Tuesday, 30 August 2011
Tuesday, 2 August 2011
Car Insurance | Compare Cheap Car Insurance Quotes
In today’s world getting cheap car insurance is all about comparing. With so many sites offering to compare car insurance for you how do you choose?
My I suggest you choose the company with the best car insurance advert on TV, easy isn’t it? It has to be the Aleksandr the Meerkat of comparethemarket.com.
comparethemarket.com is an insurance price comparison site that searches over 400 insurance prices to find the best quote for you. In our opinion their system gives the broadest insurance comparison for Northern Ireland, so need to waste time phoning around, we search so you do not have to, just five minutes if your time returns your quotes in price rank order. Buy online.
The Problem of High UK Car Insurance Premiums
Anyone that’s tried to insure a car elsewhere in Europe is sure to have found a huge difference in prices. Invariably, UK car insurance always comes out more expensive. But why is that, and is there anything that can be done to get around it?
UK car insurance is often more expensive because of the different insurance rules involved in each country. Elsewhere in the EU you’re often able to insure the car alone, meaning that as long as you have the right papers and insurance in place anyone can drive it. In the UK, however, you insure the driver as well as the vehicle, but you’ll often be able to get much more comprehensive cover as well.
But, as is often the case between different countries, sometimes you simply have to pay more for a similar level of cover and there may not be any obvious reason behind it. So how can you avoid paying such high insurance premiums?
Unfortunately there’s not a lot you can do to get around it. The fact remains that if you want to drive a car legally in the UK you need to get adequate insurance, and that often means you’ll be paying more than in the rest of Europe. But, if you make sure to shop around, you should be able to drive down the prices to something more reasonable.
Every insurance company will be able to offer different policies at different prices, so always spend the time to check. You could do this on your own, or to save yourself the hassle you could always check price comparison sites to find even better deals.
This will be the best way to avoid the often incredibly high insurance premiums that you can be faced with in the UK, and by shopping around you’ll be able to get the best you can for your money. You might also want to consider increasing your excess or going for a more basic level of cover instead of a comprehensive policy, and as long as you’re getting everything you need you shouldn’t have a problem.
So, although UK car insurance policies can often be expensive, there are things that you can do to reduce those premiums. Insurance is an unfortunate fact of life and while we may begrudge paying for it now it could well help us out later on, and if you remember to always do your research and find the best deals you can avoid breaking the bank.
Student Insurance Comparison
Being a student can be a fantastic experience. For many it’s the first time they have some form of responsibility, and while the main purpose is studying it’s obviously all about having fun as well. But, it’s important to not get carried away. There are a lot of practicalities that need to be thought of with student insurance being just one of them, and with a lot of types of insurance to consider it’s important to be prepared.
Most p
eople initially think of contents insurance, and this is a fantastic place to start. Whether you’re in halls or in rented accommodation it’s important to protect your possessions, particularly as the number of expensive gadgets that you own could cost a small fortune. Laptops, TVs and iPods are common, and with the right insurance you won’t have to worry about leaving them unattended.
But, there are a lot of other policies you might want to consider investing in as well. If you own a car then you’ll want to get adequate insurance for this stage in your life, and many student insurers will offer student car insurance in addition to your current contents policy. If you opt for a specific student policy you’ll often be able to save money when compared to regular cover, and you can have plenty of added extras such as European extension and even the option of getting your no claims bonuses quicker. Of course, this all depends on the company that you go for, so do your research and see what you can find.
Gap year travel insurance is also a common request for students taking a break from their studies, and if you’re looking to head off into the wild then you’ll want to make sure you’re adequately protected. Many of these policies can be tailored to your individual requirements whether you’re backpacking or are looking for something slightly less intense, and you can even tailor it according to the specific activities you’ll be embarking on for total peace of mind.
All types of student insurance can be tailored to your precise needs, with many being extremely competitive so you don’t have to spend that student loan on your premiums. Having the necessary cover in place can let you enjoy your time at college or university without having to worry, so make sure to do you research and you can be confident that you’ll find the perfect policies to meet your needs.
UK Tradesman Insurance
Tradesman insurance is designed to protect those people who work in other people’s homes, or on customer’s premises, or commercial properties. The term ‘tradesman’ usually refers to plumbers, electricians, buildings, decorators, cleaners but can cover a wide range of trades. If you are unsure as to whether the insurance provider is able to offer you tradesman insurance, contact them to confirm first.
If you are looking for your first tradesman insurance policy, you might wonder what is able to offer you. There are usually a couple of core policies included into your insurance, with the option to add on extras if necessary. Two absolutely essential insurance policies which must be incorporated into the most basic of tradesman insurance are public liability insurance and employers’ liability.
