a medical school, the individual policy would continue to pay the disability benefits. Moreover, the doctor would receive both the individual policy disability benefits and the medical school teaching salary.
Presumptive Disability
Disabilities that are "presumptive" are those where the insurance company will pay the full benefit even if the person is fully employed. Examples are the loss of use of two limbs, loss of sight, hearing or speech. A person who is in a wheel chair because they lost the use of their legs in a car accident is a typical example. This is a benefit provided by individual policies, but not by group LTD plans.
Partial Disability
This is the most important distinction because over 70% of the claims filed at insurance company home offices are for partial disability. The person is not completely unable to work. Their disability may only allow them to work a certain number of hours per day and their salary is adjusted downward accordingly.
An individual plan pays a percentage of the total benefit that represents the percentage of income lost. For example, if a person making $5,000 a month with a $3,000 a month individual policy benefit loses 60% of their income due to a disability, the policy would pay 60% of $3,000 or $1,800. Most group plans do not pay for a partial disability.
Conclusion
You have seen that group long term disability income plans can be cancelled, premiums waived and lack portability. Benefits are taxable and are offset by other plans. They posses no ability to protect an occupation and, most important, most do not pay for the type of claim most likely to occur: partial disability.
Individual disability insurance plans do not have these limitations. They cost more, but when it comes to disability coverage, you get what you pay for. If you get in an accident or develop a sickness that inhibits your ability to put food on the table, your thoughts are not focused on what the premium is for your disability income insurance coverage. You simply want to know when your disability check will arrive in the mail.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate and to claim the free video, "How to Sell Your Life Insurance Policy for More than the Cash Value", go to http://theestatepreservationadvisor.com/rd/subscribe.htm
Hot New Product: Long Term Care Annuities
Hot New Product: Long Term Care Annuities
In the next few minutes you will learn about a new insurance industry product that provides long term care insurance coverage if you ever need it, but requires no policy, premiums or health qualifications.
Why Seniors Don't Buy Long Term Care
1. In my experience, over half the people who shun long term care insurance do so because they feel they will never need it. It is difficult to visualize going to a nursing home. Statistically, half of these people will be right.
However, there are a number of scenarios where the person may need some kind of assistance but never see the front door of a nursing home. In fact, most people who need long term care can receive care without ever leaving their home.
When you stop and think about it, the decision not to buy long term care insurance is a decision to self insure. This can be costly and possibly devastating.
The average cost of a nursing home today is $80,000 per year and rising. At that rate, it doesn't take but a few years to grind through a modest estate. If both the husband and wife need nursing home care, the time to dissipate an estate is cut in half.
A person can spend 40 years in a career building a retirement nest egg. They spend another 40+ years conservatively managing their money while trying to keep up with inflation. If they need to go into a nursing home during the last five years of their life, it all could be gone quickly.
It doesn't have to be that way as you will soon see.
2. Many people think long term care insurance is too expensive. They may be right.
If a person waits too long to apply, they may have sticker shock. The rates are based on age.
However, long term care comes with a lot of bells and whistles. When you strip away some of the options that may be nice to have, but not essential, the premium is a lot lower.
If a person looks at a plan that covers home health care only, the premium is lower yet. This takes care of the 50% who never will need to go into a nursing home.
The only thing better is coverage without a premium, which I will get to in a minute.
3. Most people react to a problem only when the problem surfaces. If a person waits to apply for long term care insurance until they are experiencing health problems, any long term care insurance plan may be prohibitively expensive or altogether unavailable.
The Solution: The Long Term Care Insurance That is Not a Policy
The insurance industry is very competitive. This very competition engenders new thinking and creative policies. Enter "Long Term Care Annuities."
There are only a few companies offering this product and the structure differs from company to company. To give you a general overview of the concept and mechanics, I am going to describe the main aspects of one carrier's contract. Check with your financial planner for all the options.
