Posts Tagged ‘life insurance’
Wednesday, March 9th, 2011
The tough economy of the past few years has led many to shift their finances. As Americans become aware of their current financial status, they are afraid of losing even more of their hard earned assets. With high unemployment, loss of insurance benefits, and lost 401(k) savings, couples may have to drastically change the way they live – and the way they plan.
Shifting Finances
More Americans than ever are struggling with pay cuts, job loss, and other financial setbacks. This causes feelings of anxiety, especially when you factor in the potential loss of the financial breadwinner. Today, couples and families are putting together stricter budgets in order to make ends meet. But even those budgets could fail – especially if the primary income earner suddenly passes away.
An Even Greater Need for Life Insurance
Because of the loss of savings and income, it is even more important now to protect loved ones financially. Life insurance provides a great vehicle with which to do so. A life insurance policy provides funds to the policyholder’s beneficiaries in the event that he or she passes away. These funds can be used to pay immediate expenses, such as funeral costs, as well as ongoing and future expenses such as a mortgage payoff, children’s education expenses, food, and utilities. Proceeds from a life insurance policy can also be used to pay off any of the insured’s business debts or to set up a future emergency fund for loved ones.
Unfortunately, although many couples acknowledge the need for life insurance coverage, it is estimated that nearly one-third of households in the U.S. do not have a policy in force. One reason for this is that many couples feel that conversations about life insurance are too stressful. And, primary breadwinners feel averse to discussing life insurance as they do not want to hurt the feelings of their loved spouse.
Finally, due to the economic pressures of 2008-2011, couples have avoided purchasing life insurance due to their concerns about being able to afford the premium – especially if their income were to drop or be eliminated. In order to ensure that loved ones are taken care of – especially in hard economic times – a life insurance policy could be the answer.
Tags: 401k, life insurance, mortgages, unemployment
Posted in Family Life Insurance Tips, Life Insurance News | No Comments »
Thursday, December 30th, 2010
 Most investment vehicles will present both pros and cons – all of which need to be considered before making any type of investment. As all investors have varying portfolio goals, however, what may be an advantage to one investor could be considered a disadvantage to another.
Investing in Life Insurance
Some investors are drawn to investing in whole life insurance, primarily as a retirement savings vehicle. As with any other financial vehicle, life insurance also has its own set of pros and cons for investors.
The favorable tax treatment of the cash accumulation is likely one of the biggest benefits to investing in whole life. Since the funds in the account grow tax deferred, the payment of taxes on both income and capital gains is postponed.
Certainly another benefit to whole life insurance is the death benefit. Should the policyholder die, the beneficiaries will receive the death benefit proceeds income tax free.
On the down side is the liquidity factor. Although the funds in the cash value account are available, they must be borrowed if needed, and are paid back with interest. In addition, whole life insurance policies are also known for having high fees and expenses.
Investing in CDs
One of the more prevalent investment vehicles available is the certificate of deposit, or CD. As investments with fixed rates of return, many investors – and particularly retirees – purchase CDs for their regular fixed income.
Another advantage of CDs is their wide variety of maturity choices. CD maturity dates can range anywhere from one month to five years, with the longer maturity timeframes offering higher interest rates. Because of this, some investors create ongoing income through a strategy called laddering. This involves purchasing CDs with varying maturities on an ongoing basis and, after one year, the CDs begin to mature regularly.
CDs are easy to invest in and require little to no maintenance. In addition, since most CDs are backed by FDIC insurance, investors feel even safer with these investments.
There are a few drawbacks to investing in CDs. First, given their low interest rates, CD investments may not outpace inflation, causing the investor to lose purchasing power over time. And, regardless of purchasing power, CD income is taxable.
In addition, should the investor need the principal prior to maturity, there are withdrawal penalties, along with forfeiture of interest, should the investor withdraw their funds early.
In either case, it is best to determine the investors overall goals for income and capital accumulation prior to deciding on which investment vehicle best fits their situation.
 photo credit: wsilver
Tags: cd, certificate of deposit, investing, life insurance, whole life insurance
Posted in Life Insurance Products, Tips | No Comments »
Thursday, October 28th, 2010
 Fidelity, an unlisted company with approximately 150 shareholders, is the largest New Zealand owned and operated investment and life insurance company. It is currently in the midst of a potential takeover bid by Tower. This bid for $118 million is conditional upon acceptance from at least 90% of Fidelity’s shareholders.
However, there is a great deal of opposition from Fidelity shareholders to the takeover bid from Tower, including that from Farmers Mutual Group, or FMG. FMG, a holder of 10.8% of Fidelity, opposes the bid for two reasons. First, it is felt that the bid is unrealistic and that it greatly undervalues Fidelity as a company. In addition, a spokesman from FMG stated that the takeover bid could put Fidelity’s proven performance and track record unnecessarily at risk.
Other shareholders, including the Fidelity Family Trust trustees Jeffrey Meltzer and Michael Whale, and Mary and Gregory Burgess – who combined make up 70% of Fidelity ownership – also oppose the takeover bid by Tower, and have even stated that they will not accept the offer.
