Family left in Financial Difficulty when Husband died leaving no will or Life Insurance

Mandy Tenant a mom of three, found this out the hard way. Her husband Adam died suddenly without a will and had not taken out life insurance. With regard to strict intestate laws in Britain the estate was divided up between Mandy and her three young children, much being tied up in a trust fund for her kids. This meant that Mrs. Tenant was left financially insecure with no way to pay the mortgage, leaving the family in danger of losing their family home.

Mom told – if you want to keep your house then you will have to ‘Sue’ your children
On seeking legal advice she was told, by law firm Irwin Mitchell that the only way forward would be to sue her own children to gain control of the assets.  A representative at Irwin Mitchell said “This whole situation could have been avoided with a valid will leaving his wife in control of the whole estate”. Plus, If Mr. Tenant had taken out proper life insurance cover this would have allowed his wife to pay off the mortgage, on his death. Without either a will or life cover Mrs. Tenant, came to realize that, in this unfortunate situation, intestacy does not recognize partners.

Intestacy Laws do not always make sense

Intestacy laws in the US vary from state to state – in Alberta for instance, which gives unmarried couples the same rights as married, a surviving spouse may learn that she or he is entitled to no part of the deceased husband/wife’s estate. In fact it could happen that the entire estate has been given over to an ‘ex’ partner in preference to the existing spouse or even the deceased person’s children and parents.

Protect your Loved Ones by Taking out Life Insurance

As well as taking out a will – a necessary if unpalatable chore – the importance of making sure you have enough life cover is essential. By taking out enough life insurance to cover the cost of your mortgage you can at least rest assured that, whatever else happens, your family will not end up losing not only you but their family home.

 photo credit: smemon87

Source Telegraph.co.uk ‘No will? You’ll have to sue your children’ 13 August 2010

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

Examples of countries on the list are: Somalia, Iraq and Haiti. In these countries, workers, including those volunteering in the aftermath of disasters and those working for construction companies, are likely to struggle to get life insurance. In Somalia crew members or divers who are there in order to profiteer are very unlikely to obtain life insurance.

Whether working for aid organizations, construction companies or adventuring in Somalia, the one thing all these employees have in common is that life insurance is a headache to find either for themselves or by employers on their behalf.

Aid workers Struggle to get Life Insurance

According to Ryan Pinney of Pinney Insurance Center, California “The more unstable and dangerous a country is and the more likely something bad will happen, the less likely you are to get insurance, not even from Lloyds of London which provides specialty insurance if you can pay the price”.

Members of the Red Cross and Peace Corps have to find life insurance for themselves because, as Pinney states “neither agency provides it for their volunteers” and, it could cost “24 to 50 per cent more for a policy because of the danger.”

31 Countries are Considered ‘Unstable’

According to the State Department’s web site a travel warning is issued when “long term protracted conditions make a country dangerous or unstable” and thereby “lead the State Department to recommend that Americans avoid or consider the risk of travel to that country.”

There are currently 31 countries on the list and reasons for being on the list vary from war to physical instability to terrorism or to the type of rebel violence recently witnessed in Mexico. People travelling to, or working in these countries face a daily high risk of being kidnapped, injured or killed and life insurance companies can feel that the costs of insuring anyone working in these conditions is prohibitive .

Government provides Life Insurance for the Military

The military obtain life insurance through the US government and many private insurance companies are willing to insure servicemen too, but the majority of life insurance companies will not provide insurance for contractors or volunteers working in war zones.

Source: SSCI-Iraq.com

 photo credit: timsnell

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

Life insurance needs should be re-assessed at regular intervals to ensure the policy or policies taken out are still adequate for their purpose. Policies taken out 10 -15 years ago may have outlived their use, lapsed, or premiums may have gone up due to underperformance in a volatile market place. Examples of underperformers include many of the ‘permanent’ life policies available over recent years –‘whole life’, ‘universal’ and ‘variable’ life policies which are linked to interest rates, which can go up as well as down.

No ‘One size fits all’ Life Insurance Policy

There is no ‘one size fits all’ insurance policy out there and it may be a case of combining different types of life coverage in order to ensure future financial needs will be met. Many people decide to re-assess their requirements for life insurance after experiencing a big life change which affects their finances – such as having a baby, or taking out a mortgage. The implication of leaving behind dependents or partners who may be left with big financial commitments motivates many to plan a financial future which includes life cover.

As well as meeting the needs of their beneficiaries in their ongoing lives, another common reason to take out coverage could be simply to cover short term funeral costs (costs which are rising every year).

