Life insurance quotes for older people

The article looks at some of the situations in which older people may consider taking out life insurance. That said, because of preexisting health problems, not all will be able to buy a new policy.

In many ways, common sense says buying insurance for your life is for young people. That way, you have many years to pay into a fund that will grow in size. Better still, inflation will slowly make an expensive premium payment feel less painful as salaries and pay checks increase. Perhaps more importantly, it makes sure a young family is protected when any loss of earning capacity would be most damaging. There is nothing more destructive than taking on that first mortgage on a home and then filling it with two children only to find one spouse disappears. The tax-free lump sum that pays off the mortgage and keeps the home together while the children grow up will not make the grief of loss any less, but it will make life easier for those who remain.

The truth of this never changes, but it is equally true that older people may also have legitimate concerns. Let us take some scenarios to see why insurance might be considered. First, suppose an aging parent has concerns about the adult children’s financial status. The good life they had hoped for has not been possible. They are struggling. There was a small life policy taken out when they were young but that is not going to significantly improve their lot. Or suppose the main asset is the family home and, because the housing bubble burst, it is no longer a good asset. Maybe it has just lost value. Perhaps it is underwater because a mortgage has yet to be paid off. Now there will not be enough to divide fairly between the adult children. When we get to grandchildren, particularly those who are born with a disability, there are many long-tern problems with the funding of Social Security. It may not be possible for the federal or state government to continue paying the same level of benefits. In all these cases, it makes sense for an older parent to take out insurance.

Not all the older people interested in buying insurance will find it possible. Many will be turned down because of medical conditions that now affect them. Even when there are no current health concerns, the premium payments may be unaffordable. But the more practical situations do provide encouragement. Medical science has been making progress in keeping people alive. Conditions that would have killed you quickly thirty or forty years ago are now treatable. There may be enough years for insurers to collect premiums and build up reasonable cash values if you have a life expectancy of at least fifteen years. This is a judgement call for the actuaries who drive the medical underwriting side of the business. (more…)

Sometimes you can look at a rural property and fall in love with it. There can be a beautiful stream burbling through a valley with a small stand of trees and a white picket fence – all the elements artists draw into the dream home. Although exurbs are not as picturesque, they can also be on the edge of “civilization” with real countryside just a few minutes away. Under normal, the realtor’s drum will be beating location, location, location. You will be encouraged to view on a summer’s day when everything is in apple-pie order. But before you buy into this version of the American Dream, you should do some serious investigating. You should start with a little history about the area. Does this stream suddenly produce flash floods as heavy rain washes down from the distant mountains? Do those valley sides offer a secure grounding for the trees or will mudslides bring the hillside down to your porch through the fence? Then, no matter where you live, there’s the really important question. Where is the local fire department located?

Have you noticed the big debates both at federal and state level over the deficit? Sorry, silly question. It’s an unavoidable issue and we’ve seen cuts made to all public services. For the most part, this has closed local parks, libraries and reduced the number of teachers in our schools, but left the law enforcement and fire departments untouched. Except out in the countryside, the volunteer departments now suffer loss of equipment and support for training. In the fringes of cities, smaller departments are being shut down and consolidated. This is bad news on the insurance front.

Every area of the country is given a rating based on the local fire department’s Insurance Services Organization rating. If your fire department gets a low rating, this means a low premium rate. So how does the rating system work? It all comes down to the efficiency of the service the department offers to the local community. Let’s say the department is centrally located and can get to all the homes within the immediate area within just a few minutes. This would be wonderful if it also had a crew on the premises, just waiting for the alarm bells to ring, and that crew could take out the latest in fire fighting technology. The fire fighters arrive and they are able to attach the hoses to local water mains with good pressure. This puts out the fire before it can do serious damage to the property. (more…)

It’s a pretty well-known fact by now that the safety of a vehicle can be one of the determining factors when shopping for auto insurance quotes. This definition is influenced not just by your driving record, but also by the number of safety features and enhancements that are part of the vehicle itself. Now, new advantages in technology are focused not just on surviving crashes and maximizing passenger safety, but in proactively avoiding accidents entirely.