The underlying base of an "LTC annuity" is an annuity. Nothing new here; annuities have been around for a hundred years. They are safe, the funds accrue at a competitive interest rate, and the account grows tax-deferred.
To form an LTC annuity, the insurance company has built in a "long term care option." It is not a rider. There is no premium. It is simply an option you elect if long term care is ever needed. Sweet.
To qualify, a person only needs to lose two of six ADLs (activities of daily living). ADLs are insurance companies' method of determining the qualification for levels of care. They are eating, bathing, dressing, toileting, transferring (walking) and continence.
The person doesn't have to be in a nursing home. They simply need to have demonstrated the inability to perform two of the six ADLs to qualify to put the long term care option in their annuity in action.
An Example
If a male, age 60, places $200,000 into an LTC annuity, assuming a conservative interest rate, the policy would grow to $300,000 in ten years. If the $300,000 were converted into a life income, the person would receive $2,200 per month for the balance of their life. An 8.8% return. Not too bad, considering it is guaranteed no matter what.
If this person needs long term care at age 70 by virtue of losing two of six ADLs and elected the long term care option, the life income would jump to $4,500 a month.
Conclusion
These new products, long term care annuities, provide the option to receive long term care benefits only if they are needed. There is no separate long term care insurance policy, no premiums and generally little or no underwriting.
Now there are no excuses. Those who feel they will never need long term care will simply never exercise their LTC option. Those who find long term care too expensive have an alternative with no premiums. Moreover, those who have health issues can obtain long term care benefits, as underwriting is simplified or non-existent.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate and to claim the free video, "How to Sell Your Life Insurance Policy for More than the Cash Value", go to http://theestatepreservationadvisor.com/rd/subscribe.htm
In the next few minutes you will learn about a new insurance industry product that provides long term care insurance coverage if you ever need it, but requires no policy, premiums or health qualifications.
Why Seniors Don't Buy Long Term Care
1. In my experience, over half the people who shun long term care insurance do so because they feel they will never need it. It is difficult to visualize going to a nursing home. Statistically, half of these people will be right.
However, there are a number of scenarios where the person may need some kind of assistance but never see the front door of a nursing home. In fact, most people who need long term care can receive care without ever leaving their home.
When you stop and think about it, the decision not to buy long term care insurance is a decision to self insure. This can be costly and possibly devastating.
The average cost of a nursing home today is $80,000 per year and rising. At that rate, it doesn't take but a few years to grind through a modest estate. If both the husband and wife need nursing home care, the time to dissipate an estate is cut in half.
A person can spend 40 years in a career building a retirement nest egg. They spend another 40+ years conservatively managing their money while trying to keep up with inflation. If they need to go into a nursing home during the last five years of their life, it all could be gone quickly.
It doesn't have to be that way as you will soon see.
2. Many people think long term care insurance is too expensive. They may be right.
If a person waits too long to apply, they may have sticker shock. The rates are based on age.
However, long term care comes with a lot of bells and whistles. When you strip away some of the options that may be nice to have, but not essential, the premium is a lot lower.
If a person looks at a plan that covers home health care only, the premium is lower yet. This takes care of the 50% who never will need to go into a nursing home.
The only thing better is coverage without a premium, which I will get to in a minute.
3. Most people react to a problem only when the problem surfaces. If a person waits to apply for long term care insurance until they are experiencing health problems, any long term care insurance plan may be prohibitively expensive or altogether unavailable.
The Solution: The Long Term Care Insurance That is Not a Policy
The insurance industry is very competitive. This very competition engenders new thinking and creative policies. Enter "Long Term Care Annuities."
There are only a few companies offering this product and the structure differs from company to company. To give you a general overview of the concept and mechanics, I am going to describe the main aspects of one carrier's contract. Check with your financial planner for all the options.
The underlying base of an "LTC annuity" is an annuity. Nothing new here; annuities have been around for a hundred years. They are safe, the funds accrue at a competitive interest rate, and the account grows tax-deferred.