How to calculate life insurance requirements

An appraisal is needed as to how any current policies are performing, and an honest calculation of their projected value going forward is needed. You may find that there are better products out there in the marketplace to suit you. Restructuring may seem like a hassle, but lower administrative fees and the fact that insurance companies have re-designed their cost structures mean that changing policies is not the financial headache it used to be.

Alternatively – you may discover through the process of re-evaluation that your life coverage is just fine, thank you – but taking stock of finances in an uncertain economic climate has to be a good thing.

Source: Stephen Smith, Delmarvanow.com

 photo credit: SMJJP

However recent figures from a survey undertaken by Sainsbury’s Life Insurance reveal that in the UK millions of borrowers (with billions of dollars worth of home loan debt between them) have failed to take out mortgage protection. In fact a staggering 43% of British mortgagees have no life cover. The recent recession has meant that UK borrowers, struggling to keep up with mounting debts, have cut back on life insurance cover.

A recent survey has shown that nearly a third of 35 to 44 year olds have no life insurance cover protecting their mortgage payments, and 34% of 45 to 54 year olds are in a similar situation. This means that many people with children are unprotected, as well as younger mortgage holders.

According to Lucy Hunter, at Sainsbury’s Life Insurance ‘Life insurance provides financial cover should the unthinkable happen, enabling people to be secure in the knowledge that their dependents could receive a cash lump sum if they were to die.”

This is particularly important for home owners who need to have the reassurance that, should the unthinkable happen, their families would be covered and able to continue living in the family home without the burden of financial responsibility – life insurance is basically ensuring financial security for the future.

Source: The Insurance Blogger.com November 2010.

photo credit: fourbyfourblazer

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

A recent study by Cornell University revealed that there are 2.6 million or more children aged five to 15 with one disability, with more than 30% of them having at least two disabilities.  Another recent study, by Hartford, questioned 580 parents with special needs children and found that 23% of them spend over $500 per month on addressing their care.

60% of parents said that they believed their children would continue to need financial help into adulthood – but only half the parents said they had a plan in place to cover this cost. The 42% who felt confident they had planned for their children’s financial futures had mostly used life insurance as a tool to do so.

Parents of Disabled Children Unaware of Federal Laws regarding Inheritance

Many parents of children with special needs plan to leave their money to their children on their deaths – with 58% of them in the study planning to name their children as beneficiaries. However many are unaware that doing so could bar their children from receiving essential state services and benefits.

Parents of Special Needs Children have to Plan carefully when it comes to Life Insurance

Under Federal Law an inheritance of over $2000 can bar someone from receiving state assistance. SSI (State Security Income) can be withdrawn altogether for a special needs child, if they have received an inheritance – and this includes life insurance benefits.

A Special Needs Trust is an Option

A ‘Special Needs Trust’ can supply children with financial help towards their care, and will not disqualify them from receiving help and support from the government. The trust is the legal owner of financial assets such as stocks and savings and also manages any benefits or properties which ensue from a life insurance policy. The trustee is barred from profiting from the assets, but is charged with investing or dispersing them.

However according to the recent survey, just a quarter of parents have taken the step of setting up a ‘special needs trust’.

Parents need to become more Educated how to use Life Insurance

Donna Scalaro, a Director at The Hartford believes parents of special needs children need to become more informed about these ways of managing their children’s future finances. “Most parents think they cannot devote extra savings to a trust, because they feel they have to amass this large amount of savings to cover expenses.””They do not realize they can cover the expenses by using life insurance. Using dollars from life insurance can be a very affordable strategy.”

Due to the way the trusts are set up, the children with special needs to not ‘own’ the money in the trusts and therefore it cannot be viewed as income. This is why they will still be considered eligible for government aid to help with such things as food, housing, utilities, property taxes, and cash.

But the trusts can help pay for important expenses for their care such as disability aides, transportation, computers, and rehabilitative treatment.

The most important thing is that parents should always seek help from a financial advisor who can supply them with specialist help in this area. Only when they are fully armed with legal information and financial options open to them, can they come up with the best way to safeguard their children’s future.

Source: Insure.com – Life Insurance Planning for Parents of Children with Special Needs, June 2010
photo credit: Beverly & Pack

Majority of Single Mothers have no Life Insurance

Having sole responsibility for the children means single mothers must consider the welfare of the kids in the event of their death – a necessary (albeit unpleasant) task you might think, but worryingly estimates show that almost four in ten single parents do not have any life insurance cover – and those who do have often not arranged enough.

Single moms must make life insurance a priority so that their children do not suffer financially as well as emotionally should the unthinkable happen– their Life Cover must ensure sufficient resources for children to live on as well as perhaps the opportunity to go to college later on. Life insurance which would pay out on the death of the policy holder (term insurance) might be a good option to consider, however it’s worth discussing possibilities with a good insurance agent who will be able to give an expert opinion on the best low-cost life insurance policies for those on a low income.

