At some point in everyone’s life there will be a time when you will consider purchasing a life insurance policy to ensure that your loved ones are catered for in the event of your death. It can be an extremely confusing transaction because of the amount of jargon that is involved. Cheapest isn’t always best though. In reality it could often be the case that a life insurance policy is cheap because there is small print that the provider hopes you don’t notice. Instead please use these rules to identify value. Here I will show you the key points you should consider when setting up a policy:

Set the sum assured at the same level as your mortgage. If your mortgage is for

]]> http://alesha-d.org/insurance/how-to-choose-life-insurance-like-an-expert/feed 0 http://alesha-d.org/insurance/the-relationship-between-insurance-and-finance http://alesha-d.org/insurance/the-relationship-between-insurance-and-finance#comments Tue, 24 Nov 2009 22:45:31 +0000 admin http://www.alesha-d.org/?p=92

Insurance and finance are closely interwoven fields of business, not least because they both involve money. They also often both involve speculation and risk, and often where one goes, the other will follow. Take property investment for example, it involves a large amount of capital out lay, swiftly followed by insurance to protect the capital investment. It would be ridiculous to spend such a vast sum of money on a venture and not protect it against possible damage. It therefore makes sense to store information on these two subjects together, as the relationship is so logical.

Insurance is a form of risk management used to protect the insured against the risk of a loss. It is defined as the equitable transfer of the risk of a loss from one entity to another in exchange for a premium. There are different kinds of insurance for just about every conceivable event. The most common insurance is probably life insurance, which provides a monetary benefit to a decedent’s family or other designated beneficiary.

It can cover funeral or burial costs and can be paid out to the beneficiary in either a lump sum or as an annuity. Property insurance is one of the more necessary insurances as property is extremely expensive and if it is lost or damaged for some reason (fire, earthquake, flood) it can be very difficult to replace without adequate reimbursement. Travel insurance used to be seen as an unnecessary expense and is still viewed as such by many. Its importance is, however, being increasingly recognised by the public at large. It is cover taken by those who travel abroad and covers certain unforeseen events such as medical expenses, loss of personal belongings, travel delays etc. There are numerous other types of insurance, too many to mention, all vital if you want to protect something of particular importance to you or another.

In the world of finance there are many sub-categories, also too numerous to mention but a few will be included here. Forex, or the foreign exchange market wherever one currency is traded for another. It includes trading between banks, speculators, institutions, corporations, governments, and other financial markets. The average daily trade in the global forex is over US$ 3 trillion.

Tax consulting usually involves CPAs and tax lawyers in addressing any tax issues that you may have. There may also be Professional Strategic Tax Planners and Enrolled Agents, depending on the company that you hire. They will help you reduce your tax debt, eliminate tax penalties, an innocent spouse claim, tax liens, bank levies, and preparing unfilled tax returns, as well as any other tax resolution problem that you might have.

Property investment is usually when an investor buys property with an eye to generate profit and not to occupy it. It is an asset that has been purchased and held for future appreciation, income or portfolio purposes. In some instances an investment property does not have to be held for profit, as some landlords in New York lease office buildings to non-profit organisations for tax purposes. Homeowners consider their homes to be investments but they aren’t classified as investment properties. Perhaps if you’re buying your second or third home, it can be considered an investment property, especially if you plan to rent it out to help pay off the home loan.

Business networking is a marketing method, which is as old as business itself. It’s been around since ever since people learned to hold a glass of whiskey and schmooze. In fact, its probably been around a lot longer, Cro-Magnon man probably gathered around the newly discovered fire and showed each other their collection of animal teeth and traded them. Creating networks of crocodile teeth owners and sabre toothed tiger owners, who tried a take over bid against the sabre toothed leopard owners. Business networking is designed to create business opportunities through social networks. It helps if the people involved are of the same frame of mind.

These days a very handy way of business networking is via the Internet on the various social media available. But it must be said that very little can beat the intimacy and trust created by face-to-face relationships. Also, where would our businessmen be without their whiskeys and weekly schmooze?