Public liability insurance provides cover for tradesman in the event that any damage to a member of the public, or their property is caused by you or the business. You will be covered for any legal fees, other costs and expenses, and hospital treatment. Employers’ liability is required by law if you employ members of staff, as this covers you financially in the event that anyone is injured or becomes ill due to work.
Holding these two policies is extremely important, but it is also essential that you consider where else you might be at risk. More often than not a basic tradesman insurance policy is not enough to protect you or your business, and you might need to consider extras such as:
• Professional indemnity – form of insurance providing cover in the event of any professional negligence by breach of duty of care.
• Tools cover – as a tradesman the chances are you have a lot of money invested into tools, whether they are hand tools, power tools or any other equipment. Without the tools to do the job, you can’t do the job. Protect the lifeline of your business and ensure that you have adequate tool cover in the event of theft, loss or damage.
• Stock cover – if you have any stock on your business premises, or even in storage, it could get stolen. Protect yourself by ensuring that you include stock cover into your tradesman insurance.
• Revenue protection – this helps protect your business if you are forced to cease trading through no fault of your own. The insurance should offset your lost income, but it is also possible to see if you can get financial assistance to start up your business once again
Cheap Car Insurance - Trick Or Treat?
We all love a bargain whether we are in a recession or not. When it comes to cheap car insurance we particularly like to shop around. Up to a quarter of people change their insurer when the renewal date arrives. Changing utility companies is less common although getting more popular as prices rise - but you don't have a renewal date for your electric or gas so most of us avoid the paperwork and the hassle. Renewing your car insurance is easy, but there is a bit of work to do, which is probably what prompts us to shop around while we are at it. Added to this, saving some money on the car insurance may actually mean the difference between continuing to run a car or not as we all begin to feel the 'pinch' in our wallets.
Protect your assets
Finding cheap car insurance is pretty easy these days, the market is so competitive and insurers so keen to keep existing clients that they will offer discounts and bonuses galore. For new drivers finding young driver insurance is usually expensive and you may well be tempted by all kinds of offers, but for more established drivers, who posses valuable assets like their no claims bonuses, switching to an apparently cheaper policy may prove expensive in the future. Most companies will accept your no claims bonus when you purchase a new policy - but before clicking 'Yes' and switching, make sure that this is the case. The larger your no claims bonus is you have the more you will want to protect it! If your policy does not already protect your 'no claims bonus', consider when switching the inclusion of this option. Protecting your no claims bonus usually comes at a slight premium but one that may well be worth it.
Big points, small print
It's easy to think that all insurance companies and policies are the same. Many are, but there are specialist insurers out there. There are numerous factors to consider when you are searching for cheap car insurance. Age, gender, driving experience, penalty points, type and age of car are just some of these factors. For each category it is usually possible to find a specialist firm but always compare these with the mainstream providers and see if the terms and conditions are comparable as well as the costs. Finding cheap car insurance can be a real treat - or allow you to afford one - but make sure that there are no hidden surprises in the small print.
Bad Credit Auto Insurance - How to Get the Best Rate
Having bad credit doesn't make you a bad driver, but it will raise your auto insurance rates. Here's how to get a cheap rate on bad credit auto insurance.
Bad Credit Auto Insurance
As strange as it may sound, your credit rating directly affects your auto insurance rating with some companies. Auto insurance companies have figured out that people with bad credit file 40% more claims than people with good credit.
If you have bad credit your insurance could cost you 20% to 50% more in insurance premiums than someone with good credit.
The good news is not all insurance companies use your credit rating as a factor in determining your insurance rating, and some states won't allow insurance companies to use it. So if you've been labeled as a bad credit risk, or suspect you may be, you should shop around for auto insurance with other companies.
There are websites where you can get auto insurance rates from a number of A-rated companies, and also get advice from insurance professionals, absoluelty free of charge. All you do is fill out a simple questionnaire about the type of car you own and the type of insurance you want, wait for your quotes, then choose the best one. (See link below.)
Lowering Your Auto Insurance Rate
In addition to comparison shopping, here are some other ways to lower your insurance rate:
Raise your deductible - Raising your deductible can save you hundreds of dollars a year on your insurance premium. After a while the money you save on your insurance premium will more than make up for your deductible.
Drop your collision and comprehensive coverage - If you drive an older car - particularly if your car is worth less than the total of your insurance premium plus your deductible - consider dropping your collision and comprehensive coverage as repairs may cost more than your car is worth.
Consolidate your insurance policies - Purchasing your homeowners insurance (or renters insurance) and auto insurance through the same company can get you a 5% to 15% discount on your premium.
