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

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

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.

Working Parents Need to Look Realistically at their Life Insurance Needs

Also, according to Steven Weisbart, PH.d., CLU, Vice President and Chief Economist at the Insurance Information Institute, many people “overlook important expenses that life insurance can help cover. The death of a parent may not only terminate an income source but also a family’s source of health insurance, tuition assistance and other financial benefits.” Dr Weisbart recommends that working parents should get financial advice from life insurance professionals in order to assess their needs. At present only half as many women as men seek this type of assistance.

Workplace a Good Option When Taking out Life Insurance

When assessing life insurance it pays to look to your workplace since you may be able to get beneficial group rates  – it’s easy to set up and it’s also straightforward, with the deductions being made direct from pay. Many employers offer employees the option of supplementing the insurance at good rates. Also, importantly, couples should discuss their options together in order to come to a decision on their life insurance needs.

Source: Insurance News Net

photo credit: World Economic Forum

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.

Take out a Rider on a Life Insurance Plan

If, on the other hand, a donor does not intend for a charity to receive all of the proceeds of a policy (i.e. the donor wishes to make a smaller gift), then there is a relatively new way to do so using life insurance: Taking out a rider on the policy. The great thing about using a rider is that there is no additional cost to the policy holder for doing so, and it negates the necessity of having to organise and administer any additional separate trusts.

A look at the rate of giving compared to the performance of the S&P 500, a comic stock market indicator. Americans becoming increasingly giving, even when economic woes hit their wallet. Life Insurance can be an excellent gift to a worthy cause.

Restrictions of Charitable Life Insurance Riders

If taking out a rider there are a couple of restrictions: Firstly the charity has to be one recognized by the IFS as being a non-profit making organization, and secondly there may be an upper limit on how much can be given as a gift.

Whichever way is chosen, deciding to make a life insurance policy ‘charity friendly’ will ensure that a person can continue to show support to a cause which is close to their heart, even after their death.

photo credit: blueoxen

Even though the recent tough economic times have made it hard for most Americans to think well about their financial situations, they haven’t put aside their life insurance plans. Many policies are now cheaper than they’ve ever been and many investment losses in portfolios can be written off.

Even though many people buy life insurance in connection with major life events such as births or marriage, many people don’t take the time to evaluate their policies on an annual basis. Because of this, people are paying more for life insurance plans than the same or similar plans that are currently available on the market.For example: Norman Melnick, one of the creators of the Magic Marker, was overpaying his life insurance coverage by over $4,000 a year. Over ten years, Mr. Melnick would have saved $54,336 in premiums to receive the same exact coverage!

Getting Cheaper All the Time

Life insurance policies purchased before 2001 were most likely based on mortality numbers from the 1980s. Plans that have been purchased since 2001 make use of the more relevant 2000 census figures which reveals a dramatic increase in life expectancy which reduces the cost of life insurance premiums.

Because people are living longer, life insurance companies are finding it easier to insure their customers, and passing on those savings to their policyholders. By evaluating your life insurance policy and the premiums you’re paying now, you may find that you can actually pay much less for the same policy coverage today.

If you look over the life insurance policies that you have in your portfolio and find that the premiums you’re paying are far too high – compared to those paid by friends and family for the same coverage – then perhaps you should have a look at the new plans available. If you can save any money at all on your life insurance, you can put these savings into other investments and not be any worse off at all. Be sure to have your accountant or financial advisor look over your life insurance plans to see if a newer policy could save you money.

photo credit: TheTruthAbout…

Having your own business can be a complex series of ups and downs and provide you with a wide range of emotional situations. This becomes even more of a dynamic when you have a partner in the business. You have to be aware of what would happen if one of the key members of your staff (including you or your partner) were taken out of the picture.

Key person life insurance can provide coverage that will ensure protection for any business, regardless of size or complexity. Taking away key personnel from a small business can be every bit as devastating as a large corporation losing lead persons. Having a key person life insurance policy in place will allow for an infusion of cash in the event that the key person, covered under the policy, dies.

With key person coverage, the day-to-day operations of the business will be minimally impacted by the sudden loss of this person’s expertise and experience. The business can then use this money to immediately replace the key person to allow the business to run efficiently again as soon as possible. This makes excellent business sense, especially for those businesses that have stocks and shares and that have to answer to others for even the smallest cost overruns. By losing a key person, many businesses will find it difficult to maintain profit levels while that person is replaced.

