When was the last time you met someone who introduced themselves as a “life insurance agent?” These days, even life insurance salesmen refer to themselves as “financial advisors.” Yet, what advice do you think an insurance salesman will provide? Of course, they will recommend you buy life insurance. To make matters worse, the insurance industry has managed to take something quite simple and complicate it to the point where not even all the people who sell it fully grasp the implications of the product.
So what do Certified Financial Planners (CFPs) who don’t collect commissions on product sales think about life insurance? When is purchasing life insurance appropriate?
CASH VALUE vs. TERM INSURANCE
Life insurance comes in many forms. Some policies slowly accumulate a cash value, meaning most of your premium goes towards insurance and a small portion goes towards a savings account. When you surrender your policy you may be able to collect this savings account. These products include whole, universal, and variable-universal life policies.
These policies are commonly presented as an investment. But beware! You should always think of life insurance as an expense. When you purchase insurance, you are buying something –peace of mind. Insurance is a way to ensure the financial security of the breadwinner’s family until the family can accumulate enough investments to make insurance no longer necessary. For this reason, insurance is frequently a necessity for young families, and often less necessary for mature families.
Whole Life
Whole life insurance typically requires the owner to pay premiums for the life of the policy. The insurer guarantees that the policy’s cash values will increase regardless of the performance of the company or its experience with death claims. With whole life policies, the interest rate applied to the cash value is predetermined and fixed.
Universal Life
Like all types of insurance, universal life pays a death benefit when the insured individual passes. Before death, however, the cash-value grows at varying rates depending on the ups and downs of interest paid on bonds and savings accounts.
Variable-Universal Life
Variable-universal life policies are similar to universal life policies, except the cash value can be invested in mutual funds (called sub-accounts) rather than at the insurance company’s current interest rates. However, the fees on these policies can be extremely high and in almost every circumstance there are more efficient strategies.
Term
Policies with 100% insurance and no cash values are called term insurance. This is the type of policy most people picture when they think of insurance. You simply pay the premium and collect a benefit in the event of death.
Although there is no savings element to term insurance, remember you are buying insurance to ensure your family is taken care of if something happens to you. In most cases there are more efficient ways to save and plan for retirement than through the purchase of cash value insurance policies.
Insurance or Investment?
A phrase you may have heard when considering insurance is to “buy term and invest the difference.” (You likely don’t hear this from insurance agents because they are paid a higher commission on cash-value policies. The salesman’s commission on cash value policies is often 90% of your first year premium.) To implement this strategy, buy low-premium term insurance from a highly-rated insurer and put the money saved from not buying a cash-value policy into a true investment account like an IRA, Roth IRA, etc. This provides your family with the protection it needs and an efficient way to save for retirement. Hopefully, over time, the investment account will grow and the need for insurance will be eliminated.
Most fee-only financial planners are proponents of the “buy term and invest the difference” strategy. However, there are certain occasions when a cash value policy may make sense. For instance, buying a cash value policy may be appropriate if your need is permanent, such as caring for a special needs child. Additionally, cash value policies may make sense if your need is certain, such as if you have the policy and are then diagnosed with a terminable disease. However, if you need a cash value policy, look for a no-load policy that doesn’t pay the salesman a commission. This can cut your premium in half and you won’t pay penalties when you withdraw your cash value.
Canceling a Policy: Prepare to Pay
Canceling a term policy is simple – just stop paying the premium. If you cancel a cash value policy within 10 years of purchase, you will generally pay a penalty (called a surrender charge) when you withdraw your cash value. If you cancel a variable universal life policy, you will also pay ordinary income taxes on the profits inside the policy. Chances are your insurance agent forgot to mention this.
Bottom Line
Insurance is clearly a complicated product, but for many, it is a necessity. However, remember that insurance agents are financially motivated to sell you insurance, regardless of your circumstances. Always speak to a fee-only Certified Financial Planner, who is never compensated based on the product recommended, to get an objective opinion of whether you and your family have adequate insurance coverage.
Getting yourself into debt is unfortunately all too easy – it’s getting back out that is often a problem. Sometimes the debt is due to emergencies that had to be paid for with a credit card, other times it’s simply a lack of self control when spending.
Whatever the reason for the debt, once it has accumulated it must be addressed. Fortunately, the government offers a number of programs to help.
The government offers a number of loans for people who are in financial trouble. If you qualify, these loans can help you to consolidate your debt into a single payment with a lower interest rate. Over the course of repaying these loans, you will save a considerable amount of interest compared to continuing to pay them all separately.
More detailed information about these loans, as well as the necessary application forms, is available online. A good starting point is the FTC website at [http://www.ftc.gov/bcp/conline/pubs/credit/kneedeep.htm].
There are also government programs that will help you to manage your spending and keep yourself out of debt. They’ll teach you how to better manage your finances to keep on top of things before you run into problems. These government programs are available for free to anyone.
Government loans generally have certain requirements for you to qualify. It will depend on your income, your net worth and some other factors, but most people who really need them will qualify.
If you need help dealing with debt, these programs are there for the asking. Don’t be afraid to look into what help is available – you will be happy to have done so once your financial life is getting back in order.
With the cost of medical insurance on the increase dental insurance is at the top of the casualty list when it comes to employee benefits.
Historically many employees didn’t have to worry about dental insurance with employers being able to offer full dental insurance cover along side other popular employee benefits. However with health insurance continually on the increase dental insurance is generally one of the first benefits to bite the dust.
