The original ‘baby boomers’ are now entering retirement, and much has been said about their lifestyles and approach to finances over the years. But recently attention has now turned to the so-called younger ‘baby boomers’ in their late forties.

The recent recession has apparently caused many of this newer generation to become far more worried than their predecessors about their financial stability in later life. A recent study called ‘Reclaiming the Futures’ by Allianz Life Insurance Company of North America studied the attitudes of Americans aged 44-74, and found that, though a small majority (54%) felt that they were unprepared for retirement ,many showed an increased awareness about the necessity of having to plan for their financial futures.

New Baby Boomers more likely to buy Life Insurance Products to Fund Retirement

47% of the younger generation surveyed – compared with just 35% of the older people questioned, stated that they wished to attain greater security and financial stability, and 41% as opposed to just 30% of their older counterparts said they wished to reduce financial ‘vulnerability’.

84% of respondents said that financial planning was more important than it had been pre recession.”The economic downturn has woke up many Americans to the challenges of retirement income but this younger boomer segment seems to have taken the lesson even more seriously” according to Gary G Bhojwani, president of Allianz Life. He also stated that “security and guarantees with retirement income are now very important to Americans.” Also, the younger boomer generation is also more comfortable with the idea of working with financial professionals – at 47%, 20% higher than the total overall of the group studied.

Agreed Annuities and Mutual Funds most Popular

Income products such as those with agreed annuities figured high in the opinions of the young baby boomers – and of those that own annuities around 80% considered themselves happy with them, with mutual funds the next highest at 63%.

Allianz Life Insurance Company has been in operation since 1896 and the company specializes in life insurance and mutual funds .

Source: InsuranceNews.net

 photo credit: Will Merydith

Business owners have different needs when it comes to taking out life insurance which differs from individuals who are employed. Life insurance is there to help look after loved ones, should the unthinkable happen. But if you own a business and die unexpectedly then you need a life insurance plan which will not only keep your family provided with an income, but also to ensure that the business can continue as usual.

Which Type of Life Insurance Would Best Suit you as a Business Owner?

When taking out life insurance as a business owner there are some things which should be considered such as whether to take out term or permanent insurance. Term life insurance is a relatively simple idea – you decide on the level of cash payment which would be paid out upon the event of your death, and also on the term of the coverage e.g. $400,000 over 25 years. This can be a good way of making sure a mortgage balance would be repaid for instance.

This might also be a good type of life insurance for a business owner with a partner who is planning on retiring at a fixed date. For a couple running a business together they could agree that if either one dies before their planned retirement date, the partner left behind would be able to purchase their deceased partner’s share in the company. Term policies could be taken out making either partner the beneficiary.

This could be a good option to cover the business – but the problem with term insurance is that once the qualifying period runs out – say, after 20 years, then the company would no longer be covered. And, as the business gets older, so do the owners, which means taking out term insurance later on will be more costly. When term insurance ends without the policy owner having died, there will be no cash payment.

Would Permanent Life Insurance be a Better Option for Business Owners?

Permanent life insurance policies include both insurance as well as some investment, or ‘cash value’. The premiums pay, not only for your life insurance coverage, but some is used for investment purposes. The upside of this is that – when the term of the insurance ends, you will still have the investment element to call upon. Plus, permanent life insurance continues for the whole of a person’s life – and so may be more attractive to those wanting coverage for longer.

Plus an additional benefit to a business owner is that the investment component of the policy can be borrowed against and used to further the company – or the policy owner can use the funds to repay premiums.

Life Insurance for Key Employees

Life insurance can also be taken out by business owners on key employees to cover them in the event of their death – should that employee die the insurance would cover them for the loss of income entailed and help fund them in finding a replacement.

Life insurance for a business is often in place for buying out the remaining partners in the event of the premature death of one of the owners. The insurance can cover all the key members of the business. Before deciding which type of insurance to buy – business owners should get in touch with a financial advisor who can help identify the pros and cons of the various life insurance policies on offer.

