One of the biggest reasons to buy life insurance is to provide money in case of death. If you're single and don't want to leave money to anyone, you may not need life insurance. But as you take on more responsibilities and your family grows, your need for life insurance increases. The proceeds from a life insurance policy can replace the income lost to your family upon your death. The life insurance death benefit can also pay off debts and expenses, provide money to a charity or organization, and cover final and estate expenses.
Life insurance is unique in that it can be an effective tool for both protection and accumulation. While it does provide a death benefit, some types of life insurance can also be used as a source of retirement income, funding for a child's education, or as a source of cash in an emergency.
There are many different types of life insurance so you should choose one that suits your circumstances now, and later, when these change, you can amend the policy to cover such changes. Like all other types of insurance, you get double benefits from life insurance: Financial and a Peace of Mind.
Buying life insurance is an easy way to protect your family. If you know what to look for, you can get the coverage you need at a price you can afford.
Jumat, 13 November 2009
Why Buy Life Insurance ?
Jumat, 30 Oktober 2009
Insurance - A Good Thing to Have
It's easy to see why you would insure something of value. Insurance protects you against potential loss. So, why not insure everything? Hmmm ...
If you insure your car, and nothing bad happens to it ... you've still lost the money you paid for the insurance. If you get in an accident and your car is totaled but it wasn't insured ... you lose the total value of the car unless you can get someone else's insurance to pay for the accident. I'm just talking about the "comprehensive" insurance that pays for damage to your car. Liability insurance for automobiles is different and is required by law. The idea for liability insurance is you are protecting other people from loss you might cause them.
Back to automobile comprehensive insurance, though - you want to pay a small amount of money that you can afford - this is a known payment that you can plan on paying without any surprises. What you get for these insurance premium payments is protection from an unexpected sudden financial crisis that would occur if you wreck your car and it becomes useless. This actually works for anything of value that you want to protect - cars, houses, boats, snowmobiles, etc. It also works for life insurance protecting your family from financial problems if the main bread-winner were to die; or health insurance protecting you from unexpected sudden financial crisis when you or someone in your family becomes seriously ill or hospitalized.
Before the insurance company pays you any money, certain things need to happen that cause you a loss. Then you can file a claim to the insurance company that describes the loss and explains how it was covered by the insurance policy. Once the claim is accepted, the insurance company will issue payment to help you financially. Insurance companies get the money for those payments from people who are paying for insurance but aren't making claims on it yet. And if you're paying for insurance and you aren't filing a claim for damages, your payment is going to help the person who needs to file a claim.
The insurance company sets the amount of your payments according to the risk you have for making a claim and the law of averages. Using the car example, if you are a pretty good driver, you might get classified with a group of clients who are expected to have a major accident only once every eight years. This would be your risk category. On average every driver in this category is expected to make premium payments for eight years between major claims. Usually that works out pretty well for everybody.
I've heard people complain about having their premiums increased because they filed a claim against the insurance company. That can happen. If you had car insurance in a risk category expecting the car to be in a major accident every eight years, and the insurance company allowed a high-risk driver into your risk category, how would you like that? Maybe that high-risk driver could expect a major accident every four years. If that driver were allowed into your risk category, you would be paying for their frequent claims; and they would be paying for your infrequent claims. That wouldn't be fair.
To protect clients against higher-risk clients like this the insurance company will keep track of several factors they think might change the frequency or size of damage claims (risk factors). This is done to protect the clients who are not likely to file frequent, or large, damage claims. For car insurance, having an accident might signal a change in your driving capability. So having an accident might increase your premium for a couple of years just in case you are turning into a higher-risk driver. The insurance companies are cautious.
There are other factors that signal increased risk to the insurance company. These factors can also cause you to be placed in a category that requires a higher premium. For auto insurance, you don't need to file a claim to have your premium payment increased. All you need to do is get a ticket for a moving violation. If your credit score drops, it might signal the insurance company that you aren't paying attention to things low-risk customers would. They can interpret this to mean that you aren't attentive in your driving skills, or you might park you vehicle in a place where it could be damaged. Also, if you buy a more expensive car you are likely to have larger claims. All these things can indicate the insurance company might lose money on you if they don't adjust your risk classification.
