Term Life Insurance Blog: May 2006

Thursday, May 25, 2006

Lenders Sell Creditor Mortgage Insurance Not Term Life Insurance

Creditor mortgage insurance is not the same as Term life insurance. We recommend that you cover your mortgage with a term life insurance policy and not with creditor mortgage insurance.

The main reason is that mortgage insurance from the lender holds the same rate that you pay, even though the mortgage balance decreases. This is something that you should check into. Sign up for a quote here and our agents will be able to help you out with that.

HAVE ENOUGH INSURANCE TO COVER ALL DEBTS
Another thing to keep in mind is that along with your mortgage, you should have enough term life insurance to cover your other debts. A term life insurance policy will be much less expensive than the creditors will charge you insurance. These include credit cards, lines of credit, auto loans, home loans etc.

If a creditor asks you to purchase insurance for one of these types of loans , as him what the rate is per hundred or thousands of dollars.

Example...
A $100,000 term life insurance policy that costs $20 per month = 20� per thousand dollars insured.

The creditor insurance that I've been offered is usually much higher than that. This is especially true when you get those credit card solicitors calling to ask if you'll buy credit card insurance from them. I always refuse that type of insurance.

DEBTS DON'T GO AWAY, EVEN IF YOU DIE
If you die suddenly, the mortgage still needs to be paid, as well as the other debts that you've accumulated. The creditors will go after your estate to collect the balance of what they're owed. If you don't have enough money or insurance to cover you mortgage, your family could lose the house that you've worked so hard for.

Once again, take a moment to sign up for a quote on this site and one of our agents will be pleased to help you calculate how much term life insurance you'll need to properly take care of your outstanding debts, and the other living expenses that would be needed upon your death.

What the Banks don�t want you to know about Creditor Mortgage Life Insurance? Did you know the following facts about mortgage and creditor insurance offered through banks and trust companies?

1. They are "age banded" and may increase your rates as you enter the higher age bands. The premium that the bank quotes you may be valid for only one year.

2. These insurance programs do not offer contractually guaranteed rates. The insurer may increase their rates at any time depending on the experience of the program; the insurance carriers expense factor, the market interest rates, etc.


Mortgage Renewal Insurance
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Thursday, May 18, 2006

Invest in life insurance or 401k?

I posted this message on another newsgroup and was refered to this one "for expert advice"....
Here it goes:

My husband works for a company that offers a 401k. It's not a very good one; the company only matches 25 cents for every dollar the employee puts in it, up to $2 (=if we put in $8, they will put in $2, everything over $8 they won't match). We also have two life insurance policies, one in my name and one is his. They both are the kind that build up cash value (whole life?).

We pay around $130 a month for the life insurance policies and right now pay 2% of my husband's weekly income into the 401k. We would like to up the 2% to 8% to take full advantage of the company match, however, this would increase our monthly expenses by quite a bit. So now we are thinking of maybe changing from whole life to term life to lower the cost of the life insurance to be able to pay more into our 401k. Our insurance agent (of course) said that we should look at the life insurance policies as something that builds cash value and is tax-free income in case of death. I, however, would think that putting money in the 401k is a better deal than investing it in life insurance.

What do you all think about this?

I also have to add that I don't know how long my husband will work for this company (but 100% of the company match are vested right away, no waiting period) and that we have a 8-year-old child. We owe about $90,000 on our house and about $20,000 on two vehicles, other than that no debt. My husband's income is $40,000 + a year, I work part-time and make about $10,000 a year; the life insurance policies are for $100,000 (mine) and $250,000 (his).

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I also have to add that I don't know how long my husband will work for thiscompany (but 100% of the company match are vested right away, no waitingperiod) and that we have a 8-year-old child. We owe about $90,000 on our houseand about $20,000 on two vehicles, other than that no debt. My husband's incomeis $40,000 + a year, I work part-time and make about $10,000 a year; the lifeinsurance policies are for $100,000 (mine) and $250,000 (his).


> We pay>around $130 a month for the life insurance policies and right now pay 2% of my>husband's weekly income into the 401k.

One key caveat--without a *LOT* more information about the lifeinsurance policy, it's going to be difficult for anyone to giveyou reasonable advice on whether or not it makes sense to keepthe policy in force.
One caveat I'd note, though, is that the decision to keep apolicy in force is a very different one from the decision to buyit in the first place--cash value life insurance tends to befront end weighted on expenses, so you have to evaluate thepolicy from this point forward and *NOT* from the perspective ofwhether it made sense to buy it in the first place.