By: Sandy Cosser

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It is easy to understand how this system works. If you deposit your money in a participating banking or financial institution, you are given a guarantee that you will be repaid in the event of failure of the bank with which the deposit was made. You will receive the principal value of your deposit. Most of the time, you will also get the accrued interest. However, in most countries, there is a ceiling limit on the amount of money that the system covers. Fundamentally, the deposit insurance system is established to protect the less financially knowledgeable and small depositors from losing their savings. Thus, huge deposits are usually excluded. This system assures the people to trust the stability of the financial system of the country.

In most cases, deposit insurance institutions are operated by the government and are a part of the country’s central bank. Some are run by private companies, which may or may not have government backing. A considerable number of national deposit insurers are members of IADI (International Association of Deposit Insurers), an international organization formed to contribute to the steadiness of financial systems and to encourage cooperation among deposit insurers.

As of 2006, there are 118 countries with a deposit insurance scheme in operation, planned or under study. Some of them have more than one system in operation. These include Canada, Germany, Italy, Austria and the United States. There are also deposit insurance systems that cover more than one country. For example, the US Federal Deposit Insurance Corporation covers Puerto Rico, Micronesia and the Marshall Islands.

By: Aila Sanchez

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With advances in medicine and technology, mortality tables have been changed dramatically in recent years. At the bottom line, we live longer. For some of us, this is much longer than they expected. If 20 years ago a 65 years old retiree thought he’ll live till the age of 83 or so, now days he more likely to reach the age of 87.

In some cases these senior citizens need more supplemental cash in order to maintain their standard of living. Since they do not want to liquidate any tangible assets they have.

Today, few financial tools can help these senior by leveraging their insurability.

In this article I’ll spread information about two ways seniors can tap into cash that in most cases they did not know they have.

The first method is Life Settlement or Senior Settlement where an old life insurance policy is being sold on the secondary market and leaves the insured with lump sum of cash. However, no insurance coverage is now protecting the senior. In order to qualify for a life settlement, the insured must posses a policy that is out of contestability and has a death benefit of minimum $250,000. However, some providers will buy a policy that is less than $250,000 , some other criteria has to do with the insured age (65 and above) ,life expectancy (2-12 years) , premium on the policy (less than 5% of death benefit) and cash surrender value not to be more than 30% of the death benefit.

If all parameters fit the buyer’s criteria, an average of 20% of the face value will be paid to the insured as a life settlement less any commission paid to the agent (Broker) who handles the case. Results may vary from case to case.

The second method is Life Insurance Premium Finance. Each and every one of us have hidden asset called insurability. Our insurability allows people to obtain life insurance up to their net worth which all we have minus what we owe. For example a 77 male who’s house worth $1,200,000 and has a vacation home that worth $500,000 plus some stock and pension may have a net worth of $2,000,000 to $2,500,000. What it means is that that person has insurability of $2,500,000 assume no life insurance is in force.

Using the premium program will allow the insured to obtain a loan to finance the premium on the policy. The insured will assign the policy as collateral for the loan plus a personal guarantee equal to 25% of the loan. After the loan is mature (usually 2-5 years)

The insured will have to decide what to do. At that point the insured will have few options:

The first is to pay the loan plus interest and assume full responsibility for future premium. 2nd option will be to renew the loan for another period and to assign more personal guarantee. 3rd option will be to sell the policy on the secondary market as a life settlement.

If choosing the life settlement option, the following numbers should be considered:

$2,500,000 life insurance policy on a 77 years old male will generate an annual premium of around $125,000 plus interest and fees.

After 2 years the total loan can reach the amount of $300,000. With a settlement offer of 20% of the face value the amount will be $500,000.

After paying the loan, the insured will remain with $200,000. Based on the deal structure the insured may have to pay a commission of up to $60,000 to the agent/broker who brokered the deal.

With the Premium Finance Program, if insured passes away during the loan period, the processed will cover the loan and the rest will go to the beneficiaries

In conclusion, senior citizen have some options when it comes to generating cash using their insurability via channels like carrier approved premium finance program and life settlement program, all designed to help them use their life insurance policy and their life insurance insurability.

By: Boaz Arbel

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It has been eight years since my friends and I graduated from business school, eight long years since we studied all about the law of supply and demand and dreamed about our future careers in the exciting and rewarding field of finance.

