ACLI, as well as the Association for Advanced Life Underwriting (AALU), GAMA International, The National Association of Insurance and Financial Advisors (NAIFA) and the National Association of Independent Life Brokerage Agencies (NAILBA) have written a letter to congress in the light of concerns about government proposals to change the rules regarding the tax code – rules which may affect current benefits on the kinds of private financial products offered by life insurance companies.

Congress is planning Changes to the Tax Code in order to Reduce National Debt

The reason behind the proposed changes is part of the government’s urgent goal of reducing the national debt.

In the letter ACLI state that while they appreciate that “The huge national debt is a crisis that must be addressed” their (the government’s) plans to replace this crisis with “a new crisis that damages the financial protection and retirement plans of millions of Americans would be misguided.”

And

“As changes are considered to the tax code … the vital role life insurers’ products play in the lives of 75 million American families must be recognized.”

Life Insurance Protects Against the Risks of Death of Wage Earners

Life insurance has long been recognized as providing an essential public service, protecting American families from the early death of a breadwinner, as well as providing a security net for the longer term – as people live longer, or need financial support through illness or disability. ACLI has stated that rather than undermining the public’s efforts to provide for themselves via private means, the “use of safe and secure financial products like those offered by life insurers…should be encouraged”.

A Change in the tax code could discourage rather than encourage members of the American public to “explore private retirement income options, whether individually or through the workplace”

Changing the Tax Code Unfair on Individuals who have acted prudently

The letter to congress also points out that changing the system now would be especially unfair on the millions of Americans who took “thoughtful and reasonable steps to protect their families. Years of personal sacrifice and careful financial planning could be undermined by such an abrupt change.”

What the government plans to do still remains to be seen – but what is certain is that the Life Insurance industry are prepared to do whatever it takes to persuade the American Government to call a halt to plans to change the tax code as regards life insurance products.

Source: Insurance news.net, targeted news service Nov 15

photo credit: Alex E. Proimos

Unfortunately, however, married couples neglect to consider negative outcomes. As Carole Peck, president of Carole Peck Financial Center puts it “Couples often overlook the financial ramifications of their split, or assume lawyers will hammer things out to everyone’s satisfactions.”

Female Spouse often Loses out Financially in Divorce

Very often it is the female partner who gets to keep the family home in the event of a divorce, in order to carry on looking after the children in familiar surroundings.

In exchange the main wage earner, (usually, but not always), the male spouse, tends to keep control of IRAs and other long term financial assets; and while he continues to reap the rewards from their previously joint financial portfolios the family home may start to seem  less of an asset and more of an intolerable financial burden.

Even with decent alimony and child support there may well not be sufficient funds to keep up with mortgage payments, property taxes and home repairs. And if payments cease due to the illness or bereavement of an ex-spouse the family face eviction.

Life Insurance can Provide Financial Stability in the Event of Divorce

Ellie DeLano writes a blog – the ‘Divorce Diaries’ about her personal journey through the divorce process and urges women to think about the importance of life insurance in the event of divorce . The spouse considered to be the most financially well-off (usually the male) should be encouraged to take out a life insurance policy which includes the children as beneficiaries, until they can be considered independent.

In her case she was lucky – a divorced friend had urged her many years previously to have it written into the parenting agreement that Peter, her husband, be “required to name me as beneficiary on his life insurance, until the children are no longer my dependents.” Now that the couple are divorcing Ellie is thankful for this timely advice.

As she says, “If I were to die unexpectedly, Peter would have more than enough money to buy and keep a roof over the kid’s heads, feed them and even probably send them to college. If the situation were reversed, I’d be in serious trouble. We’d lose the house without his support check, and life would certainly be much harder than I complain about now.”

Life Insurance could be a Lifeline – so it Pays to be Practical

In her ‘Divorce Diaries’ Ellie advises even the most happily married to plan for any contingency:  “Don’t sell yourself short just to seem like the ‘nicer’ person.”

We all enter into our marriage contracts thinking it will last forever- but it is imperative to use your ‘practical head’ when planning the future. Setting up adequate life insurance has to be a priority when it comes to safeguarding a future for you and your children – something which you may be very thankful for one day.

Source: mainstreet.com posted 02 December 2010

Divorce Diaries, posted in WomansDay.com Editors on 29 December 2010

photo credit: epSos.de

The need for parents to consider taking out life insurance has been highlighted recently. LIFE (Life and Health Insurance Foundation for Education) recently awarded $105,000 worth of Scholarships to students who could not afford to pay for college because a parent had died.

Parents who die without Life Insurance Scupper College Plans for Children

LIFE reported on the case of Esther Kim who was only 16 when her dad died of cancer – he didn’t have any life insurance, which left her and her family financially insecure. Esther had always been a straight ‘A’ student and had always planned to go to College, but the bereavement looked set to put her plans on hold, since she, along with her mom had to work flat out in order to keep the family going.

Luckily for Esther she now has the chance to start a course at Oglethorpe University. She has achieved this by using money she saved herself, as well as a student loan and a scholarship worth $10,000 from the not for profit organization LIFE.

Parents have to Consider Children’s Future should they Die Prematurely

Mr Marvin H Feldman, President and CEO of LIFE Foundation stated “ When parents die prematurely without adequate life insurance, the people who depend on them most – their children – often face difficult financial realities that can force their dreams of a higher education and a better life to be put on hold.” “We are proud to be able to help deserving young people like Esther and our other scholarship recipients to reach their college goals, and we hope their stories will remind all parents to protect the financial well-being of their loved ones through proper financial planning.”

