Life Insurance Australia News
Fri, 05 October 2007
MBF To List On ASX
MBF Australia said it intends to demutualise and list on the Australian stock exchange in an attempt to grow and diversify its business.
The health insurer said its plans have been endorsed by the MBF Council.It said a share market listing is likely in calendar 2008.
The board believes that demutualising is in the best interests of policyholders, that it will maximise MBF's future growth potential and enhance its ability to compete in a rapidly changing environment," chairman John Conde said.
Sun, 24 August 2008
How much is your life worth?
By Sarah Mills, ninemsn Money
Putting a number on your life can be a bit disconcerting, possibly even disappointing. The thought of mortality can be sobering and many people avoid the issue altogether. However, we are all going to die and it is common sense to address the topic of life insurance sooner rather than later.
By your mid-30s the chance of contracting a degenerative disease starts to rise sharply. Degenerative diseases include cancer, heart attack, diabetes, arthritis, Parkinson's, Alzheimer's and multiple sclerosis, to name just a few. Any of these can cause debilitation or death, as can an accident.
How much should I insure for?
Deciding on a life insurance payout can be tricky. Some might consider themselves priceless but insurance companies prefer to deal in specifics and they do have limits.
Generally, the higher the lump-sum payout, the higher the premium — to a large extent insurance companies leave it to the individual and market forces to arrive at a figure.
A $1 million term insurance policy, for example, will normally cost a healthy person in their late thirties about $70 a month or $840 a year. Many insurers put an upper limit of about $2 million on an average life. If you wish to insure for more than this, you may have to take out separate policies with different companies.
When calculating the amount of life insurance you want, the first step is to calculate your cost of living — mortgages, bills, food, rent, debt, clothing, transport and so on. This will help you determine how much money you will need to survive if you are unable to work because of a life-threatening condition or how much money your family will need to survive in the event of your death.
One quick method to estimate life insurance is to calculate your gross annual income and times it by 20 years. An average gross weekly family income of $1324 translates to about $70,000 a year or $1.4 million over 20 years.
However, insurance is needs based and the amount you insure for should primarily reflect your stage in the life cycle.
Single people
A single person with no dependants does not have a great need for life insurance. Any policy would only really need to cover net debts and funeral costs. Average personal debt outside home loans includes HECS debt, credit card debt, car loans and personal loans and averages $14,400.
Married couples
For those married with a mortgage, the stakes rise. If one partner dies, the capacity of the remaining partner to repay the mortgage is severely compromised. This is exacerbated by the fact the economies of scale on the cost of living available to couples are withdrawn. Any insurance would need to cover mortgage repayments, other debts and funeral costs, with something left over as a cushion to fund the grieving period.
Couples with children
Life insurance is critical for people with children. According to ABS statistics, 4400 parents die each year. While this is only a small percentage of the 2.7 million families in Australia, if you or your partner prove to be one of the 4400, that is little consolation.
A report by AMP and the National Centre for Social and Economic Modelling shows an average family is likely to spend about $448,000 in today's dollars to raise two children from birth to age 20. Another report in The Bulletin in 2005 estimated that the cost of raising a child to age 18 for a typical higher income family was just over $500,000.
It would be safe to assume then that the parents of a two-child family would need to be insured for at least $1 million. This would cover mortgage repayments, education, food, clothing and other expenses over the life of the child. Inflation also needs to be incorporated into the calculations. Those with businesses also need to calculate business debts and assets.
These figures assume a speedy death. For those suffering loss of income arising from a health problem, medical costs also need to be factored into the equation.
Life insurers offer a number of packages to meet the life stages of different individuals and they usually offer a lump sum or pension in the event of death, total and permanent disablement, accident and trauma. Working from an average figure like this, you will need to determine how much you are prepared to insure yourself for. If a family can't afford to insure both parents, the primary wage earner should be insured.
Types of insurance
How much you insure your life for will depend very much on the type of policy you take. Offerings usually fall under the following categories:
Term insurance
Whole-of-life insurance
Income protection insurance
Accident insurance
Mortgage insurance
Business overheads and insurance
Trauma insurance
Policies that mature and return a lump sum or a pension after a certain period are more expensive and have an investment component. They can be regarded not only as insurance but as savings.
Premiums
Your premiums will be set according to your risk rating. Insurers have four general risk categories:
Preferred
Standard
Substandard (this normally refers to those with a high-risk job or hobby)
Uninsurable (those with a terminal illness)
Beneficiaries
Insurance companies will issue a beneficiary form to new policyholders, asking them to nominate the payee. It is essential that this is completed, otherwise the lump-sum payout can get held up in the estate — sometimes for years, depending on how quickly a will is processed.
It means the proceeds will go directly to your nominated beneficiary as soon as the claim has been processed. This means your loved ones will have access to sorely needed funds in the shortest possible time. Under law, the person nominated on the insurance beneficiary form takes precedence over the benefactors of a will.
Joint or single insurance
Most couples have the option of taking out joint or single insurance. Joint life policies are cheaper but they usually pay out on the death of the first policy holder, leaving the second person uninsured at an age when the premiums shoot up in price. However, so long as all obligations have been met by the first payout, this may be worth it.
Thu, 11 September 2008
Women are the underdogs when it comes to insurance
Research released by the Investment and Financial Services Association in late September highlighted the fact that Australian women with dependent children had significantly less life insurance than their male counterparts.