There are six of us in our group and we have all managed to stay in touch with each other despite our hectic schedules. Who am I kidding? One big reason why we have stayed in touch with each other is because we help each other with contacts and networking. There’s nothing like a little school spirit to make the wheels of business spin a little faster. That is especially so since most of us have landed in different spheres of the financial industry. Different, yes, but I must also stress that these spheres are inter-connected. It really is a fascinating industry.

One day over drinks at the club, we decided to compare notes about our respective jobs. Much of the discussion revolved around the topic of who had the best job among us. Two of the guys, who were making a splash in insurance, strongly endorsed their field. They said that the insurance industry has annual revenues that surpass the trillion-dollar mark, which makes it a secure and financially-rewarding place to spend one’s career. The guys said that there are over 2.5 million people currently working in insurance now holding jobs as an underwriter, sales representative, customer service rep, asset manager or an actuary. As the guys said, the name of the game now is knowing how to manage risk and anticipate problem areas.

Gregory, the most scholastically gifted among us back in school, had a different opinion. He worked as a financial planner in a major corporation. Gregory argued that it is not the size of the industry that should determine who has the best job, but rather how important that job contributes to his company or clients. As a financial planner, Gregory said his position made him vital to the future of his company because he was the one who planned all the future spending of the company. Nothing would move without my approval, he said.

Actually, both of them had a point, but I had to ponder a little bit before I could response.

By: Jonathon Hardcastle

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There is no time like the present to ensure that you and your family are adequately protected should the inevitable happen.

The harsh fact is that at some time we will all leave loved ones behind. However, it is great know that we can make sure they are financially stable when we do come to pass. One way of ensuring this is through Life Insurance.

What is Life Insurance?

Life Insurance is an agreement that is held between an insurer and the policy holder that pays out to a beneficiary, when the policy holder dies. Not only does it offer the policy holder peace of mind in knowing that their family will be looked after, it also guarantees their families do not have to worry about the financial costs involved in losing a loved one.

Can anyone get life insurance?

As long as you are over 18 years old you can indeed get insured. Depending on your particular circumstances the cost of Life Insurance varies.

What circumstances can affect the cost of Life Insurance?

Do you smoke?
Are you healthy?
What age are you?
Do you have any illnesses?

All of the above can affect the cost of life insurance if you are a non smoking, healthy person your insurance will naturally be cheaper than an unfit person that smokes 60 cigarettes a day.

By: James Phillip Upjohn

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The most common and probably smartest answer would be to buy a life insurance policy for the main purpose of estate planning and estate protection. You can purchase a major life insurance based on your net worth and then place it in a trust outside of your estate. Having your life insurance policy issued into a ILIT (Irrevocable Life Insurance Trust) will separate between the life insurance death benefit and your estate, and therefore allow taxation eliminate.

How would you pay the high life insurance policy premiums? The first option would be to pay it out of your pocket, each year, by taking money out of your savings. In some cases you’ll have to break saving programs that you kept for a rainy day or even to sell some real estate to cover the costs. The other option would be to finance the premium via a bank or a premium finance company.

Life insurance companies recognize the need of life insurance for estate planning and have approved these types of deals in the past. A Carrier Approved Premium Finance Program is a great tool to support the expense of paying the high premiums on a life insurance policy. The idea behind the Carrier Approved Premium Finance Program is that the premium will be paid by a bank for a certain period of time that is agreed upon in advance. it can range from a 2 year period to a lifetime.

Once the loan is due, all premium paid-to-date in addition to the interest and other fees will be paid back to the bank. in case the insured passes away prior to the loan maturing, all death benefits will be paid to the beneficiaries minus the amount that is due for the premiums. In order to initiate a Premium Finance transaction, the insured must qualify not only by the insurance company standards, but also by the Life Insurance Premium Finance Company.

When it comes to the Life Insurance Company, the insured must be healthy at a standard level or better and prove his/ her medical and financial status. On the Premium Finance Company side, their evaluation will be based on age, life expectancy, health situation and financial status. They will also require some collateral to secure the loan.In conclusion, all senior citizen with a high net worth of approximately $2,000,000 should look into estate protection alternative and may want to think about getting a new Life Insurance Policy to cover all estate tax when they pass away.