The LIFE Lessons Scholarship Program offers scholarships to students who are unable to afford a college education due to a parent dying with negligible or no life insurance. During the last year 59 American students received awards from the Foundation – in order to qualify students had to make a video, or write about the financial consequences of losing their mom or dad.

The judges included members of the LIFE Board, as well as Life Insurance company executives, from some of the top US Life Insurance companies. One of the scholarships was awarded as a result of an online vote – Mashell Ewing was the winner, for describing how difficult her financial circumstances had become since the death of her single mom.

Single Parents need to Consider Life Insurance as a Priority

Mashell’s mom died suddenly of a heart attack having made no provision for life insurance. Since then Mashel l and her brother both had to work long hours just to pay the rent and care for their younger sister. Despite this Mashell managed to secure a place at the University of California, Berkeley and so determined was she, she took out loans to help pay for college fees. The extra $5000 dollars awarded to her last year by LIFE will help her achieve her plan to graduate this May.

The LIFE foundation was set up in 1994 with the aim of educating the public about life, health, disability, and long-term care insurance.

Source: lifehappens.org/content

photo credit: ralph and jenny

This was illustrated recently in a high profile celebrity divorce case where the life policy owner – film star Dennis Hopper, was locked in an acrimonious divorce with his estranged fifth wife Victoria Duffy-Hopper. Hopper attempted to change the beneficiary of his life policy mid divorce so that his wife and young daughter would not receive an insurance payout in the event of his death. However the judge decided he would have to wait until the divorce came to trial before any names could be changed. Hopper died before the divorce came through and his estranged partner received the life insurance payout.

Rules Prevent Life Policy Holders from Impulsiveness

The rules regarding when changes can be made to an estate plan vary from state to state. In California, for instance, no changes can be made for a set period of time after a divorce is filed. What this seems to imply is that a person holding a life insurance policy might be better off making any necessary changes before filing the divorce papers.

The reasons for preventing those going through a divorce from making big changes such as changing beneficiaries of wills or life insurance policies is to allow them a ‘cooling off’ period; it has happened that soon to be divorced couples reunite and, if a spouse then dies without having changed their will or life policy back, they leave their bereaved partner with nothing.

Source

The Probate Lawyer Blog[1], June 2010; also featured in Forbes Magazine [2]

photo credit: ljv

Southern Indiana District Judge Sara Evans Barker ruled against the life insurer which was seeking a summary judgment against those attempting to secure a claim. Instead she decided that the case warranted further legal consideration in the form of a trial.

AIG Voids Policy Claiming Authenticity is “Questionable”

AIG who has voided the controversial policy, claims that the authenticity of the life insurance taken out on behalf of Ms Tomlinson by a friend and associate, J.B. Carlson, is questionable. The life insurer asserts that he (Carlson) “procured the policy by improper and fraudulent means” and that the policy was “procured on individuals for whom there was no insurable interest.” Geoffrey Vanderpal, an independent life insurance agent was the driving force behind the proceedings, according to court records.

Defendants Attempted to Sell Life Policy on Stranger-Oriented Market

Apparently Carlson and his co-defendants were attempting to sell the policy on the stranger-oriented life insurance market when Suzy Tomlinson died, which stopped them in their tracks. Judge Barker stated that she believed that the lawsuit had been brought against Carlson, Vanderpal and other defendants because there was a belief that they had duped Ms Tomlinson into obtaining a huge life policy without them having any insurable interest – in order to collect a sizeable profit by selling the policy in the secondary market.

Spokesman for AIG, Mark Herr responded to Judge Evans Barker’s decision to bring the case to trial by saying, “We believe that this policy was obtained by fraud” and that “the order gives us the opportunity to prove that at trial.”

Deceased’s Daughter Steps into the Fray

However the case has become even more complicated for AIG, with the arrival of Ms Tomlinson’s daughter Tomisue Hilbert on the scene. She is acting on behalf of the Tomlinson estate and argues that the life policy should be honored but the proceeds should be paid to the estate. According to the Hilbert spokesperson “American General issued the policy for its own gain and anticipated profit, and accepted substantial premiums for the insurance of the policy without due regard to sound underwriting policies or procedures.” Tomisue Hilbert only learnt of the policy after reading about it in a newspaper and was, understandably “shocked.”

Judge Sara Evans Barker welcomed the daughter’s right to be involved in the trial – the date for which is due to be set in the near future.

photo credit: yeowatzup

Jean Crump, aged 67, from Los Angeles, could face a prison sentence of up to 90 years after a jury found her guilty of fraud, including one count of mail fraud and two counts of wire fraud.

Woman Sought a $1.2 million Life Insurance Benefit

Crump, along with three accomplices went to painstaking lengths in her attempt to defraud a life insurance company and obtain payment on a policy worth more than 1.2 million dollars.

1. First the woman obtained a fake death certificate
2. Then, Crump purchased land for a burial plot
3. Finally, she staged a funeral where an empty casket was buried

Foul play Suspected by Life Insurers

The life insurance company became suspicious of the claims and launched an investigation, so Crump took drastic measures. She had the coffin exhumed and filled with animal remains and a dummy before cremating the contents.

Fraud Included Obtaining Advance Funding for Bereaved Families

Crump has also been charged with obtaining money from a life insurance company to cover bereavement expenses, in order to cover the cost of the funeral (the life insurance company later takes a cut of the life insurance payout of the deceased life insurance policy holder). Crump is to be sentenced later this year – her accomplices have pleaded guilty as charged.