Daily Car Insurance - The Cost Effective Solution
It is getting harder for everyone to afford good car insurance but the fact remains that by law you have to have it on your vehicle. This means for some they cannot afford to buy insurance. Their cars have to sit in the drive collecting dust. This is unfortunate but that is the law. No one is allowed to drive on public roads and highways without insurance. So what are your choices?
You do have choices in the matter. Nowadays you can purchase auto insurance for a day. This type of cover is available for 28 days at a time. There is a limit on how many days a year you can purchase this however. This is something you will want to remember. If you do not drive often and can not afford yearly cover you may want to consider this type of cover. You will get comprehensive cover on whatever vehicle you insure. It does not even have to be your vehicle.
If you have to borrow the car of a friend for a day, you are going to want insurance on it. There is no way you want to risk an accident while driving a friend's vehicle and not be covered. This is when auto cover for a day makes the most sense. You can purchase one a day cover and protect your friend's car. Since it is comprehensive cover you will be protected for all eventualities. One a day makes more sense than getting an annual policy to cover while you borrow the vehicle.
One a day car insurance is also great for driving a brand new car home from the dealership. By getting one a day you can drive the vehicle home right away. You will not have to wait until you line up your annual policy on it. Taking holiday with a rented vehicle or to have someone else covered on your car is another good reason to carry auto insurance for a day. Sometimes you have to take a break from driving. You can let someone else drive if you have comprehensive cover that lasts a few days. It is a cheaper method of getting insurance on the car and the person driving the car.
When family or friends come to visit who come by train or plane, they will need a vehicle to drive while they are here. You can get one day car insurance on your vehicle to cover them while they are using it. It is perfect for a week or two. New drivers have a lot of trouble affording policies. Many of them have to let their car sit. Although it is only a temporary fix, using car insurance for a day is a good way to be able to get to an important meeting or to school.
Short term car insurance definitely has its benefits. This cover is easy to apply for with many companies offering it over the internet. Since it is temporary insurance there will be fewer questions to answer. There is the drawback of insurance companies being picky over whom they insure, however.
Wednesday, 8 June 2011
Life Insurance Definitions
Accelerated Benefit Provision
Enables a policy owner to receive early death benefits if he
or she is diagnosed with a terminal illness or permanently
confined to a nursing home.
Accidental Death Benefit
A policy rider that provides additional benefits for those who die of accidental causes
Actuary
A professional trained in the mathematics of insurance and risk management. Known as a mathematician in most countries outside the United States.
Adjuster
A person who investigates and settles insurance claims.
Administrative Costs
Costs related to utilization review, insurance marketing, medical underwriting, agents' commissions, premium collection, claims processing, insurer profit, quality assurance programs and risk management.
Admitted Company
An insurance company authorized to do business in a given state.
Age Limits
The ages below or above which the insurance company will not issue a given policy or renew a policy in force.
Agent
A person who sells insurance products of the insurance company; the person responsible for your insurance coverage needs.
Alien Insurance Company
An insurance company incorporated under the laws of a foreign country.
Assigned Risk
A risk assigned to insurers by law, which they may not otherwise accept.
Automatic Premium Loan
Any life insurance premium not paid by the end of the grace period (usually 31 days) is automatically paid by a policy loan if there is sufficient cash value.
Cancellation
The termination of insurance coverage during the policy period.
Cash Value
The amount of money, before adjustment for factors such as policy loans or late premiums, that the policy owner will receive if the policy owner allows the policy to lapse or cancels the coverage and surrenders the policy to the insurance company. Cash values are a feature of most types of permanent life insurance, such as whole life and universal life.
Certificate
A document used to verify coverage for a person covered under a group insurance policy.
Claim
A formal request for payment of a loss under an insurance contract.
Claimant
The first or third party. That is any person who asserts right of recovery.
Clause
A section or paragraph in an insurance policy that explains, defines or clarifies the conditions of coverage.
Commission
Paid to the insurance agent as compensation.
Composite Rate
A uniform premium applicable to all those eligible in a subscriber group, regardless of the number of claimed dependents. This is common among plans purchased by large employer groups.
Decline
An insurance company refuses to accept the request for insurance coverage.
Disability Benefits
A feature added to some life insurance policies providing for waiver of premium, if the policyholder becomes totally and permanently disabled.
Effective Date (Inception Date)
The date on which an insurance policy coverage starts.
Endorsement (Rider)
Amendment to the policy used to add or delete coverage.
Evidence of Insurability
Medical information about someone applying for insurance; this is used to determine which policies can be issued, and what premiums can be charged. It is kept confidential.
Exclusion
Certain causes and conditions, listed in the policy, which are not covered.
