Total assets of life insurance companies grew at an average annual rate of 12 percent from 2002 to 2004, rebounding from slower growth of 3 percent from 2000 to 2002.
Cash value life insurance is considered worst financial products available. Sadly, over 70 percent of the life insurance policies sold today are cash value policies.
A cash value policy is an insurance product that packages insurance and savings together. Investing money in life insurance has resulted the returns horrible sometimes.
Your insurance person will show you wonderful projections, but none of these policies perform as projected.
Saturday, December 13, 2008
How to Save Money on a Policy
There are a couple different ways you can save on a policy. First of all, with any type of insurance, it’s always a good idea to ask what discounts might be available. If you buy all of your insurance policies at one company, that company will often give you a deal. Another good rule of thumb is to buy a policy when you are young and healthy, because premiums only get higher the older you get or if you experience any health problems. If it fits your needs, a term policy is usually cheaper than a whole policy. Also, check with your employer. Many companies offer it as a benefit at more affordable rates. And, of course, remember to get multiple quotes. Comparing quotes is a great way to see how much coverage you can get for your money and gives you the means to negotiate your rates.
The Business Insurance in USA
Insurance for your company isn’t just protection you should have, it is often required by law, depending on the state you live in. Most businesses need everything from liability coverage to property insurance to worker’s compensation. But that doesn’t mean it has to bust your budget.
Private Health Insurance
If you are not offered with health insurance plan by your employer or if your employer does not pay for the offered plans, you consider about buying a private health insurance. Usually, private health insurance is a medical insurance which you to fund from your own money.
Catastrophic Health Insurance
This health care plan is also referred to as Major Medical Plan. This plan is normally offered to healthy people. You can not buy a catastrophic health insurance plan if you have major diseases such as
* Multiple sclerosis
* Emphysema
* Heart disease
* Diabetes
* Schizophrenia
* AIDS
Catastrophic health insurance has very low monthly premiums and high deductibles. This type of health insurance plan covers only major medical and hospital expenses. These expenses include hospitalization charges, intensive care, laboratory tests, surgery and diagnostic tests such as X-ray. You have to for other expenses from your pocket. You have the choice to select a catastrophic health plan providing different coverage by choosing from various deductible plans. Usually, deductible under this plan are in the range of $500 and more. This type of health insurance is considered suitable for those who are not eligible for Medicaid and seeking for an affordable health insurance plan.
* Multiple sclerosis
* Emphysema
* Heart disease
* Diabetes
* Schizophrenia
* AIDS
Catastrophic health insurance has very low monthly premiums and high deductibles. This type of health insurance plan covers only major medical and hospital expenses. These expenses include hospitalization charges, intensive care, laboratory tests, surgery and diagnostic tests such as X-ray. You have to for other expenses from your pocket. You have the choice to select a catastrophic health plan providing different coverage by choosing from various deductible plans. Usually, deductible under this plan are in the range of $500 and more. This type of health insurance is considered suitable for those who are not eligible for Medicaid and seeking for an affordable health insurance plan.
Small Business Health Insurance
There is a confusion in mind of the most of the people working in small companies or own a small business regarding eligibility for establishing a health insurance program. Do not worry. There are companies which offer health insurance coverage for companies having employees as less as two or high as 50. Like big companies premium of health insurance of small business group is shared by employer and the employees. Even some insurance permit the employees to include their family member in the small business group health insurance. It must be noted that if you include your family members in the small business group health insurance your employer will not pay his share for premium of your family members. Premium of group health insurance is always less when compared to individual health insurance.
Apart from the medical coverage you get through your small business group insurance, you also save on taxes as contributions made to health insurances are tax-free.
Apart from the medical coverage you get through your small business group insurance, you also save on taxes as contributions made to health insurances are tax-free.