Generally, it's expensive to change your mind about a cash valuelife insurance policy after the fact, since what you ended upbuying if you kill off the policy was simply an incrediblyexpensive term policy. You also will have a taxable event if thecash value of the policy exceeds your basis when you cash it out.

>We would like to up the 2% to 8% to take>full advantage of the company match, however, this would increase our monthly>expenses by quite a bit.

Probably a good idea to up the 401(k) contribution since you areotherwise leaving the 1.75% on the table--and it's tough to beatthat immediate rate of return . The problem is that youare creating an either/or situation that forces a straightcomparison of the 401(k) vs. a savings vehicle you previouslycommitted to.

>So now we are thinking of maybe changing from whole>life to term life to lower the cost of the life insurance to be able to pay>more into our 401k.

Actually, probably the *best* solution would be to see if you cansqueeze down your monthly expenses so that you net increase yoursavings. Then you can judge whether or not this policy makessense from a financial standpoint without having created aneither/or choice between it or the 401(k) plan.
But if it's truly an either/or choice, then you have to look intothe future and make some projections about what happens if...

For instance, it's virtually certain the 401(k) plus term willbeat the cash value policy if you happen to die a couple of yearsdown the road, especially if your policy is one that only paysthe death benefit (not the death benefit plus the accumulatedcash value).

Remember that if you die, the 401(k) proceeds will still betaxable income to whoever is the successor beneficiary. So onceyou've dropped the term life insurance, the 401(k) has to be farenough ahead to both provide the funds that the policy would haveprovided *AND* pay the tax on the distribution. Life insuranceproceeds would not be subject to income tax.

There may be an issue of whether there is a long term need forlife insurance in your case that might argue in favor of having acash value policy. One reason might be to provide for estatetaxes to be paid at the second death (but then we have to worryabout incidents of ownership and the like).

Also, you can borrow against the life insurance policy value,with the loan to be paid off when you die by a reduction inproceeds. So long as the policy stays in force (HUGE ISSUE), youwill not pay any income tax on those funds. However, you have tolimit your borrowings to insure that the policy does not collapseand create a huge tax bill with no cash to pay the tax (generallynot a good thing ).

One thing to be careful of--be aware that many of thejustifications offered for keeping the insurance policy aremutually exclusive. That is, if you have a need for the deathbenefit for your entire life, that argues against borrowingagainst the policy. If you want to borrow against the policy,that severely limits options for keeping it out of your estateand able to pay estate taxes. So the key is to be sure you havea *rational* and *consistent* justification for the insurancepolicy--not just a bunch of talking points about general reasonsto hold insurance. A good agent will have such a justificationready--a poor one will end up giving contradictory reasons tohold the policy and act as if you can have it all (which youcan't).
>Our insurance agent (of course) said that we should look at>the life insurance policies as something that builds cash value and is tax-free>income in case of death. I, however, would think that putting money in the 401k>is a better deal than investing it in life insurance.
Without seeing the specific policy and the specific 401k plan(and options) I don't think a rational answer can be given.

>What do you all think about this?
>I also have to add that I don't know how long my husband will work for this>company (but 100% of the company match are vested right away, no waiting>period) and that we have a 8-year-old child.

That will complicate matters, since you can't be sure how longthe 401(k) option will be there for you. It's possible that your husband could end up with an employer with a 401(k) with no match*OR* no plan at all.
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Ponzi Scam & Life Insurance ?

It doesn't cease to amaze the lengths that people will go to, to make money and live the life style. Robert Alvin Coberly Jr. and Curtis Devin Somoza, must be pretty intelligent in order to cook up all of these schemes etc. And for the most part, people are dazzled when they see someone with high priced cars, jewellry and houses etc. It's easier to scam people when they see you are "successful". I find it really curious that these men spent $4.7 million on life insurance pools. My impression is that these funds are used to create or develop a life insurance company or service. While life insurance is a great business, I would hate to see life insurance clients have to "check out" a life insurance companies credentials before they bought their life insurance policies.
Two Men Nabbed For $68 Million Alleged Ponzi Scam (CBS) WESTLAKE VILLAGE, Calif. Two Westlake Village men were arrested Tuesday on charges they conned about 70 investors out of more than $68 million in a classic Ponzi scam. Robert Alvin Coberly Jr. and Curtis Devin Somoza, both 38, are accused in a criminal complaint of misleading investors into believing their money was going to be used to buy pools of life insurance policies that would eventually yield a five-to-one return -- supposedly with no risk. Prosecutors say investors were told the life insurance pools were being bought on behalf of the Personal Involvement Center, a church-based group in South Los Angeles. In reality, just $4.7 million of the more than $68 million the two men allegedly took in was invested in life insurance policy pools, prosecutors contend.