Obama aims to get Single Moms back to school

In an attempt to lift single mothers out of poverty Barack Obama is attempting to make prospects better for single moms who want to return to study but are hampered by lack of finances. Grants are available to enable single mothers to get a second chance at education – education which can only benefit both their families and their future employers.

The Scholarships for Moms program has increased funding via Pell Grants ,which have been around for some time – the maximum amount of aid has been increased to over $5000 –$1000 more than previously. Also importantly the range of study options for which funding is available has increased to cover part-time and distance study, thereby making it far easier for a single mother to access learning whilst working or caring for children. A further $10,000 worth of financial aid via a Scholarship is available for some single mothers – in order to qualify you must be female and have a child.

The Obama Scholarships give single moms a real chance at improving prospects both for themselves and their children – but they must also consider how important life insurance is to their offspring’s potential happiness and security.

photo credit: meemal

Life insurance companies do pay the majority of claims, and paid out $38 billion pounds on individual life policy death benefits last year, but a recent case involving American General has shown that Life Insurers are not always playing fair when it comes to refusing to pay out.

American Life Cancelled Life Policy and Withheld Monies from ‘Exemplary’ Life Policy Holders

Sheila Weissberger became a widow in 2005, after her husband Ian died of Lou Gehrig’s disease. American Life was the Weissbergers’ life insurer and – according to their advertizing -the protector of ‘the hopes and dreams of American families’. Upon the death of Mr Weissberger, they cancelled Mr Weissburger’s life policy and much to her astonishment refused to pay Mrs Weissberger the expected $250,000 payout.

American life confirmed the premiums were fully paid up, no fraud was suspected and nobody could doubt that Sheila Weissberger was the rightful sole beneficiary – plus, Mr Weissberger’s illness was not diagnosed for several months after taking out the life policy. In fact it might seem as if the Weissbergers were exemplary life policy holders.

Refused Payout to Widow on basis Life Application was ‘Incomplete’

The reason for this decision was, according to American Life, that the life policy application was in their opinion incomplete. They stated that Mr Weissberger had failed to declare on the form that he had a bipolar disorder and pulmonary disease – conditions he did not actually have, according to his doctors.

Due to their decision Mrs Weissberger, 62, said “I lost my house. I lost everything” “It was very, very devastating”. American General has now reached a confidential financial settlement with Mrs Weissberger, but she will not likely to ever forget this period in her life.

Most Common Reason for Withholding Payouts is ‘Flawed Applications’

Life insurers can refuse to payout on policies for legitimate reasons such as foul play, unpaid premiums and suicide, but the most common reason for disputing claims is ‘material misrepresentation’. This means failure to disclose information deemed important when assessing risk – this clause can allow life insurance companies to totally rescind live cover.

The majority of American states have banned limitless rescissions in order to stop life insurers abusing the system, but Californian and other areas, life insurance companies can rescind life policies in the two years following the signing of a policy.

Source: Latimes.com November 2010

photo credit: StuartWebster, tibchris

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

A study published in May 2010 in the journal “Demography” looked at data collected from over 2 million Danish couples. Statistics showed that women who married partners seven to nine years younger than themselves had an increased mortality rate of 20%.

The study, carried out by the Max Planck Institute for Demographic Research in Rostock, Germany, found that women who marry considerably older men also tend to have shorter lives. A big age gap either way from a woman’s point of view has a detrimental effect on her life expectancy.

A woman’s best choice of partner for a long life is someone of the same age or slightly older.

Men who marry younger women are a much better risk to a life insurance company

This is not the case for men since the research showed that the mortality risk of a man who marries a woman seven to nine years younger than himself is reduced on average by 11%, compared to marrying someone the same age.

“Health Selection” doesn’t work for women

Previously it was thought that it was beneficial for either partner to marry a younger spouse.  This idea known as “health selection” says that those selecting younger partners are generally healthier and have the potential to live longer than others, and that by matching up with someone younger this would increase the positive psychological and social effects which help in older age.

Why don’t women  benefit from their younger husbands

According to researcher Sven Drefahl, “One of the few possible explanations is that couples with younger husbands violate social norms and thus suffer from social sanctions.” It is also believed that the psychological and social benefits an older husband gets from a younger wife do not hold true the other way round – the husband is unlikely to have as many social contacts as a woman would and is less likely to match a woman in terms of the level of care he will offer his ageing wife.

