Tips on buying Life Insurance

Most people don't like to talk about Life Insurance. They feel invincible, like nothing will happen to them. What they need to remember is that if something does happen. Life moves on. The purpose of Life Insurance is to protect their immediate family or beneficiaries who are still here. If your family is depending on your income every month when you are alive then isn't it fair to say they will depend on it every month if tragedy strikes. Talk to your family and your insurance advisor about your coverage and make sure it is enough if something happens unexpectedly. Follow these tips:

1. Don't depend on employer insurance

It can be easy to choose a policy at work that is deducted from your paycheck. Buy those policies can expire at retirement or if you leave for another job. What if your new employer does not provide Insurance. You might also have health problems that would prevent you from qualifying for a new policy.

2. Understand your needs

Sit down with your family and a trusted advisor and walk thru the steps to find out how much Life Insurance you really need. One common rule of thumb is 15 times your annual salary. This can be altered if you depending on your circumstances. If you have more dependents or debt the more your need will be.

3. Understand the difference between Term and Whole Life.

Term insurance is for a certain time period and should cover your temporary needs like a mortgage or until your kids are out of the house. Whole Life is more for permanent needs like funeral expenses or gifts to a charity. Knowing the difference can help you make an informed decision on what kind of policy to purchase.

4. Recognize that insurance is for protection and not investing.

Term insurance provides protection only, without a savings component. Whole life policies have a savings component and are much more expensive. Ask your advisor which might suit your family.

5. Take advantage of your 30 day free look.

You have 30 days to look at the policy and understand it. If you are not satisfied with it cancel the policy and get your premium back.

Where to grow your money

Knowing where to put your money has always been a sensitive topic. These turbulent times cause a lot of uncertainties to the point that most people would rather cave in to their comfort zones than make a risk in investing their money in a shoestring budget. Investing has always been about learning to make risks to gain bigger profits. Most often than not, investments that are high risk, have high returns while investments that are low risk, have low returns. On the other hand, some investments guarantee returns, others do not.

Investing is not for the faint-hearted. If you have the stomach for it, then proceed with the next steps. One of the first few things that you need to do is to determine your financial and personal goals. Is it a long-term or a short-term goal? When exactly do you need the money? Do you want a high return or a low return? How much risk are you willing to take? Once you are clear with your financial and personal objectives, the next step is to determine the type of investment you should take.

Where to Invest

There are different types of investments that you can make to grow your moneyand to hopefully achieve your projected return. It is important that you know the pros and cons of each type before you plunge in. Here are the most common types of investments:

Stocks

Stocks are also known as shares and cant be compared to forex market, because owning a stock allows you to share ownership of a company or allows you to own some part of the company. The more stocks you own, the more ownership you have. Investors who own stocks of a certain company gain profits through dividends. Dividends are basically the profits of the company that are divided among stock owners. So the more stocks you have, the more dividends you will receive if the company is profiting.

There are two types of stocks, the common stock and the preferred stock. Common stocks have higher risks and higher returns than preferred stocks. Common stocks provide the highest returns, but in cases of company bankruptcy or loss, common stock owners are the last one to receive money. The creditors, bondholders, and preferred shareholders will be the first ones to receive money when the company folds; on the other hand, the common stock shareholders come last. Preferred stocks do not have the same investment returns and rights as common stocks. Preferred stocks receive a fixed, guaranteed dividend all the time. If you are not so much of a risk taker, you can invest in preferred stocks.

Bonds

Bonds are issued out by the government and corporations to those who would like to lend their money for a profit. Bonds, also known as securities, are said to be risk-free investments making them a low return investment in general.

Mutual Funds

When you invest in mutual funds, you allow commercial entities or other people to invest your money for you in various stock options. These commercial entities are normally financial experts and they basically collect money from various investors and individuals so that they could invest the money and gain profit from it. The returns that you will receive are shared on the basis of your individual contribution in the total sum. Mutual funds are known to be less risky compared with stock markets simply because you are sure your money is being invested by professionals or experts.