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Tuesday, May 16, 2006

Term Life Insurance & Health Insurance. FAT OR FICTION?

Life and Health Insurance. FAT OR FICTION? Michael Challiner Express Life Insurance Holmes Chapel, Cheshire Thinking of taking out life or health insurance? You�re a perfect weight? Fine, good for you, but if you�re not, read on: Do you know your BMI figure? BMI stands for body mass indicator and is used to ascertain whether you are underweight, normal weight, or obese. It works in the following way: You will need to know your weight and height, using metric measures. Multiply your height by itself, and then divide the result by your weight. Hopefully the result will be in the 18.5 to 24.9 range, which is absolutely fine. The BMI categories are listed below. � Less then 18.5 is classified as underweight � 18.5 to 24.9 is classified as normal weight � 25 to 29.9 is classified as overweight � 30 or greater is classified as obese These figures are for adults. There is a slight variation in that it is possible that this method overestimates fatness in people who are muscular or athletic. Worryingly for the insurance companies, if not for the fatties themselves, is that, according to a recent survey, 1 in 4 of UK adults is overweight. According to Cancer research UK, 1 in 4 of these overweight adults is simply not interested in losing weight. The UK government is also concerned about these figures and a campaign has just been announced to urge GP�s to encourage patients to consider weight reducing measures. It is a sad fact that we, as a nation, are second only to Greece in obesity levels in Europe. In view of these facts and in an effort to get at the truth, Scottish Provident, one of the UK�s biggest life insurers, have introduced a new question into their insurance application forms. As well as asking your weight, you�ll be asked when you last weighed yourself. Scottish Provident believes that many people understate their weight, feeling sensitive about the subject. It may be some time since they last weighed themselves and the memory can be very hazy when it comes to something you�d prefer to forget! In some cases, people are deliberately lying in an effort to get cheaper premiums or even to get insurance cover at all. Are these fair measures? I believe so. The life insurance industry has taken a BMI level of 30 as acceptable, which I think is generous. Beyond that figure, you may have to pay an increased premium or in a worst case scenario, be refused your health or life insurance. The Lancet recently reported the results of a study of 33,000 adults and considered that a BMI of over 25 is fine. This is an increase of the over 24 definition that the medical profession was recommending � the equivalent of an extra half stone, or around 15kg. They also, reassuringly, found that only adults with a BMI in excess of 35 were in danger of suffering a serious lowering of life expectancy. The facts given in health or life applications forms form the basis of your agreement with the insurance company. You can�t blame them for insisting on complete honesty. Would you want it any other way? Express Life Insurance ( www.express-life-insurance.co.uk ) are specialists in Life Insurance and Critical Illness Insurance ( www.express-life-insurance.co.uk Term Life Insurance
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Wednesday, May 03, 2006

Muslin Mortgages and Loans etc. No interest payments - for those of the muslim faith?

Mortgages and Loans. No interest payments for those of Muslim faith

With over two million Muslims in the Canada and U.S., the question of how to borrow
money for a mortgage is one that faces many. Mortgages and loans operated in the Canada and U.S. all work using a repayment system based on interest, and those of the Muslim faith are forbidden to pay ‘riba’ (the Islamic term for interest) by the requirements of the Quran.

To address the size of the Muslim population in the Canada and U.S., some lenders have found it necessary to develop specific products that meet Muslims’ needs. Here we have detailed two of the financial products suitable for Muslims.

The Islamic alternative to the mortgage - Ijara with diminishing Musharaka

This is the main Islamic alternative to a Canada and U.S. mortgage, and Canada and U.S. banks and building societies are increasingly offering this option to Muslim
customers.

’Musharaka’ means partnership and the mortgage works by way of a variable shared equity plan. The bank is the legal owner of the property and is its legal owner. For the term of the agreement, 25 years for example, the customer pays a monthly payment which includes a rent payment and a payment that buys a small proportion of the property. The proportion that the buyer owns of the property increases over time as more payments are made. The buyer owns the property in full once the final payment has been made.