Source

Daily Telegraph

photo credit: codepo8

Raymond Brogan told Joyce Guzman that he would take care of her bills and invest the money for her – but instead Brogan, along with this accomplice Robert Brogan, 63 went on to induce her to sign fraudulent checks, forging her name on others.

Widow Tricked into Signing Away Son’s Life Insurance

Raymond Brogan was the boyfriend of Mrs. Guzman’s half-sister Carol Ann Damico, aged 35. Both of them manipulated the grieving mom into signing a power of attorney favoring Brogan – and two days later the pair signed an addendum which designated the couple’s address as the one to send the life policy benefits to.

Raymond Brogan had an accomplice in the fraud, his uncle,  Robert Brogan and both were jailed by US District Judge Morrison C England Jr. – Robert Brogan to three years and one month, and Raymond Brogan to two years and nine months. The judge, in a rare move, rejected a plea bargain by Robert Brogan and his lawyers, which would have reduced his sentence. R. Steven Lapham, top prosecuting lawyer and John Manning, a renowned defense lawyer argued that Robert Brogan was simply a ‘conduit’ for the money laundering operation.  They also stated that he had given ‘substantial’ assistance to the government’ in a criminal case.

Judge Morrison admitted Life Insurance Case had Troubled Him

But Judge Morrison, although he admitted that the case had promoted a ‘very visceral emotional response’ in him, believed that Robert Brogan was just as culpable of the crime and therefore there should be no diminution of the sentence.

Both Brogans have been ordered to pay back the stolen life insurance benefits to Joyce Guzman of Burney, Shasta County.

In the case, in which more than $200,000 of life insurance was stolen, charges against Carol Ann Damico who was originally implicated were dropped.

Source:  Insurancenews. Net and McClathy-Tribune Information Services Jan 2011

photo credit: hectorir

Women less Likely to Initiate a Discussion about Life Insurance

The results of the interviews showed that primary earners within families found it the most difficult to broach the subject of life insurance, with women being slightly less likely to initiate a discussion; 64% of women compared with 47% of men were less prepared to talk about the prospect of being the only breadwinner – showing that life insurance for women is a particular trouble spot.

According to Professor Mary Quist-Newins, Chair for Women and Finance at State Farm Insurance and the American College, “Women, in particular, appear to be especially silent on this topic, and this is troubling when increasing numbers of women are becoming primary income earners for their families.”

Reasons for Avoidance include Economic Insecurity

Reasons for avoidance are thought to include worries about daily economic issues, and fear of upsetting the other partner. But, according to Joe Monk, Vice President and Chief Administrative Officer at State Farm Life Insurance “As awkward as it can be to discuss the potential death of a family member, an uncomfortable discussion today can prevent a devastating financial impact tomorrow.”

The survey found that 62% of those questioned believed that, due to the economic downturn life insurance was more important than ever. But when asked why they were reluctant to discuss this important topic 74% said that simply meeting their families’ immediate financial needs as the sole earner was their main concern – in many cases this having become a struggle. 51% said that they would not be prepared to start a discussion about life insurance in the event of their partner losing their job since they would consider this insensitive, in terms of hurting their feelings.

Encouragingly (85%) the couples questioned believed that it was just as important for stay at home moms and dads to take out life insurance as it was for partners who worked.

Make Time to Talk about Life Insurance

With the current economic instability making plans for the financial future is more important than ever – State Farm’s advice is start small – even becoming more educated about life insurance options is a step forward – and the best way to do this is to consult a life insurance expert who can provide information about all the different options available.

Source:

Insurancenewsnet.com September 2010

photo credit: gripso_banana_prune

The agreement was only made public due to a request filed to the Freedom of Information Act. The agreement, forged in 1999, was never put in writing – it allowed the life insurance company to withhold large sums of money which should have been passed directly to survivors – money which went on to make the Prudential a substantial sum in interest.

Grieving Families Disallowed Life Insurance Payouts

Brendan Bridgeland , a lawyer with the not-for-profit group Center for Insurance Research based in Cambridge Massachusetts, said that for a decade Prudential had not been fulfilling its obligations to veterans;  and that it was very clear that Prudential had been “violating the terms of the original contract.”

The revelations have appalled veterans who have accused the Prudential of “brazen war profiteering.” Paul Williams who served in the Afghanistan war as an army cavalry scout stated “When grieving families tick the box that they want a lump sum they should get it.”

Prudential and Other Insurance Companies to Face Fraud Investigation

New York Attorney General Andrew Cuomo has launched a fraud investigation into both the Prudential and other life insurers over the use of ‘retained asset accounts.’ Under the original VA contract with the Prudential the insurance company was “required to send lump sum payouts to survivors requesting them.”

However instead of life insurance payouts the Prudential was issuing families with ‘check books’ or IOUs which are not insured by the Federal Insurance Deposit Corp. The withheld payouts to survivors have were placed in investment accounts, earning the insurer over eight times more in interest than that paid in interest to beneficiaries. Prudential held over $662 million of survivors’ assets in its corporate account in June of this year.

Veterans’ Families have Good Case for Suing Life Insurer for Lost Interest

According to Bridgeland the families have a very good case for suing the Prudential. The Prudential insists it was acting in accordance with the wishes of the VA who, in a bid to salvage the situation has attempted to put in writing the changes only verbally agreed in 1999. According to insurance law Professor Jeremy Stempel this is simply an attempt to ‘reinvent history’ giving nothing to ‘the people in uniform.’