Life Insurance Glossary Tips

Life Insurance Glossary

Absolute Assignment

The transfer of ownership of a life insurance contract to another owner.

Account Value - Accumulation Value - Cash Value

All of these are synonymous. See "Cash Value"

Actuary

A professional person trained in analyzing statistical information about people and insurance policies. Life insurance companies depend on actuaries to balance risks and set premium rates.

Admitted Assets

These are assets permitted on the balance sheet of life insurance companies according to special accounting rules. The purpose of this concept is to facilitate the determination of the liquid financial strength and claims paying ability of insurance companies.

Admitted Company

States regulate insurance companies. An insurance company is "Admitted" if it is licensed and authorized to do business in a particular state.

Adverse Selection

The desire of a person exposed to a higher risk to seek more insurance coverage than an average exposure. If insurers don't consider this concentration of exposure, they can have bad claims experience.

APS- Attending Physician Statement

Medical records of insured client used in life insurance and life settlement underwriting. These are doctor write ups of patient conditions. Most often doctors simply provide copies of the entire medical file.

Beneficiary

The person, persons, or entity named to receive the life insurance death benefit.

Captive Agent

An insurance agent selling for only one insurance company. These agents are prevented by contract from selling for any other carrier unless the insurance application is rejected by the agent's captive company first. This is not favorable to the buyer trying to get the best coverage for the lowest price.

Cash Value

The accumulated portion of unused premiums inside of a universal life policy. This entire amount is invested in the general account of the life insurance company and earns interest. This amount less any surrender charge is available as a refund upon surrender.

Carrier

The life insurance company that issues a life insurance policy.

Contestability Period

The initial 2 years of a new life insurance policy when a death claim can be contested (not paid) for suicide or fraudulent statements made on the insurance application.

Convertible Term Insurance

A term life insurance policy that contains the contractual right to be exchanged upon request for a permanent form of policy without requiring any underwriting (with applicable permanent insurance pricing).

COI- Cost of Insurance

This is the actual monthly costs that must be contributed or already be on deposit in a universal life policy. This amount is sometimes referred to as the "Pure Term Insurance Cost" or the "Pure Cost of Insurance" in analyzing an insurance contract. Life settlement buyers use sophisticated software (Milliman, DataLife and others) to calculate this amount so as to fund the absolute minimum amount monthly onto a policy held in a life settlement portfolio.

Crummy Powers

Trust provisions typically in ILITs where large annual gifts to the trust are allocated to various beneficiaries but are actually intended to go towards paying life insurance premiums. The crummy power permits the trustee to inform all of the beneficiaries of the receipt of the gift and let them know that if they do not elect to withdraw their portion of the gift within a number of days, the trustee will be paying the life insurance premium with the money.

Current Assumptions

The sales ledger "Illustration" for flexible premium life insurance is most often presented using interest rates and cost for insurance that are not guaranteed. Instead they are "currently assumed to be correct" as sanctioned by the issuing insurance carrier. Whenever this is reviewed, it is important to see the sister ledger of guaranteed rates. These guaranteed rates are the actual maximum amounts of premium it can cost to keep the proposed policy in force.

Dynasty Trust

A trust set up in a jurisdiction that permits perpetual trusts and the terms of the trust indicate holding onto assets indefinitely.

Death Benefit

The life insurance amount payable at death (Face Amount)

Estate Planning

The process whereby an individual or a married couple plan for the future disposition of all their property. This can involve who gets what and when, tax planning, income and retirement planning. There may also be considerations for passing along values, family history and cultural components as well. It can be simple or quite complex depending upon what is at stake and the family's tolerance for complexity. This process is best when it involves legal and financial advice from real experts and trusted advisors who can offer alternatives and model potential outcomes.

Estate Tax

A federal tax on individuals' right to transfer property at death beyond a life time amount excluded from this tax. Most states also have estate taxes that are coordinated with the federal estate tax.

Face Amount

The life insurance amount payable at death (Death Benefit)

Flexible Premium

Other than whole life, most permanent life insurance anticipates the option of irregular premium payments. These contract provisions are termed "Flexible Premium" policies.