The IFSA-sponsored research found that 50 per cent of female parents hold life insurance, compared to 62 per cent of male parents, but their cover is “most likely to be through their superannuation fund and is therefore unlikely to be adequate in meeting their family’s needs, unless extra units of insurance cover are purchased”.
The research represented part of IFSA’s push to address what is perceived to be a chronic under-insurance problem in Australia, but recent data compiled by trans-Tasman financial services house Tower suggests the problem where it related to women goes much deeper.
The bottom line of that research is that, generally speaking, the insurance industry adopts a very different approach when it comes to insuring women, and one that tends to explain the findings of the recent IFSA exercise.
In circumstances where the attitude of insurance companies is largely determined by their claims experience, the Tower data makes disturbing reading for those hoping to inject equality into the life insurance equation.
According to Tower, the most recent Australian study into disability income claims drivers was the Report of the Disability Committee, conducted by The Institute of Actuaries of Australia in 1997, a study that analysed the combined incidence rates and average claims duration of 17 life insurance companies during 1992 and 1995.
That report confirmed that Australian women had a significantly worse experience than men, with the overall incidence rates for females being 138 per cent of that for men. In other words, women represented a higher risk for insurers than their male counterparts.
The Tower analysis of the 1997 study said that when analysed over different occupations and waiting period categories, female incidence rates were almost always worse than the corresponding male category.
The study also found longer average claims durations for females.
“In aggregate, the average claim duration for women was 131 days compared to 110 days for men,” it said. “The data analysed cause of claim and occupation, and the results demonstrated an experience for females which was almost always worse than males.”
The problem confronting insurers and, indeed, women is that more recent exercises undertaken by the same committee suggest that there has been little improvement over recent years.
Noting these findings, Tower’s analysis said that Australian insurance companies also referred to their own claims experience and other factors before determining appropriate disability premium rates.
“We can confidently conclude that the higher premium rates calculated for female income protection policies are based on actual facts regarding the higher costs of insuring females,” it said.
In launching the outcome of its research late last month, IFSA noted that women often cited the high cost of obtaining appropriate insurance as a major hurdle to getting coverage, but pointed out that women with dependent children could get coverage for as little as a dollar a day.
Referring to the research, IFSA chief executive officer Richard Gilbert said: “Women commonly cited the expense of life insurance as the primary reason for not having risk protection cover, with 48 per cent of full-time working mothers stating that expense was a major barrier to coverage”.
“Clearly, our industry has got to do a better job of dispelling the widely held belief that life insurance, particularly among women, is too expensive. Term life cover for up to $700,000 can be bought for around $1 per day,” he said.
Gilbert said only 20 per cent of full-time working women with dependent children had enough insurance to cover their income for three years or more, yet the commonly accepted benchmark was 10 times their annual salary.
“A recent House of Representatives Committee Inquiry into Balancing Work and Family heard that the hourly rate for nannies looking after children and assisting in the running of a household ranged between $18 to $26 per hour,” he said. “Based on these hourly rates, for 50 to 60 hours a week, a family losing a mother may find that the cost of home help and child care for very young children is in excess of $75,000 per year – not that you can ever really put a price on a mum, or a stay-at-home dad for that matter.”
“Fifty per cent of female parents hold life insurance as compared to 62 per cent of male parents, but cover is most likely to be through their superannuation fund and is therefore unlikely to be adequate in meeting their family’s needs, unless extra units of insurance cover are purchased,” Gilbert said. “I think that when you look at what it can cost to raise children and run a household in the absence of a mother, a dollar a day to insure a woman with dependent children is really very affordable.”
by Mike Taylor
Source: Money Management
Sun, 21 September 2008
To insure ... or not to insure
A question oft posed by many a business or household is whether insurance is really worth the expense. After all, the "It'll never happen to me" syndrome (unless we're talking about death) always seems to strike at the hip pocket.
And while taxation rarely forms part of this decision, the Tax Office will often be wanting their share of any compensation.
Where the compensation is to make good lost income it will be of a revenue nature and taxable to the recipient.
Where the compensation is for the loss of destruction of a capital asset the compensation will have the unmistakable character of capital.
In that case, it will only be taxable if caught by the capital gains tax ("CGT") provisions of the Tax Act.
Death Cover
Never a truer word has been uttered than by Benjamin Franklin when he said that there were only two certainties in life - death and taxes.
When he spoke these words we doubt he contemplated taxation on death.
Fortunately, the Tax Office also does not contemplate tax on death (in most circumstances).
Losses as a result of death are capital in nature and, therefore, payments to compensate for these losses are almost always non-taxable.
However, proceeds of death cover may be revenue in nature in limited circumstances, such as where they are intended to compensate a business for a temporary loss of income between the death of an employee and the employment of a suitable replacement.
Superannuation Death Benefits
Death benefits received from a Superannuation fund will not be taxable provided they are paid to a dependent of the deceased and do not result in the deceased exceeding their reasonable benefit limit.
Where death benefits from a Superannuation fund are paid to a trust, or to the deceased's estate, they will be taxable under the eligible termination payment provisions. In this case, the commissioner has the discretion to treat the benefit as paid to a dependent and he will usually do so if he is satisfied that the money will ultimately be paid to dependents.
Accident and Disability
As a general rule, periodical payments made in substitution for lost wages, or which otherwise compensate for loss of income, are themselves of an income nature and taxable.
On the other hand, lump sum compensation for the loss of earning capacity generally is a capital receipt, as the ability or capacity to earn income is a capital asset.