Source: Bloomberg

photo credit: DVIDSHUB

Larry Rudd, a soldier from Brantford, was killed by a roadside bomb in Afghanistan last year and his funeral service was streamed live from Brantford to his colleagues in Afghanistan and to relatives in British Columbia and Holland who watched the service on their computers at home.

Facebook for Funerals

The new technology has been touted as ‘Facebook for funerals,’ meaning that footage from the webcam can also be watched the next day, which was a help to Larry Rudd’s relatives in B.C since some of them lost visuals of the funeral during the service.

Life Insurance is an Option worth considering when it comes to funeral costs

For those left behind, having to arrange a funeral service for a loved one, online service or not, is one of life’s less pleasant tasks. Having the additional burden of wondering how to cover the expenses of funerals is even worse; which is why many people choose to take out life insurance which has the option to pay cash to the bereaved to cover funeral costs (sometimes cash can be paid directly to the funeral directors).

Parents of Baby Boomers would “Turn in their Graves”

The idea of online funerals doesn’t appeal to everyone, admits Glaves – “The big fear is those crazies on the internet – that mom or dad will end up in their casket on You Tube.” There is also the fact that some funeral homes are attempting to make profits by charging as much as $500 for the extra service (the Beckett Glaves Funeral Center provides the webcam for free).

When you consider that the average cost of a funeral in the US is $6500, according to the National Funeral Directors Association, it becomes apparent that dying is expensive for those left behind; this is worth remembering when taking out Life Insurance and planning ahead is the key.

Take up of Online Funerals is Rising

Around 80% of people are apparently signing up for the ‘sympathy cast’ according to Glaves, and those that decide against the service are usually baby boomers arranging funerals for parents. “They’re saying I would like to do this for me but mom would hate it.” Glaves admitted that his father, who was funeral director before him, ‘would have been horrified.’”

But, according to Paul Generowicz, owner of Sympathynet.com, the technology has been a ‘godsend’ for friends and relatives who cannot physically attend funerals – for instance because they live too far away or are confined to bed (or even prison). This is something Larry Rudd’s mother, reiterated: Zuidema Rudd said that broadcasting her son’s funeral was a comfort and that “it brought our family together without them having to come here.”

Source

Susan Pigg, The Star.com August 2010

photo credit: The National Guard

Whole Life Policies Show Biggest Increase in Sales

Whole life policies, offering death benefits with additional savings features showed the sharpest gain with sales rising by 23%. Life insurance products which have just guaranteed death benefits went up by 5%.

Half of Insurers Saw Double Digit Growth

Ashley Durham, a senior analyst at Limra stated “Things appear to be looking up” and added that “nearly half of all companies experienced double-digit growth during the first half of the year.” New York based Met Life, the largest life insurance company in the USA, saw increased earnings as did Prudential who reported a sevenfold increase in profits on investments compared with the previous year.

According to Limra Term Life Insurance was the only product which saw a decline in sales in the second quarter with premiums dropping by 11%.

Source

• Inyoung Hwang –25  August, Bloomberg Businessweek

photo credit: kevinzhengli

Genetics and Life Insurance

Earlier this year Australian Life Insurance company NIB offered its customers half price DNA tests. The cut price tests – down to $500 from $999 were offered to 5000 of their policy holders. The firm responsible for carrying out the tests is Californian based firm Navigenics.

NIB insists that the offer was simply an altruistic attempt to help customers get a better understanding of their health risks; in fact their chief executive, Mark Fitzgibbon says that he has had the test himself and has “found it to be an invaluable experience.”

DNA Tests have Financial Implications for Life Insurance

Fitzgibbon’s statement may be genuine but,  for some, the issue of life insurers encouraging customers to undergo genetic testing has privacy and financial implications. Once someone has taken a DNA test, they could be forced to declare the results to a life insurance company; If the results of the tests are less than satisfactory the life insurance company could raise their premiums – and if potential policy holders fail to declare having taken the tests their policy could later be rendered invalid.

Life Insurance and Genetic Discrimination

The fact is: There have been a number of cases whereby individuals have been refused life coverage due to their DNA profiles. Kristine Barlow Stewart, an academic and board member of the Australian Government’s Human Genetics Advisory Committee has done research into this so-called ‘genetic discrimination’ and finds the Life Insurer’s offer concerning. She has stated that “the move has raised red flags for me.”

Reliability of DNA Tests Questioned

Apart from the implications for life insurance policies, some academics and researchers are questioning the reliability of the data produced by firms like Navigenics, since many discrepancies have been found between gene scans of the different companies carrying them out.

NIB however insists that the results of the tests are private between Navigenics and the policy holders, even though the small print states that “you may be required to disclose genetic test results, including any underlying health risks and conditions which the tests reveal, to life insurance or superannuation providers.”

USA and UK have Voluntary Agreement regarding Use of Genetic Information

The US, like the UK, has at present an unofficial voluntary agreement banning the use of genetic information for underwriting life insurance policies. The Genetics Information Discrimination Act 2008 bans the use of genetic information for both health insurance companies and in the workplace. Life Insurers are, however watching with interest how things develop for NIB, and future pairings between the booming consumer genomics and life insurance companies cannot be entirely ruled out.

Source

New Scientist (Feb 2010) , Pharmacogenomics Reporter(Mar 2010)

photo credit: net_efekt

• A divorce or marriage, leading to a name change
• A house move where no forwarding address has been left
• Illegible or badly written records
• Transient lifestyles such as those in the military
• And, most common of all: The heir or beneficiary has died without the knowledge of the life insurer.

