Posted on Sat, Feb 27, 2010
This is NOT your father’s, or your grandfather’s,
Whole Life Insurance, says
The Wall Street Journal. The old gray mare of life insurance — whole-life insurance — was “a shining star during the financial crisis.”
“Thanks to conservative investments in bonds, whole life—and its cousin, universal life—delivered positive returns during the financial crisis,” reports the financial news beacon.
But before you ride off with a new policy, realize that whole life is a horse of a different oolor compared to term life insurance. Because it is a permanent, long-term, investment-oriented account, new buyers will typically face stiff start-up costs and up-front commissions that soak up most of the first-year’s premium, well before the policy’s investment performance gets growing.
Term life is still the “default recommendation” for most consumers, particularly those on tight budgets, remarked James Hunt, an actuary with the Consumer Federation of America.
Under a whole-life or universal-life policy, the insurer deposits your premium, less insurance costs and other expenses, into a “cash value” account. Insurers typically promise minimum interest payments of 3% to 4%.
Investment gains are tax-deferred, and you are able to withdraw tax-free much or all of what you put into the policy. The policies are a good way for many people who have maxed out contributions to 401(k)s and other tax-advantaged plans to save for a variety of purposes
Over 20 years, Mr. Hunt says, the annual investment return on whole-life policies from the best insurers approaches a tax-deferred 4.5% (tax-free if held until death), after adjusting for the value of the insurance and assuming dividend schedules don’t continue to decrease.
It makes a difference where you buy your policy. Look for a company known for both low annual costs and solid investment performance. Efinancial can help you compare whole life features from several companies.
The all-important point is that whole life’s performance edge plays out over decades, so don’t purchase it if you aren’t confident you can stick with it.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Tue, Feb 23, 2010
Is there a good time and a “less than good” time to bid farewell to a life insurance policy that has accumulated cash value?
A recent case covered in the New Jersey press offers an illustrative example.
A 62 year old man had held a whole life insurance policy with a $125,000 death benefit since January of 1992. He had accumulated $14,667 in dividends earning about 5.5 percent, and cash value of $33,736. His annual premium is $2,416. His wife is 60, and the couple are both healthy and working.
The question?: If he forfeited this policy (to pay off a mortgage), would he owe income taxes? Should he keep the policy and pay the premium out of the dividends?
While the answer could be complicated depending on the couple’s overall financial picture, a simple answer is as follows:
If a life insurance policy that has accumulated cash value is surrendered, the amount of cash received from the cash value that exceeds the basis (above the premiums paid to date) is taxed as ordinary income. Your insurance company can provide an in-force illustration to determine your basis.
An insurance policy dividend, unlike a stock dividend, is generally considered a return of premium. As such, it is not taxable income unless the total amount of dividends received exceeds the total amount of premiums paid — the basis.
If dividends are left to accumulate and earn interest, the interest credited each year is taxable income.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Fri, Feb 19, 2010
If you’ve landed one of America’s best-paying jobs, you’ll definitely want to look closely at the many posts in
Efinancialblogon protecting your income with the right kind of life insurance.
According to the U.S. government’s Occupational Employment and Wage Estimates, based on 2008 data, high income earners span the spectrum, but most of the wealth is concentrated in the health care sector.
The typical surgeon (position # 1) makes an average of $206,770 a year. That puts surgeons above anesthesiologists (position #2) to have the best-paying job in the country.
Orthodontists (#3) average $194,930 in annual pay, while Obstetricians (#4) report in at an average of $192.780. Also putting their money where the mouth is are Oral and Maxilofacial Surgeons who earn an average $190,420 annually, (#5). Medical Internists are (#6) on the list, earning the most in the state of Wisconsin.
Back to the oral cavity again, Prosthodontists (#7) bring home a whopping $164,810 per year with “All Other” Physician and Surgeons avergaing $165,000 at the (#8) slot and General Medical Practicioners at (#9).