Experience
The record of claims made or paid within a specified period.
Experience Rating
Determination of the premium rate for an individual risk, made partially or wholly on the basis of that risk's own past claim experience.
Expiration Date
The date on which the policy ends.
Face Amount
The amount that the beneficiary receives upon the death of the insured.
Flat Cancellation
the cancellation of a policy as of it's effective date, without any premium charge.
Financial Ratings
Reflects the financial strength of insurance companies, and their ability to meet their obligations to their policyholders. Major rating organizations include Standard & Poor's, Moody's, and AM Best.
Free Look
The right of the owner of the policy to examine the policy, and return it for a full refund if necessary; this usually lasts for at least ten days.
Grace Period
A stated period over which an overdue premium may be paid without penalty.
Group Life Insurance
Life Insurance provided for members of a group. It is most often issued to a group of employees but may be issued to any group provided it is not formed for the purpose of buying insurance. The cost is lower than for individual policies because administrative expenses per life are decreased, there are certain tax advantages, and measures taken against adverse selection are effective.
Guaranteed Insurability
An option that allows a policyholder to purchase new life insurance at certain points in the future, without providing new evidence of insurability.
Illustration
A document showing yearly numbers to indicate how a policy will work; it is used in insurance sales presentations.
Incontestable Clause
A clause in a policy providing that after a policy has been in effect for a given length of time (two or three years), the insurer shall not be able to contest the statements contained in the application. A health insurance provision also states that after that time no claim shall be denied or reduced on the grounds that a condition not excluded by name at the time of issue existed prior to the effective date. In life policies, if an insured lied as to the condition of his health at the time the policy was taken out, that lie could not be used to contest payment under the policy if death occurred after the time limit stated in the incontestable clause.
Top Ten Tips to Save on Life Insurance
Looking to save money on your life insurance? If you are willing to do a bit of work and consider alternatives in your search, you could save yourself a lot of money.
The most important thing, first and foremost, is to shop around. There are hundreds of insurance companies offering a wide variety of plans and prices. Different companies could have different claim experiences and therefore have very different rates. You could save big bucks, just by doing some comparison-shopping.
What else can you do? You have many options. Here are 10 more ways you can save on life insurance:
- Consider term insurance over whole or universal life.
Term insurance is insurance and insurance only. Unlike whole life policies that have a savings component, you just get life insurance. As a result, you can actually save money on premiums with term insurance. In fact, according to one insurance association, the cost of a universal or whole life policy could be 8 or 9 times more than for term insurance with the same death benefit!
Having said that, if whole life is your preferred policy, there are still ways to save some money and get the insurance that you want. A big part of the costs associated with whole life insurance are administration fees. If you are willing to check around, you may be able to find companies that sell “no load” or “low load” policies. As always, check any fine print when buying these kinds of products, to ensure there are no hidden charges and that you are getting exactly what you expect.
Do keep in mind that if you choose whole life, it doesn't really give you the full benefit's of a savings vehicle. Any partial withdrawals or loans will reduce your death benefit. Also, if you partially withdraw or take out a loan against your cash value, and the cash value exceeds the premiums you have paid into the policy, you will be hit with a tax bill. Finally, every year you own the policy, more of your premium money goes to pay for the cost of insuring you and less of it goes toward the cash value. Why? Because your risk of death increases and the cost of your insurance component therefore increases. - Look for no-commission policies if possible
What is a “no-load” insurance policy? Well, first of all, it's really more accurately a “low-load” life insurance policy. Such policies have fewer expenses built into them, such as agent commissions and fees for marketing. This can mean lower premiums to you.
How can you get a no-load policy? You need to buy from a financial advisor who will charge a “flat fee” rather than collect a commission. The flat fee will normally be lower than the built-in cost of commission.
You can also buy no-load policies direct from an insurance company. If the company is selling without an agent, there is less cost to them and potential savings to you. More and more insurers are selling directly via the Internet. It's worth checking out. - Avoid a guaranteed issue policy if you are young or healthy
“Guaranteed issue” term life insurance policies require no medical exam and are sold to anyone who comes along. Youve likely seen commercials for “Guaranteed Life” or other such policies. Guaranteed issue policies are riskier for the insurer than policies that require medical exams and are thus more expensive than regular term insurance policies. While these policies can be a great way for people who have medical problems to obtain some life insurance, if you're healthy, you'll get better rates by taking the tests and qualifying.
Theres another reason not to take a guaranteed life insurance policy. With guaranteed life insurance, your death benefit is usually low. At the same time, your premiums are high because of the risk factor. As a result, you could end up paying more in premiums in just a few years than your family will receive in death benefit's. - Shop online!