The Islamic alternative to the loan - Ijara

If a customer wants to buy a car or another big item for which they do not have the money, they can ask the bank to buy the item for them. Then the customer pays the bank back by way of a monthly payment. That payment covers the bank’s costs in buying the item and the bank allows the customer to use the car, for example, so it’s like having a lease.

Finance for Muslims is not something that is easily accessible in the Canada and U.S., but it’s there if you know where to look. Here we have collated three institutions that offer finance to Muslims.

1. Lloyds TSB has introduced financial products aimed at Muslims in 33 branches in the last few years. This is their position on the matter: “It’s important for our customers to see that we are following the right procedures. We have a panel of four Islamic scholars who oversee the products. They offer guidance on Islamic law and audit the products”.

2. HSBC has devoted a brand called ‘Amanah’ to service Muslim customers. Included within the range are current accounts and pensions, home finance plans, home insurance and commercial finance opportunities. The product manager for the brand, Hussam Sultan, has stated: “As a bank, we are not here to moralise or tell our customers that Amanah finance is the way to please Allah. We’re just here to provide them with a choice”.

3. The Islamic Bank of Canada and U.S. has seven branches across the Canada and U.S.,

The Islamic Bank of Canada and U.S. is the only Canada and U.S. bank that deals
specifically with Muslim customers and they are 100% halal in all respects. The Sharia’s Supervisory Committee approves all of their financial products, which consults with specialist expert financial Muslim scholars.

We have collated a list of oft-used Islamic finance terms and defined them for you here, for your interest and information.

How To Easily Find The Best Term Life Insurance company

The concept of ~ term life insurance is very easy to understand. term life insurance remains effective for a limited, predetermined time span. A term life insurance holder pays regular premium during the term of ~ his term life insurance policy. If the insurance holder dies during the term, death benefits directly go to the beneficiary. Most of ~ the term life insurance policies offer variety of ~ options but term life insurance offer only limited flexibility. Additionally, term life insurance does not make any cash value or any residual. After the expiry of ~ term life insurance policy, there is no use of ~ it, you just need to renew it or purchase a new one. It is also true that options are more readily available with other insurance solutions. Despite simplicity and limitations, term life insurance is still sensible among many customers. Those who need temporary term life insurance protection should prefer term life insurance policy. Some times it happens that an individual is not covered by any term life insurance policy due to some reasons, under such circumstances, a term life insurance can fill the gap, protecting the financial interests of ~ their family. If you also need term life insurance coverage for a short period, term life insurance comes in picture. term life insurance is mostly meant for young working people with families. You can quickly find the best term life insurance quote using Internet. While searching for online term term life insurance quotes you should keep some points in mind like the premium to be paid, term of ~ the insurance, term life insurance rate, authenticity of ~ the company etc. You can find affordable term life insurance by searching online life insurance companies. By comparing term life insurance policies of ~ different companies you can find the best term life insurance policy suitable for you. term life insurance is a must for all of ~ us. Do not postpone it any more. Get a new term life insurance. Good luck.
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RE: Health Problems and term life insurance

Greetings:

For people who have pre-existing conditions such as disability and have questions regarding there qualification for life Insurance and Disability insurance the best thing for them to do is to arrange to have the no cost, no obligation medical offered by the life insurance company in order to confirm there premiums and qualification. Something to keep in mind is most pre-existing conditions will not be covered by any new coverage taken out.

When applying for life insurance whether it is Low cost Term Insurance or Universal Life Insurance a medical is needed to complete your application. The medical is used to evaluate the individual’s eligibility for insurance. The insurance company looks at the medical information gathered as well as the information on the individual’s application to determine there need for insurance. Other forms may be necessary but this are gathered on a case by case basis. Individuals with pre-existing conditions must disclose all information about there condition on the application as it effects there premium, in most cases it is either the condition is not covered or there is a rating on your policy which brings the premiums higher. As medicals are performed at no cost, or obligation to the client they are the best way to determine a client’s eligibility. Once the medial is completed and an approval is reached the client will decide on how to proceed.

The same applies for individuals who apply for disability insurance, medicals are not needed for disability plans unless requested by the insurance company but like applying for Life Insurance, applying for disability coverage is the best way for people who have questions regarding there eligibility to confirm there premiums and eligibility. It is best to disclose all information about any pre-existing conditions at time of application and like life insurance most pre-existing conditions will not covered by new disability coverage.
Sheldon



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