However, the answer may not always be so clear.
Between these two extremes lie a range of possible outcomes.
The proceeds of a personal disability insurance policy, received as a series of periodic payments, are assessable where the purpose of the policy is to provide a periodic indemnity against income loss arising from the inability to earn.
This is true even when there is no actual loss of earnings.
In circumstances where an accident or disability policy is taken out to provide compensation for the loss of an earning capacity and the recipient receives a lump sum payment, such a payment should not be assessable income to the recipient.
However, if the compensation is received as periodic payments then that, together with other factors, may change what would otherwise be capital amounts into income.
Trauma Policies
Trauma policies usually pay out a specified amount in a lump sum form. In such cases the pay-out is of a capital nature.
Where the compensation is in a different form, the taxation treatment needs to be determined having regard to the factors discussed above.
CGT
The CGT provisions do not generally apply when there is a pay-out under a life insurance policy.
However, they do apply where the recipient is not the original beneficial owner and acquires the rights under the policy for consideration.
If the compensation is of a capital nature, it will be necessary to consider the CGT provisions.
Compensation or damages received for any wrong, injury or illness suffered personally by the taxpayer or relative is also specifically exempt from CGT.
Death, Disability and Taxes
An event of death or disability is no time to discover that the Tax Office will be taking a hefty slice of any insurance proceeds.
There is no time like the present to consider the structure and nature of any insurance policies entered into, to ensure that the after tax proceeds of the policy are sufficient for your needs.
By Financial Services Online
Mon, 29 September 2008
A Handy Guide On Life Insurance
On a general scale, life insurance falls into the cash value and no cash value scale. The cash value life insurance policies are those that have investment options. The non cash life insurance policies are those that strictly have death benefits.
To get the life insurance that is best suited to your needs, you will need to engage in some serious research. you can go to a financial advisor for advice on the best life insurance policy for you. Always confirm any information you are given in your quest for the best life insurance policy for you to ensure that you make a decision you will not regret.
Unexpected events may force you to get a life policy. Your daughter may fall sick and in need of money to pay medicals bills. In this case, life insurance can cover the medical bills for treatment.
A whole life insurance policy is one that has a fixed premium. A fixed premium in the context of life insurance refers to an unchanging amount of cash that has to be paid each month. The possessor of a whole life policy often can take out a loan against the life insurance.
A term life insurance is the cheapest type of insurance that there is. There is a conspicuous absence of cash value with a term life insurance because of the absence of extra saving involved in the plan. The term life insurance is the most stressless of all the life insurance policies.
Most people have an aversion to life insurance policies because of the medical tests that follow the introductory stages. A lot of people complain that pre-life insurance medical examinations have become more all-encompassing over the years. These days, people would rather choose a life insurance offer that comes without a medical test attached to it than those that do.
In selecting the best life insurance policy, you should ask yourself what your needs are. Your needs make an excellent yardstick for the selection of an appropriate life insurance policy. The most common life insurance types are whole life insurance and term life insurance.
If you want to spare your family the trauma of burying you, you can go for a final expense life insurance. A final expense life insurance ensures that details such as burial plot land, coffin, etc are paid for. With a final expense life insurance, your loved ones don't have to worry about spending a dime to lay you to rest.
By: JohnJamespnp
Mon, 06 October 2008
Why You Should Consider A Cheap Life Insurance
Many people opt for cheap life insurance. It makes them feel that their dependents will have some financial resource to fall back on. And when it comes with the additional value of being cheap, you know that it is going to be friendly for your wallet too.
Cheap life insurance is simply a contract between you and your insurance agency which obliges them to pay a stipulated amount of money in the event of your death. In return, you pay them a sum of money called premium at fixed intervals- weekly, monthly or annually.
There are many ways how availing such a policy can help you. If you are salaried and your spouse is not, then your family will be left in the lurch in the event of your demise. The situation could become worse if you have mortgage claims on your house or any other loans which has not been repaid completely. This is just one scenario out of many that could happen. A cheap life insurance can step in and provide funds so that your family will be at least spared of dire consequences.
There are various types of cheap life insurance available but they can be largely categorized into two forms:
Cheap whole life insurance
It is a permanent form of cheap life insurance where you get lifetime coverage. You get death benefit which is equal to your premiums. Premiums can be a little high for this type but you will be able to build cash value through it.
Cheap term life insurance
It is a temporary form of cheap life insurance as the coverage extends for a fixed period of time. Premium payments last for that period only. Death benefit can also be claimed only during that term. This policy is however popular due to the low cost involved. If you are young and healthy, it will be a cheaper option for you.
Cheap life insurance has been given its name because it is cost-effective and has generally low premiums. You should always compare quotes of different policies to select more affordable ones. It can be done easily and swiftly by applying online. Afford your life insurance with cheap life insurance and secured your future now!
By: Charle Lawrence
Thu, 16 October 2008
Affordable Health Insurance
Having a healthy lifestyle does not guarantee that an individual would not get sick because no matter how good a person takes care of himself, unforeseen things can still happen. The healthiest person you know might wake up one day and find out that he has cancer. People are getting sick everyday, yet affordable health insurance is not available to all.
All individuals need affordable health insurance to protect from not only financial disaster but to also give peace of mind. The sad reality is that most people have habits that are detrimental to their health such as choosing unhealthy foods, cigarette smoking, lack of exercise and alcohol and drug abuse.