The good news is that life insurance for married couples is cheaper overall

The bright side is that marriage raises life expectancy for both sexes compared with the unmarried, with women overall still outliving men by a few years. This makes them more of a positive investment for a life insurance company when it comes to taking out a life insurance policy.

photo credit: jenny downing

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

There are lots of great deals on the market currently if you are looking for term life insurance and critical illness cover. Term life insurance is cheaper than whole life insurance because it only covers you for an agreed term, whereas whole life insurance provides coverage for life. Plus, you do not get any return on investment with term life – but can reap good dividends with whole life coverage.

Critical Illness Cover is a Welcome Boost to a Life Insurance Policy

Term life insurance can be boosted by adding on critical illness cover to it and many life insurers can offer this benefit at a very cost effective rate. Critical illness insurance means you are insured against the main critical medical conditions and illnesses including cancer, heart attacks and kidney failure – insurers will publish a comprehensive list of illnesses they cover.

Make sure to carefully check out exactly what is covered, since you could get a nasty shock if it later turns out that e.g. the loss of one limb is not considered ‘critical’ by the insurer, whereas losing two e.g. legs is. Similarly, some insurance companies will only cover you for certain types of cancers – so check the terms very carefully. And speak to an advisor before taking out critical illness protection.

Take the time to Check Terms and Conditions of Life Policies

Many of the term life insurance policies being offered seem like really good deals – the policy premiums often look like excellent value as far as the policy cover amount. For example, a 40 year old non-smoker could arrange a $1 million dollar term policy to run over 30 years, and only pay around $2,500 per annum for it.

Use a top Rated Company

But –make sure you are buying a policy from a trusted and known source. If you don’t you run the risk of being shortchanged in the event of a claim. The best way to check out which life companies are reliable is via a broker or the internet.  Make sure you check out whether the life insurer is financially stable, too by looking up its rating on Standard & Poor’s or AM Best – and go with an insurer that has an A rating or better.

Use ‘Execution Only’ Brokers for Cheaper Life Insurance Deals

Also it’s worth noting that life insurance prices change on a daily basis – so it’s a case of ‘best buy brokers’ rather than ‘best buy insurers.’ Brokers take on the job of finding the lowest priced insurance companies – but – some brokers receive extremely large commissions from the insurance providers and this can have a big impact on how much you end up paying. The best way of getting round this is to utilize ‘execution only’ brokers – they give you the commission, and charge a small fee in return.

Other things to check are that life premiums are ‘guaranteed’ rather than ‘reviewable’ so that know exactly where you are when it comes to monthly payments. The most important thing to remember when you are trying to get the cheapest life insurance and critical illness deals is that it pays to get advice.

Source: Amy Perry, Allvoices.com Jan 2011, and MoneySavingExpert.com Oct 2010

photo credit: allaboutgeorge

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

Euthanasia’s Implications for Life Insurance

During all his years as a doctor Howard Martin made no secret of his belief in euthanasia – a belief which was tested to the utmost in 1988, when he helped his son Paul , who was terminally ill with cancer, die. Euthanasia, however, is illegal in the UK and Dr Martin, who is now 75 years old, said that in making his recent confession he was doing so with the full knowledge that he may have to spend the rest of his life in prison.

Life insurance companies will not pay out if suicide is found to be the cause of death, even if the person is terminally ill. Assisted suicide in these types of cases can be difficult to prove however if the person’s life was hanging in the balance anyway due to their illness. If suicide is suspected, then life insurers will insist on an autopsy to determine the cause of death.

Dr Martin Acted Autonomously in Administering Fatal Drugs

The police believe that Dr Martin may have been involved in the deaths of up to 30 patients, and he has stated that he acted in accordance with their wishes, in terms of carrying out assisted suicides. However there were apparently two exceptions to this where the drugs administered by Dr Martin – those which killed the patients -were administered without their having given their consent, effectively making Dr Martin’s involvement in their deaths murder.

Many people back the right of the terminally ill to choose when to die, including some of the relatives of those assisted by Dr Martin, who called him an ‘angel of mercy.’ Other relatives, however, said they felt betrayed by him.

This recent case illustrates how the debate over assisted suicide continues with opinions divided on the issue. The government in the UK has tried to bring in a bill to legalize euthanasia three times and three times it has been defeated. Very few places in the world have a form of legal euthanasia, and they include: The Netherlands, Belgium and the American states of Oregon, Washington, Montana, and Texas. Life Insurers will have policies which reflect the legality of these practices in these areas.

photo credit: Sarah G…

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

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

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

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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

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

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

Despite this there is, according to Kim Holland, the insurance commissioner of Oklahoma “a legitimate purpose in viaticals and life settlements.”  The sale of a policy whereby the seller is not expected to live more than two years is known as a Viatical and these payments are not subject to income taxes. Life settlements on the other hand are made on policies surrendered where the owner has a longer life expectancy, and are subject to taxation.