Source: Karin Price Muewller at Entrepreneur.com

photo credit: Greg317

According to a recent survey by the Guardian Life Insurance Company of America, based in New York, people aged 40 and under are opting for traditional whole life coverage rather than alternative forms of life coverage, in a bid to ensure their financial stability in the shorter term. The research showed that younger buyers are keen to pay off their policies within ten years or less, with 35% stating that they would rather meet financial obligations now than have to pay for it over their lifetime.

Limited Pay Policies Up By 152%

As Michael Ferik, Senior VP for independent life cover at Guardian Life, speaking at Guardian Whole Life International Forum on October 5 stated “This finding underscores a pronounced desire among Millenials and Gen Xers for financial security at an early age.” This research seems to be corroborated by the fact that sales of ‘limited pay’ life policies at Guardian life – policies which can be paid off over a shorter term, were up by a massive 152% year on year to June this year.

Young Life Policy Buyers Plan their Financial Futures

According to the Guardian survey, 74% of those aged 40 and under stated that they wanted to be more financially stable sooner rather than later, with 76% or respondents saying it was very important for them to be debt free in the near future. In contrast, those aged 40 or older attached less importance to having financial stability or leaving debts behind at 69% and 68% respectively. Mr Ferik believes this could be down to the heavy burden of student debt which younger people have had to deal with which has been reflected in a “desire to be debt free” rather than the more typical baby boomers who have more of a “live for today” attitude.

Protecting Families Number One Reason for Buying Life Insurance

The main reason given by the under 40′s for purchasing life insurance was to protect their families (72%) Those aged over 40 also gave this reason with 79% giving it as the driving motivation. Both age groups also counted the cash payout as the second biggest reason for taking out life coverage.

The results seem to indicate that younger buyers see whole life insurance as less of an ‘insurance product’ but rather as one of a number of assets which can be used to build a stable financial future. According to Ferik “They see whole life’s benefits for meeting unanticipated financial needs that arrive while still alive as better than borrowing from a 401K plan or – for now at least – betting on the stock market.”

Source: Insurancenewsnet.com

photo credit: faungg

A recent report shows there is a substantial gap between the amount of life insurance taken out by men and women who are married with children under 18. The research was carried out by MetLife in its annual ‘Study of Employee Benefit Trends‘ and it shows that working married men take out far more cover than their partners. Working dads take out an average of five times their earnings in life cover, while moms take out on average just three times their annual income.

The report was based on 382 interviews with working parents at companies who had at least two employees and was completed over the last quarter of 2009.

The Gap in Life Coverage is a ‘Worrying Trend’

According to Bill Rackzo vice president of US Business at MetLife this is a worrying trend since “Life Insurance can provide a family with substantial peace of mind. It is important to not only have coverage but to make sure coverage amounts are adequate. That is why it is concerning to see the income of working mothers is not as adequately protected as that of fathers.”

The gap in life coverage amounts is surprising given the survey also showed that both working moms and dads say they are concerned about not having enough life coverage, with six out of ten saying they felt ‘very’ concerned. So why are women not taking out enough life insurance? MetLife believes the reason may be down to poor communications from their employers about benefits – only 26% of working moms thought they were receiving adequate information compared to 46% of working dads.

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Millions of Americans give their financial support to charitable organizations every year. In addition to donating to good causes during their lifetimes, there are ways for the philanthropic to continue to help a charity of choice, even after death. In fact, any type of life insurance can be altered or designed with this in mind.

Using Life Insurance as a Charitable Gift

One of the simplest ways is to ‘gift’ a life insurance policy. Doing so will mean that the charity receives the total amount of the policy proceeds upon the death of the holder, and further advantages are that it will substantially reduce estates taxes and income taxes. So the not-for-profit organization receives the full benefit of the policy.

Making the life insurance policy a gift will only cost slightly more for the holder (and the additional premium amount can be partly claimed back in tax over the ensuing years). Gifting a policy may be a good way of disbursing monies from a redundant life insurance policy; where the finance which was required and planned for when the policy was taken out is no longer needed.

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