The bid by Tower for Fidelity comes just after AMP’s acquisition bid for AXA Asia Pacific that was tendered in November 2009.
Acquisition of Fidelity Life Insurance Would Make it Third Largest Life Insurer
If the AXA and Tower’s acquisitions succeed, then AMP and AXA would become the second largest insurance company in New Zealand with a combined share of 20%. These moves would also put Tower and Fidelity in the number three spot with a 10.4% share.
Sovereign, New Zealand’s largest insurer, says that the move by Tower is, although interesting, not surprising since Tower raised over $80 million for acquisition last year. Although a Sovereign spokesman also stated that the company would welcome the challenge of another strong player in the insurance market. He also stated that it is likely that there will be even more industry competition in the future due to the recent significant regulatory and tax changes.
At this time, Tower is slotted at number 9 in the risk and insurance market with 4.9%, and Fidelity is currently at number 8, with a 5.5% market share. AMP is presently ranked number 2 with a 10.1% share, with AXA sitting at number 3 with a market share of just under 10%.
The bid by AMP for AXA already has received approval from the Australian Competition and Consumer Commission and the New Zealand Commerce Commission. All four of the companies discussed have interests in both managed funds as well as in insurance.
photo credit: Lordcolus
Tags: acquisitions, amp, axa, farmers mutual group, fidelity, life insurance, mergers
Posted in Life Insurance Events, Life Plan Company News | No Comments »
Monday, October 4th, 2010
 Three Texas executives from A&O Resource Management Ltd. have been charged with swindling more than 800 investors from the United States and Canada out of more than $100 million in a scheme that involves life insurance settlements. Four other people are also charged in connection with the scheme.
What are Life Insurance Settlements?
Life insurance settlements are investments in which an individual, usually a terminally ill or elderly person, sells their life insurance policy in return for a cash payment. Typically this cash payment is a percentage of the life insurance policy death benefit. While the life insurance policy owner receives the cash payment, buyers of these settlements pay the premium in order to maintain the policy. The investors then receive the policy death benefit when the insured person dies.
A&O Resource Management allegedly used funds from investors in Canada and 37 states in the U.S. to purchase the investments. They then promised investors returns of between 10% and 20%. However, it is estimated that neither the bonds promised to investors, nor the underlying life insurance policies were even close in number or amount such that A&O Resources could pay off the investors.
Ill-Gotten Life Settlement Wealth Used Extravagantly
Money from investors was used to purchase personal items such as exotic automobiles, diamonds, and even a Steinway grand piano. Allegedly the executives also formed shell companies in the attempt to throw off investigators, in hopes of making the money trail more difficult to trace.
Adley H. Abdulwahab, 35, Christian M. Allmendinger, 39, and David C. White, 40, each executives and principals at Houston based A&O Resource Management Ltd. are each charged in federal court with conspiracy to commit mail fraud, six counts of mail fraud, four counts of securities fraud, one count of conspiracy to commit money laundering, and six counts of money laundering.
If the men are convicted, they can face up to twenty years in prison on each of the counts, with the exception of the securities fraud counts, where they could face up to five years in prison per each count.
Tags: fraud, life insurance, life settlement, scheme
Posted in Life Insurance Fraud, Life Insurance Products | No Comments »
Wednesday, July 28th, 2010
 A look from at the findings of the Bureau of Labor Statistics listing the most dangerous professions in the United States. The Bureau of Labor Statistics recently updated its Census of Fatal Occupational Injuries which tells us which are the most hazardous professions to work in within the US. The CFOI builds up a picture about the circumstances of the death of an employee using death certificates, workers’ compensation reports and Federal and State administrative reports regarding the incident.
Which Workers Pose Risk to Life Insurance Companies?
The figures help inform employees about the various risk areas involved in their work, aid the promotion of better work practices and are used to improve workplace safety standards; in fact the National Safety Council uses the data as the basis for its information and research. There is however, another use for these statistics –as a tool for life insurance companies to help them apportion risk to potential policy holders – life insurance premiums will be higher for those working in the most hazardous industries since they will be a higher risk to insure.
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Tags: bureau of labor statistics, census, dangerous jobs, life insurance, occupations
Posted in Life Insurance by Lifestyle | No Comments »
Thursday, June 24th, 2010
 Being obese or overweight could be a hindrance to obtaining affordable life insurance. Going on a diet could seriously help your finances when it comes to taking out life insurance. Life insurance companies tend to increase premiums for overweight people, even if they are otherwise healthy.
According to a recent study by the Center for Disease Control and Prevention (CDC) around 66% of the American public is classified as either overweight or obese. A recent study in PLoS Medicine reports that obesity is one of the four main risk factors which can lead to chronic disease, along with smoking, hypertension, and elevated blood sugar levels. As one of these multiple risk factors, obesity plays its part in reducing the average American life by 4.9 years for men and 4.1 for women.
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Tags: ama, cdc, life insurance, obesity, overweight, plos medicine, premiums
Posted in Life Insurance & Health | No Comments »
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