While online services may not automatically give you the best price, they can still be a useful source of information about prices overall. You may also find less expensive policies available, from companies who only sell direct and therefore have lower fees. However, the quote you get online will only be as useful as the personal information you provide. Provide the most accurate and complete information possible. For comparison, you should consider speaking with a local insurance broker or other insurance professional to compare quotes and ask additional questions if you have them. - Save money by improving your health
Any kind of health problem can hurt your chances of buying life insurance. However, conditions like high blood pressure, diabetes and heart disease are among the ones that can make life insurance companies reluctant to sell you a policy at all.
The better your health, the less risk you pose to the insurance company. It's as simple as that. For this, you'll have more choice of insurer and likely lower premiums too.
If you are a smoker, you will pay more. Research shows smokers pay nearly three times the premium of non-smokers and you can't just quit the day before you apply. Most companies will want you to have been smoke-free for at least a year. However, it's not unusual for a company to require as little as 2 years smoke-free or as many as 5 years, in order to qualify for non-smoker rates.
Here's a bit more bad news: If you smoke marijuana, pipes or cigars, you still must admit to being a smoker on the policy application, although insurers don't generally differentiate between different types of smoke inhalation. So, no matter what you smoke, you will be considered a smoker. Marijuana users must also disclose their drug use.
So, your first goal should be to give up smoking, but that's not the end of the road to good health. Some companies are now classifying as many as 5 different categories of non-smoker, based on the other medical conditions that you might have.
Think you are out of the woods because you chew tobacco rather than inhale it? Insurance companies use urine tests to check for the presence of nicotine. If you chew tobacco, you might just end up with smoker rates on your life insurance policy.
If you're healthy but somewhat overweight, this could also impact your ability to buy life insurance. Generally, the heavier you are, the more you'll pay, if the company is willing to insure you. Losing weight is the right thing to do; however, you'll have to lose your weight safely and slowly! Rapid weight lose is associated with many serious health conditions.
If you have a pre-existing medical condition that could lead to higher rates, take action now. By showing your insurer a history of improving your health, taking your medications regularly and acting responsibly about your health, you'll probably get yourself lower life insurance premiums than you otherwise would have. - Buy only the insurance that you need
With life insurance, if you buy too much, you'll pay too much. If you buy too little, you could leave your family with a financial problem. Whats the right balance? It's a basic formula:- short-term needs of your family long-term needs of your family the familys resources = how much life insurance you need
Short-term needs would be for such things as funeral costs, debt repayment, immediate income replacement (six months to a year), and potential childcare to help your spouse continue or return to work. Long-term needs would include your children's college education or long-term income replacement for a spouse who will not be returning to work (especially if you don't have a pension).
Experts advise you do an analysis at least once every three years or whenever you have a major life change. For example, if you have a new baby, you have to recalculate long-term college education needs and short-term child-care costs. If you own a home, a mortgage is likely your biggest financial burden and it should be paid off in the case of your death. Because your mortgage balance decreases over time, it's important to review the actual amount of coverage you need on a regular basis. - Consider a rider on your whole life policy, rather than a new policy
Do you already have a whole or universal life policy? Well, just because your needs change doesn't mean you should run out and buy a new whole life policy. A rider may be the answer to your problem. A rider amends an insurance policy to expand your coverage, without sacrificing any cash value you may already have.
Still, be sure to shop around. If you're still in good health, you might be able to get a better deal by buying additional term life insurance to supplement your original whole life one
Donating Your Life Insurance to Charity
As the hunt for funding gets more and more challenging for many non-profit and charitable organizations, I've seen more and more short bit's of information on donating your life insurance as a legacy. Is this a good idea? What do you need to know before you decide to take this route? And is it the best one for you?
First of all, charitable donations are tax deductible. While this isn't usually a prime motivator for most of us, it does make the donation to a charity even more inviting. After all, you can support a cause you believe in and get a tax break on the money you give. It's a win-win, right? If a tax benefit is one of your motives for signing away the benefit's of your life insurance policy, you should first confirm a few things first.
Life Insurance for Children
We always want the best for our children. Life insurance companies know this. As a result, you might find that you are the target of sales pitches from life insurance companies. This is a time when emotions can run high. We all want to secure our children's future, right? If you are considering life insurance for your child, it's a good idea to step back from the sales pitches and be sure that you are clearly considering your and your child's needs before you make a purchase decision.
Life Insurance For the Overweight
Are you overweight? Are you otherwise healthy? You still might have a hard time buying life insurance. Even if you're not obese, there are some cases in which you'll have to pay more for life insurance.