The salaries of people do not usually increase as quickly as health care costs do. The steep price of the advanced and highly technical medical diagnostic and treatment procedures ordered by physicians make people think twice about going to the hospital. They usually wait until the last minute to do so - by this time, the disease has progressed. This is the reason why affordable health insurance is desired and needed by everyone.
Affordable health insurance is a way of safeguarding oneself in case of illnesses or injuries. It assures us that should anything happen, affordable health insurance is there.
There are a lot of health insurance packages out there offered by various companies but one should choose the most suitable, most affordable health insurance coverage because not all packages offer the same. Some affordable health insurance coverage programs offer premiums that are lower than the others. One should choose the affordable health insurance program that would fit his situation and weed out those affordable health insurance coverage that offers packages that he does not really need.
In choosing affordable health insurance program, one should also take into consideration the time length required to pay the plan. There are some affordable health insurance programs that are applicable only for a fixed period, say 30 years. Other affordable health insurance programs extend until the death of the insured. Additional payments should also be considered in choosing for affordable health care programs.
Managed care plans are affordable health insurance are pre-arranged and work with hospitals. Some prefer this affordable health insurance. This type of coverage saves time and effort because they have doctors and hospitals affiliated with them. However, some prefer other affordable health plans that are flexible enough to allow them to seek treatment from their own doctors and choose the hospitals they like.
Be careful in choosing among the different affordable health insurance programs. Choosing the wrong one will waste money and time. Study all your different options when in the process of choosing affordable health insurance. You will most likely find the one that works the best for you!
Source: Finance Unlimited
Thu, 23 October 2008
Term Life Insurance
Term life insurance is perhaps the most basic form of life insurance. It usually provides affordable protection, often with a guaranteed premium, for some period of time. If the insured should die while the policy is in force, the face amount is paid to the named beneficiary. At the end of the premium guarantee period, the insured can renew the coverage at a higher premium. The premium for term life insurance is initially lower than a comparable permanent insurance policy; however, it can increase at each renewal. This initial lower premium usually makes term insurance an ideal choice for individuals with a temporary need for life insurance protection.
Tue, 28 October 2008
The Funnier Side of Insurance
The statements below are taken from actual insurance accident claims forms. They are real, true (you can't make up this kind of stuff). Read 'em and laugh and be glad it wasn't you.
The guy was all over the road. I had to swerve a number of times before I hit him.
A pedestrian hit me and went under my car.
I collided with a stationary truck coming the other way.
A truck backed through my windshield into my wife's face.
The other car collided with mine without giving warning of its intention.
My car was legally parked as it backed into another vehicle.
I started to slow down but the traffic was more stationary than I thought.
The accident occurred when I was attempting to bring my car out of a skid by steering it into the other vehicle.
I was unable to stop in time and my car crashed into the other vehicle. The driver and passengers then left immediately for a vacation with injuries.
The gentleman behind me struck me on the backside. He then went to rest in a bush with just his rear end showing.
The car in front of me stopped for a yellow light, so I had no choice but to hit him.
Coming home I drove into the wrong house and collided with a tree I don't have.
I told the police that I was not injured, but on removing my hat found that I had a fractured skull.
I pulled away from the side of the road, glanced at my mother-in-law and headed over the embankment.
I thought my window was down, but I found it was up when I put my head through it.
As I approached an intersection a sign suddenly appeared in a place where no stop sign had ever appeared before. I was unable to stop in time to avoid the accident.
In an attempt to kill a fly, I drove into a telephone pole.
I saw two kangaroos having it off in the middle of the road. So I hit them, which caused me to ejaculate through the sunroof.
I was thrown from my car as it left the road. I was later found in a ditch by some stray cows.
I pulled in to the side of the road because there was smoke coming from under the hood. I realized there was a fire in the engine, so I took my dog and smothered it with a blanket.
No one was to blame for the accident but it would never have happened if the other driver had been alert.
I had been shopping for plants all day and was on my way home. As I reached an intersection a hedge sprang up, obscuring my vision and I did not see the other car.
The indirect cause of the accident was a little guy in a small car with a big mouth.
I was on the way to the doctor with rear end trouble when my universal joint gave way causing me to have an accident.
On approach to the traffic lights the car in front suddenly broke.
No witnesses would admit having seen the mishap until after it happened.
I had been learning to drive with power steering. I turned the wheel to what I thought was enough and found myself in a different direction going the opposite way.
The accident happened when the right front door of a car came round the corner without giving a signal.
I had been driving for forty years when I fell asleep at the wheel and had an accident.
An invisible car came out of nowhere, struck my car and vanished.
Source:Frank Hills
The accident happened because I had one eye on the truck in front, one eye on the pedestrian, and the other on the car behind.
Tue, 04 November 2008
Disability Income Insurance - Protection In Troubling Times
Nobody likes to think about being disabled. Unfortunately when accidents strike they will quickly change your financial outlook. What disability income insurance options do you have if you find yourself disabled, temporarily or otherwise? In other words do you have a plan of action if you don't have, or plan to take, disability income insurance?
There Are 2 Types Of Disability Income Insurance Contracts:
* Non-cancellable: premiums are guaranteed level for the life of the contract unless the benefits are increased.
* Guaranteed renewable: Company reserves the right to increase the disability income insurance premiums for everybody, should the number of claims in a particular class begin to rise.
Your Disability Income Insurance Concerns:
* Occupation: The dangers of your job are a factor companies weigh to see the chances of you getting injured.
* Compensation: How much are you looking for to cover your expenses, and is it less than 70% of your present gross salary?