Rounding out the Top 10 are CEO’s (#10) with average annual pay of $160,444 for running their companies.
Taking a quick glance at these salaries, and the fact that 9 out of the top 10 jobs in America are in the field of medicine or oral health, is it just a coincidence that our nation’s health health care system is accused of living “high on the hog.” Or do our doctors and orthodontists deserve every penny that is comiing to them?
The Top 10 list at CNN Money strays outside of the medical profession with Sales Directors at #5 and a median salary of $149,000, and Actuaries at # 6 with their median at $129,000 . Finance Directors ranked (#7) with a median salary of $121,000.
Rounding out the CNN Money Top 10 are #8 Software Architect (Median: $117.000), # 9 Attorney (Median: $115,000) and #10, (OMG!), Insurance Broker!
And what about hedge fund managers, stockbrokers and oil executives? You won’t do shabbily in any of these spots either!
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Mon, Feb 15, 2010
“Can you get life insurance while pregnant?” Are there special underwriting factors? What is the best way to get life insurance as a pregnant woman?” You are reading some of the most frequently asked questions in the life insurance field.
The most common answer is this: Typically, the best time to get life insurance is before you give birth to your newborn child. But let’s examine which conditions might be cause for concern?
Are your pregnant now? If you have a normal pregnancy and are otherwise low-risk, you can still get life insurance even while you’re pregnant. Expect the underwriter to order your medical records when you apply for insurance during pregnancy. The process may take a few extra weeks when records are ordered from your doctor’s office.
What is the life insurer looking for at this point? The underwriter wants to see what your weight was before and make sure that you’ve added a healthy amount of baby weight. They also want to make sure you don’t have any complications.
Are there actual medical issues that an insurance underwriter be concerned about with your pregnancy? A few complications may pose a risk.
Ectopic pregnancy
An ectopic pregnancy is defined as one where the fertilized egg is attached in some other place than the uterus. The symptoms of such a condition could include pain and discomfort. However in the most evere cases, this condition could be a real cause for concern.
If you have an ectopic pregnancy, the life insurance underwriter will want to see your detailed medical records and make sure you have good follow-ups. In some cases, you may have to wait until after you deliver your baby to get your policy.
Gestational diabetes
Gestational diabetes is a form of diabetes that only shows up in pregnant women. It is usually easy to manage and goes away after having your baby.
This condition will increase your future risk of developing diabetes later in life. A key co0ncern is that a woman’s diabetes brought on during fgestationk may not disappear after delivery. Since diabetes an be a cause for other ailments, including everything from a lower immune system to heart problems, getting life insurance may be problematic.
Preeclampsia
Preeclampsia is another common pregnancy complication that may affect your life insurance. It is characterized primarily by high blood pressure. Your ability to get life insurance with preeclampsia will depend on your specific medical history and the life insurance company you choose. An underwriter may be comfortable with a stable situation that is well-controlled. In many cases, however, you may have to wait until after your condition completely resolves to re-apply for life insurance.
Getting Ready for Baby
If you have a normal pregnancy, go ahead and get a life insurance quote. Explain you are with-child in the open field and answer the rest of the questions normally.
If you experience complications while pregnant, you may still be able to get life insurance. The best advice is to be patient with the underwriting process. Depending on your situation, you may be asked to re-apply after your condition has resolved. If the life insurance rate you get comes back higher than you expected, go ahead and take it, knowing that you can always apply again later to try to reduce your premium.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Fri, Feb 12, 2010
When calculating the need for life insurance, the conventional, “inside the box” thinking typically takes into account the need to replace just one income…the income that is lost by the primary income earner who is no longer there to make a financial contribution. But like so many things in life, the most simplistic, top-of-the-head way of thinking about a problem is not always the most useful.
Tragically, when the life of one parent in a young family is lost, a paycheck is only one part of what disappears into the enormous void that is suddenly created. The working partnership that existed between two parents role-playing is forever changed. The multifaceted roles that were performed by both spouses in running a family can hardly be filled by a single parent alone.