Free Look Period

There is an initial period from when a new life insurance policy is purchased and when the owner can return it for a full refund. The period runs from 10 to 30 days depending on jurisdiction.

GSTT - Generation Skipping Transfer Tax

This an additional estate tax on direct transfer to generations below children (like grandchildren). The tax kicks in for transfers above lifetime exclusion amounts.

Gift Tax

A federal tax on an individuals' right to transfer property during life. The tax is imposed on gifts in excess of annual exclusions and his or her lifetime exemption.

Grace Period

A 30 day window when premiums have gone unpaid and life insurance coverage has ceased. During this window, the insurance company will accept premiums to reinstate coverage without requiring any underwriting to re-qualify the insured for coverage. At the end of the grace period, the policy lapses and the insured must reapply if coverage is to be reinstated.

Guaranteed Premium

Every sales ledger proposed for flexible premium life insurance must include a ledger for the highest possible premium costs under the contract. These amounts are the guaranteed premiums.

HIPPA

Health Insurance Portability and Accountability Act of 1996 - This federal law strictly dictates rules for handling confidential medical information used in the life insurance business

Illustration - Life Insurance Sales Illustration

All life insurance - including term, universal life, variable life and whole life - should be proposed and presented using a ledger created on software published by the life insurance carrier. These are custom ledgers that indicate many factors: age, gender, product type, coverage amount, medical rating, planned premium, guaranteed premium and interest rate or projected returns. These illustrations are NOT considered part of the life insurance contract.

In Force Ledger

A ledger of projected future costs and coverage created upon request by the life insurance company. It expresses a status report covering a policy that is already in force.

Inside Build Up

The accumulating cash value inside of a Universal Life policy. These amounts earn an annual interest rate published by the insurance carrier. These amounts accumulate tax free and, in most policies, are available for tax free policy loans. Life insurance carriers make the argument that life settlements, and most particularly early life settlements, threaten the special tax free status of cash values because they make life insurance more like an investment product that competes with other taxable investments.

Insurability

An individual's ability to qualify for new life insurance coverage. Insurability is principally limited by 1) health 2) net worth and/or income 3) amount of insurance currently in force including any policies previously sold into the life settlement market.

Insured

The person upon whose life the insurance policy is based.

Insurable Interest

A legal concept describing which categories of possible beneficiaries are legitimate when applying for life insurance. Any person, business or charity that would potentially suffer economic loss.

Interest Rate

Inside universal life insurance policies, life insurance companies, credit cash value accounts at declared "Interest Rates". The effect of this is cash value accounts grow like savings accounts, less deductions for maintaining the insurance coverage.

ILIT- Irrevocable Life Insurance Trust

This is the most popular legal device to hold and administer life insurance policies intended as an estate planning technique. Done correctly, the life insurance proceeds escape all taxation and are available to settle the estate.

Lapse

This occurs when a life insurance policy is cancelled by the insurance company for lack of sufficient premiums to keep it in force.

Lapse Pending

This is a grace period of 30 days when a policy is technically no longer in-force due to lack of premium payments but the life insurance company permits the policy to be reinstated without any new underwriting if sufficient premiums are paid before the 30 days grace period ends.

Life Insurance Producer

This is the life insurance agent licensed by the state and holding a contract with the life insurance company to represent it in the sale of life insurance.

Maturity

An insured person "matures" when they die. A life policy "matures" when it either pays out the death claim or ceases due to contractual terms such as "At age 95 the coverage ends."

Paid-up Insurance

An insurance policy where enough premiums have been paid and the policy will stay in force and pay out the death benefit no matter how long the insured lives.

Participating Policy

A life insurance policy, usually whole life, which pays dividends.