Jonathan Pond, a financial advisor from Newton, Massachusetts agrees that cashing in a life insurance policy sometimes makes sense and states “If you really need the cash then it’s certainly worthwhile to consider”.

Substantial number of Seniors Seek to Cash in Life Policies

The trade in selling viatical policies emerged in the 80’s as individuals with AIDs, for whom death suddenly loomed large cashed in their policies to get quick access to finance either because they had lost their jobs or had to pay huge medical bills. Since then another group of people have taken their place – people approaching their seventies who wish to surrender or sell their life insurance policies for reasons such as needing money for long term health care, for vacations or just cash to make ends meet. Alternatively, some older people find that they have amply provided for themselves and their spouse via other investments and have no need of the policy any longer.

Seek Financial Advice before Cashing in a Life Policy

Although Jonathan Pond believes that cashing in a life policy can be a valid way of raising money he urges his clients to try other routes first. Typical life policies will reserve some of their value as a death benefit even after it has been surrendered. And the policy owner may be disappointed with the amount after tax is applied. The amount they get depends on a number of factors, including their age, sex, health, and life expectancy, the type of policy it is, and the cash value of the policy.

Those selling Life Insurance Policies should shop around

Gloria Grening Volk has written a book entitled “Cash for the Final Days” (Bialkin Books 1997) and she says selling a policy should be looked upon in the same way as selling a house – “Don’t go with the first one that makes you an offer.” Matthew J Gaul, deputy superintendant for life insurance at the New York State Insurance Department agrees that sales were “something where consumers really need to price comparison shop among different providers.”

Source: Charles Delafuente “When Life Insurance is More Valuable as Cash”, NY Times Mar 3 2010

photo credit: Hakan Dahlstrom

Iceland leads in life expectancy.

Life Insurance Premiums Likely to Differ Depending on Location

The report showed that although the global mortality rate for adults has fallen by 1% a year for the past 40 years, the difference between the mortality rate of those countries with the highest and lowest rates is increasing. Substantial increases in adult mortality have been seen in the Sub Saharan Desert and in the Soviet Republic due to the Aids epidemic and a significant decline in mortality rates in South Asia. One implication of this new information is that people living in South Asia will be able to get lower Life Insurance premiums.

Individuals with Best Chance of Low Life Insurance premiums

The countries with the lowest mortality rates for men are: Iceland, Sweden, Malta, Netherlands, Switzerland, and Australia – in fact Australia’s mortality rate decreased dramatically from 44^th place in 1970 to 6^th in 2010. The UK came in at 19^th for mortality rates, Greece at 22^nd.

The report was bad news for the U.S. however, since mortality rates have increased for both men and women – with men dropping to 45^th place (170 deaths per 1000) and women to 49^th. This puts the U.S. way behind its neighbor, Canada whose mortality puts them in 28^th place – a statistic which some people may find surprising.

According to Dr Christopher Murray, author of the study, there may be good reasons for this “Part of it is that Canada is doing a much better job in tobacco than the United States.” Another factor is that Canada has universal health care and less incidence of so-called “affluence diseases” such as high blood pressure, diabetes, coronary heart disease and obesity, rates of which are increasing more rapidly in North America than in the developing nations.

Women of Cyprus have Best Chance of Longevity

For women the best place to live is Cyprus, followed by South Korea, Japan, Italy and Greece with Spain retaining a good rating (looks as though that Mediterranean diet pays off after all).

The adult mortality rate has big implications for public health globally and is listed as a Millennium Goal, but has been somewhat neglected until now. The latest research will also be useful for life insurance companies when it comes to underwriting policies in different countries.

Sources

Reuters

Huffington Post

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

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

Recent research carried out by the Boston Medical Centre, University of Boston, shed new light on the role genetics play in the aging process. The study, entitled the “New England Centenarian Study,” is the largest study of people who have reached the age of 100, and includes data from as far back as 1995.

It was found that 77% of the 1000 participants possessed 150 genetic variants in common, so-called ‘longevity genes’. From this research it may be concluded that the presence of these genes in individuals could possibly indicate an increased potential to live to the age of 100.

Environmental Influences also Play a Significant Part in Lifespan

Simply possessing these genes does not insure you are going to live a long, fruitful life. Environmental factors play a huge role in determining ones life expectancy. Factors such as smoking, becoming overweight, and diet will all play a part in determining how long a person will live – which are the same factors life insurance companies have to take into account when assessing a person’s insurance premiums. It is also worth noting that although it seems 77% of people made it to the age of 100 with genetic factors helping them, 23% did it without.

‘Longevity’ Genes may Suppress Harmful ‘Aging’ Genes

Exactly what part these genes play in increasing lifespan is not entirely known. Previously it was thought some people lived longer because they lacked some of the harmful genes which hasten the onset of aging diseases; this new research tells us that in fact longer-lived people possess all the harmful genes, along with the 150 newly identified ones.