To form an LTC annuity, the insurance company has built in a "long term care option." It is not a rider. There is no premium. It is simply an option you elect if long term care is ever needed. Sweet.
To qualify, a person only needs to lose two of six ADLs (activities of daily living). ADLs are insurance companies' method of determining the qualification for levels of care. They are eating, bathing, dressing, toileting, transferring (walking) and continence.
The person doesn't have to be in a nursing home. They simply need to have demonstrated the inability to perform two of the six ADLs to qualify to put the long term care option in their annuity in action.
An Example
If a male, age 60, places $200,000 into an LTC annuity, assuming a conservative interest rate, the policy would grow to $300,000 in ten years. If the $300,000 were converted into a life income, the person would receive $2,200 per month for the balance of their life. An 8.8% return. Not too bad, considering it is guaranteed no matter what.
If this person needs long term care at age 70 by virtue of losing two of six ADLs and elected the long term care option, the life income would jump to $4,500 a month.
Conclusion
These new products, long term care annuities, provide the option to receive long term care benefits only if they are needed. There is no separate long term care insurance policy, no premiums and generally little or no underwriting.
Now there are no excuses. Those who feel they will never need long term care will simply never exercise their LTC option. Those who find long term care too expensive have an alternative with no premiums. Moreover, those who have health issues can obtain long term care benefits, as underwriting is simplified or non-existent.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate and to claim the free video, "How to Sell Your Life Insurance Policy for More than the Cash Value", go to http://theestatepreservationadvisor.com/rd/subscribe.htm
Hurricane Season 2007: Tips to Keep Your Home Insured Against Flood Damage
Hurricane Season 2007: Tips to Keep Your Home Insured Against Flood Damage
By Krista M. Farmer
The lazy days of summer are upon us. So pass the sweetened sun-brewed iced tea with the mini cocktail umbrella and light up a few tiki torches. But don?t doze off in that hammock just yet. Along with summer comes the increased chance of severe summer weather. As hurricane season swiftly approaches, homeowners are encouraged to prepare for worst case scenarios.
Eight days shy of hurricane season, time is quickly ticking for consumers to take action against financial ruin in the event of catastrophe. With an increased amount of hurricanes anticipated this season, the National Oceanic & Atmospheric Administration urges folks to prepare for the worst. The NOAA reports that approximately 13-17 storms will be named and seven to 10 will likely become hurricanes.
So what do you need to do to prepare? Don?t run to the home improvement store just yet. Plywood and duct tape won?t prevent or fix damage from a hurricane. Because hurricanes bring torrential rains and cause extensive flood damage, you need to be sure you?ve purchased flood insurance.
?But doesn?t my homeowner?s insurance take care of flooding? I thought homeowner?s insurance was supposed to cover things like this??
While it seems logical that homeowner?s insurance would cover flooding, it does not. With FEMA reporting flooding as America?s #1 natural disaster, it makes sense to look into purchasing flood insurance.
You have several options when it comes to purchasing flood coverage. The National Flood Insurance Program offers two federal programs. The main stipulation for these programs is that your community must enroll and be an NFIP participant. This flood insurance can be purchased directly from the NFIP or from some insurance agents.
?But do I have to buy flood insurance when there is a national disaster program that will assist me??
Because both programs provide coverage for flood damage, you don?t HAVE to purchase flood insurance. Like many government programs, however, national disaster assistance requires much more paperwork and waiting than flood insurance does.
In addition, flood insurance does not have to be re-paid. Most disaster assistance comes in the form of a loan, so it has to be re-paid over a set amount of time. Disaster assistance is only guaranteed when the president puts it into effect ? and even then you have to wait for reimbursement.
In short, keep in mind that FLOOD INSURANCE IS NOT INCLUDED in your homeowner?s insurance policy. If you need to apply for flood insurance, start preparing ASAP. Unless you just built your house, there is a 30-day waiting period between when you apply for the insurance and the date it goes into effect. With a little more than a week before hurricane season and 30 days for your policy to take effect, don?t let time slip away with the lazy days of summer unless you?re insured for flood damage.