Advancements in testing
The testing process itself is improving, as more accurate crash test dummies are being used during testing. Dummy anatomy is now more reflective of actual humans, reacting more similarly under impact. There is also growing focus on diversity of crash test models, as the very young and the very old both have different physical characteristics that influence how much they may be impacted in the case of an accident. For example, elderly people are more prone to bone breakage, while young children have the added factor of car seats.

Increased protection
Passenger protection has come a long way in a short amount of time. Remember, seat belts in cars weren’t made mandatory by Congress until the 1960s. Other advances in technology that keep both passenger and driver safe include airbags, side airbags, and crumple zones that help move the collision impact away from those within the vehicle. Future advancements include inflatable rear safety belts, which essentially combine a seat belt with an airbag for optimum rear passenger protection.

Crash avoidance
The biggest trend in car safety technology is an overall shift toward preventing crashes in the first place rather than just minimizing the impact on passengers and vehicles. There has been much discussion of microchip-based safety systems which may eventually eliminate accidents entirely. Future vehicles could come equipped with communication capabilities that eliminate blind spots, allowing coordination with other vehicles to avoid not just collision, but even traffic congestion. Other possibilities include an electronic connection to the larger communications grid, allowing direct access to EMS services in case of an accident. In the future, vehicles may also be able to sense and remember the vitals of each passenger and adjust accordingly. (more…)

Although the latest employment statistics show a drop in the number of people claiming benefit, there’s little real improvement in the availability of work. It’s still tough to find and keep a job. Curiously, both the GOP and the Democrats see the need to encourage small business, believing new entrepreneurs will lead us out of the recession. The problem with this view is we are less entrepreneurial than we used to be. Many other countries have a higher percentage of people prepared to risk their capital in starting new businesses. The majority of our younger adults are just sitting back waiting for jobs to come along. That said, the Government is encouraging small business with tax breaks. All of which brings us to the Affordable Care Act.

Ignoring the usual politics and second-guessing what the Supreme Court will rule in 2012, let’s focus on what will happen between now and 2014 when the whole Act’s program is supposed to be in force. If you are a one-person business, you will be caught by the mandate just like any other individual. That means you buy cover or pay a penalty. For the record, the penalty is $695 or 2.5% of your income whichever is the greater unless the actual cost of the premium will be more than 8% of your income. You do the math to weigh up where you interests lie.

There’s no mandate for businesses, but there are penalties for failing to put a plan in place. If you have up to 25 employees, there’s a tax break to set off against half the cost of group cover. But you only get the maximum benefit if you are really small, i.e. you do not have the equivalent of 10 full-time employees and the average of their pay is less than $25,000. Your right to the tax break reduces as your size and the average pay increases. If you are small but your employees earn an average of $50,000 or more you lose the tax credit. In 2014 every state should have a Small Business Exchange in operation and, if you decide to buy through your local exchange, the tax credit will increase. However, these tax credits are only to prime the pump. Once you have a plan for your business, the credit will phase out over five years and only for two years after the exchanges are running. (more…)

An increasing number of companies advertise their willingness to buy your policy, but is this always a good idea?There’s news from Britain where some of these companies are based. It seems some have run into financial difficulty and the national regulator is imposing new limits on the right of British-based companies to buy US life policies. The problem is these companies are forced to guess how long you will live after the deal is made. Put simply, if the buyer makes a good guess, there is a good return on the money invested. But if medical science keeps you alive for more years than expected, the buyer may make a loss.

It will help understanding to put numbers on this. Suppose you are aged 72 and, looking at the current life expectancy statistics, you are expected to live for a further ten years. The guaranteed minimum payment is $500,000 and the annual premium is $18,000. In today’s market, you would expect to sell at around $220,000. If the estimate is correct and you live for a further ten years, this means the buyer will pay $180,000 in installments and make a profit of at least $100,000 less the cost of financing and administration. But if you live for more than fifteen years, the buyer has paid out more than it will receive unless there is a good cash value.