Per Capita

A beneficiary designation where all beneficiaries receive equal benefits if they survive the insured. If a beneficiary dies and his/her children are contingent beneficiaries, the grandchildren of the insured step up in rank to receive a full participating measure of the benefits. (See Per Stirpes)

Per Stirpes

A beneficiary designation where benefits are divided among classes of beneficiaries. If a beneficiary dies and his/her children are contingent beneficiaries, the grandchildren of the insured remain in the class of their deceased parent and share just the deceased parents share of the benefits. (See Per Capita)

Planned Premium

Flexible premium life insurance is most often presented using a sales ledger called an "Illustration" showing premiums to be paid on the policy. These initial proposed premiums are called "Planned Premiums". These planned premiums are not locked in and can vary in frequency and amount. The total amount shown on the illustration may or may not actually be sufficient to pay for the actual costs of maintaining the policy to maturity.

Policy

The written contract for insurance. It is between the owner/applicant and the insurance company. The insured need not be a principal to the contract.

Policy Loan

A loan to the policy owner by a life insurance company using the policy cash value as collateral. In most contracts, loans reduce the policy's death benefit and cash value by the amount of the loan and interest.

Policy Owner

The legal owner of the policy, who can be the insured, partner, business, family member, trustee of a trust, employer, etc.

Premiums

The payments to buy and keep a policy.

Rating - Life Carrier Financial Strength and Claims Paying Ability

All legitimate US-based life insurers are rated by a number of ratings agencies as to their financial strength and their claims paying ability. There are a number of rating agencies including; A M Best, Moody's, Fitch, Standard & Poor's, Weiss.

Rating - Medical Risk Classification

Life insurance policies are issued using an underwriting classification of medical conditions of the insured called ratings. The range is from "Preferred", "Standard" and then there are "Table Ratings" from A through F. A "Preferred" rating is associated with the lowest premium cost based on an assessment of the longest relative life expectancy for a person of a given age and gender.

Rule against perpetuity

Most states have limits on how long a trust can retain property before it is completely liquidated. The rule is often for as long as all lives in being plus 21 years. Some states permit trusts to go on indefinitely. See Dynasty trusts.

Surrender

The process wherein the life policy owner cancels his/her insurance policy by officially informing the issuing carrier and requesting a refund of any surrender value (cash value).

Surrender Charge

The penalty assessed against cash value or accumulation value for early cancellation of a universal life policy. This amount is fixed at the outset of a policy and declines to zero during a predetermined period of years. In most policies, the period runs from about 10 to 20 years.

Surrender Value

The cash amount that is available as a refund upon the surrender of a life insurance policy. It is equal to the cash value less the surrender charges (if any) on the date of the surrender.

SUL - Survivorship Universal Life

A generic term for a universal life policy that insures the lives of two people. The death benefit is paid to beneficiaries only after both insured have died. These are also known as "Second to Die" insurance policies. See Universal Life for more information

Target Premium

The first premium that insurance companies use as a benchmark for calculating commissions to sales agents.

Term Life

A generic expression for a life insurance contract that has no cash value with a pre-determined number of years of coverage at a very reasonable rate. At the end of the pre-determined years of coverage (the expiration date) an increased rate must be paid to continue coverage. The increased rates are so excessive that they amount to cancellation by overcharging. Term life costs less (prior to expiration date) than permanent forms of life insurance because it is scheduled to be cancelled or otherwise not in force before death occurs. This is not withstanding early unanticipated mortality.

Trust Owned Life Insurance - TOLI

In using life insurance as part of an estate plan, a majority of advisors recommend owning life insurance inside a special purpose trust (see ILIT).

Underwriting

The process whereby life insurance companies evaluate whether to issue a policy and if so, what premiums to charge and what amount of coverage are they willing to issue. The process involves reviews of medical information, age, gender, lifestyle, travel and family financial evaluations.

UL - Universal Life

A generic term for a flexible premium permanent type of life insurance contract that has evolved to be the dominant form of permanent policy issued by most life insurance carriers. Unlike whole life, UL pays no dividends. Rather UL generally includes cash values that earn declared interest rates. There are dozens of nuances in UL contracts. The basic premise is that premiums accumulate at a stated interest rate in the general account of the issuing insurance carrier. There are monthly deductions from this account including the "COI", expenses and sales loads.