Publishing Guidelines: This article may be published with permission by sending a request to krista@hometownquotes.com.
HometownQuotes provides a quick and easy way for consumers to compare multiple insurance quotes. To learn more, visit http://www.hometownquotes.com.
By Krista M. Farmer
The lazy days of summer are upon us. So pass the sweetened sun-brewed iced tea with the mini cocktail umbrella and light up a few tiki torches. But don?t doze off in that hammock just yet. Along with summer comes the increased chance of severe summer weather. As hurricane season swiftly approaches, homeowners are encouraged to prepare for worst case scenarios.
Eight days shy of hurricane season, time is quickly ticking for consumers to take action against financial ruin in the event of catastrophe. With an increased amount of hurricanes anticipated this season, the National Oceanic & Atmospheric Administration urges folks to prepare for the worst. The NOAA reports that approximately 13-17 storms will be named and seven to 10 will likely become hurricanes.
So what do you need to do to prepare? Don?t run to the home improvement store just yet. Plywood and duct tape won?t prevent or fix damage from a hurricane. Because hurricanes bring torrential rains and cause extensive flood damage, you need to be sure you?ve purchased flood insurance.
?But doesn?t my homeowner?s insurance take care of flooding? I thought homeowner?s insurance was supposed to cover things like this??
While it seems logical that homeowner?s insurance would cover flooding, it does not. With FEMA reporting flooding as America?s #1 natural disaster, it makes sense to look into purchasing flood insurance.
You have several options when it comes to purchasing flood coverage. The National Flood Insurance Program offers two federal programs. The main stipulation for these programs is that your community must enroll and be an NFIP participant. This flood insurance can be purchased directly from the NFIP or from some insurance agents.
?But do I have to buy flood insurance when there is a national disaster program that will assist me??
Because both programs provide coverage for flood damage, you don?t HAVE to purchase flood insurance. Like many government programs, however, national disaster assistance requires much more paperwork and waiting than flood insurance does.
In addition, flood insurance does not have to be re-paid. Most disaster assistance comes in the form of a loan, so it has to be re-paid over a set amount of time. Disaster assistance is only guaranteed when the president puts it into effect ? and even then you have to wait for reimbursement.
In short, keep in mind that FLOOD INSURANCE IS NOT INCLUDED in your homeowner?s insurance policy. If you need to apply for flood insurance, start preparing ASAP. Unless you just built your house, there is a 30-day waiting period between when you apply for the insurance and the date it goes into effect. With a little more than a week before hurricane season and 30 days for your policy to take effect, don?t let time slip away with the lazy days of summer unless you?re insured for flood damage.
Publishing Guidelines: This article may be published with permission by sending a request to krista@hometownquotes.com.
HometownQuotes provides a quick and easy way for consumers to compare multiple insurance quotes. To learn more, visit http://www.hometownquotes.com.
How to Sell Your Life Insurance Policy for More Than the Cash Value
How to Sell Your Life Insurance Policy for More Than the Cash Value
Most people do not know they can sell an insurance policy. There are companies that will pay you more than the cash value. Even term insurance, which has no cash value, is a candidate for purchase.
This transaction is called a life settlement. Life settlements have been on the scene since 1995; they are not new. While the purchase is facilitated by an insurance company, the buyers typically are pension and institutional funds which hold the policies in their investment portfolios.
Here are three common reasons why a person would sell their insurance policy?
1. The policy has outlived its usefulness.
78% of all insurance is purchased for family protection. Families with children insure the breadwinner(s) until they have had the time to build up an estate or an adequate 401(k) plan to provide for the family, pay off a mortgage and educate the children. Most people have been there and done that.
However, later in life these needs may have disappeared. The house is paid for, the kids have been to college and your 401(k) plan has a balance ten times greater than your life insurance face value.