In most instances, the heavier you are, the more you'll pay.Along with age, medical history and lifestyle, life insurance companies take your "build" into consideration on your application. "Build" is your weight relative to your height. Life insurers use standard tables that combine weight and height in a chart to help determine what kind of risk you pose.
The more you weigh in relation to your height, the more potential you have for health problems. That's what the statistics say. Insurers will combine their unique claims history with those statistics to come up with their risk factor for you as a client.
The ideal life insurance customer is someone who is expected to live a long, healthy life. That means that the risk you pose to the insurer is low. Statistics consistently show overweight people pose increased insurance risks, because they are likely to develop health problems as they grow older.
At the same time, the average American waistline is getting bigger. Obesity is considered a silent epidemic. Weight related diseases like diabetes are also increasing at very high rates. Increases are evident regardless of sex, age, race and educational status. Since diabetes increases your risk of an earlier death, an overweight person poses a higher risk to insurers.
If you're just a little overweight, say about 10 pounds, you might see no difference in the life insurance rates you are quoted compared to a friend who is 10 pounds lighter and the same height. However, if you're severely overweight, you'd better budget more money for life insurance. Obesity is clinically diagnosed when you are 20 % or more over your ideal weight. At this level, your insurance rates will likely be increased.
A person can be denied life insurance at some companies if the person is morbidly obese even if that person does not have any other health problems. This is definitely something to keep in mind.
Reducing Life Insurance Costs
You can control your cost of life insurance to some extent. Here are some tried and true tips:
- Always get more than one quote for life insurance. Comparing prices is critical to getting the right life insurance at the right price. I recently got quotes on term life insurance for $250,000. Quotes ranged from about $40 a month to over $80 a month. This is a clear case for shopping around. But don't just buy on price - I compared life insurance companies with similar financial ratings (mostly by A.M. Best), and similar policies. Then, I bought life insurance based on the life insurance policy itself and it's price.
- Buy only the life insurance that you need. If you buy more life insurance than you need you will pay more for it - and the chances are in the life insurance company's favor. You are not likely going to collect on that policy. Your chance of being off work for more than 90 days is higher than your chances of dying between the ages of 40 and 64. Keep this in mind.
Term Life Insurance
Term life insurance is generally your most cost effective option if all you need is life insurance.
If you are looking for a tax sheltered investment you might want to consider Universal Life Insurance. If you want a savings component, you might want Whole Life Insurance. But the bottom line is this: you will pay administration charges over and above your life insurance premium cost in both cases.
Term Life Insurance Calculator
The following calculator will help you estimate how much life insurance you need to cover your family's financial needs, following their loss.| Financial Need | Amount |
| Remaining Balance on Current Mortgage | |
| Funeral Expenses | |
| Children's Future Education | |
| Debt (Autos, Credit Cards, Loans, etc) | |
| Family Emergency Fund | |
| Your Current Income | |
| Total Life Insurance Needed | |
Other Types Of Life Insurance
Life insurance makes money for organizations. It's the last insurance most of us ever want to collect on.
The chance of paying out is relatively low and it should be no surprise that other institutions want to offer this to you.
Here are two types of life insurance that you may have been offered:
- Mortgage Life Insurance
The short answer is that you likely shouldn't get Mortgage life insurance. Your bank will make significant efforts to have you buy it, but tell them you are fully insured through your other life insurance coverage. Why would you do that? Because mortgage life insurance through your bank is notoriously expensive for the amount of coverage. Whatever you pay to have your mortgage of $150,000, completely insured through the bank, it will be more than a comparable term policy 9 times out of 10. Just get more term life insurance if you need it. - Credit Card Life Insurance
Credit card insurance is very expensive coverage for very small amounts. Instead of doing this get more term life insurance. If you don't have term life insurance, get a small policy - you'll find that it's very inexpensive in comparison to the cost of the coverage through the credit card.
Now, the credit card company will try to sell you the credit card life insurance because "you don't pay if you don't have a balance". Well folks - THEY don't pay you a benefit either if you don't have a balance.
In general, don't do it.
Whole Life Insurance
Whole Life Insurance, also called Permanent Life Insurance, is bought for the rest of your life. You'll pay more than you would for term life insurance, but whole life insurance premiums do not increase with your age after you buy. This is one of the selling points.
In the early years of the whole life insurance policy when you're a low risk, you'll pay more in annual premiums than you would with a comparable term life insurance plan. However, you become a higher risk at an older age, and the cost of term life insurance goes up. Therefore, the premium eventually becomes less than the cost of a comparable term policy.
Universal Life Insurance
Universal Life Insurance
This universal life insurance policy is really best-suited for a person who wants tax sheltered investments outside of their 401(k) or RRSP. Most of us are not maximizing our contributions in these retirement vehicles, so we aren't in the market for universal life insurance coverage.