Group Health Insurance
Usually Group Health Insurance is established by employers with large number of employees. Prices of the group health insurance are negotiated based on the strength of employees. Obviously companies with greater number of employees are benefited. In this type of insurance all participants pay premium and number of employees falling sick is considerably less. Group Health insurance contributions are shared by employee and the employer hence the employer is benefited by paying lower premium. Some companies even allow a participant to include his spouse and dependants in the group health insurance program. Even you have the option to make your own group consisting of your family members. This type of health insurance program is termed as family group insurance. Premiums of such group insurance health programs are comparatively low.
Usually, employers can not deny you to participate in the health insurance program. Some employers review their health insurance program on yearly basis. Many employers introduce wellness programs to ensure healthy employees and also to obtain better management of medical costs.
Like other insurance programs, group health insurance also has its disadvantages. You have very little choice to choose a health insurance plan according to your wish. Your program may restrict you to limited hospitals and doctors. Your employer may increase the premium rate depending upon the medical costs.
Usually, employers can not deny you to participate in the health insurance program. Some employers review their health insurance program on yearly basis. Many employers introduce wellness programs to ensure healthy employees and also to obtain better management of medical costs.
Like other insurance programs, group health insurance also has its disadvantages. You have very little choice to choose a health insurance plan according to your wish. Your program may restrict you to limited hospitals and doctors. Your employer may increase the premium rate depending upon the medical costs.
Individual Health Insurance
You may be working with a company that does not offer health insurance plan or you may be a self-employed. Under these circumstances you have to purchase a health insurance quote from an insurance agent. Regulations set for individual health insurance policy are different from those applicable for job-based (group insurance) insurance plans. You have the option to choose from fee-for-service plan, HMO plan and PPO plan. Like other insurance policies individual health insurance policies also have their ‘haves’ and ‘haves not’. Following is the illustration on this
* Guarantee for issue of individual health plan: Many states have the provision to turn down individual’s application for health plan on account of individual’s health condition.
* Renewal of policy: Renewal of your health insurance plan can not be denied even if you fall sick.
* Different states have different limits on pre-existing condition exclusions. It depends on the state where you are residing. Insurance companies may put an exclusion rider on your policy which results in total elimination of coverage for full policy life for pre-existing conditions.
* Requirements of portability defers from state to state. You may not be provided with prior coverage credit and have to wait for full period of pre-existing condition exclusion.
* COBRA coverage is not applicable for individual health insurance plans.
* Guarantee for issue of individual health plan: Many states have the provision to turn down individual’s application for health plan on account of individual’s health condition.
* Renewal of policy: Renewal of your health insurance plan can not be denied even if you fall sick.
* Different states have different limits on pre-existing condition exclusions. It depends on the state where you are residing. Insurance companies may put an exclusion rider on your policy which results in total elimination of coverage for full policy life for pre-existing conditions.
* Requirements of portability defers from state to state. You may not be provided with prior coverage credit and have to wait for full period of pre-existing condition exclusion.
* COBRA coverage is not applicable for individual health insurance plans.
Disability Health Insurance
Disability insurance enables you to ensure income –either full or portion – even when you can not work owing to your injury or prolonged sickness. This is considered to be an important coverage especially for working people. However, disability insurance does not cater for providing rehabilitation costs. This aspect can be covered under your major medical insurance. There are many companies that offer disability insurance plan to their employees. You may also be eligible to acquire a government sponsor disability insurance plan.
Long-Term Health Insurance
This type of health insurance plan is preferable for senior people which need prolonged health care coverage. Usually such plans provide health care in nursing homes and assisted living facilities. Medicare provides coverage for first 100 days of hospitalization and generally does not cater for provision of staying at assisted living facilities. Usually, average annual expenses of nursing homes are in the tune of $40,000 this facts motivate many senior people to opt for long term health insurance coverage instead of spending their life savings. The other advantage of long-term health insurance plans is that these plans allow you to choose the best available facility.