Rather than continue to pay premiums, or surrender it for its cash value, you can sell it for more than the cash value. Buy a boat, take an extended vacation or go down to the dealership and plunk down cash for that car you have always wanted.
2. The policy has a large loan.
There are three common ways a policy can acquire a large loan.
First, at some point you simply took a maximum loan against your policy. It could have been to satisfy an emergency, take advantage of an investment opportunity?any number of things. But the loan was never repaid.
Second, you could have taken a modest loan years ago and never paid anything toward the principal. Every year, however, you received a bill for the interest due. If you are like many people, this goes in the round file and you never pay the interest. What happens is that the interest gets added to the loan. So what is originally simple interest turns into compound interest.
Over time, the loan and the unpaid interest can consume the entire cash value. That's when you get the letter from the insurance company telling you that to keep the policy in force, you need to come up with some astronomical amount of money.
But that's not the worst of it. When you call your agent to see what your other options might be, he or she informs you that if the policy lapses, there will be a gain (cash value less premiums paid) that the insurance company is required to report to the IRS. Worse yet is the fact that there is no money in the insurance policy to pay the tax (remember it lapsed for lack of premium payment and/or lack of any remaining values). So you are going to have to come up with the tax from someplace else. I don't think you would consider getting this information one of your better days.
3. You own Universal Life and interest rates have declined.
Getting this news is another bad day at the mail box. This time the letter from the insurance company says that in order to keep the policy in force, you have to come up with more than you could get for your first born.
How this occurs goes back to when you bought your policy. One of the major factors in determining the premium for a given face amount of Universal Life is the interest rate assumption made in the original proposal. Remember the double-digit interest rates? You could have bought your policy during this time frame. Most insurance agents would have suggested using a lower interest rate assumption to be conservative. However, interest rates have declined to even below these play-it-safe assumptions.
The sale of your insurance policy averts all three of these problems. In the first case, you don't have to pay any more premiums for coverage that is no longer needed. In the second, the problem you have with the loan disappears and is replaced by cash. And in the third, the probable lapse of the policy due to the fact that the premium to maintain the coverage is off the charts is offset by the cash received via a sale.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate and to claim the free video, "How to Sell Your Life Insurance Policy for More than the Cash Value", go to http://theestatepreservationadvisor.com/rd/subscribe.htm
Most people do not know they can sell an insurance policy. There are companies that will pay you more than the cash value. Even term insurance, which has no cash value, is a candidate for purchase.
This transaction is called a life settlement. Life settlements have been on the scene since 1995; they are not new. While the purchase is facilitated by an insurance company, the buyers typically are pension and institutional funds which hold the policies in their investment portfolios.
Here are three common reasons why a person would sell their insurance policy?
1. The policy has outlived its usefulness.
78% of all insurance is purchased for family protection. Families with children insure the breadwinner(s) until they have had the time to build up an estate or an adequate 401(k) plan to provide for the family, pay off a mortgage and educate the children. Most people have been there and done that.
However, later in life these needs may have disappeared. The house is paid for, the kids have been to college and your 401(k) plan has a balance ten times greater than your life insurance face value.
Rather than continue to pay premiums, or surrender it for its cash value, you can sell it for more than the cash value. Buy a boat, take an extended vacation or go down to the dealership and plunk down cash for that car you have always wanted.
2. The policy has a large loan.
There are three common ways a policy can acquire a large loan.
First, at some point you simply took a maximum loan against your policy. It could have been to satisfy an emergency, take advantage of an investment opportunity?any number of things. But the loan was never repaid.
Second, you could have taken a modest loan years ago and never paid anything toward the principal. Every year, however, you received a bill for the interest due. If you are like many people, this goes in the round file and you never pay the interest. What happens is that the interest gets added to the loan. So what is originally simple interest turns into compound interest.
Over time, the loan and the unpaid interest can consume the entire cash value. That's when you get the letter from the insurance company telling you that to keep the policy in force, you need to come up with some astronomical amount of money.