If you are maxing out your retirement savings then you might consider a universal life insurance policy. But remember - you will pay administration fees.
If you are maxing out your retirement savings then you might consider a universal life insurance policy. But remember - you will pay administration fees.
If you think you might be in the market for universal life insurance you should likely seek some independent financial advice - not advice from a life insurance agent who has a vested interest. A financial advisor can look at your total financial picture and let you know if this product makes sense for you.
For more information regarding life insurance check out the following pages: Life Insurance, Why do I need life insurance, How do I decide what I need, What types of life insure can I get, Permanent life insurance, Whole life insurance, Universal life insurance, Term life insurance, Other types of life insurance and don't forget to check out the How can I reduce life insurance costs page.
For more information regarding life insurance check out the following pages: Life Insurance, Why do I need life insurance, How do I decide what I need, What types of life insure can I get, Permanent life insurance, Whole life insurance, Universal life insurance, Term life insurance, Other types of life insurance and don't forget to check out the How can I reduce life insurance costs page.
Life Insurance - How do I decide what I need?
This is a big question. In general, most financial planners will say that you should have life insurance equal to at least 5 times your annual salary. Some folks with more dependents (older parents, children and spouse) may need more life insurance.
Other financial planners say that you should look at the total amount of income that you want to replace between now and retirement. While the numbers can be big and scary if you are young, your actual life insurance needs will decrease over time.
Let's look at an example. If I'm 25 and make $35,000 a year and I want to replace the income I'd make between now and retirement age, I'd be looking at life insurance for $848,000. Whew! Well, there are a number of concerns with that:
- First and foremost, can I afford the premium?
At this age, you may be able to. The risk to a life insurance company is low. - Does my spouse work?
If my spouse does work I may not have to replace my total salary. - If I have a stay-at-home spouse, would they consider going back to work after a certain period?
If you think your spouse may want to retrain for another career you may actually need to consider more money. Or perhaps, if the total amount of the life insurance policy paid out the mortgage and put some money in the bank, your spouse could return to the workforce on a part-time basis. - Am I trying to leave my family 'set for life' or am I trying to get them over a tough time?
This is entirely up to you. Balance it out against the amount of the life insurance premium. - Is it overkill?
(Excuse the pun.)
Beneficiaries
For the sake of your loved ones it's usually better to name a beneficiary on your life insurance policy. If the proceeds of your life insurance go to your estate and get tied up in probate, it could be months before your family is paid the death benefit - and a lot can have happened in that time.
Pay careful attention to how you designate the beneficiary of your life insurance policy. If you want your wife or husband to get the proceeds of your life insurance, you should not just say "wife" you should say the name. Why? If you have a previous wife that person could receive the life insurance benefits.
Types Of Life Insurance
Life insurance gives you some options
In most cases, term life insurance is your best buy. This is because your need for life insurance actually decreases over time - when your mortgage is paid off, when the kids are already through college and on their own or when you are into your retirement years.Permanent life insurance provides you with a saving's account coupled with a life insurance policy, in most cases. Premiums tend to be higher in part because many of these policies will develop a 'cash value' over time. Now, if you really want to save money you are generally better off with a savings account. However, for some people, the need to 'liquidate' a life insurance policy in order to get the cash helps to protect these savings
Permanent Life Insurance
he only reason to buy permanent life insurance is that you are going to hold this insurance for life.
By holding the "permanent life insurance for life," we mean for life. There are usually up-front charges which considerably impact the savings component. Eventually, the savings will begin to pay off, but it can take 10 to 20 years for things to begin moving your way.So what are you really getting? Well, it works like this: part of your monthly payment pays for the actual life insurance (This will normally be close to the amount you'd pay for term life insurance). The rest of your payment (minus management charges; which are a fee over and above the cost of premium) is applied to the savings component. Therefore, in order to actually build savings, your premiums are higher than term life insurance by the amount of your savings contribution, plus fees to the life insurance company to 'manage' your money.
Now, if you want someone to manage your money, wouldn't you want a specialist? Maybe a bank?
Originally, the cash value that you built in your permanent life insurance was designed to continue to pay your premiums when you get older and premiums become REALLY expensive. This was a selling point because you banked money to pay high premiums to keep life insurance in force after retirement - when you don't make as much.
Another of the big selling points has been that you (as the life insurance policy holder) could access those savings if you need them. Sounds good, right? Well, it doesn't always work as planned. If you want to use those savings for something other than life insurance payments you will likely pay income tax on them; which negates any "tax shelter" status and could even push you into a higher tax bracket (with higher taxes).
