Wise Observer

Not too many years ago life insurance was considered to be the indispensable platform upon which all other estate planning efforts should be based. In fact, for those in the median and lower income ranges, it was often the only recognized method for protecting one’s heirs, particularly in the event of untimely death. However, over the past twenty or so years, the concept of financial planning has changed considerably. The proliferation of varied retirement plans available through work (IRAs, SEPs, SARSEPs, mutual funds, etc) has changed people’s perspectives about the need for life large life insurance policies.

Does that mean that you don’t need life insurance? No. Most people, perhaps with the exception of the very wealthy, do need some sort of life insurance, although even the very wealthy may opt for a life insurance policy (generally whole life) to defray the costs of burial and estate taxes.

In general, the options are whole life (also called permanent insurance) and term life, with variations like universal life or variable life that combine some of the benefits of each. Different companies offer different options, but which you need and how much you need are matters for heated debate. Those who sell one and make most of their commissions from it will vehemently try to convince you that the other is not a good investment. Here are some facts for your consideration.

Whole Life Insurance Advantages:

•	Offers a guaranteed death benefit no matter how long you live
 •	Is generally not subject to rising premiums; rates stay the same
 •	Many policies become "paid up" at some point (15 years, age 65, etc.) after which no more premiums are paid
 •	Has investment value which can be cashed out after some specified interval
 •	Can be borrowed against in case of financial emergency
 •	Can, in many cases, occasionally earn dividends depending on the company's solvency and accuracy in predicting actual costs
 •	The income from a whole life policy is tax deferred
 •	Can be cashed out after age 65 and used for retirement

Whole Life Insurance Disadvantages:
 •	Costs more than term life insurance
 •	Generally returns a fairly low rate of interest
 •	Does not begin to accumulate any real value for the first 10-15 years
 •	If the policy is surrendered within the first few years, money paid into it is lost
 •	Does not provide the investment value of a mutual fund or other investment

Term Life Advantages:
 •	Premiums are generally very inexpensive
 •	Lower premiums allow the buyer to purchase more insurance with higher death benefits
 •	Can be quite useful if the buyer only needs coverage for a specified period (while paying off the mortgage or while kids are in college, etc.)
 •	Leaves the buyer with more money to purchase other investment vehicles like mutual funds, stocks, bonds, etc. that provide higher rates of return than whole life
 •	Often beneficial for younger families who can’t afford whole life rates, but need to insure the primary income earner

Term Life Disadvantages:
 •	Only pays if and when you die; you can never personally recoup any of the money spent on term life insurance
 •	While premiums are lower than whole life, they also tend to go up and can become unaffordable
 •	Term life is only available for a specific term (up to 30 years), and then goes away; if you don’t die within the term, your premiums are lost

Almost everyone needs life insurance of one variety or the other. The type of insurance and the amount to purchase depend entirely upon you, your family and your mutual goals and needs. In any case, make sure the company you purchase insurance from is reputable and financially solvent. Don’t be convinced by a fast-talking sales person without doing your homework first. There are few remedies if your life insurance company dies before you do.

About Ronald E. Hudkins;
Ronald Hudkins is a retired U.S. Army Military Police member that was assigned as a staff researcher. He has coordinated with military and criminal investigators, set on court marshals and worked closely with the Staff Judge Advocate Generals Office (JAG). He has a keen sense of legal matters - their interpretation, initiatives and guidelines. For imperative financial planning needs he suggests his book “Asset Protection and Estate Planning for All Ages.” Additionally, he offers a Free Newsletter at his web site: http://www.AssetProtectNow.com

All the sorts of firms, including mortgage advisors, may wish to consider thinking of purchasing public liability insurance. A corporation will want this sort of public insurance to cover a series of scenarios such as a customer tripping over a poorly laid carpet flooring on your premises. Public business liability insurance will often cover all solicitor costs and compensation given to a member of the public that has received a broken finger or maybe damage resulted by you or your business. Insure your company van for cheaper with Insured Risk’s Commercial Vehicle Insurance.

Any one who desire to secure a public liability policy will probably review the terms and conditions as innumerable will often void your insurance claim if there are certain circumstances. The choicest advice to do is to consult with the public insurance consultant the policy in great detail.