But that's not the worst of it. When you call your agent to see what your other options might be, he or she informs you that if the policy lapses, there will be a gain (cash value less premiums paid) that the insurance company is required to report to the IRS. Worse yet is the fact that there is no money in the insurance policy to pay the tax (remember it lapsed for lack of premium payment and/or lack of any remaining values). So you are going to have to come up with the tax from someplace else. I don't think you would consider getting this information one of your better days.
3. You own Universal Life and interest rates have declined.
Getting this news is another bad day at the mail box. This time the letter from the insurance company says that in order to keep the policy in force, you have to come up with more than you could get for your first born.
How this occurs goes back to when you bought your policy. One of the major factors in determining the premium for a given face amount of Universal Life is the interest rate assumption made in the original proposal. Remember the double-digit interest rates? You could have bought your policy during this time frame. Most insurance agents would have suggested using a lower interest rate assumption to be conservative. However, interest rates have declined to even below these play-it-safe assumptions.
The sale of your insurance policy averts all three of these problems. In the first case, you don't have to pay any more premiums for coverage that is no longer needed. In the second, the problem you have with the loan disappears and is replaced by cash. And in the third, the probable lapse of the policy due to the fact that the premium to maintain the coverage is off the charts is offset by the cash received via a sale.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate and to claim the free video, "How to Sell Your Life Insurance Policy for More than the Cash Value", go to http://theestatepreservationadvisor.com/rd/subscribe.htm
How to Sell Your Life Insurance Policy for More Than the Cash Value
How to Sell Your Life Insurance Policy for More Than the Cash Value
Most people do not know they can sell an insurance policy. There are companies that will pay you more than the cash value. Even term insurance, which has no cash value, is a candidate for purchase.
This transaction is called a life settlement. Life settlements have been on the scene since 1995; they are not new. While the purchase is facilitated by an insurance company, the buyers typically are pension and institutional funds which hold the policies in their investment portfolios.
Here are three common reasons why a person would sell their insurance policy?
1. The policy has outlived its usefulness.
78% of all insurance is purchased for family protection. Families with children insure the breadwinner(s) until they have had the time to build up an estate or an adequate 401(k) plan to provide for the family, pay off a mortgage and educate the children. Most people have been there and done that.
However, later in life these needs may have disappeared. The house is paid for, the kids have been to college and your 401(k) plan has a balance ten times greater than your life insurance face value.
Rather than continue to pay premiums, or surrender it for its cash value, you can sell it for more than the cash value. Buy a boat, take an extended vacation or go down to the dealership and plunk down cash for that car you have always wanted.
2. The policy has a large loan.
There are three common ways a policy can acquire a large loan.
First, at some point you simply took a maximum loan against your policy. It could have been to satisfy an emergency, take advantage of an investment opportunity?any number of things. But the loan was never repaid.
Second, you could have taken a modest loan years ago and never paid anything toward the principal. Every year, however, you received a bill for the interest due. If you are like many people, this goes in the round file and you never pay the interest. What happens is that the interest gets added to the loan. So what is originally simple interest turns into compound interest.
Over time, the loan and the unpaid interest can consume the entire cash value. That's when you get the letter from the insurance company telling you that to keep the policy in force, you need to come up with some astronomical amount of money.
But that's not the worst of it. When you call your agent to see what your other options might be, he or she informs you that if the policy lapses, there will be a gain (cash value less premiums paid) that the insurance company is required to report to the IRS. Worse yet is the fact that there is no money in the insurance policy to pay the tax (remember it lapsed for lack of premium payment and/or lack of any remaining values). So you are going to have to come up with the tax from someplace else. I don't think you would consider getting this information one of your better days.
3. You own Universal Life and interest rates have declined.
Getting this news is another bad day at the mail box. This time the letter from the insurance company says that in order to keep the policy in force, you have to come up with more than you could get for your first born.