* Medical History: Your current health and what medical history your family has, will also affect how the life disability income insurance carriers will see you.
Other factors that go into assessing your situation are your gender, age and province or state of residence.
You also have the option of riders. Residual and partial riders are available to you if your situation changes and you are returning to work in a different job and experience a loss of income. Or if you return to work as a part time employee, but in the same job.
Plan Disability Income Insurance For Potential Accidents Or Sickness
Although no one likes to talk about getting hurt or such, the benefits of a disability insurance policy greatly help during times of crisis. Investing in a policy helps strengthen your overall financial plan or at least puts a floor underneath it. Get together soon with an insurance broker and discuss how your personal situation can benefit from disability income insurance.
By: Ivon T. Hughes -
Sat, 08 November 2008
Life Insurance - Start A New Term
Consider your home – how would it look without your presence? Rather empty? The loss of one person can make such a difference. Now consider the family finances and how they would look without you. Rather empty? The loss of one source of income can make such a difference.
Now consider your family’s position immediately after your death. Would they know what to do? Life goes on and bills have to be paid, but would they know how to get the essential funds? Even if your spouse had always dealt with the household financial matters, this would be difficult to deal with without knowledgeable support and assistance. But suppose that you had been wise and had obtained adequate insurance to cover just such circumstances. The grief would be no less, but at least a quick call to the insurance company would get things moving. Then, by the time that the period of mourning was over and reality started to demand attention, an expert would have looked at your family’s affairs and would have at least initial answers ready.
In the real world there are many types of problems, from the minor to the disaster, and there are consequently a host of variations on standard insurance policies to cover most eventualities. You only need to concern yourself with a few of these varieties for straight forward life cover, and ‘term’ policies will meet most of the less complicated situations.
The name ‘term insurance’ indicates that the insurance is set up for a specified period or term, at the end of which all cover ceases and there is not normally a surrender value. Payment is usually provided on the death of the policy holder in the form of a lump sum. However, there are a number of different types of term insurance from which to take your pick. They have been ‘designed’ to suit different needs but this need not cause concern’ as the purpose of each type is clear enough for a decision to be reached without difficulty.
A level term policy pays an amount which is specified at the outset, and this value does not change. These are frequently used to cover the capital sum of an interest only mortgage, which stays constant whilst only the interest is paid off.
An increasing term policy takes account of inflation during its term, but it is inevitable that higher premiums will be required, to cover the extra cost.
A decreasing term (also known as a mortgage protection) policy is used to cover a repayment mortgage, and once a year the value is reduced to the expected balance remaining on the mortgage. This has the effect of reducing the premiums because the longer it lasts the lower the payout, down to zero at the end.
Away from the likes of mortgage protection where any payout is in the form of a lump sum, which solves any problem about keeping a roof over your family’s heads, the day to day costs of living can also present something of a problem. An inflow of smaller sums on a regular basis will be needed to keep food on the table etc., and this type of cover can be obtained with a family income benefit policy. This is still a term policy in that it has a final date beyond which it ceases to operate, but any payout is in a very different form. You death would trigger annual tax free payments through to the end of the term, and because the period for such payments is constantly decreasing to a finite end, the premium costs necessary can be held to a minimum.
Away from term insurance, but extremely worthwhile is the well known whole of life cover. This is perhaps one of the simplest forms of cover which runs to the point of the death of the insured; it then pays out the guaranteed amount which will be augmented by a bonus or bonuses if the ‘with profits’ version was purchased. The value of any bonuses depends on the performance of the investment during the period that it was current.
If both you and your spouse are earning and putting a significant contribution into the ‘housekeeping’ pot, you should consider obtaining cover for you both. This could be in the form of a joint policy which will pay out only on the first death, thus holding the cost down. Cover as individuals will be more expensive because there will be two payouts, triggered by each death.
So get the peace of mind that only good insurance cover can provide, and visit the internet for a good broker who will guide you to your new term insurance.
Source:By Expert Author: Micheal Challiner
Tue, 25 November 2008
Life Insurance – Ensure The Correct Balance.
Very few people have sufficient assets to enable them to plough along through life, without making provision for their dependents to continue with their present standard of living when the principal earner is gone. However there are many who seem to have delusions of immortality and keep putting off doing anything about it because they aren’t intending to go just yet. Those who cannot afford life insurance are in a very unfortunate position, but those who can afford it but will not get around to doing anything about it are gambling on the future of their families or other dependents.
The loss of a parent or other relative is traumatic enough, but to find out when life goes on after the loss that financial problems are going to be a major factor in life for the foreseeable future, is adding to the grief. So what is to be done? Well, the first action should be to draw up a simple balance sheet – what are your assets and what do you owe.
On the assets side of the sheet you should first of all put down your ‘ready cash’ items. Always remembering to allow as far as possible for any potential changes, the first items should be investments which can be cashed in at short notice. Then methodically work your way through longer term investments, not forgetting such items as life cover provided as a benefit of your employment. You should make a note if applicable if loss of job would lose this cover.
Once the cash side is completed, you move on to material possessions – your house value can be included but bear in mind that your dependants will have to have somewhere to live, so the full value will not be available. The same factor applies to household contents – you are unlikely to be fondly remembered for long by family members who cannot sit down because they had to sell the furniture! A holiday home and contents is not a necessity and the full realisable value could be included, as could the value of a caravan, boat or even a saleable timeshare.