VUL- Variable Universal Life

A generic term for a flexible premium permanent type of life insurance contract that has embedded mutual fund like investment accounts (called separate accounts) that can earn returns (or lose as the case may be) that can build up cash values. There are dozens of nuances in VUL contracts including "SVUL" Survivorship Variable Universal Life that pays after the second of the two insureds passes away.

Whole Life

The traditional form of permanent life insurance. It is characterized by higher premiums than universal life. Premiums are partially offset with dividends that can be returned in cash, reduce future premiums, or buy paid up insurance.

Choosing a (beauty tips) Life Insurance Policy

Most people feel that a life insurance policy can be a priceless investment in one’s life. If you have this, that would provide for a lot of financial help for your family in the unfortunate event of your death. In this section you will find the necessary tips that will help you decide what policy is best suited to you.

Two different types of insurance are available. Term life insurance is the first type of insurance. After 20 years, the product will expire. Then there is whole life. Whole life insurance does not expire; you are in for life unless you cancel. The whole life insurance policy will continue as long as each month’s premium is paid.

There are pros and cons to both types of policies. There are different types of policies; a term life policy is only valid for a certain period of time. Generally, whole life policy premiums are significantly higher than the payment for premiums on a term life policy. On the other hand, the monthly premium of a whole life insurance policy is much higher. This will be effective for the rest of your life. This vehicle has a monetary value that accrues that makes it a good investment.

You can learn about all the available life insurance opportunities by checking with an insurance agent or a financial planner. The policies have many variables that cause them to differ in a range of ways. Whether you’re buying whole life or term life insurance, you need to determine just how much you require.

There are many different factors you need to consider when looking into insurance coverage. There are specific features that can set your decision on the amount. These include the size of your family, your age, your debt level, and various other factors. You need to have enough insurance to pay off your credit cards, mortgages, and children’s college educations if applicable.

You also need to consider the income of your spouse. You need to deduct this amount from your monthly debts to make sure that you can afford the difference in insurance.

You can research different types of life insurance through the Internet. Learn more about the kinds available, after seeking them out. Call and get quotes from good companies before you make your decision. It should always be known, that one should never do anything in haste. In order to take good care of your family, you should take a correct decision.

Before you choose life insurance, there are several things to consider. I have shared just a couple of them. If anything happens to you, you can take comfort in the fact that your family will be taken care of by having a life insurance policy. Your policy needs to cover your family’s financial needs while being affordable enough not to cause hardship here and now. You should talk to an insurance agent or financial planner so that you can discover just how much insurance you require, and what kind of insurance you should buy.

Richard Ramey provides great tips on choosing a life insurance policy, plus many other insurance articles, at his helpfulBlue Cross Insurance Guide website.

Learn Beauty Tips That Bring Out Your Natural Look

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Life Insurance Basics and Terms

When searching for a life insurance plan, you should know basic insurance terms so that you will more easily understand the policies presented to you, compare several plans in terms of costs and benefits, and check the financial solvency of the insurance company.

Life Insurance Basics

Life insurance is available for consumers to purchase a policy to provide a cash payment to any beneficiaries named, paid at the time of death. (Also called a death benefit). Life insurance’s benefits are 1) to support dependents through their lives and 2) to provide cash to cover expenses incurred upon death. If an individual does not have any minor children or dependents and they are not in bad financial shape or dependent upon you financially, then life insurance may not be required. Life insurance is purchased through policies, which require premium payments either monthly, quarterly, semi-annually or annually, and in varying dollar amounts, lengths of time and coverage.

Life insurance policies would assist your dependents in covering the expenses that were caused at the time of your death and would provide them with resources through their life, if they are currently dependent upon you financially.

Examples of some of the reasons for purchasing a life insurance policy include, funeral expenses, hospital bills, living expenses, mortgages and loans, estate and inheritance taxes, educational expenses and retirement funds for the surviving spouse and/or family.

Do you need life insurance?

A few things to consider before purchasing a life insurance policy.

• How many people are dependent upon you financially?

• Would these people be able to obtain income elsewhere, from savings, relatives, investments, scholarships, work income, etc? Considering this, would additional cash be required?