Luckily low cost dental discount plans are now widely available and are proving to be a completely affordable alternative to dental insurance.
Unlike dental insurance, dental plans provide plan holders with low cost dental care for all dental work, including cosmetic procedures although, for non routine care, the level of discount will generally be reduced.
There are now many plans available and, as with dental insurance, the benefits will vary according to the price you are willing to pay. DentalPlans.com is becoming a popular choice of dental plan provider and offers consumers a choice between 30 different national and regional plans with up to 60% discount on routine dental care.
Dental plans are not a dental insurance but rather a service by which, for a fixed monthly fee, members will receive deep discounts for all dental care from routine dental work to more complex dental procedures.
The benefits of dental plans over dental insurance are that:
o There are no deductibles, you receive a discount on all work received.
o The monthly premiums for dental plans tend to be significantly less than dental insurance premiums.
o If you move house you will generally be able to just switch to another participating dentist.
o Unlike dental insurance, there doesn’t tend to be any limit to the amount you can use your dental plan in any given period of time. You will continue to receive a discount no matter how many dental visits you make.
o You can make use of a dental care plan as soon as you receive your card. Dental plans are not dental insurance and there is no waiting period.
o With dental plans there are no exclusions for pre-existing conditions.
ICICI Bank provides loans to Non-Residential Indians also. ICICI Bank NRI Home loans have lots of advantages. Some of the benefits and facilities provided are listed below here.
Benefits of NRI Home loans:
This bank provides excellent guidance for the applicants. This helps the applicant to select a suitable loan type. Moreover, suitable loan amount is also selected. The documentation process is very simple. Facilities like door step delivering of loan papers are also available. Free personal accident insurance is provided. They also provide insurance for home loans at negotiable premiums. Home loans have online application form. Moreover, online tracking facilities are also provided for monitoring the loan status.
Rate of Interest:
There are two types of interest rates. You can select the interest rate as per your wish. This bank provides both floating interest rate and fixed rate. ICICI bank has reduced the floating rate by 0.50%. The PLR rate is also reduced by 0.50%. They have reduced 50 basis points. The floating rate has been reduced from 13.25% to 12.75%. The PLR has been reduced from 15.25% to 14.75%.
Eligibility criteria for applying loan include age, income and residential status. The minimum age required is 21 years. There are two categories of applicants. Self employed applicants and salaried applicants have different and separate rules. The maximum age allowed is 60 years for salaried applicants at the loan maturity time. The maximum age allowed is 65 years for self employed applicants at the loan maturity time. Salaried applicant should have stayed a minimum period of 1 year in abroad. Self employed applicant should have stayed a minimum period of 3 year in abroad.
If you are one of countless Americans who are feeling like they have no financial breathing room there is one thing that you can do to help yourself now and stay on a solid long term financial track. Debt consolidation loans are one of the most used and best tools for relieving financial hardships among those who are burdened with too much unsecured high interest debt. These debts are usually things like credit card, store credit, and other types of debt that if not managed properly can quickly spiral out of control and can lead someone to have no spare money because of all the payments they are making on these inherently higher interest debts. The biggest problem with debt of this type is that usually, only a minimal portion of the payment is actually applied to the principle balance of the loan.
A debt consolidation loan works by securing unsecured debt. With this type of loan the debtor will usually go into their financial institution and put up something as collateral, usually equity in a home in exchange for the loan. The loan is used to pay off the balances of many smaller debts and the consolidation loan usually has a lower interest rate than the net rate of the smaller loans. This will lead to more of each payment being applied to the principle balance of the loan and therefore the balance will be paid off more quickly. The key is to remain out of debt after the loan is paid off.
Car insurance policy differs with different insurers in different countries. How, there is at least one thing in common: you can never be too careful before agreeing to the quotes. Reading policy thoroughly and carefully will save you much trouble when you have to make a claim. Here are some traps in car insurance which you should pay extra attention to so that you don’t get fooled by your insurer and feel deceived after an accident.
1. If you want to change your insurer, the right thing for you to do is inform your present insurer and finish all the paperwork with them. Don’t take it for granted that your insurer will automatically cancel your quote once it is expired. To the contrary, they will add your name to the list again and keep charging money from your account. And you can not put a note about this on the insurance policy, so you need to bother yourself to officially inform your insurance about the cancellation. Besides, you need to deal with this carefully without leaving any problem, or else your next insure will charge you higher premium for cancelling during the insurance period.
2. An insurance policy always has so many clauses that most people do not finish reading them through before signing. Actually, however, every clause is very important, even if it is something that you regard as useless. For example, there is always a clause about the time limit for claim. It is understandable that people loss their mind after an accident and they forget about the time limit for claim and when they finally think of insurance, it is out of the time limit for making a claim. If you can read the clause carefully, you will not miss the deadline. If you are getting a comprehensive, you need to pay attention to the proportion of the cover for theft to that for damage. Sometimes, the proportion is so low that when your car gets stolen, you can only receive very little money from your insurer. Other clauses about liabilities should also be studied if you do not want to argue with your insurer over whose liability it is for a certain incident.
3. After a collision, your car needs repair and repair needs replacements. Most insurers encourage you to use replacements in the market because they are much cheaper than OEM replacements. It is not time for saving money, especially if your car is an expensive one. Using non-OEM replacements does not only decrease the value of your car, but also add to your bill sneakily because your insurer will not pay for such replacements fully.
There are so many things you need to know about car insurance, so the best thing for you to do is find a well reputed insurer and make a policy that suits you.