How this occurs goes back to when you bought your policy. One of the major factors in determining the premium for a given face amount of Universal Life is the interest rate assumption made in the original proposal. Remember the double-digit interest rates? You could have bought your policy during this time frame. Most insurance agents would have suggested using a lower interest rate assumption to be conservative. However, interest rates have declined to even below these play-it-safe assumptions.
The sale of your insurance policy averts all three of these problems. In the first case, you don't have to pay any more premiums for coverage that is no longer needed. In the second, the problem you have with the loan disappears and is replaced by cash. And in the third, the probable lapse of the policy due to the fact that the premium to maintain the coverage is off the charts is offset by the cash received via a sale.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate and to claim the free video, "How to Sell Your Life Insurance Policy for More than the Cash Value", go to http://theestatepreservationadvisor.com/rd/subscribe.htm
Most people do not know they can sell an insurance policy. There are companies that will pay you more than the cash value. Even term insurance, which has no cash value, is a candidate for purchase.
This transaction is called a life settlement. Life settlements have been on the scene since 1995; they are not new. While the purchase is facilitated by an insurance company, the buyers typically are pension and institutional funds which hold the policies in their investment portfolios.
Here are three common reasons why a person would sell their insurance policy?
1. The policy has outlived its usefulness.
78% of all insurance is purchased for family protection. Families with children insure the breadwinner(s) until they have had the time to build up an estate or an adequate 401(k) plan to provide for the family, pay off a mortgage and educate the children. Most people have been there and done that.
However, later in life these needs may have disappeared. The house is paid for, the kids have been to college and your 401(k) plan has a balance ten times greater than your life insurance face value.
Rather than continue to pay premiums, or surrender it for its cash value, you can sell it for more than the cash value. Buy a boat, take an extended vacation or go down to the dealership and plunk down cash for that car you have always wanted.
2. The policy has a large loan.
There are three common ways a policy can acquire a large loan.
First, at some point you simply took a maximum loan against your policy. It could have been to satisfy an emergency, take advantage of an investment opportunity?any number of things. But the loan was never repaid.
Second, you could have taken a modest loan years ago and never paid anything toward the principal. Every year, however, you received a bill for the interest due. If you are like many people, this goes in the round file and you never pay the interest. What happens is that the interest gets added to the loan. So what is originally simple interest turns into compound interest.
Over time, the loan and the unpaid interest can consume the entire cash value. That's when you get the letter from the insurance company telling you that to keep the policy in force, you need to come up with some astronomical amount of money.
But that's not the worst of it. When you call your agent to see what your other options might be, he or she informs you that if the policy lapses, there will be a gain (cash value less premiums paid) that the insurance company is required to report to the IRS. Worse yet is the fact that there is no money in the insurance policy to pay the tax (remember it lapsed for lack of premium payment and/or lack of any remaining values). So you are going to have to come up with the tax from someplace else. I don't think you would consider getting this information one of your better days.
3. You own Universal Life and interest rates have declined.
Getting this news is another bad day at the mail box. This time the letter from the insurance company says that in order to keep the policy in force, you have to come up with more than you could get for your first born.
How this occurs goes back to when you bought your policy. One of the major factors in determining the premium for a given face amount of Universal Life is the interest rate assumption made in the original proposal. Remember the double-digit interest rates? You could have bought your policy during this time frame. Most insurance agents would have suggested using a lower interest rate assumption to be conservative. However, interest rates have declined to even below these play-it-safe assumptions.
The sale of your insurance policy averts all three of these problems. In the first case, you don't have to pay any more premiums for coverage that is no longer needed. In the second, the problem you have with the loan disappears and is replaced by cash. And in the third, the probable lapse of the policy due to the fact that the premium to maintain the coverage is off the charts is offset by the cash received via a sale.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate and to claim the free video, "How to Sell Your Life Insurance Policy for More than the Cash Value", go to http://theestatepreservationadvisor.com/rd/subscribe.htm
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