Before making any decision regarding the sale of a life insurance policy it is important to weigh up the pros and cons. Selling a life policy to a third party is known as ‘life settlement’ and means that the policy owner hands over ownership of the policy and all beneficiary rights in return for a payment. The payment to the original policy holder will be higher than simply cashing in the policy, but less than the eventual death benefit – a benefit which the new owner will receive. Most third party buyers will only be interested in purchasing larger policies – of over £500,000.

Life Settlement by seniors

The practice of ‘life settlement’ is carried out mostly by seniors, who perhaps decide that they would rather live in the ‘here and now’ or need cash to improve their standard of living. Alternatively perhaps they have decided that the policy is no longer required since they have made alternative financial arrangements for the future.

But before thinking of selling a life policy seniors should consider the following:

• Do they have adequate coverage for funeral expenses etc. in the event of their death?
• Do any members of their family have special needs which require extra financial provision?
• Life Insurance payouts are exempt from income tax – this is extra money which could help a charity or family member – giving up the policy means they would miss out
• Depending on government policy the beneficiaries might be able to pay estate taxes with the proceeds of life insurance payouts
• The process of selling a policy is quite complicated since all the premiums made from when the policy was originally taken out have to be calculated and the tax on the sale has to be carefully calculated by professionals

There certainly are situations when selling a life policy on to a third party makes sense – emergency cash may be urgently required or the policy holder may have made other suitable provisions for those left behind. Before taking this big decision however policy holders must seek advice from a qualified financial advisor.

Source: John Bullis, founder of Bullis and Company CPAs in ‘The Nevada Appeal’

Swiss Re recently published a report which suggests that many hundreds of thousands individuals living in Europe have not taken out adequate life insurance. Swiss Re interviewed 11 thousand people identified as being in a high priority group as regards life insurance and found that many of these consumers were unclear about how life insurance could help guard against the risk of sudden death or against the potential threat to finances of becoming ill or disabled.

Cost One Factor for Remaining Unprotected

The cost of life insurance also appeared to have prevented some people from taking out life cover – although the life insurance produces were theoretically well within their capability.

Life Insurance Gap Leaves Individuals Unprotected

According to Swiss Re “there is a sizeable untapped potential for life insurance to protect people’s financial needs effectively and affordably”.

The report included a somewhat startling ‘Mortality Protection Gap’ amounting to more than ten thousand billion euros when looking at the European countries collectively. This figure looks at the money which would be available to the bereaved should a loved one suddenly die – compared with the amount which would actually be required to meet their financial needs.

Life Insurers need to find ways to Access this Shortfall

To life insurers this could mean an extra 25 billion euros per year, and according to Swiss Re – a life insurance company would only need to access just one per cent of this to boost its life insurance premiums by a sizeable 250 million euros a year.

Source: Insurance Daily.com 29 Sept

photo credit: BlatantWorld.com

There is a meeting in the conference room at 9am and the keynote presentation for the meeting is far from being complete. It is another busy day at the office, but nothing a little cup of joe can’t overcome. Coffee goes well with a muffin and orange juice in the morning and can be easily transported in a travel mug. The chemical in coffee that provides that extra boost of energy in the morning is of course, caffeine.

Why Insects Don’t Drink Coffee

The same chemical that gives humans the extra boost of energy in the morning is actually a pesticide produced by the coffee plant to kill off insects that try to eat it. Insects have a different ideal breakfast than humans that does not consist of coffee, orange juice, and a muffin. The caffeine is too strong for the insects and causes an increase in heart rate that results in death. Humans are much larger and have the ability to consume larger amounts of caffeine. One proven effect of consuming caffeine for humans is adrenal depletion which results in an increase in stress throughout one’s life.

Stress can cause hair loss, heart attacks, premature aging, and a shorter lifespan. One way to deal with stress is to exercise which releases endorphins into the body from the pituitary gland which creates a feeling of euphoria after a strenuous workout. Instead of drinking that coffee every morning, maybe it would be a better idea to go to the gym and workout. The heart rate increases naturally from the workout and the endorphins will release after strenuous exercise. The addictive properties of caffeine make it difficult to give up and look for an alternative, but it is never too late to try decreasing the amount of coffee and increasing the amount of exercise in the morning.

photo credit: Jack Zalium