By: Boaz Arbel

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The insurance sector is getting more and more popular day by day. It has gained a great importance in business sector. There are so many finance companies that have emerged in a little span of time. There are many fields in which insurance business is running successfully such as motor insurance, home insurance, business insurance, life insurance etc. the insurance companies also offer the services of insurance brokers to their customers. They hire the finance brokers for the help of their customers.

Finance brokers are those persons that act on the behalf of their customers. All the matters of negotiation are handled by these professionals. Finance broker Australia does all the work on the behalf of their customers. Insurance broker Australia is a representative of that finance firm for which it is working and that is interested in selling the finance policies to third parties that are interested in the deal. Insurance broker Australia is paid a good fee for their work. Insurance brokers Australia work on the basis if the insurance brokers act 1977.

Business insurance is a very important investment and very crucial in the successful operation of the business. It is a way of providing security in case of some mis-happening. This is a very important type of investment that is done by the insurance broker Australia. There are many requirements that are fulfilled by the business insurance. Modern time is full of uncertainties and the finance is a way of providing stability to the business even in case of some mis-happening. Every business that may be small or big requires proper insurance to work without any hindrance. There may be some accident in factory or office of your business or there may be some fire accident or some employee of your business may get hurt in some mis-happening while on work. All these situations may have an adverse effect on your business but if you have properly insured your business then you will easily cope up with these adversities. There are many reasons that make it compulsory to have proper business insurance policy.

Liability insurance is also called as public insurance. It is very important for those persons who are self employed. This kind of finance is required to cover yourself against any kind of damage in case your activities cause some kind of damage to some person or to the property of some other person. It can be liability against public or liability against product or liability against employees.

Liability insurance when applied against public then it covers all the losses that may occur to the members of public or to the property of some member of public due to the operations of the business. Liability insurance when taken in reference with products then it covers all the losses that may occur to the consumers on account of faulty or defective products that may be produced by the business. Liability insurance when taken in reference with employees then it covers all the losses in case some employee of the business gets injured or dies while in operation of the work of business.

By: Allan Massey

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When you got your mortgage you may have been offered the opportunity to purchase Mortgage Protection Insurance. Mortgage protection insurance is as simple as this – you pay a non-changing premium for the duration of your life insurance policy, and if you die, the insurance pays off the rest of your mortgage. The lender becomes the beneficiary if and only if the loan gets defaulted from the borrower who is paying for coverage. Now the question is, is mortgage protection insurance for you?

This should really be a no brainer, you have this investment that you have enter in to, you want to make sure that you are prepare for all the unforeseen events that can happen. You take out the coverage because it not a question of price it about making sure that you have the stability to survive any financial problems. With Mortgage Protection Insurance you have protection from job loss, sickness, accidents. You are unable to work you do not have to be concerned with how to make the payment while you are out of work.

The type of policy to use will be a more valid question, you do not have life insurance you would want to use a whole life policy to have benefit for your family in case you were to die, while paying the mortgage off so that after the home paid off there would be money left to help out with expenses that the family would have while they got there affairs work out.

PROTECT YOUR MOST IMPORTANT INVESTMENT. YOUR HOME. A wide variety of plans to meet every budget and coverage need. Take pride in getting the protection to take care of your investment. This type of coverage can be a great benefit especially in our current market, with so many cutback in the work place.

the most important part of the mortgage protection plan is the life insurance. It can provide the coverage from and untimely death. This will insure that your dreams do not end because of this event happening when you could least afford for it. With this protection you make sure that what you have worked so hard to provide for your family that they will get to keep it. In the event that you have paid down the mortgage and have a spread sufficient enough can bridge the gap in the income lost to make it that the life style will be maintained for your family.

The most misunderstood products are insurance, not understanding how they add benefit for you, sure you pay money and in most cases never use the product. The down size is that there are more illness, and accidents each year, your chances of getting sick or in and accident increase every day.

The question is not if you will have and accident or get sick but when? Taking your financing seriously makes having the right coverage very important. As when they say being prepared for a rainy day, when you have a mortgage, mortgage protection insurance is your preparation.

By: Dan S Carter

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