Dental Health Insurance
You will find number of companies that provide dental health insurance for individuals and families. You have the option to choose from PPO and HMO dental health plans. If you select a HMO dental insurance plan you will have to select a dentist or group of dentists to provide you dental care. If you choose a PPO dental health insurance plan you have the option for choosing from many empanelled dentists in your area. You have another option of choosing any other dental plan, which is not a dental insurance plan, which may offer you facility to visit dentists. Some plans offer you discounts on expenses incurred on dental care.
Medicare Supplemental Health Insurance
This is supplementary health insurance plan to cover the aspects which are not covered by other types of Medicare plans. In private insurance companies these plans are referred to as Medigap plans. Such plans cover medical expenses like prescription coverage, expenses on preventive health care, deductibles of other types of Medicare, co-payments, extra days of hospital care (not covered under other health insurance) and even emergency care you obtained through foreign travel. List of companies that offer supplemental insurance is available on internet or you can consult an insurance provider on this aspect.
Medicare Health Insurance
Medicare is a federal government sponsored health insurance program. The program is aimed at providing health care services to elderly people above 65 years of age. However, age is not a bar in certain exceptions such as individuals suffering from kidney failures that requires a transplant or dialysis. Some people feel that this plan be reviewed forthwith as the cost of health care is accelerating day by day which may result in bankruptcy of this program.
Insurance - Jeevan Anurag
LIC's Jeevan ANURAG is a with profits plan specifically designed to take care of the educational needs of children. The plan can be taken by a parent on his or her own life. Benefits under the plan are payable at prespecified durations irrespective of whether the Life Assured survives to the end of the policy term or dies during the term of the policy. In addition, this plan also provides for an immediate payment of Basic Sum Assured amount on death of the Life Assured during the term of the policy.
Assured Benefit
Payment of 20% of the Basic Sum Assured at the start of every year during last 3 policy years before maturity. At maturity, 40% of the Basic Sum Assured along with reversionary bonuses declared from time to time on full Sum Assured for the full term and the Terminal bonus, if any shall be payable. For example, if term of the policy is 20 years, 20% of the Sum assured will be payable at the end of the 17th, 18th, 19th year and 40% of the Sum Assured along with the reversionary bonuses and the terminal bonus, if any, at the end of the 20th year.
Death Benefit
Payment of an amount equal to Sum Assured under the basic plan immediately on the death of the life assured.
Assured Benefit
Payment of 20% of the Basic Sum Assured at the start of every year during last 3 policy years before maturity. At maturity, 40% of the Basic Sum Assured along with reversionary bonuses declared from time to time on full Sum Assured for the full term and the Terminal bonus, if any shall be payable. For example, if term of the policy is 20 years, 20% of the Sum assured will be payable at the end of the 17th, 18th, 19th year and 40% of the Sum Assured along with the reversionary bonuses and the terminal bonus, if any, at the end of the 20th year.
Death Benefit
Payment of an amount equal to Sum Assured under the basic plan immediately on the death of the life assured.
Life Insurance Vs. Other Savings
Contract Of Insurance:
A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance.
At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void.
Protection:
Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.
Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly because of the 'easy instalment' facility built into the scheme. (Premium payment for insurance is either monthly, quarterly, half yearly or yearly).
For example: The Salary Saving Scheme popularly known as SSS, provides a convenient method of paying premium each month by deduction from one's salary.
In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme is ideal for any institution or establishment subject to specified terms and conditions.
Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan.
Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force.
Assessees can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for insurance than otherwise.
Money When You Need It:
A policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs that may arise from time-to-time.
Children's education, start-in-life or marriage provision or even periodical needs for cash over a stretch of time can be less stressful with the help of these policies.
Alternatively, policy money can be made available at the time of one's retirement from service and used for any specific purpose, such as, purchase of a house or for other investments. Also, loans are granted to policyholders for house building or for purchase of flats (subject to certain conditions).
A contract of insurance is a contract of utmost good faith technically known as uberrima fides. The doctrine of disclosing all material facts is embodied in this important principle, which applies to all forms of insurance.