In so many cases today, the reality of the situation is that both spouse’s income earning potential is affected when one is lost. As a practical matter, when both parents work, many families will need to take into account two incomes when calculating life insurance need.
Thinking it over, the idea of “over insuring” seems far fetched especially when buying term insurance is so inexpensive.
Let’s take one example:
* The head of a household decides on $500-$600,000 in a term life insurance policy, for several reasons. First, the coverage needs to replace a good portion of the breadwinner’s lost income. With the main income earner removed, the spouse would very likely need to continue to work, or potentially to find a job.
There’s also the mortgage. After the surviving spouse pays off the mortgage and puts money into a child’s 529 account, how much will be left? How far will the income last if a widow or widower decides not to work for 6 months in order to provide their children with more stability?
When another quarter of a million dollars can cost as little as $22 dollars/month, the lifestyle implications are clear. Calculate the consequences of what will befall two incoems, not just one. In the final analysis, two incomes are what can be at stake.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Tue, Feb 09, 2010
eHealth, parent company of eHealthInsurance, an online source of health insurance for individuals, families, and small businesses, has launched a new life insurance product offering, which allows consumers to research and comparison
shop for life insurance.
According to eHealth, the new offering allows consumers to conduct side-by-side comparisons of quotes and life insurance policy benefits. Through a referral partnership with Seattle-based Efinancial, the company was able to launch its life insurance offering with range of products from life insurance providers.
According to eHealth, the new offering allows consumers to conduct side-by-side comparisons of quotes and life insurance policy benefits. Through a referral partnership with Seattle-based Efinancial, the company was able to launch its life insurance offering with range of products from life insurance providers.
The new offering gives consumers access to various life insurance policies including underwritten policies, which require a medical review; guaranteed issue policies, which are available without a medical review or health questionnaire; and issue policies, which can be applied for and approved online in a single online insurance application session by answering a few basic health questions.
In addition, the company also provides phone support, with access to Efinancial’s agents to answer any life insurance policy-related questions.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com
Posted on Fri, Feb 05, 2010
With
“Nine Small Financial Steps That Will Pay Off Big in the Future,”financial advisor and consumer advocate Suze Orman offers readers some valuable advice for 2010.
In a recent article, Orman puts (1) savings, (2) retirement and (3) life insurance among the top priorities for personal financial planning. Orman’s recommendations for savings include admonitions to “save a bit at a time” and exercise more personal financial self discipline. In planning for the future, Orman encourages 401(k) participants to “max out their company match” and to invest in a Roth IRA. She rounds out her 2010 recommendations with a call to create the “most loving documents in existence” — a living trust, a durable power of attorney and a will. She concludes with a recommendation to guarantee “peace of mind” by purchasing a life insurance policy.
Experts note that more one-third of all adults carry no life insurance and the majority of those adults who do carry life insurance rely on more limited group life polices obtained through an employer.
Suze Orman notes, “If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance. Keep it simple and buy term life insurance; it’s good only for a specific number of years and then expires. That’s okay — life insurance wasn’t meant to be permanent; it’s there to protect your family before you’ve had a chance to accumulate enough funds (through investments and savings) to do so.”
She adds, “Most people should get a 20-year level term policy that has a value equal to 25 times the amount of annual income your family needs to live securely.”
To ensure that you are getting the best value when purchasing a life insurance policy, experts say to conduct research and compare life insurance quotes and prices online for different policies. Life insurance costs can vary widely depending on variables such as age, health, and whether or not a person smokes. There are a number online sources that a consumer can consult when considering life insurance: The American Council of Life Insurance (www.acli.com) has a range of information and brochures, and Efinancial.com offers a fast, secure and effective way to compare insurance rates at America’s top companies.
To get a
Term Life Insurance Quote or Research how to
Buy Life Insurance Online visit
Efinancial.com