According to NAUPA (National Association of Unclaimed Property Administrators) state departments across America are sitting on $32.877 billion in unclaimed funds, including life insurance benefits. The New York department holds a staggering $9.9 billion worth of unclaimed assets, and the state of California $5.4 billion.

Life Insurance Policies One of the Biggest areas of Unclaimed Assets

Figures from demutualized Life Insurers show that after becoming public companies, they needed to find millions of policy holders and beneficiaries – totaling $4 billion in unclaimed assets. On demutualization, John Hancock found it did not have current addresses for 400,000 current policy holders; Prudential did not know the whereabouts of 1.2 million of its policyholders, and Met Life held $2.7 billion worth of unclaimed demutualized assets.

Government takes control of Unclaimed Life Policy Funds after 3-5 Years

When a life insurance company receives notification of the death of the policy holder the law states that any unclaimed assets from the demutualization have to be placed in a government trust, if, the listed beneficiaries cannot be found. If there has been no notification that a life insurance policy holder has died and the policy owners cannot be traced, then Life Insurers tend to hold onto life policies until the owner would have reached 100 years of age before handing funds over to the treasury.

Could You be Missing Out on a Payout from an Unclaimed Life Insurance Policy?

If you think you might be a beneficiary of an unclaimed life insurance policy it is worth investigating. It’s worth remembering that even if the Life Insurer holding your potential funds no longer exists there will still be the possibility of a payout of up to $300,000 because the funds should have been placed in a state insurance guaranty association.

Sources

• NAUPA
• MSN Money: Unclaimed Billions How Much Is Yours? Liz Pullman Weston

photo credit: swanksalot

This is unfortunate because as Debbie Cecil, director of life products at Unum says “Life Insurance is one of the building blocks of a solid financial plan.” But due to the economy “many people are just turning away from pursuing this type of coverage.”

U.S. Public has put Life Insurance on the Back Burner

Also, according to financial services consulting and research firm LIMRA the reason more than 40% of Americans have not bought a life insurance policy  is that other priorities such as paying off debt or saving for retirement have become top of the list. This is why 11 million fewer American households are covered by life insurance than six years ago.

Life Insurance Awareness Month Promotes Importance of Life Coverage

Life Insurance Awareness Month is the invention of LIFE (Life and Health Insurance Foundation for Education), a not-for-profit organization. The organization is joined each September by 100 of the world’s leading insurers and industry groups with the aim of raising awareness about the importance of life insurance. LIFE urges the public to think of the future in terms of how their family would cope financially if it were suddenly bereaved  - how much of a struggle it would be dealing with the everyday costs of living, as well as education and paying the mortgage?

LIFE is joined by Actress Leslie Bibb

In order to get us thinking about the future LIFE has enlisted a celebrity help in the shape of Leslie Bibb, who has appeared in films such as Iron Man 2, Confessions of a Shopaholic and The Ballad of Ricky Bobby. Leslie was only three years old when her father, aged 39, died in an accident at work, leaving her mother with four young children to bring up on her own. Leslie believes that it was her father’s life insurance that enabled the family to survive. “My father died at a young age, but he loved his family enough to expect the unexpected” said Leslie.

The government is also keen to encourage people to include life coverage in their finances: Leslie’s story will be broadcast for the rest of the year via public service announcements on TV and Radio in a bid to remind all of us about the importance of taking stock of our life insurance needs.

photo credit: pshegubj

Alan Duvall, 61, died at his home in Columbus back in 2007 and the cause of death was initially determined to be alcohol poisoning. Tami Duvall confirmed these findings, stating that she believed he had ‘drunk himself to death.’ But Mr. Duvall’s blood also had a high level of morphine in it at the time of death – around 82 times the recommended therapeutic level.

Increasing Suspicion from Life Insurance Company and Victim’s Family

The presence of drugs in his system made Mr. Duvall’s family suspicious: Duval’s stepbrother stated that Alan Duvall enjoyed his drink but strictly abhorred the use of drugs – he told the Republic newspaper that “if someone walked in his house and had drugs, he would throw them out.”

Working at a local nursing home, Tami Duvall would have easy access to certain drugs such as morphine, which killed her husband. Prosecutors affirm that the cause of death was drugs which were placed in Alan. Duvall’s food by Tami Duvall on the night he died.

Life Insurance Policy Worth $100,000 Believed to be the Motive

The prosecution reported that just a month prior to his death Tami Duvall persuaded her husband to take out a life insurance policy of $100,000 naming her as the beneficiary, even though she had recently told friends that she intended to divorce her husband.

Duvall Anxious to have Life Insurance Payout Released

Tami Duvall began acting suspiciously after her husband’s death; she became anxious to get the body cremated as quickly as possible and asked investigators several times how much longer they were going to take since she needed to collect on a life insurance policy.

Tami Duvall later changed her statement to police about what happened the night of her husband’s death. She stated that Alan Duvall had taken the morphine himself in order to commit suicide.

Tami Duvall has been charged with murder, insurance fraud and obstruction of justice. A plea of ‘not guilty’ has been entered for her at a preliminary hearing and the trial date is set for January 2011.

Source: Chicago Tribune August 2010

A recent study suggests that poverty contributes to decreased life expectancy. This makes a life insurance policy all the more vital to families with limited incomes.

It may not come as a complete surprise to be told that well-off people tend to live longer than poor; unemployment, poor diet, and lack of leisure time play a part in increasing stress and decreasing quality of life for low earners. What is startling however is just how big a life expectancy gap there may be between the two groups.