Rules to borrow against a permanent life insurance plan can be very complicated, can cost interest, and what if you don't want to pay it back? It's supposed to be "your money" after all.
Life insurance companies make good money on these policies. There are generally incentives to life insurance agents to sell them. Insurers profit from people who buy these plans young and then drop them early.
For more information regarding life insurance check out the following pages: Life Insurance, Why do I need life insurance, How do I decide what I need, What types of life insure can I get, Permanent life insurance, Whole life insurance, Universal life insurance, Term life insurance, Other types of life insurance and don't forget to check out the How can I reduce life insurance costs page
Life Insurance
Life insurance is a critical part of your long term financial planning. Every person with dependents should have life insurance.
Life insurance is particularly important if you are the sole breadwinner for your family. The loss of you and your income could devastate your family. Life insurance will ensure that if anything happens to you, your loved ones will be able to manage financially.
Why Do I Need Life Insurance?
You need life insurance in order to ensure that your loved ones can cope financially with your loss. That's the bottom line.
The reasoning behind life insurance is most evident when you consider sole breadwinners, but applies to everyone who has dependents, even stay-at-home spouses. If you (as the stay-at-home spouse) were to suddenly die, your family would have to find other ways to: ensure care of children; get the family home cleaned; handle dry cleaning and laundry; do grocery shopping; and many other tasks which you currently handle. While your services appear to be 'low cost' because no one is paying you directly, if your family has to replace you with paid help you will quickly see your 'value'.In addition, funerals are expensive. An average funeral can set you back between $8,000 and $10,000 considering the funeral home services, casket, burial plot and headstone. This is part of what you want to insure yourself against. You can bundle in these costs when you consider a life insurance policy's total benefit amount that you insure yourself for.
While you can buy life insurance policies which are a small amount suitable only to cover funeral costs, you will generally need much more life insurance than that. Many of these life insurance policies look good because of low prices, but you have to look closely. For the dollar amount of coverage you get, it is generally a more expensive life insurance policy.
Some people who are single or have no dependents might want to consider 'funeral coverage' only. For the rest of us, we should be looking at more substantial life insurance.
For more information regarding life insurance check out the following pages: Life Insurance, Why do I need life insurance, How do I decide what I need, What types of life insure can I get, Permanent life insurance, Whole life insurance, Universal life insurance, Term life insurance, Other types of life insurance and don't forget to check out the How can I reduce life insurance costs page.
Top Ten Most Dangerous Jobs
You might not think that you work in a dangerous job. You might just be surprised. However, according to the Bureau of Labor Statistics, the top 10 most dangerous jobs are:
- Timber cutters
- Airplane pilots
- Construction laborers
- Truck drivers
- Farm occupations
- Groundskeepers
- Laborers
- Police and detectives
- Carpenters
- Sales occupations
Groundskeepers? That one certainly wouldn't have been on any list of mine. Neither would sales occupations. After having worked in an office tower, I'd have included window washers for sure. Which brings us to an important question; do you have enough life insurance? Whether you are in a risky occupation or not, life insurance is part of a complete financial plan for everyone. Having said that, if you're single and no one is depending upon your income for support, you probably don't need life insurance. But you should definitely have it if you fall into any of the following categories:- You're married and your spouse depends on your income
- You have children
- You have an aging parent or disabled relative who depends on your income
- Your retirement savings, pension, or other cash accounts won't adequately support your loved ones after you die
- You have a large estate and expect to owe estate taxes
- You own a business
How do you figure out exactly how much you need? You can check out our insurance pages for more detail. Alternatively, you may want to contact an insurance agent or broker who can help you determine what type of life insurance is best for you and the amount of coverage you need.
Rule of thumb is that you should have enough life insurance to pay off your major debts. This would include your mortgage, your car loan and any other large outstanding loan (which could include credit cards). In addition, if you have children, you should factor in childcare for the surviving spouse and potentially money for college. If your spouse would not want to return to work while the children are young, you might have to factor in a living allowance for a number of years.
Keep in mind that every year your insurance needs could change. Perhaps you have a new addition to the family. Perhaps you've paid off the car loan. Maybe your oldest is now in college with a full scholarship. Review your life insurance coverage frequently and adjust as necessary. (This will be easier with term insurance than with whole life or other universal insurance.)
No matter what kind of life insurance you decide to buy, ALWAYS shop around. Since many different types of life policies are available, it's important to compare what you are getting. Your insurance coverage should meet your individual needs. Premiums on insurance of any kind can vary widely, so be sure to get quotes from a number of companies. In most cases, the rule of thumb is at least 3. Just make sure you're comparing policies that offer similar benefits.