This change in risk classification also works in your favor. Insurance claim records indicate that drivers under the age of 25 are more likely to be involved in accidents than middle-aged drivers. So, when you have your 25th birthday, your car insurance premiums are reduced. If you go three years without a moving traffic violation you will be seen as improving your risk classification and your rates will drop. The insurance company also sees less risk if you buy a less expensive car (with cheaper repair costs), or start parking in a private garage instead of on the street.
The calculation of risk is also considered for house insurance. That is why you can get reduced insurance premiums for having a security system, deadbolts, and fire extinguishers. For houses, they consider the neighborhood you live in and the types of claims the insurance industry has received from your neighbors. A neighborhood with a lot of vandalism can increase the cost of your insurance.
Similar calculations are used for analyzing risk factors for life insurance and health insurance. The claims history on smokers, people who are overweight, and the elderly shows them to be a higher risk for the insurance company. People who exercise regularly, have regular preventive health care, and eat a healthy diet are seen as lower risk than other people their own age who do not follow those practices.
You buy insurance for the times you will be filing a damage claim. Until that time comes, insurance will cost you a small amount of money. But when the time comes to file a claim, insurance is a good thing to have and you will be glad you have been paying for it.
James W. Stone
Copyright 2009, James W. Stone, all rights reserved worldwide
James W. Stone has been involved in new product development and marketing for most of his working career. His current interests focus on the psychology and sociology that influence our daily decisions when we spend money.
Read more of Jim's articles at http://www.jameswstone.com
Article Source: http://EzineArticles.com/?expert=James_W._Stone
Rabu, 22 Juli 2009
Using Life Insurance Wisely
Every family should have a life insurance policy on at least one of the financial providers. A policy should always be in place in case one of the primary breadwinners passes away so that the family will be able to support itself if no other source of income is available after the breadwinner dies.
Estate or “Death” taxes can be as high as 55% when the insurance policyholder dies. Many families cannot afford to pay these steep taxes and still maintain the lifestyle that they are accustomed to. Therefore, we have compiled a few tips to help ensure that your family can maximize the benefits they receive from your life insurance policy - and avoid giving so much of it to the government.
First of all, you should know that a portion of your estate will be given to your beneficiaries with a tax exclusion. The number of dollars covered by the exclusion each year varies, but here’s a brief overview: in 2004 and 2005, the exclusion was $1.5 million per person. From 2006 through 2008, the exclusion is $2 million, and, in 2009, the exclusion is $3.5 million. The estate tax is repealed for the year 2010, but the tax returns with an exclusion of $1 million in the year 2011. Now, that can get confusing!
Because the government can take so much of your estate for taxes, it’s important to shield as much as possible with the use of a variety of Trusts. One such Trust is the Irrevocable Life Insurance Trust, otherwise known as the ILIT.
When you establish an ILIT, you will name a trustee to manage that trust. Your trustee can be your financial advisor or a beneficiary. Your trustee will purchase a life insurance contract on your life. Upon your death, the policy’s death benefit will provide liquidity of the assets in your Trust.
With your ILIT, you can control how the estate is divided and spent. Having the ability to control your own estate, post-mortem, may prove to be especially helpful if you have young adults who are going to receive a sizeable sum of money. You can, for example, enumerate which funds will be spent for education, which for costs of living, and which for other activities. Thus, you can allocate portions of your estate for any activities you wish.
You can also transfer ownership of the life insurance policy you already own. However, there are complications that may arise from the transfer. You will want to consult a qualified attorney to ensure that you fully understand how the system works. For example, if you die within three (3) years of transferring ownership of your existing policy, the life insurance policy will be taxed as part of your estate.
With the right help, figuring out how to handle life insurance (and your estate in general) doesn’t have to be difficult or complicated. Consult a qualified attorney for more information on how to set up your ILIT or other Trusts so that your beneficiaries can receive the most benefit from your assets.
Thomas McNally is the staff writer at the National Directory of Estate Planning, Probate & Elder Law Attorneys. McNally stresses the importance of finding a qualified estate planning attorney to ensure that your estate passes to whom you want, when you want, and is carried out in the manner you've chosen.
Article Source: http://EzineArticles.com/?expert=Thomas_McNally
Kamis, 02 Juli 2009
Life Insurance - A Brief History
Life insurance, in one shape or another, has been around for centuries, and believe it or not, the first polices were crafted way back by the Chinese.