This would seem to indicate that ‘longevity genes’ have an ability to suppress harmful genes, somehow limiting their power to trigger aging illnesses in individuals. It was also discovered that in 90% of the centenarians studied none suffered from any typical age-related illnesses, such as Alzheimer’s or dementia, until after the age of 93.

Implications for Medicine and Life Insurance

This study has big implications for preventative medicine in the area of aging related disease. It is hoped that further research will be extended in order to focus on different nationalities including the Japanese, believed to have the longest life expectancies of people on the planet. This type of research will also be of great interest to life insurance companies – access to this type of new genetic information might give life insurers a more informed way of assessing risk; knowing that potential life insurance customers have genes which make them likely to live to 100 might reduce life insurance premiums for them since a payout on their life insurance might be a long way off.

Better rates on life insurance would be great – but being told you possess ‘longevity genes’ can’t really be topped.

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

Life insurance for older people is getting more affordable

Sakhan Dosova has never thought about life insurance, but for many seniors in the West life insurance is becoming more affordable – living to the age of 130 is obviously far from the norm but many more of us are living into our 80s due to better health care and diet.

For people buying a senior-oriented life insurance there are various ways to help get a better deal: Firstly, get a medical check-up – if you can prove you are still fit and healthy you are likely to get a better deal on life insurance. And if, like Sakhan Dosova’s descendants, you can prove that your predecessors were particularly long-lived this could also help lower your premiums.

Seniors have different life insurance needs than younger people

Many Life insurance companies specialize in providing life insurance for retirement. Insurance needs for this age group differ from those of younger people – the mortgage may well be paid off, and the car. Plus, seniors generally have a steady income available upon which to live; in this situation there may be no need to take out insurance for investment purposes. However, taking out a life insurance policy can still be a good tax-free option to help pay for funeral expenses or medical care for a surviving spouse, especially ‘term’ insurance, whereby the policy has no cash value but simply pays out upon death.

In regards to Sakhan Dosova, the government of Kazakhstan wants more checks to be made before officially declaring her the oldest woman in the world:  If the claims are true, and Sakhan Dosova was born in 1879 as she states, she would share the same birth year as Einstein and Stalin.  She is no doubt very old, but as officials point out, birth records in Kazakhstan are notoriously unreliable.

The Kazakhstani government is still recovering from the ridicule poured on it in the aftermath of Sacha Baron Cohen’s film ‘Borat’ and have stated “for the sake of our country we want to make sure her claim is correct.”

photo credit: Ernst Vikne

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

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

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

A diagram showing the inner workings of an artery

The rising epidemic in obesity and diabetes in the U.S. is frustrating heart experts in their attempts to reduce heart disease. The message about living a healthy lifestyle and keeping weight down just doesn’t seem to be getting through. It is hoped, however, that looking at our health from a different perspective – in terms of our ‘vascular age’ we might be motivated to make the necessary lifestyle changes to cut our future risk of heart problems.

“There’s a saying that ‘you’re as old as your arteries,’ meaning that the state of your arteries is more important than your actual age in the evolution of heart disease and stroke,” Says Geetha Raghuveer, associate professor of pediatrics at the University of Missouri Kansas City School of Medicine. “We found that the state of the arteries in [some] children is more typical of a 45-year-old than of someone their own age.”

How is vascular age calculated?

By taking into account such things as age, sex, cholesterol, blood pressure, whether or not you smoke, as well as any instances of stroke, heart failure or arterial disease, a health professional can tell us the ‘real’ age of our arteries. A 35-year-old might turn out to have the blood vessels of an average 80-year-old — a real shock to the system.

A look at the risk of heart disease based on vascular age

Could my vascular age affect my life insurance?

Your ‘vascular age,’ along with other indicators could well have a bearing on the cost of life insurance you can get.  The estimated age of your blood vessels, if significantly higher than your real age will indicate to a life insurer that you are more likely to die younger, from heart complications. Life insurance companies cannot ignore this kind of information when assessing your premiums.

Make lifestyle changes to lower your vascular age

By changing your habits and lifestyle you can rapidly improve the health of your arteries. By adopting a healthy lifestyle not only will your life expectancy increase, but your risk to a life insurance company will decrease. You may even end up having a vascular age which is significantly lower than your real age, which will make you an even better bet when it comes to taking our life assurance.

photo credit: perpetualplum

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

Divorce is a difficult time for all parties involved, and as you gather together and divvy up what’s left in the wake of your separation, life insurance is something that will become an inevitable issue. Before proceeding with divorce papers, it is important to reassess life insurance coverage levels, whether it can help to protect income received from child support payments or save money by changing the term of coverage.