The firm are an amazing organization that make available business insurance at unbelievable prices. Having insurance is not a fixed condition for all organisations, nevertheless countless private firms can require you have this in order to make available your services to them. Insured Risks offer protective insurance levels of up to four millions pounds, & is perfect for sole traders such as recruiters, or large corporations such as therapists,

Public liability insurance will probably help to remove risk if you are running a small business. The law does state that if you cause damage to someone else or their business property then you might have to pay the price of damage. Public liability will often protect the corporation from going bankrupt if disaster strike.

These are systems which have been found has a great ideal in homes and they have been found efficient. Most of these are being used as a way of monitoring children’s activity whilst the parents are in another room. For example another one is a home alarm monitoring system which can detect sounds, when a baby cries after from waking up it triggers the alarm and notifies the parents in the other room that the baby has awake. It works on the recognition of sound and speech and this is one of the major reasons that have made this system superb.

It has been marketed world wide and its functions of monitoring range from one to another. If you are considering on taking a house baby-minder you should also think of purchasing one of these systems. Some of these systems are used to monitor various activities at home such as the air-conditioning systems; if there is a malfunction or water has stopped flowing to the air-con it will notify the home owner. These monitoring alarm systems have played a major role in homes and others have included monitoring systems such as checking on which doors have not been closed or locked up and also checking if the gate has not been shut properly.

Insurance Glossary: Part 1

Accelerated Benefits Rider: A life
insurance rider that allows for the early payment of some
portion of the policy’s face amount should the insured suffer
from a terminal illness or injury.

Accidental Death Benefit Rider: A life insurance policy rider
providing for payment of an additional cash benefit related to
the face amount of the base policy when death occurs by
accidental means.

Accidental Death Insurance: Insurance providing payment if the
insured’s death results from an accident.

Agent: An authorized representative of an insu
rance company who sells and services insurance contracts.

Annually Renewable Term: A form of renewable term insurance that
provides coverage for one year and allows the policy owner to
renew his or her coverage each year, without evidence of
insurability. Also called yearly renewable term.

Assignment Assignment: The transfer of the ownership rights of a
Life Insurance policy from one person to another.

Attained Age: Your current age. Your attained age is one of the
factors life insurance companies use to determine your premiums.
The older you are, the greater chance you’ll die while you are
covered - so the higher your premium.

Backdating: A procedure for making the effective date of a
policy earlier than the application date. Backdating is often
used to make the age of the consumer at issue lower than it
actually was in order to get lower premium. State laws often
limit to six months the time to which policies can be backdated.

Beneficiary: The person designated to receive the death benefit
when the insured dies.

Binder: A temporary insurance policy that expires at the end of
a specific time period or when the permanent policy is written.
A binder is given to an applicant for insurance during the time
the complete policy paperwork is being completed.

Cash Benefits: Money that is paid to the insured upon settlement
of a covered claim. Often found with Hospital Income Programs,
“cash benefits” are paid directly to the insured rather than the
doctor or the hospital directly.

Cash Value: The equity amount or “savings” accumulation in a
whole life policy. Claim Notification to an insurance company
that payment of an amount is due under the terms of the policy.

Conditional Receipt: Given to policy owners when they pay a
premium at time of application. Such receipts bind the insurance
company if the risk is approved as applied for, subject to any
other conditions stated on the receipt.

Contestable Clause: A provision in an insu
rance policy setting forth the conditions under which or the
period of time during which the insurer may contest or void the
policy. After that time has lapsed, normally two years, the
policy cannot be contested. Example: Suicide.

Contingent Beneficiary: Person or persons named to receive
proceeds in case the original beneficiary is not alive. Also
referred to as secondary or tertiary beneficiary.

Coverage: Another word for insurance. Insurance companies use
the term coverage to mean either the dollar amounts of insurance
purchased ($200,000 of liability coverage), or the type of loss
covered (coverage for theft). e a large proportion of part-time
workers, or that experience high employee turnover.

Conversion Privilege: Allows the policy owner, before an
original insurance policy expires, to elect to have a new policy
issued that will continue the insurance coverage. Conversion may
be effected at attained age (premiums based on the age attained
at time of conversion) or at original age (premiums based on
ageat time of original issue).

Convertible Term: A policy that may be changed to another form
by contractual provision and without evidence of insurability.
Most term policies are convertible into permanent insurance.

Cross-Purchase Plan: An agreement that provides that upon a
business owner’s death, surviving owners will purchase the
deceased’s interest, often with funds from life insurance.

Death Benefit: The amount of money paid to the beneficiary when
the insured person dies.

Decreasing Term Insurance: Term life insurance on which the face
value slowly decreases in scheduled steps from the date the
policy comes into force to the date the policy expires, while
the premium remains level. The intervals between decreases are
usually monthly or annually.