At the time of taking a policy, policyholder should ensure that all questions in the proposal form are correctly answered. Any misrepresentation, non-disclosure or fraud in any document leading to the acceptance of the risk would render the insurance contract null and void.
Protection:
Savings through life insurance guarantee full protection against risk of death of the saver. Also, in case of demise, life insurance assures payment of the entire amount assured (with bonuses wherever applicable) whereas in other savings schemes, only the amount saved (with interest) is payable.
Aid To Thrift:
Life insurance encourages 'thrift'. It allows long-term savings since payments can be made effortlessly because of the 'easy instalment' facility built into the scheme. (Premium payment for insurance is either monthly, quarterly, half yearly or yearly).
For example: The Salary Saving Scheme popularly known as SSS, provides a convenient method of paying premium each month by deduction from one's salary.
In this case the employer directly pays the deducted premium to LIC. The Salary Saving Scheme is ideal for any institution or establishment subject to specified terms and conditions.
Liquidity:
In case of insurance, it is easy to acquire loans on the sole security of any policy that has acquired loan value. Besides, a life insurance policy is also generally accepted as security, even for a commercial loan.
Tax Relief:
Life Insurance is the best way to enjoy tax deductions on income tax and wealth tax. This is available for amounts paid by way of premium for life insurance subject to income tax rates in force.
Assessees can also avail of provisions in the law for tax relief. In such cases the assured in effect pays a lower premium for insurance than otherwise.
Money When You Need It:
A policy that has a suitable insurance plan or a combination of different plans can be effectively used to meet certain monetary needs that may arise from time-to-time.
Children's education, start-in-life or marriage provision or even periodical needs for cash over a stretch of time can be less stressful with the help of these policies.
Alternatively, policy money can be made available at the time of one's retirement from service and used for any specific purpose, such as, purchase of a house or for other investments. Also, loans are granted to policyholders for house building or for purchase of flats (subject to certain conditions).
Keyman Insurance
Keyman insurance is taken by a business firm on the life of key employee(s) to protect the firm against financial losses, which may occur due to the premature demise of the Keyman.
With Profit And Without Profit Plans
An insurance policy can be 'with' or 'without' profit. In the former, bonuses disclosed, if any, after periodical valuations are allotted to the policy and are payable along with the contracted amount.
Medical And Non-Medical Schemes
Life insurance is normally offered after a medical examination of the life to be assured. However, to facilitate greater spread of insurance and also to avoid inconvenience, LIC has been extending insurance cover without any medical examination, subject to certain conditions.
Who Can Buy A Policy?
Any person who has attained majority and is eligible to enter into a valid contract can insure himself/herself and those in whom he/she has insurable interest.
Policies can also be taken, subject to certain conditions, on the life of one's spouse or children. While underwriting proposals, certain factors such as the policyholder’s state of health, the proponent's income and other relevant factors are considered by the Corporation.
Policies can also be taken, subject to certain conditions, on the life of one's spouse or children. While underwriting proposals, certain factors such as the policyholder’s state of health, the proponent's income and other relevant factors are considered by the Corporation.
What Is Life Insurance?
Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against.
The contract is valid for payment of the insured amount during:
* The date of maturity, or
* Specified dates at periodic intervals, or
* Unfortunate death, if it occurs earlier.
Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
By and large, life insurance is civilisation's partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person:
1. That of dying prematurely leaving a dependent family to fend for itself.
2. That of living till old age without visible means of support.
The contract is valid for payment of the insured amount during:
* The date of maturity, or
* Specified dates at periodic intervals, or
* Unfortunate death, if it occurs earlier.
Among other things, the contract also provides for the payment of premium periodically to the Corporation by the policyholder. Life insurance is universally acknowledged to be an institution, which eliminates 'risk', substituting certainty for uncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner.
By and large, life insurance is civilisation's partial solution to the problems caused by death. Life insurance, in short, is concerned with two hazards that stand across the life-path of every person:
1. That of dying prematurely leaving a dependent family to fend for itself.
2. That of living till old age without visible means of support.
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