Finally, on the credit side, include valuables such as jewellery, cameras, electrical items etc. but don’t allow yourself to be fooled over the possible value. The vase which your favourite aunt left to you some years ago may be reputed to have a considerable value but don’t rely on hearsay. Get it valued and then write that value down by 25% or more – the valuer may have been more enthusiastic about it than a potential buyer would be.
Now move onto your liabilities, remembering to allow as far as possible for future changes, i.e. have you had a loan which will be paid up in the near future, thus releasing more cash; alternatively are you likely to take out a new loan which would then commit a proportion of your cash to repayments? Do you have commitments which would cease on your death, such as a health protection plan?
When the above is completed why not take the opportunity to do something else which you have probably been procrastinating about for many years – make a will. Now you know what your assets are, why not ensure that they go to the people for whom they are intended – intestacy is a sure fire way to create problems for your family when you depart this life, so why not deal with it now?
You are now in a position to do your sums and decide how much life cover you need to enable your family to live more or less as they do at present. You should be able to arrive at a figure which will be as adequate as you can make it and affordable, but not excessive to the point that paying for it becomes a serious burden.
You have arrived at the point where you are likely to need expert help in drawing up the most suitable policy for your needs, so why not take the easy route (after all your hard work) and browse the internet for a suitable broker. Better still find 2 or 3 brokers and give yourself a choice when initial discussions have enabled you to form an opinion.
You can now settle into sorting out the fine detail, including the type of insurance which you require and the affordability of your intentions. There are a few different types of insurance available to you, each of which has a different cost. Term insurance for example, provides cover over a specified period, during which your death would trigger payment of the agreed sum; at the end of the term all cover ceases and a new policy would be taken out if required.
The type which historically was frequently employed for mortgage cover is the decreasing term policy, where the amount to be paid out gradually reduces by an agreed amount each year until the end of the term, when cover ceases. This type of policy is very much lower in cost due to the decreasing commitment, but don’t forget to allow something in the sum due for potential inflation.
See a broker, discuss your needs and rest assured that you have taken a major step for your family in reducing the trauma of your inevitable departure. At least it shouldn’t be financial worries that speed your end!
By: Michael Challiner
Wed, 10 December 2008
Life Insurance Questions Answered
Q: Why do men have to pay more for life insurance than women?
A: Insurance rates are all about risk, and men are riskier to insure than women, so they pay more. Almost every typical cause of death will take men at a younger age than women, including heart disease, stroke, diabetes, infections, and almost every form of cancer. Women, on the other hand, only have higher mortality rates for a few typical causes of death, including breast cancer, Alzheimer’s disease, and rheumatic fever. Of course, women also die from things which don’t affect men such as pregnancy and childbirth complications, but these don’t outweigh the death risks that come along with being a man.
Men also tend to participate in—and die younger from—high-risk adventure and leisure activities. Unfortunately, there’s no way to get around the statistics, so if you’re a man, no matter what insurance company you use, you’re going to pay more for your policy than a woman would.
Source: Insurance Compared.com
Tue, 23 December 2008
ALL ABOUT LIFE INSURANCE
Life insurance, sometimes referred to as life assurance, provides for a payment of a sum of money upon the death of the insured. Life Insurance is insurance that provides a financial remuneration on the premature death of the policy holder. As in all insurance, the insured transfers a risk to the insurer, receiving a policy and paying a premium in exchange. The risk assumed by the insurer is the risk of death of the insured. A business that collects a person's savings by selling contracts (policies) often paid for through periodic premiums to provide cash payment upon death. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium.
Mortgage Life Insurance
Mortgage is one of the types of Term life insurance obtained by borrowers of a home mortgage. Mortgage life insurance can take by the owner of the property who has taken out a mortgage on the property. Mortgage life insurance pays the mortgage upon the death of the mortgagor/owner. It gives peace of mind by ensuring full payment of your mortgage in case of terminal illness or death. The premium in this plan decreases each year with the decreasing sum. This policy ensures apart from death or terminal illness, critical illness result in repayment mortgage being fully repaid. Its a big relief for insurer. Its also possible to buy combined mortgage life insurance policy and critical illness policy with a guaranteed fixed premium.
Universal life insurance
Universal life insurance is permanent life insurance with premiums that are not guaranteed. The company chooses the investment vehicle, which is generally restricted to bonds and mortgages. To a certain degree one can “design” a premium on this type of policy. The investment and the returns go into a cash-value account, which you can use against premiums or allow building. Universal life insurance often can be set up with a lower premium initially than whole life insurance. When a customer taking life insurance for life time, want to make sure that his family will receive insurance at death no matter how old he is. The three main options were whole life, a combination of whole life and term, or universal life. To get a 100 guaranteed rates, needed to pay approximately double than a normal projected rate in a whole life and term combination, universal life, or the guaranteed whole life rate.
A variation of a universal policy, often called universal variable life, allows policyholders to choose investment vehicles. Now days many companies come with a universal plan with premium payable to age 100 and cover insurance until age 120 or longer. The Companies providing completely guaranteed rates and can never be increased, regardless of the interest rates paid by the insurance company, or the mortality charges. These rates are approximately same as the universal life or whole life and term combination bought on a low cost basis. The main objective of Universal life insurance policy like the other life insurance policies is to provide the death protection to loved ones.
Source:http://www.123-life-insurance.com
Tue, 20 January 2009
Life Insurance
Life insurance can be critical for a secure financial future. In simple terms, you
insure yourself for a particular amount, and in the unfortunate event that you
die, the insurer pays that amount.