Another Reason for Key Person Coverage

Another reason many business partners have key person life insurance in place is so that when they pass on, their shares in the business can either be bought by the other owner or passed on to their heirs. In this way, your heirs will not have to participate in a business that may or may not welcome their participation. A key person life insurance policy will make sure that there are funds in the company to allow for buying out partner shares in the business, if necessary or desired.

photo credit: “T” altered art

Life insurance comes in many varieties and coverage levels. Being able to add onto your insurance policy is one of the most important options you can have. But remember that adding extras for your life insurance policy will almost assuredly add to your overall monthly premium cost. If you need the extra coverage – and you can afford to do this – the coverage is usually a good value. Some extras that are most popular with policy holders can include some or all of the items listed described below. Life insurance companies offer these extras in an effort to provide the most comprehensive coverage plans for you and your family.

The Waiver of Premium Extra Explained

The waiver of premium option allows you to skip premium payments for a specified time for reasons such as injury of illness. Even though no premium payments are being made, the coverage is still in effect – even for other family members. Another extra along these lines is the critical illness cover which takes effect in the event of a critical illness such as cancer. Part of the maturity amount of the policy is paid out in a lump sum to help with medical services or drug plans.

Add-ons Are Generally Worth the Extra Expense

Another extra you should look at is the accidental death benefit, which provides a large monetary coverage level to beneficiaries in the even of the accidental death of the policy holder. For a very modest rise in premium, coverage of up to a million dollars can be added on to the existing policy benefits. In the case of a terminal illness, the accelerated death benefit extra allows the insured person or their spouse to collect coverage benefits that will aid in the well-being and comfort of the terminally ill person. The amount forwarded will be deducted off the total payable amount upon the death of the insured.

photo credit: VirtualErn

Whether you’ve just gotten married, thinking of starting a family or planning for your retirement – you’ve probably given a thought or two to purchasing life insurance. In order to financially protect those we love, it becomes clear that buying life insurance is the best way to prepare for the inevitable. Whether you want to take care of your funeral expenses, pay off the balance of your mortgage or plan for the financial security of your spouse and family, having a good life insurance policy in place will provide much more than just peace of mind.

Best Ways to Save on Life Insurance

Some things to keep in mind when buying life insurance can include the amount of coverage you need. Most industry representatives suggest purchasing five times your annual salary in life insurance. This will help to cover many costs of your estate and ensure that your family maintains their level of financial security.

Buying more insurance coverage than you need, will only result in a higher premium, which may or may not be a problem for you. If you’re in good physical shape, avoid guaranteed issue policies. Because they don’t require a medical exam, they cost more. If you’re healthy you’ll get a better rate if you choose a policy that requires a medical exam.

Of course, if you’re trying to save on your policy then be sure to look into term insurance plans first. Offering the best coverage for the money, term policies won’t allow you to build up any cash value – but many experts suggest buying term insurance and investing the difference. One of the best ways to save on life insurance costs is to purchase a joint policy for you and your partner. Many companies will lower the premium by up to 15% for a joint policy compared to two individual ones.

photo credit: Tanya Ryno

Most of us know enough to have auto insurance when we do any amount of driving in our car. And having homeowner insurance when you own your own home just makes perfect sense. Then why do many of us put such a low priority on getting any sort of life insurance – especially when we’re younger? The answer usually lies in what’s called ‘the probability factor’ and it keeps a lot of people away from getting the life insurance they should have. What it means is that most people – and especially when you’re talking about younger people – tend to believe that any sort of accident, even one causing death, will only happen to the other guy.

Because people are generally optimistic about their lives, the idea that any sort of accident could happen to them is usually the furthest thing from their mind. Death is what happens to old people, they think but of course, that’s not the case and in fact, many automobile accidents causing death happen to younger people every day.

Group Coverage Isn’t Always Best

Having life insurance – especially when you’re young and starting out with a new family – is simply one of the most responsible purchases you can make for taking care of your family. If you stop to think about what would happen to your family if you were suddenly taken out of the picture, you’d know how hard it will be, not only emotionally but financially as well.

Group Coverage vs Personally Owned Coverage

You may not need millions and millions of dollars worth of coverage, but you should at least acknowledge that if the need is there, you should have enough for your family to be comfortable after you’re gone. Many people have group insurance coverage at their workplace, but what they have to remember is that if they change employers, the coverage generally doesn’t follow them to their next employer. And if you do want to continue the coverage to another employer, it’s usually very costly to do so. Having ‘personally owned’ coverage is usually the best option if you know you may be switching employers over the next few years. That way, you can simply take your coverage to wherever you go to work next, knowing that you and your family are covered.

photo credit: Akuppa