One way to save money on life insurance is to purchase term life insurance instead of a whole life policy because of its impermanence. Term life policies allow for flexibility once the dust clears and enables both parties involved to move on with their lives.

Divorce and Ownership of a Term Life Policy

During a divorce, the owner of the policy has the ability to change the beneficiary at any time without any notification and take out cash values in the policy if they are available. This makes things difficult if there is a conflict or any sort of disagreement during the divorce. The duration of the policy may be held until the child reaches an age of maturity and all child support payments have been settled.

The type of life insurance coverage that is chosen during divorce is just as important as the people involved. For families across the nation, reassessing life insurance policies during divorce allows everyone to benefit, even if it may be a difficult and painful process for the entire family.

photo credit: Editor B

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…

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

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

Many companies offer specialized life insurance policies for those people over the age of 50. You’ve probably seen ads on television for them over the years, but may not have been ready to commit to the coverage of the policy. These policies have proven to be very popular and more and more insurance companies are realizing what a huge market there is for this type of policy. Many policies that provide coverage for those over 50 are designed to be very affordable – regardless of whatever medical history or employment status you may have. Many people simply put off purchasing the proper life insurance coverage they need, waiting for a better time or for the cost to go down. The truth is, there’s no better time to purchase retirement-oriented life insurance for yourself or your spouse, than right now. Many companies are offering the lowest premiums in the industry in order to get your business.

Finding Valuable Life Coverage before Retirement

Most life insurance policies for people over 50 will of course ask you to answer a few questions about your life and your general health. In this way the insurance company can accurately match your life insurance needs to your lifestyle and health needs. While there’s no need to have far more insurance than you require (and having to pay extra to have it) you also have to make certain that your present and future medical needs will be taken care of.

Qualified life insurance professionals can make certain that the life insurance policy you end up with is perfectly tailored to your life. Whether you’re thinking of retiring next week or in the distant future, a life insurance plan that’s designed to take the worry out of being over 50 can mean the difference between having a happy retirement and simply sitting around – worrying about health matters.

photo credit: pedrosimoes7

There’s no getting around the fact that the current economic conditions are getting on peoples’ nerves. The stress factors that many people have to deal with are rising rapidly as life insurance and other financial matters grind away at the thoughts and worries of everyone. There’s a definite link between financial pressures and personal stress and for many people that means not being able to deal properly with the everyday matters of life such as friends and family. Unfortunately, having a good life insurance plan usually doesn’t mean it’ll help you live a better life while you’re here. That’s why it’s important to keep your quality of life in the upper reaches by dealing properly with stress levels.

The simple truth is that 44% of all employees in America are living from one paycheck to the next with 60% of all employees – even the more successful ones – worried about their financial future and whether or not they’ll continue to be able to make ends meet. It’s very important that you don’t allow financial worries to begin to take a toll on your personal health. Stress has a very subtle way of grinding away at a person a little more every day until only the raw nerve ends are showing. Increased stress levels can also mean increased health costs to people who have a hard time dealing with the stress brought on by uncertain financial times.

Tips for Reducing Financial Stress in Your Life

If you find yourself grinding your teeth and hyperventilating you don’t have to be a genius to realize that you’re probably under stress. Here are a few tips to help you recover your bearings.

• Get up and walk around and let new surroundings help to clear your head.
• Don’t try and be a stress superhero; take a five-minute rest from stress to recompose yourself.
• Recognize when you’re body is being put under stress and get relief by turning your thoughts to a positive trajectory.
• Be proactive in the early stages of stress before it becomes overwhelming and harder to manage.

Job pressures, family obligations and other personal commitments will all contribute to your levels of stress so be ready to defuse potential stressors when you can. Something as simple as walking around the office can help you deal with the stress brought on by factors such as your current financial portfolio.

Life Insurance as a Financial De-Stressor

Life insurance helps quell financial stress, particularly if you’re worried about your family should something unfortunate occur. If you choose a whole life insurance plan, you can be sure that your coverage will last for the entirety of your life. If you choose a term life insurance option, you’ll at least have the comfort of a set period of time for coverage – and many term life insurance policies give you the option to renew your policy at expiration.

Whatever steps you take to take away the financial stress, a few minutes of relaxation and introspection can help turn even the most doomsday of thoughts towards optimism and hope. The world financial situation may be stressful now, but wait around a few years and things will turn around.

photo credit: gingerpig2000

This will probably come as a surprise to many of you, but life insurance plays a huge part in the assets value of nearly every bank doing business today. The banks buy so much cash value life insurance that this type of asset has earned its own name: “Bank Owned Life Insurance.” Bank-owned life insurance (or BOLI, for short) represents a huge chunk of the assets base of almost every major bank in America. Banks own so much of this type of asset that they can almost be considered as life insurance companies unto themselves.

