Coventry is the force behind America’s huge secondary life insurance market – so it came as no surprise that they were elated by the result of a recent U.S high court case.

In the recent court case – Kramer v. Phoenix Life Insurance Company, the New York Court of Appeals sided with the purchaser of a life insurance policy, rather than the life insurer. Phoenix Life Insurance had tried to invalidate a life insurance policy which they asserted had been taken out with intent to sell at a later date.

Highest Court in the US rejects New York Insurable Interest Law as a reason to invalidate policy

The highest US Court’s decision in this case, effectively meant saying “no” as to whether the New York insurable interest law “prohibits an insured from procuring a policy on his own life and immediately transferring the policy …if the insured did not ever intend to provide insurance protection for a person with an insurable interest in the insured’s life”.

The court decided that life insurance products should be bought and sold like any other product on the open market and that insurers cannot second-guess consumer’s choices.

Alan Buerger, CEO of Coventry, stated that he hoped that “this decision will spell the end of carriers’ cynical actions to undermine the well-regulated secondary market.” According to Buerger “the high court’s statement of intent is a win for life insurance consumers because it should prevent insurers from attempting to invalidate policies based on an insurer’s assertion that a policy was taken out to resell at some time in the future.”

Regulation is Important in the Secondary Life Insurance Market – but so is Consumer Choice

Making a settlement on a life policy has become far more common over the recent years, due to the fact that policy owners whose policies would otherwise lapse or have to be surrendered can get far greater cash value via the option of life settlement. In fact, according to a recent report issued in July by the United States Government Accountability Office, life policy owners who sold their life insurance policies between the years 2006-2009 made a staggering $5.6 billion more than if they had simply surrendered them.

The New York settlement law prohibits the immediate sale of a life insurance policy and states that the policy owner must wait two years before making any decision to sell. In fact 40 US states have introduced their own laws regarding settlements. The new laws have been brought in to protect consumers and have been highly effective.

Following the High Court’s decision the National Conference of Insurance Regulators is expected to look at introducing general legislation to cover the 16% of states currently without formal laws on life insurance settlements.

Source: Coventry, Medicalnewstoday.com

photo credit: taberandrew

If you have someone in your life that depends upon your income, then it is likely that you need life insurance. Life insurance helps ensure that the family and loved ones who depend on your for expenses can still maintain their current lifestyle if you were to pass away.

The tricky part is calculating how much coverage you need. There are numerous factors to consider. Some online calculators and “rules of thumb” can make it seem easy – such as simply purchasing an amount equal to 20 times you annual salary (according to CNN Money) – but these methods really have no validity when it comes to determining the amount of life insurance you need for your specific situation.

In order to more accurately come up with an appropriate figure, here are some of the things you should consider:

• Final Expenses. Funeral and burial costs can run between $10,000 and $20,000 today. This is money that your loved ones will likely need to come up with immediately.
• Mortgage and Other Debts. Add up all of your debts, including your mortgage, any auto loans, student loans, credit card balances, and any other amounts you owe. This way, your family will be able to continue their present lifestyle without having to sell the home or other assets to pay these expenses.
• Education Expenses. If you have children and they plan to attend college, determine the approximate cost of a four-year higher education at the time they will likely enroll.
• Income Replacement. After you have determined all of the above figures, your loved ones will likely not have to replace a full 100 percent of your income. Some advisors recommend that replacing an amount closer to 50 percent of your income is sufficient to cover any remaining ongoing expenses such as food, utilities, and other regular bills.

Once you have settled on an appropriate amount of coverage, you will need to review it often. This is because you will likely experience life events that could make your current amount of coverage insufficient.

Some life events that could require you to adjust the amount of your life insurance coverage include:

• Marriage. Depending upon whether your new spouse earns an income can have an impact on the amount of live insurance coverage you carry.
• Divorce. Your specific situation could cause you to either raise or lower your amount of coverage.
• Birth of a Child. It takes a great deal of money to raise a child, so you will need to update your life insurance policy appropriately.
• Retirement. Retiring could mean that you no longer have life insurance coverage from your employer. And, if you pass away, your spouse could potentially lose pension or Social Security income. Therefore, you will need to make sure you are adequately covered in this situation.

Having the right – or the wrong – amount of life insurance coverage could drastically change the way your loved ones live when you are gone. It is important to make sure that you – and they – are covered with the right amount of life insurance.

photo credit: kenteegardin

photo credit: jk.fotografie

In New York City alone, there are over 11,500 stores licensed to sell tobacco products. In a recent drive to boost awareness of the health risks associated with smoking New York’s Mayor Michael Bloomberg implemented a health awareness campaign targeting these outlets.

The store owners have been asked to display signs outside their shops which show graphic images of how smoking tobacco harms the body. A few of the posters show a lung badly damaged by cancer, a decaying tooth, and a brain that has suffered a stroke, all aftermaths of using tobacco products. The posters include information for the residents of New York on where to get help in quitting smoking, and a call to join New York City’s quit program.

Tobacco Companies Strive to Maintain their Market – While Smokers Continue to Die from their Habit

Surely, you may think, any attempt to reduce the amount of deaths by smoking has to be a good thing? Not only will there be a reduction in the numbers of deaths due to smoking but non smokers will have added financial benefits such as more money in their pockets and access to far cheaper life insurance.

The three big tobacco companies, Philip Morris, RJ Reynolds Tobacco and Lorillard, however, have banned together in an attempt to cease the campaign’s efforts and have the signs taken down. In an effort to keep their customers, they are taking legal action against what they perceive to be a so far successful campaign to cut the number of smokers in New York City.

Tobacco Manufacturers Talk of ‘Rights’ in Attempt to Win Against Health Campaign

Unfortunately if history repeats itself, they may well succeed in their attempt. In 2003, Reynolds and Lorillard were successful in suing the California Department of Health Services and managed  to wipe out their effective anti-smoking advertisements. The tobacco giants usually call on the services of the First Amendment in these types of cases arguing that store owners should not be forced to put up any material they do not wish to.

The Residents of New York City, however, have rights which far outweigh the spurious rights cited by the big tobacco companies – for instance – the right to be educated against the dangers of smoking and the right to live a long healthy life – with the added benefit of  good medical and life insurance.