In the mid nineteenth century, life insurance polices emerged in the United States, slowly influencing Europe and South Africa towards the last quarter of the nineteen hundreds.
When life insurance first hit the scene, it was quite rare to know any family who had any form of life insurance. If you think people are skeptical now about life insurance, you should have seen them 100 years ago. But as people learned more about the benefits, life insurance slowly built up steam.
By the twentieth century, insurance had started to grow into a demand. People wanted to get coverage, however there weren't enough staff members to assist the demand. The offices were flooded and the insurance agents overwhelmed.
Insurance brokers became the future. They traveled to people's homes and discussed policies. They offered advice on what policy would work the best. Soon insurance brokers were regarded in the same class as doctors, lawyers, and post office workers.
The public loved the accessibility and friendliness of brokers. Insurance sales went through the roof. Customers and insurance companies alike loved what brokers were doing for their personal business.
An insurance broker would never pass up the opportunity to discuss life insurance with an interested person. They would highlight the advantages and obligations of each policy.
Brokers are very knowledgeable in the area of insurance. They have spent time studying and receiving formal training. They understand about everything you need to know about insurance. They provide objective advice on policies and which one suits you best.
Because of their vast knowledge, brokers often become a part of a family. The father or mother, whoever handles the insurance duties forms a close bond with the broker. They discuss personal issues and concerns and trust the broker to handle their insurance with care.
However, brokers have "broken down" in a small way. The internet is taking the insurance industry for good. It's definitely the way of the future. Getting quotes and receiving insights and tips is much easier online than it is with a broker. Unfortunately these friendly little men and women are no longer needed like they use to. A lot of brokers are realizing that, and jumping ship to the internet where they can provide their insights there.
Copyright (c) 2009 Graham McKenzie
Graham McKenzie is the content syndication coordinator at Lifeinsurance-Southafrica.co.za a leading Life Insurance information portal
Article Source: http://EzineArticles.com/?expert=Graham_McKenzie
Sabtu, 27 Juni 2009
Life Insurance With Critical-Illness Cover
When you get a life insurance quote, bear in mind that critical-illness cover is usually available at very little extra cost, and sometimes no cost at all. Critical-illness cover on top of your life insurance pays out a lump sum should you be diagnosed within a period of time with particular critical illnesses. When you get your life-insurance quote, note that critical-illness cover is usually available only with relevant life insurance cover.
If it pays out, you can use the lump sum to adapt your home if need be or get help with medical costs. If you are diagnosed with a critical illness these include cancer, coronary artery bypass surgery, heart attack, kidney failure and other serious conditions your payout under your policy will be tax-free.
You should not, however, confuse critical-illness cover with private insurance, which is used to pay for medical treatment in the private sector. Life insurance with critical illness cover is also different from income protection cover. This kicks in once you have been unable to work for a particular length of time, perhaps six months, and pays you a monthly sum.
When you get a life insurance quote and ask about critical illness, remember that there are many different serious illnesses and not every policy will cover the same illnesses, although all policies cover cancer, stroke and heart attack. Be careful to get a quote for the right life insurance with critical-illness cover for your needs. It would be unimaginable to take a life insurance policy with critical illness cover, and be left high and dry at a difficult time. To achieve this, it's always a good idea to speak to an independent advisor who has no axe to grind.
In 2003, new rules came in that changed the conditions under which you can claim on critical-illness policies. The ABI sets out rules that mean that all providers will not cover illnesses like non invasive skin cancer or tumours that have yet to invade the organ or tissue.
Conditions around heart attacks and the this type of insurance have also been tightened. For a claim to be successful, there must be evidence of chest pain, or changes registering on the ECG. More moderate conditions like angina are no longer covered by critical-illness insurance.
You should note that, as well as the insurer's core list of illnesses, they will have a secondary list that includes illnesses they believe are serious enough to pay out on. For instance, a minor heart operation may not be classed as a qualifying illness by every provider. HIV and AIDS is a common exclusion from this cover if it is a result of drug abuse. Not following the advice of doctors when recovering from critical illness can also invalidate your cover. Critical-illness cover is handy if you have family dependants. But, if you're single, it's arguably more vital than life insurance. it could repay your mortgage balance meaning you will have no mortgage payment to make.