As average life expectancy increases, this makes the decision for the potential buyers much more difficult. Will you be one of the many who will die young or will you be the less common person who lives until more than one-hundred? This decision is easier when the buyer has a medical report prepared, but it is not always convenient and cost-effective to pay for a full report. Faced with this uncertainty, there is increasing pressure on buyers to offer less. Indeed, many informed observers are beginning to describe some of the offers as so low they are potentially fraudulent. All of this should encourage you to approach the life settlement market with some caution. Always know exactly what the insurance company will offer as the surrender value. Then remember it is not a good reason to sell on the secondary market just because you are offered a few thousand more. You should be looking for a substantial improvement over surrender value. (more…)

This is something of a rarity: a tax provision that actually works in your favor. So it is worth knowing what it is and how it can help you. As the title to the article suggests, this is all about Section 1035(a) to (d) of the IRS Code and it allows you to avoid paying tax when you sell an asset. Take the example of shares on which you have made a good profit. You decide you would like to take that profit and reinvest the original capital. So you sell the shares and then discover you have to pay tax on the realized gain. Indeed, almost all rollovers with this purpose will result in a bill from the tax office unless you are exchanging insurance assets. What is wrong with paying tax in this situation? In a capitalist society, the government is supposed to encourage people to invest their money in assets likely to grow in value. If tax interferes with the decisions of when and how many assets to sell, this is an artificial deterrent to commercial decision-making. Indeed, some people may deliberately sell some shares at a loss to set off against gains in other shares. You cannot get more irrational than that when everyone is supposed to be working to maximize their profits.

In this instance, the IRS is encouraging competition between different insurance products by removing the tax incentives from changing one for another. This allows fair competition. So, for example, you may start off with a moderate guaranteed minimum life policy but find competing products are offering a better minimum payout for the same premium payments. More importantly, it allows policyholders to change policies to reflect changes in circumstances. This could be financial problems in the insurer. If the policyholder loses confidence in the insurer and fears it may go into bankruptcy, there should be no penalty to changing. Similarly, if the policyholder is struggling to pay the premium, it should be possible to switch to another insurer who will carry a similar benefit for a lower premium.

Section 1035 allows a transfer between “like-kind” insurance assets. This means you could exchange a health for a life policy, or convert to an annuity or endowment. However, nothing this simple in principle can ever be allowed to remain simple in practice. So you have to get an agreement from the new insurance company to act as your trustee in holding the capital value of your existing assets. The new insurer then writes to the existing insurer to request a transfer of the funds to its possession so that this is a business-to-business transfer and not a cent passes through your hands. You should be warned, some less than responsible insurers can take up to six months to make the transfer. (more…)

If you’ve been looking forward to insure your car and spent some time on learning the basics of this type of insurance you’ve probably noticed that the rates vary significantly depending on the type of car you’re trying to cover. The vehicle you want to insure is definitely the most crucial factor when it comes to determining your rates. And the types of vehicle you drive can put you in a particular risk category according to the insurance provider’s classifications. So, the logic question would is: what types of cars will be costly to insure and which won’t? Let’s go through all main types of cars we see on the road.

Small cars

Small cars usually cost less and have good gas mileage. Yet it’s usually more costly to insure this car type because the damage delivered in course of a typical accident is excessive and involves higher repair and medical costs.

Medium sized sedans and hatchbacks

These cars usually cost more and fill the price range from budget to business class vehicles. The rates at which this particular car type gets insured vary to a certain degree yet they are usually more affordable than for smaller vehicles because mid sized vehicles usually have better safety ratings and don’t involve as much costs after a typical collision. Yet, it all depends on a particular car make and model as there are always exceptions to any rule.

SUVs

Large SUVs and minivans are certainly very comfortable from the driver and passenger point of view. Yet, if you’re looking for cheap car insurance it may be a wrong pick. This vehicle type is known for its increased safety bud due to the larger size these cars tend to deliver more damage to other cars and elements of infrastructure, which results in higher repair cost towards the other party involved. (more…)

We live in the cradle of capitalism. No matter what the Occupy movement may actually want to happen to Wall Street (and that’s by no means clear), the underlying truth is we all depend on the financial system for America’s economy to work. It’s therefore reassuring when we see the latest consumer survey show confidence at the highest level for the year. As a nation, we are starting to buy more goods and services. With increased demand, our industrial and service sectors can slowly return to profit. As all of us who watch the stock exchanges will know there was a marked drop in values followed by considerable volatility. There’s been slow upward movement and many of the larger corporations have managed to maintain their dividends despite the recession and its aftermath. Taking the general view, this is good for the economy. Taking a more limited view, times have been difficult and this has put a break on the profitability of the service sector including the insurance industry. Insurers cannot continually increase the premium rates to their clients when even a small increase in business overheads may be the difference between survival and bankruptcy.