Income Inequality Results in a Life Expectancy Differences

Researchers at Statistics Canada recently attempted to analyze the effect  poverty vs. affluence or ‘income disparity’ has on life expectancy. The findings, based on data gathered in Canada, were published recently in the journal Health Reports and make for disquieting reading: Figures show that on average only 54% of men from the lowest income group (bottom 10%) have a life expectancy of 75 years of age, compared with 74% of top earners. For women, 69.4.% of the least well-off can be expected to reach the age of 75, as opposed to 84.4% of the wealthiest women.

Life Insurance often not a Priority for those on a Low Income

Falling into the poverty trap also brings other complications – due to a lack of funds less affluent people often fail to take out adequate life insurance – insurance which would help family enormously in the event of their death. However there are lots of cheap life insurance deals on the market (most are available through low-cost, term life insurance) which low earners can take advantage of to help safeguard their future.

Life Insurance is a good Option for those on a Limited Income

While the super wealthy usually have numerous investments and portfolios to protect their futures people in low income brackets still need to plan ahead – and taking out a life insurance policy is a good tax efficient option. The sooner life insurance is set up, the better the rates on the premiums – since the older a person is the higher risk they will be to an insurer.

It’s also important to remember that no matter how much a person earns, lifestyle choices also play a big part in determining how healthy they stay and how long they will live – making the decision to give up smoking for instance will not only put more money in the pocket but significantly reduce the cost of life insurance.

Source

Andre Picard in ‘Globe and Mail’ Nov 2009

photo credit: woodleywonderworks

Dubious Ethics Not an Issue for Insurance Agents or Investors

Regulators were startled by the huge rise in the number of ‘stranger-originated’ policies being sold in this way – between the years of 2004 and 2008 it became a billion-dollar industry. Although the agents often set up the deals at huge financial gain to themselves, it has to be noted that investors were happy to climb on the bandwagon.

Despite only narrowly skirting the “insurable interest law” which prohibits a third party owning an insurance policy when they could have no conceivable interest in the well-being of the person holding it – (far from it in fact), the practice was legal across quite a few states until recently.

A bar graph showing the growth in life settlement policies.

Insurers File Civil Actions against Agents for Life Settlement Policies

Insurance companies claim insurance agents misrepresented their clients’ assets when looking to purchase life insurance policies for them, with many committing acts of outright fraud when filling in the application forms. According to them, in an attempt to secure policies, over eager agents, fueled by greed, inflated the estimated wealth of their clients and fraudulently answered ‘no’ when asked if they had any plans to sell the policies on.

For this reason insurers such as AXA have voided many of these insurance policies, leaving investors with now-worthless investments – unsurprisingly they are also suing the brokers for compensation.

Wealthy Insurance Agent in Trouble for Life Plan Fraud

One insurance agent being pursued in a high profile case, is Steven M Brasner, accused of committing grand theft and fraud when acting as the middleman in securing $78 million worth of insurance policies, netting him over $2 million in commission.

An illustration of the life insurance securitization process, which is complicated and similar to mortgage securitization.

He is charged with lying on his clients’ application forms in order to secure life insurance policies for them.  As well as facing state prosecution Mr Brasner is also being pursued through the civil courts by the insurance companies and investors he dealt with.  Mr Brasner is believed to have inflated his client’s net worth sometimes by up to six times in order to secure business. Steven Brasner is just one among many agents who are being pursued – there are over 200 civil lawsuits pending, filed by insurers. Judge John Meyer noted that the level of fraud was ‘astounding.’

Mr Brasner has declared himself innocent of all charges. He is quoted as saying that the companies he dealt with such as the investment group G111 Accumulation Trust (part of Deutsche Bank) were culpable and ‘had the expertise’ to ‘conduct due diligence’ prior to buying ownership risks.

More Information

See the New York Times article on Life Settlement Securitization here

photo credit: VoisineN

Life insurance is even more vital for soldiers whose family relies on their financial support.

Life insurance may be an afterthought for much of the general public, but for many young soldiers in the battlefields abroad, it’s a vital tool to help protect the financial security of a soldiers’ family and loved ones.

In a recent statement, defense secretary Robert Gates has warned that the U.S. public needs to see evidence that efforts to make a strategic breakthrough in Afghanistan are working if both countries are to continue to suffer the losses of young soldiers. According to Gates “the public expects to see us moving in the right direction.” We could no longer be expected to “tolerate the perception of a stalemate where we are losing young men.”

Stanley McChrystal, former U.S. commander of NATO forces is, however, said to be confident that there will soon be “sufficient progress” to “validate the strategy.” Belying this aspiration is a recent operation to clear insurgents from Marjah and parts of Helmand – both UK and US sources agree this has not gone according to plan, and soldiers on these battlefields may face a higher risk of death on the lines.

Military Personnel Risky for Most Life Insurance Companies

Soldiers at the front line such as those in Afghanistan and in other war zones operate in an environment whereby fatalities occur daily. Their bravery in light of their hazardous occupation cannot be overstated. From the point of view of life insurance companies, however, they are often too big a risk to insure. Many will not provide life insurance for soldiers who are on active duty.

This graph uses data collected from the Associated Press and Department of Defense to illustrate the growth in soldier deaths in Afghanistan. A soldier's life is at risk, and although most soldiers receive basic life insurance, it may be a good idea to purchase supplemental coverage.

Government Steps in to Provide Life Insurance for Military

This is why the U.S. government provides SGLI – Servicemembers Group Life Insurance – an affordable form of life insurance cover for servicemen and women. Up to $400,000 is provided through this program, in the event of death whilst on active service. There are also commercial life insurers, operating as partners to the US government, who can offer discounts for military personnel. Of course, many members of the armed forces sometimes decide to take out additional life insurance with them. You can request a life plan quote here to see which additional coverage options are available to you.