The lump sum payment can be used to help with the repayment of debts, the
covering of future needs (for example, the cost of children’s education or longterm
care), and providing funds for investment to generate an income, or to
keep your business afloat.
Life insurance may be obtained via a superannuation fund.
Factors to be aware of
• You should ensure your insurance cover is adequate for your needs. Underinsurance
can present a serious problem.
• Changes in your personal circumstances (ie taking on additional debt) often
necessitate higher insurance levels.
• Death benefits received via a superannuation policy may be taxed.
Source: Elders.com
Wed, 18 February 2009
Life Insurance Australia
Life insurance is essentially considered long term financial planning, and the purchase of this insurance permits those who rely on you to continue in your absence without having to suffer a financial crisis. Even if you aren’t considered the earner in the family, the “stay-at-home” spouse is considered equally as important. In the event of your death as a “stay-at-home” spouse, all the tasks that you fulfilled will become paid tasks. This means that your spouse will have to pay someone to complete the tasks that you used to do. Whether the breadwinner or the “stay-at-home” spouse, your spouse’s financial security is important.
Online shopping for insurance is fast and easy because we do the work for you, and you save time and money in the process. Just fill out the form from one of the choices listed on the right, and agents from various companies will present you with quotes, all you have to do is compare them. Choosing proper life insurance is one of the most important decisions you will make in not only your lifetime, but your family’s as well; let us help you make the right decision.
Here are 10 Rules to Remember When Buying life insurance.
Understand and know what your life insurance needs are before any purchase, and make sure that the company you choose can meet those needs.
Buy your life insurance from a company that is licensed in your state.
Select a life insurance producer who is competent, knowledgeable and trustworthy.
Shop around and compare life insurance policy costs.
Buy only the amount of life insurance you need and can afford.
Ask your life insurance agent about lower premium rates for non-smokers.
Read your life insurance policy and make sure you understand it.
Inform your beneficiaries about the kinds and amount of life insurance you own.
Keep your life insurance policy in a safe place at home and, in addition, keep your life insurance company's name and your policy number in a safe deposit box.
Check your life insurance coverage periodically or when ever your situation changes, to be sure it meets your current needs.
Source: http://www.newhealthinsurance.com
Wed, 11 March 2009
Why do people buy Life Insurance?
People buy life insurance to replace their income if they pass away so that their family can maintain their standard of living. People typically don’t need life insurance when they are young, single and working. People typically don’t need life insurance when they get married. Both people are working. If one person dies, the other person may want a little insurance to help with funeral expenses or to be able to take a little time off work while grieving. More often than not, once the grieving passes, the surviving person can go back to work and continue to live as they did before marriage.
It usually is not at a certain age, but rather when a certain event happens in their lives. Things typically change when a couple has a baby. Many times one person in the family stops working to raise the baby and the family becomes dependant on one income. Sometimes both people work because their standard of living can’t be maintained on just one income. This income stream has to be insured to make sure that the spouse and the baby will be ok if tragedy strikes. There are bills to pay, kid’s college to pay, funeral expenses, daycare expenses if the surviving spouse returns to work, healthcare to pay if the spouse doesn’t return to work, the list goes on. Life insurance is protection to make sure your family has the money to can take care of themselves if tragedy strikes.
Source:Financial Swami.com
Thu, 11 June 2009
Here are 10 Rules to Remember When Buying life insurance.
•Understand and know what your life insurance needs are before any purchase, and make sure that the company you choose can meet those needs.
•Buy your life insurance from a company that is licensed in your state.
•Select a life insurance producer who is competent, knowledgeable and trustworthy.
•Shop around and compare life insurance policy costs.
•Buy only the amount of life insurance you need and can afford.
•Ask your life insurance agent about lower premium rates for non-smokers.
•Read your life insurance policy and make sure you understand it.
•Inform your beneficiaries about the kinds and amount of life insurance you own.
•Keep your life insurance policy in a safe place at home and, in addition, keep your life insurance company's name and your policy number in a safe deposit box.
•Check your life insurance coverage periodically or when ever your situation changes, to be sure it meets your current needs.
Fri, 24 July 2009
Who Buys Life Insurance?
People from all walks of life, income levels, single and married, buy life insurance.
It is such an essential part of financial planning that many of us don’t consider the unfortunate circumstances which may arise after the death of an income producer in the family. Most people who own life insurance are family breadwinners who want to make sure that in the event they die, the future financial needs of dependents, such as a spouse, children or elderly parents, are met.
For peace of mind apply for a free quote. Find out the benefits of Life Insurance and you may well find that there could be some tax advantages in certain situations.
Applying for Life Insurance online is the quickest and simplest method to get all the information you need for complete cover and reassurance.
Fri, 21 August 2009
Life Insurance Australia-Term & Whole Life Insurance
You get life insurance by buying a policy (a contract). When you do so, you join a risk sharing group. The company promises to pay, at the time of your death, a sum of money to the person or persons selected by you (the beneficiaries), who are named in the policy. This promise is given in return for your agreement to pay a sum of money (the premium) to the company over a specified period of time.
Term insurance offers protection that insures your family for a specified and finite period of time -- usually one, five, 10 or 20 years, or up to age 65. A term life insurance policy pays a benefit only if you die during the period covered by the policy. If you stop paying premiums, the life insurance stops. At the end of the term, the coverage ends, but it can be continued for another term if you have a "renewable" policy. Under such a policy, you will not have to provide evidence of insurability to renew the policy, but each time you renew, your premiums will be higher because you are older.