The Federal Deposit Insurance Corporation (FDIC) states that BOLI is an essential cornerstone of the nation’s banking and financial systems. At the end of 2007, over four thousand of the country’s banks owned BOLI, with the value well up over 120 billion dollars! Even more astounding is the fact that the total death benefit value to the bank is five times that amount!

BOLI Makes Sense to Banks

The life insurance that banks purchase for their employees is held as Tier One Capital, which is their most valuable asset. This capital is the foundation of a bank’s reserve fund and helps to determine the bank’s worth and ability to lend funds to the public. One of the main reasons that banks purchase life insurance in this massive manner is because life insurers are generally much more stable than banks, because they are not as highly leveraged. Life insurance account balances also grow tax-deferred making even more capital for the bank to be able to use. When a bank employee dies, the benefit from that policy comes into the bank tax-free, raising the bank’s tier one capital even higher.

During the Great Depression, when thousands of banks closed their doors permanently, cash value life and annuity providers remained 99.9% stable. The truth is that banks own far more value in BOLI than they do in cash, fixed assets and real estate combined.

photo credit: Orin Optiglot

photo credit: bluemodern

One of the hardest decisions to make when trying to purchase a life insurance policy is the amount of coverage you should have. You want to make sure that your family is well taken care of after you’re gone and not having to scrape by – because you didn’t choose a large enough life insurance policy in the first place. Having a plan in place that will allow them to vacation on the French Riviera every year isn’t necessary – though it is possible to have such a plan set up. You basically just want enough of a plan in place to keep them comfortable and not having to worry about their futures after you’re gone.

Hopefully, your estate will have far more investments in it besides a good life insurance policy. You need to have your other financial investments in place to make sure that the life insurance policy isn’t your family’s sole source of income from your estate. Of course, if you’re not married and have no family, your life insurance policy will be tailored completely differently. You may opt to have a smaller policy to take care of a relative or even a special pet – that part is entirely up to yourself.

Too Much or Not Enough?

If you over insure, you’ll probably be throwing money away on the unlikely chance of an early death. That is, unless you’re working in an industry where there are more workplace hazards than normal, such as a mining operation or working at a job in a volatile country. But if you under insure, you will always be worrying about whether it’ll be enough for your family once you’re gone.

Imagine yourself out of the financial picture of your family. If it doesn’t seem like your family will get by with the level of life insurance you chose, raise it until you’d be comfortable stepping out of the picture. The key is to balance what you can realistically afford to pay for now, to get the highest amount of coverage for later.

Most people don’t spend too much of their waking hours wondering about this question. The fact is, the great majority of us simply don’t want to think about whether or not we’re ready to…die. I mean, who’s ready to die, right? The most we can do is prepare for the great inevitable and do the very best we can to make sure that those people we care about are going to be taken care of after we’re gone. Death-proofing your life can be as simple as making sure you’ve got the right amount of life insurance in place.

How Easy is Purchasing Protection with Life Insurance?

Protecting your family financially after you’re gone isn’t as hard as you might think. It’s simply a matter of making sure that your financial life is in order and ready to handle the needs of your family when you pass on. Because most of us don’t go through our days with a ‘what if…’ plan going through our minds, we probably don’t have the faintest idea what will happen after… you know.

Taking the Time to do the Right Thing

Take the time to get all your affairs in order as soon as you can to get it off your mind. Then you’ll know that your family will be protected. It may surprise you to know that the cost of buying life insurance has never been lower, even though fewer people are buying it these days. Some don’t see the need for it or are simply too busy to take the time to answer the questions required to set a policy up. Take the time. It’ll be the best hour or so you’ll ever spend for your family.

Fixed Premiums for Level Term Policies?

Paying a fixed premium for a level-term policy is probably the cheapest and best policy if you only want to cover your life until your children are grown and on their own. A ten year policy can be as low as $50 per month compared to nearly double that for a whole-life policy. The money you save can be put into investment portfolio for that time and earn more money for your eventual estate.

Keep a “Doomsday” Notebook

One of the best, no-cost things you can do is to make sure you have a ‘doomsday’ notebook, that you can write down all your personal information such as ATM pin numbers, the tax files, bank account numbers and passwords, social security cards and passports, phone numbers of professional or other important people your spouse can contact and email addresses and passwords.

Important documents such as trusts, wills, powers of attorney and living wills can also be identified in this notebook. Keep this in a safe place and in hard copy form rather than on your computer. Having a lawyer keep it in his office safe may be a good idea.

photo credit: Daniel Leininger