It’s a great time to protect your family’s finances with life insurance. Start here >>

photo credit: The National Guard

Skydiving is a high-risk activity, which means life insurance companies will charge more.

As extreme pastimes go, mountaineering must be one of the riskiest, and the ultimate achievement for climbers is still conquering the highest peak in the world, Mount Everest. Last month saw yet another attempt on the summit succeed. At thirteen years old, American Jordan Romero has become the youngest climber ever to reach the top of Everest. Jordan, who hails from Big Bear California, reached the summit on May 23^rd, earlier than planned, and the first thing he did was to call his stepmother.  Speaking to her via satellite phone he told her “Mom, I’m calling you from the top of the world”.

Good News: Young People Most Likely to Partake, Which Means Lower Life Insurance Costs

Dismissing criticisms that Jordan is too young to be participating in such highly risky mountaineering activities, his stepmother, Karen said that Antarctica, which is next on Jordan’s list would be “a piece of cake”. She described Jordan as a quiet boy and “no thrill seeker.” In fact he took schoolbooks with him on the expedition to study for when he had some “downtime” in the tents.

Mountaineering Is a Highly Risky Pastime

Bungee Jumping is also a high-risk sport. Life insurance companies will set their premiums appropriately to factor in this added risk.

photo credit (top to bottom): oncethiswas, LaBellaVida

It’s no surprise that in today’s difficult economy, many people are finding it hard to make room in their budgets for the basic essentials in life. This is no different for business owners trying to do the right thing and maintain their health and life insurance plans for their employees. Life insurance and health plans are costing more and more each year with many plans becoming simply too costly to keep for many smaller businesses. When it comes down to a matter of dollars and cents, many business owners are faced with the decision of cutting life and health insurance coverage for their employees instead of laying off some of those employees to keep costs down.

Economy, Rising Life Insurance Premiums Squeeze Employers’ Bottom Lines

The hard economic conditions that many businesses face now are directly related to stagnating sales and industry slumps that affect a business’s bottom line and operating costs on a weekly basis. The only way that many businesses – especially smaller ones with 2-30 employees – can handle the matter, is to really take a long, hard look at what’s important.

Providing excellent health and life insurance for employees is costly, but cutting the work force may be just as costly in the long run. Many employers are opting to reduce the level of coverage in their plans in order to keep costs down and keep more employees working. Costs for life and health insurance are outpacing many other costs of doing business and it’s affecting these smaller businesses the hardest. Many companies renewing business policies are reporting cost increases of 12-15 percent with some plans costing 30-40 percent more, based on health and demographic figures.

Employers Cutting Losses by Cutting Life Insurance Benefits

In an effort to cut their losses, many employers are cutting their own contributions to employee plans by raising deductibles, cutting benefits and increasing the employee share of the plan cost premiums. This takes the burden off of the employer to provide a high level of coverage, while encouraging the employee to take more responsibility for their own health care. By having each employee become more responsible for their own share of the health plan support, the company can keep health care costs down to a more manageable level.

photo credit: clementine gallot

Massachusetts Mutual Life Insurance Company’s LifeBridge program is a philanthropic program intended to help provide education to children of working parents. Since 2002, MassMutual has been offering free ten-year, $50,000 term life insurance policies to eligible families. In order to qualify, says MassMutual, a family must be in a good health and earn between $10,000 to $40,000 a year.

Any benefits paid through LifeBridge are distributed into a trust, which pays for the educational expenses of your child. Should your income go above the income limit after you qualify for LifeBridge, the life policy will still remain in effect and the only exclusion is in the event of suicide within the first two years of the policy.

Whether you’re a full-time or part-timer working parent, you may be eligible, but you should first check with MassMutual. Since the program started about 9,500 free policies have been issued totaling about $450 million in coverage. Since its inception, the LifeBridge program has paid on six claims through the program.

photo credit: atennies94

It is hard to believe that it has been over a year since the tragic loss of one of the scariest “Jokers” in “Batman” history. One of the first Jokers, Jack Nicholson, warned Heath Ledger about the emotional drain the part of the “Joker” can put on an actor. It wasn’t until audiences flocked to the box office to see the new Batman movie that they realized just how serious Ledger took on the role.

“His voice sent shivers through my bones,” an audience member was quoted as saying after seeing the Batman thriller. There are very few actors that can transform a role like Ledger did in The Dark Knight and his films live on in the hearts of audiences around the world. He took on a powerful role as a gay cowboy in “Brokeback Mountain” in which he kissed Jake Gyllehnaal and won an Oscar for his performance.

Ledger’s Suicide and Life Insurance Woes

During the filming of The Dark Knight , Ledger was found dead and at the time his life insurance company, ReliaStar wanted to perform an investigation as to whether it was a suicide. Friends, family, and fans of Ledger felt that it was preposterous for ReliaStar to accuse Ledger of lying on his insurance application. The $10 million life insurance policy whose only beneficiary is Ledger’s three-year-old daughter reached a confidential settlement in court, where both parties were pleased according to a spokesperson for Ledger’s attorney.

See our original coverage of the Heath Ledger Life Insurance controversy here.

photo credit: John Griffiths

Life insurance companies are finding it hard to keep up with real estate investment losses and costly retirement contracts in the midst of the current economic hurricane. With the prospect of even more credit rating cuts for the balance of the year, companies are faced with little choice but to find more capital sources from an unforgiving marketplace.