• Will probate be involved in regards to your estate? Will there be lengthy court expenses?

• Are there any alternatives to life insurance, such as available cash, checking or savings accounts, stocks, or other investments that would take care of these expenses after your death?

• Will you have substantial debts and taxes to be owed after your death?

• Will additional cash be required for your business to continue operations?

If it does appear that there will be financial responsibilities after your death that will not be met, then you should consider a life insurance policy.

What type of life insurance policy should you purchase?

Term Life Insurance (yearly renewable term and level premium term) is the most affordable type of coverage to purchase. Essentially, premiums are paid towards this policy for a specified time period. If death occurs within this time period, a benefit is paid to the beneficiary. However, if death occurs outside of this time period, no benefit is paid. This type of coverage may be required for temporary time periods, such as the time until your children are out of college.

Truth And Lies In Car Insurance

The number one thing to remember, and to always keep foremost in your thoughts when purchasing any kind of insurance - particularly for your car - is that insurance companies are out to make money.

It might seem simple common sense to state that so bluntly, but when you are being dazzled by specious guarantees and spurious quotes, it is easy to forget. So what should you look out for?

Insurance companies - they quote themselves happy!

There are some factors that are unavoidable, so it’s best not to worry about them and move on. For instance, if you are male and under the age of 25, your insurance policy will inevitably cost more than nearly anyone else on the road. By the same token, if you live in an area with high car crime, your premium will go up, often substantially. As much as we would like to be able to move house and travel through time, these are not pragmatic solutions.

However, there are steps you can take to significantly reduce your premium.

If at all possible, and especially if you are a young driver, start with the car you buy. All cars in the UK are classified within an insurance group, from 1, the cheapest, to 20, outrageously expensive. The main defining factors in which group your car will be placed in are: the initial cost of the car if bought new; the size of the engine and its performance figures; the security measures built in to the car; how costly it would be to repair and replace parts if the car was involved in an accident. As a rule of thumb, hatchbacks with small engines such as the Fiat Punto, the Renault Clio and the Ford Fiesta are all cheap to insure.

Even larger, family size cars can be cheap to insure if chosen well. The Ford Focus, for instance, is only rated as a group 4 car at the time of writing. Try avoiding cars like the group 20 Porsche 911. You might be sacrificing a few seconds on your 0-62mph time, but you will be saving a hefty wad of cash to spend when you get to your destination. Also, get a Thatcham-approved alarm system for your car. Thatcham are beloved by insurance companies and their approval can go a long way to helping reduce your premium for a small initial outlay. Whatever you do, resist the temptation to modify your little hatchback. This can send your policy through the roof, and neon blue lights are ugly and illegal.

Shopping Around for Car Insurance

One of the best ways to save money on your car insurance and guarantee low yearly premiums is to shop around. The insurance industry is highly competitive, and each company will be very keen for new customers, especially those with full no claims bonuses and good insurance history.

Before you start applying for newquotes for car insurance, make sure you have all of the information regarding your car and current insurance close at hand. Mostinsurance companies will need to know the model and registration number of your car, as they will check this is on the main insurance records before giving you a quote (to make sure it is a legal car and has not been in any serious accidents), and may also need to know a few details from your current policy such as your coverage amounts and deductibles.

It can be very time consuming contacting all of the many insurance companies by yourself, and even if you look online for special offers and bonuses you will still have to wait around for one of the agents to get back to you with a personal quote. It is a lot easier to use one of the car insurance comparison websites, who will take your details and look at all of the top insurance policies available, and then come back to you with only the very best quotes. This makes shopping around for car insurance much quicker and more effective, and you can make some great savings on quality policies.

CIQ provide an online car insurance comparison service, and it couldn’t be easier to get a selection of car insurance quotes tailored to your needs. To get a fast quote, just fill in the online form you’re your vehicle, coverage and driver details, and an agent will start creating a personalized plan just for you. To learn more about CIQand the car insurance comparison services they provide you can visit the website atCarInsuranceQuote.net .