Double Indemnity: Payment of twice the basic benefit in the
event of loss resulting from specified causes or under specified
circumstances.

Evidence of Insurability: Any statement or proof of a person’s
physical condition, occupation, etc., affecting acceptance of
the applicant for insurance.

Exclusions: Specified hazards listed in a policy for which
benefits will not be paid.

Expiry: The termination of a term life insurance policy at the
end of its period of coverage.

Face Amount: The amount of insu
rance provided by the terms of an insurance contract,
usually found on the first page of the policy. In a life
insurance policy, the death benefit.

Final Expenses: Expenses incurred at the time of a person’s
death. These include funeral costs, court expenses associated
with probating his or her will, current bills or debt, and
taxes. Depending on their circumstances, the survivors may also
want to pay the outstanding balances of mortgage and loans.

First To Die Insurance: Insurance policy whose death benefit is
paid to the surviving insured upon the death of one of the
insured’s. There is no longer a benefit once the benefit is
paid, however, the surviving insured usually has the option of
purchasing a policy of the same amount without providing
evidence of insurability.

Fixed Benefit: A death benefit, the dollar amount of which does
not vary.

Free Look: Provision required in most states whereby policy
owners have up to 20 days to examine their new policies at no
obligation.

Funeral Expenses: Expenses incurred for a funeral and burial.
These can include casket, vault, grave plot, headstone and
funeral director.

Grace Period: Period of time after the due date of a premium
during which the policy remains in force without penalty.

Graded Premium Policy: A type of whole life policy designed for
people who want more life coverage than they can currently
afford. They pay a lower premium rate that increases gradually
over the first three to five years and then remains constant
over the life of the policy.

Divorce causes major issues with health insurance benefits. Many families have employer provided and/or paid for health insurance benefits that cover the entire family. It is not uncommon to see situations where the other spouse is a stay at home parent, with absolutely no access to health insurance benefits, or employed at a job with either no health insurance benefits available or those benefits available at a substantial cost. After a divorce, the spouse with the family health insurance coverage can no longer cover the other parent. They are no longer “family” members who can take advantage of one health insurance policy. How to then ensure that everyone stays insured does become an issue for negotiation and/or divorce litigation.

If both parties do not have health insurance benefits available and if the cost of obtaining those health insurance benefits for the other party after a divorce become prohibitive, there is one way to continue benefits without additional cost. That way is to enter into a separation agreement, but delay the divorce. That way, the parties actually do remain married and they can stay on the same health insurance plan even thought they are separed. The parties can consent to waiting for one, two or more years before either one files for a divorce. While the parties will remain married, their property, custody, and support issues will be addressed in their separation agreement. Under some circumstances, this is an optimal resolution. For example, what if both parties want one spouse to remain at home for several more years with young children, but they do still want to separate and divorce? This option works for them. They can separate, agree upon getting a divorce and all of the terms that they have to agree upon, but delay the final divorce so that they can keep cost effective health insurance benefits in place.

The above example can provide some difficulties that must be discusse in detail with your divorce attorney. For example, if you separate but do not divorce, your federal tax filing status may be affected. Also, in some states, it is not as easy as in other states to enforce a separation agreement. Or, in yet other states, it is possible for one spouse to take the advantages provided by the agreement for a year or two and then go to court and seek entirley different forms of financial relief in a divorce action. Only a divorce attorney licensed to practice in your state can advise you on these issues.

Another option for couples divorce is COBRA coverage. COBRA is a federal law which mandates that a person covered under a health insurance policy be given the right to continue that coverage, at their own cost, for a set time period if certain requirements exist. For example, if you obtain a divorce and your spouse had family health insurance coverage through his employer, the employer would have to provide COBRA coverage for you after the divorce. That COBRA coverage would require that you have the same health insurance policy, although your coverage would now be individual and not family. You would have to pay the employer’s cost for that individual policy.

It is not uncommon for a stay at home spouse or a spouse who has less income or employment options to obtain COBRA coverage and to negotiate that their spouse pay for that coverage for a specified time period after the divorce. In doing so, this gives the spouse who did not have coverage available some time to either obtain employment with coverage or become financially settled and able to afford their own coverage.

Divorce Attorney Jean Mahserjian makes it easier to make it through your divorce by providing you with the essential information you need to understand the divorce process. To download free excerpts from her books, visit: www.millenniumdivorce.com