Copyright (c) 2009 Mark Walpole
On life insurance with critical illness cover, we rebate at least half of the initial commission that the provider would have paid to us back into your policy, to lower your monthly premiums. Godirect.co.uk has some great advice on how you can buy life insurance with critical-illness cover. Visit the website to find full details of the protection options open to you and to get an online life insurance quote.
Article Source: http://EzineArticles.com/?expert=Mark_Walpole
Jumat, 26 Juni 2009
Buy Term Life Insurance Today
Term life insurance is a simple form of insurance that can provide peace of mind for you and your family. Term life insurance is simply insurance cover that lasts for a restricted time. If you're on a low budget and you buy term life insurance, you will get excellent temporary cover. Once it has run its course, you can buy it again, renew it or extend it, or you can leave it expired. Term life insurance will pay out if the you die, provided it's within term.
If you buy life insurance, it isn't a way of building up a cash lump sum. There's a level premium that's set depending on factors such as age, health, location or other factors the insurance company deems important. The younger you are the lower the risk the insurance provider sees you as.
Term life insurance is good for the insurance company. The number of claims is very low at around one in 100. This is beneficial to the insured as the premiums are kept low. If there happens to be a payout to dependents, it will usually be a very generous one.
This all means that buying term life cover is great on a coverage per premium basis, as there is such a slim chance of the insurer having to pay out.
With term life insurance, certain complications do arise. For instance, insurability is an important issue. You could buy a life policy covering just one year and be diagnosed with cancer within the term. However, you might not actually die until after the term life insurance has expired. This would make you unfortunately uninsured.
However, there is a feature on some term life insurance policies called guaranteed reinsurability that gets around the issue. This will let you renew your insurance without needing to prove your insurability.
Annual renewable term is another variant of term life insurance. You would pay for one year's cover, but be given a guarantee that your policy can carry on each year for an agreed period of between 10 and 30 years. The premium is greater for a years cover, however there is a higher chance of the policy paying out.
You must keep up with the payments on your life insurance policy once you have purchased it, though. Failure to do so could mean your dependents not being paid out if you die. For that reason, it's best to automate your term life insurance payments by paying by direct debit. You could also do worse than have some independent expert assess your small print, too, as failure to disclose even the smallest health problems could render your term life insurance policy invalid.
Copyright (c) 2009 Mark Walpole
On term life insurance, we rebate at least half of the initial commission that the provider would have paid to us back into your policy, to lower your monthly premiums.
To get lots more information on how to buy life insurance, and to find full details on your protection options and to get online quotes, go to godirect.co.uk.
Article Source: http://EzineArticles.com/?expert=Mark_Walpole
Selasa, 23 Juni 2009
Payday Loans - No Debit Card
A question often asked by people in the UK when looking for a payday loan is whether or not they can be accepted for a loan if they do not have a debit card. To give you the short answer, you can certainly still qualify for a loan even if you do not have a debit card.
Often referred to as debit card loans they are a type of payday loan, this is where you can borrow a relatively small cash sum for a short period of time. It is often thought of as an emergency loan but there are no restrictions on what you can spend the money on.
Payday loans with no debit cards have been around for many years and have been accepted as a fast and convenient way to borrow money when you need it fast. It is a form of unsecured lending which means that you do not have to provide any security or collateral to be able to borrow the money
If you think of it this way, when you sign a higher purchase agreement when you buy a car you are essentially using the car as collateral. This means that if you default on your payments the higher purchase company can take your car back. This does not happen with payday loans so there is no need to worry about losing anything.
The amount of money borrowed is usually quite low and tend to be a few hundred pounds at most. However if you needed it could be possible to borrow over a thousand pounds with payday loans. No debit card is needed however much you decide you need to borrow.
When you take out a short cash loan such as this you are expected to usually repay the money by the following month. This is because these are considered short term emergency loans and are usually taken out by people to cover a short term financial short fall. If you need to borrow the money over a longer period you can negotiate with the lender. There are lenders who are able to provide 3 month debit card loans if you do need longer to repay the money.
This is a fast and convenient method to get cash in your bank account when you need it urgently. You can apply online and you will usually get a prompt email response. If you are in a hurry it is possible to get the monies paid directly into your UK bank account the very same day.
Find out how you can get payday loans, no debit card or personal loan in a hurry at http://www.paydayloansnodebitcarduk.co.uk
Article Source: http://EzineArticles.com/?expert=James_Hayden-Smith