It’s therefore interesting to see the commercial insurance market now beginning to increase its rates. Not surprisingly, the companies formally announcing this trend have seen their stock prices rise – an increase of revenue triggers greater profits and better dividends. For businesses of all size who must carry insurance, this is bad news. Already under pressure, seeing the premium rates go up by 5% and more is not welcome. Looking across the commercial sector, it’s difficult to get an overview. Neither side of the bargain publicizes the rates paid for each type of policy. Every company wanting cover, regardless of size, negotiates with the insurance industry based on their individual risks. Most of the rates are tailored within bands. Nevertheless, there are more general signs of rising rates. MarketScout, an insurance exchange based in Dallas, showed rates rising by 1% in November.

In a way, we should not begrudge the insurance industry a little latitude. Under normal trading conditions, it invests its premium revenue in stock exchanges and different forms of portfolio. When the recession arrived, investments lost their capital value and underperformed in returns. By coincidence, there have also been a series of bad years for claims with 2101 and, now, 2011 breaking records for catastrophic weather events. It’s ironic to see revenue falling at a time when extraordinary amounts of money have been paid out. The insurers need to start the process of filling their bank accounts and making new investments, hoping to recover their previous strength. (more…)

If a family unexpectedly loses one of the incomes, the effect can be devastating. If we look around, there are tens of thousands of two-income families struggling to make ends meet. If unemployment cuts off one income you always hope this is just a temporary blip. But if the worst has happened, there’s no recovery. This means every family should aim to carry some level of financial protection. Sadly, the statistics show less than 45% of families have an insurance policy. That’s millions of household with children who will have no money to replace the lost income. So we should all make insurance a priority, particularly when economic times are uncertain.

One of the factors that should focus our attention is the decision by the Obama administration not to go forward with the Community Living Assistance Supports and Services Act (CLASS). This was intended to help people in need of long-term health care, but the costs of a public-supported approach are too high. This will leave it for the private insurers to continue to offer products to the market. So, if you suffer an injury or disease that leaves you in need of long-term nursing care, it’s possible you can use the insurance policy on your life to help pay for that care. Assuming there’s a cash value to the policy with a reasonable amount already accumulated, you can borrow this money or use the policy as security for a loan. Alternatively, you can either surrender the policy or sell it on the secondary market. With a conventional policy, this gives you a lump sum with which to pay for long-term nursing care. Except this is an inefficient approach.

If you borrow money, you have to pay it back or you end up with serious debt problems. The surrender or sale of the policy gives you a cash sum without strings attached. You can use the money until it has gone. The best option is to have a policy with an annuity built in. This way, you can trigger the annuity should the need arise or leave the investment to accumulate for the benefit of your descendants. Why provide for the possibility of long-term care? Medical science has been increasing life expectancy. As we live longer, the risk of needing long-term care also increases. So far, medical costs have been rising faster than inflation. The federal government has seen the problem and has helped with the Pension Protection Act of 2010 which allows accumulating cash value to be used to pay long-term care expenses without being caught by income tax. (more…)

UK car insurance fraud is a type of problem that involves all insurance users, not just the person involved in a fraudulent scheme as a victim. Car insurance fraud always involves additional claims within the pool and when there are more claims filed the insurance company has to increase premiums for all their customers in order to transfer the risks and costs of those claims settled. So in the end it’s us, the usual customers, who are paying for every fraudulent claim settled by our providers. But what is fraud in the first place and what are the most widespread forms of auto insurance fraud in the UK?

Car insurance fraud in general refers to any activity that leads to obtaining money from the insurance company in an illegitimate manner. Car insurance fraud can involve vehicle damage, personal injury or both. There are many types of car insurance fraud out there and the schemes tend to evolve with time as insurance companies discover previous methods and make everything to prevent them. And while fraudsters think of new ways to make their scam schemes work simple drivers have to deal with increased costs and robust claim review just because a small group of people is exploiting car insurance possibilities. (more…)