Whole life insurance (often referred to as straight life or permanent life) is protection that can be kept in force for as long as you live. By choosing to pay a premium that does not increase as you grow older, you average out the costs of your policy over your lifetime on a yearly basis. The "cash value" is an important feature of whole life insurance. This is a sum that increases over the years on a tax-deferred basis. If you cancel your policy, you can get the cash value in a lump sum. You pay taxes only if the cash value plus any policy dividends you may have received exceed the sum of the premiums you have paid. Most policies contain a table that enables you to tell how much cash value it has. You should consult your producer or company for further information.
Fri, 20 November 2009
Life Insurance Australia- some guidelines
Life insurance is often described as Term Life Insurance. Quite simply, this type of insurance policy will provide a cash lump sum in the event of death. Some policies pay on the diagnosis of a terminal illness. Cover normally applies immediately to any cause of death with the exception of suicide occurring within the first 13 months. Premiums generally increase each year as you get older.
What is total and permanent disability insurance (TPD) ?
Total and permanent disability insurance (TPD) is usually an optional extra on a life insurance policy and covers against a permanent disability. The amount of cover you can buy is usually limited to the amount of life cover purchased. A claim is usually paid as a lump sum.
Why do I need life insurance and/or TPD insurance?
The choice of cover depends entirely on an individual's circumstances. Term life insurance is probably the most economical form of protection for your family in the event of your death. TPD insurance covers serious and permanent disablement but does not cover temporary disabilities or many traumas - these are best covered by income protection and trauma policies. The number of cases of total and permanent disablement in comparison to other conditions is small, so if you have a limited amount of dollars to spend on insurance you will need to weigh up whether to spend it on this form of cover.
How much cover do I need?
Once you accumulate liabilities and have dependants, the need for insurance increases. On the other hand, as you approach retirement you are more likely to have accumulated assets and paid off liabilities and children are more likely to have left home, reducing the need for life or permanent disability insurance.
Tue, 29 June 2010
Protect your family from possible financial hardship.
Life Insurance can be seen as falling into a cash value or non cash value scale. Policies that have investment options fall into the cash value category. Alternatively, the non cash policies will only have death benefits.
By doing some important research you can find the most suitable cover. You might go to a financial consultant for ideas on the suitable life insurance policy for you. Always confirm any information you are given in your quest for the best life insurance policy for you to ensure that you make a decision you will not regret.
Unexpected events could force you to get a life policy. Your child may fall ill and in need of money to pay medicals bills. In this case, life insurance can cover the medical bills for treatment.
A whole life insurance policy is one that has a fixed premium. This would basically mean that you would paid a fixed monthly installment. The possessor of a whole life policy often can take out a loan against the life insurance.
Whole life insurance is typically regarded as the least expensive type of life insurance. There is a conspicuous absence of cash value with a term life insurance because of the absence of extra saving involved in the plan. The term life insurance is the most stressless of all the life insurance policies.
Most people have an aversion to life insurance policies because of the medical tests that follow the introductory stages. A lot of people complain that pre-life insurance medical examinations have become more all-encompassing over the years. These days, people would rather choose a life insurance offer that comes without a medical test attached to it than those that do.
In selecting the best life insurance policy, you should ask yourself what your needs are. Your needs make an excellent yardstick for the selection of an appropriate life insurance policy. The most common life insurance types are whole life insurance and term life insurance.
If you want to spare your family the trauma of burying you, you can go for a final expense life insurance. A final expense life insurance ensures that details such as burial plot land, coffin, etc are paid for. With a final expense life insurance, your loved ones don´t have to worry about spending a dime to lay you to rest.
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Sat, 31 July 2010
How would your family cope if you died?
Life Insurance can be seen as falling into a cash value or non cash value scale. Policies that have investment options fall into the cash value category. Alternatively, the non cash policies will only have death benefits.
By doing some important research you can find the most suitable cover. You may go to a financial advisor for pointers on the suitable life insurance policy for you. Always confirm any information you are given in your pursuit for the best life insurance policy for you to assure that you make a decision you will not regret.
Unexpected events could drive you to get a life policy. Your child may fall ill and in need of money to pay medicals bills. This is a case where your life insurance policy would cover all the medical expenses.
A whole life insurance policy is one that has a fixed premium. This would basically mean that you would paid a fixed monthly installment. The possessor of a whole life policy often can take out a loan against the life insurance.
A term life insurance is the cheapest type of insurance that there is. There is a conspicuous absence of cash value with a term life insurance because of the absence of extra saving involved in the plan. The term life insurance is the most stressless of all the life insurance policies.
Most people have an aversion to life insurance policies because of the medical tests that follow the introductory stages. A lot of people complain that pre-life insurance medical examinations have become more all-encompassing over the years. These days, people would rather choose a life insurance offer that comes without a medical test attached to it than those that do.
In selecting the best life insurance policy, you should ask yourself what your needs are. Your needs make an excellent yardstick for the selection of an appropriate life insurance policy. The most common life insurance types are whole life insurance and term life insurance.
If you want to spare your family the trauma of burying you, you can go for a final expense life insurance. A final expense life insurance ensures that details such as burial plot land, coffin, etc are paid for. With a final expense life insurance, your loved ones don´t have to worry about spending a dime to lay you to rest.
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Mon, 27 June 2011
Sun, 13 November 2011
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