Federal Government, TARP, and Life Insurance Companies

Under the federal government’s TARP system (Troubled Asset Relief Program), only those insurance companies affiliated with banks or under the umbrella of thrift organizations can qualify for financial assistance. That only takes into account about half the insurers in the country with the other half preparing to scramble for funds wherever they can get them. Because of the market’s perception of financial weakness that may be construed when a company asks for aid, many have simply refused to go that route – for now.

One of the nation’s largest insurers, MetLife, is rumored to be heading for federal aid, though their spokesman declined to comment on the rumor. Not because it needs the bailout money, but rather to prepare itself for the many smaller companies that it will try to buy up when the opportunity presents itself. Economists feel that opportunity is rapidly approaching. With a sale of its stock recently raising over $2 billion, the company is poised to buy up the assets of troubled and weakened institutions that may become available over the coming months.

A New Insurance World may be Dawning

The life insurance landscape is most likely going to change dramatically over the next several months, as more and more smaller companies either apply and receive federal aid or don’t. The ones that are still in financial trouble over the coming months will find themselves either the victim of consumer non-confidence or being gobbled up by the huge insurance sharks that will be circling in the insurance waters.

With many insurance companies holding mortgage-backed securities in their investment portfolios, the troubles being felt in the stock market are rattling the financial foundations for them as well.

photo credit: Mike Licht, NotionsCapital.com

The headline “suicide” probably jumped out at you like a red flag in front of a mad bull. Suicide is nothing to take lightly, and it certainly isn’t in this case here. Chantix, an anti-smoking drug created by the pharmaceutical mega-giant Pfizer, has been linked to cases of depression, psychiatric problems and even suicide. Maybe you have never heard of the drug, but you probably know someone in your life who is a smoker. If they have ever thought of quitting, pass this vital information along to them.

What is Chantix?

According to drugs.com, Chantix “is used as a smoking cessation medicine or treatment. It is used together with behavior modification and counseling support to help you stop smoking cigarettes. Chantix works in the brain to block the pleasurable effects of smoking. This helps to decrease your desire to keep smoking.” That right there might be a warning sign for some: “works in the brain.” Taking a drug like this is no lighthearted undertaking; it literally affects the way your mind thinks and feels about smoking, and obviously other things in your life as well, and as you will see below, has had disastrous side effects.

In the last reported quarter of 2007, Chantix accounted for 988 serious injuries in the US reported to the FDA, more than any other individual drug in this time period. By comparison, the FDA received a median of five reports of serious injury for 769 different drugs. Following that fatal quarter, the total of 20,745 cases reported from January to March was 38 percent higher than the average for the previous four calendar quarters, and the highest for any quarter, a report by the Institute for Safe Medication Practices stated. Fatalities accounted for 23 percent of the cases.

The total number of deaths, 4,824, was an increase of nearly 3 percent from the last calendar quarter of 2007. According the a Public Health Advisory issued last year by the FDA, from May 2006 through December 2007, they received 227 reports of suicidal acts, thoughts or behaviors, 397 cases of possible psychosis and 525 reports of hostility or aggression. These included 28 cases of suicide and 41 mentions of homicidal ideation, 60 cases of paranoia and 55 cases of hallucination.

Your Life and Life Insurance Are in Your Hands

The terrifying thing about studies and drugs like Chantix is that the power of your rationale and subsequently, life, are placed in someone else’s hands. In the cases of drugs that work miracles to help with cancer and diabetes, this might be a good thing, because you are being healed. With Chantix, the drug seems to be doing harm to innocent people only seeking to kick an addiction, and despite positive results in some patients, the possibly fatal side effects cannot be ignored. These statistics should help prompt you to think about the value of your own life, whether you are seeking to quit an addiction to smoking or not. Having a life insurance policy is one of the smartest steps you can take to protect yourself and your family.

You never know what life is going to throw at you, how certain medications may affect your body, or even how poorly people are going to be driving on the roads any given morning. If you were to suddenly and unexpectedly pass away and you were without a life insurance policy, your loved ones would be left with nothing. Life insurance policies are designed to protect the family you leave behind in the case of an unexpected death. Funds from a life insurance policy can be used to help cover any funeral or memorial costs or to simply help with everyday things like mortgage payments, a child’s tuition, groceries.

Life insurance policies can normally be as flexible as you need them to be: you can decide your premium (the amount you pay per month) your beneficiaries (who the money would go to if you died) and even determining a cash value that you could potentially draw out of if there was an emergency while you are still alive. There are various types of life insurance plans to consider: Temporary insurance, whole life coverage, universal life coverage, limited pay and accidental death. This only a small smattering of what is available to you; life insurance specifically for smokers is available, and this http://www.my-life-insured.com has a number of special topics designed to help you learn more about what policy might work best for you.

photo credit: aprilzosia

photo credit: John Griffiths

Heath Ledger, who tragically died of acute prescription drug intoxication in January of 2008, may have his life insurance policy revoked.  Ledger’s policy was carried by ReliaStar (a subsidiary of ING Americas), and its benefit was a reported $10 million. But lawyers for the life insurance company say they intend to investigate the matter, and “take the depositions of Mary-Kate Olsen, as well as the masseuse who was at Ledger’s home when he died.”

Though Ledger had not been taking any illegal substances at the time of his death according to the New York coroner, the insurance company is reportedly looking into the possibility that he had lied on his insurance application. If Ledger had lied, whether it was about any potential past illegal drug use, or the prescription drugs that he was taking, it’s possible that the $10 million policy will be revoked and his two-year-old daughter will not receive the benefits under her trust.