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The Basics of Life Insurance

admin — Fri, 07 Jan 2011 06:53:34 +0000

If you are a loving parent of one or more children, one of the greatest legacies you can give them is the assurance that they will be well provided for and taken cared of upon your death. And the safest and most reliable way to do this is to have life insurance.

All insurance companies have the life insurance as one of their basic insurance products. Its main objective is to provide the named beneficiaries to the policy with some amount of money in the event that you die. Usually the named beneficiary is either the spouse, and/or the children.

The standard benefit is monetary, which you have partly or fully paid through monthly premiums from the start of taking up the insurance. The amount of your monthly premium will depend on how much money you want to give your beneficiaries, the age you first applied for the insurance, your gender, occupation, and medical history.

Aside from this basic life insurance, there are other insurance plans that can provide monetary benefits to your loved ones, and a lot of them would even give out the benefit even while you’re still alive.

Examples are life insurances that do not only provide money upon death, but also for major diseases and/or permanent disabilities after accidents. Others take the form of a retirement fund or child’s education fund.

While you are still alive and have an income, the money you earn goes towards paying for all that you need to survive: a home, food, transportation, medicine, leisure, and if there’s some to spare, luxuries that allow you to enjoy your life.

However, there will always be the risk that what you are used to on a fairly regular basis will be gone in an instance because of circumstances that are beyond your control. Not only will you be affected, but those around you as well. Consider the statements below, and if any of it applies to you, then it is for your benefit to take up life insurance:

1. You are married.

2. You have dependent children.

3. You have a dependent or disabled parent.

4. There is a loved one in your life that is in your care.

5. Your job retirement plan, pension and savings are not enough to take care of your dependents

Now that you have decided to take up life insurance, you have 4 basic types to choose from, depending on what your needs are:

Term Life Insurance

This is the least expensive and the simplest type of coverage. No cash value is accrued, and the amount is fixed. The fixed amount is paid off to the beneficiary upon the event of your death, within the period of time included in your policy. The younger you start paying your premiums, the lesser the amount you have to pay.

Whole Life Insurance

This is just like Term Life Insurance, except that there is a cash value provided for. While you have the insurance, and you keep paying the monthly premium, you are also building up a cash value that is on a tax-deferred basis.

There are even some providers who give out dividends to their policy holders. The cash value is usually accessible even before you die, which makes this insurance policy very popular.

Universal Life Insurance

This type of life insurance is unique in the sense that it is very flexible: adjustments can be made with regards to the benefits and premiums, factoring in changes to current life situations. Interest is also accrued.

Skipping payments will not mean automatic forfeit of insurance, but will only be deducted from your total death benefit. Although the rates are subject to change with time, there is a minimum rate that is assured, which you are made aware at the onset of taking up this insurance.

Variable Life Insurance

This type of life insurance is dependent on the financial market. The money you pay into the insurance is usually invested in funds or stocks in the market, which then gives you the opportunity to accrue cash at a more rapid rate if the stocks are good. In the same way, if the market is bad, your policy will also result in a smaller amount of money.

In the end, it is all about saving money, and having money to spare. If you don’t need life insurance, don’t buy it. If you do need life insurance, based on the conditions mentioned above, then just get the policy that fits your requirements: the smaller the amount of money you think your family would need in the event you die, the smaller the premium you would have to pay each month.

You need not get the optional coverage that the insurance companies usually offer alongside the standard policies, such as riders, unless you think they are significant to you.

Also, before committing to one insurance company, check out the competition. Also check out the different policies available to you; aim for 3 separate quotations before making the choice.

Most importantly, take care of your body. Exercise and maintain good eating habits to keep healthy. Aside from lessening the risk of untoward life situations that could terminate your income prematurely, you will also be charged lower premiums when the insurance company sees you have a healthy life.

The Basics of Life Insurance is a post from: Finance Broker :: Financial Brokers

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Computing Your Home Mortgage Costs

admin — Tue, 07 Sep 2010 06:05:46 +0000

Buying your own home can be the most exciting event in your family’s life and it can be the most expensive purchase as well that you need to consider all your costs before applying for a mortgage.

Deposit: You’ll still have to come up with a deposit which is generally at 20% of the property’s purchase price. This amount will be deducted from the total purchase price before computing the interest and other charges of the lender.

Home inspection: This is an examination of the structure and systems of a home such as its heating and air conditioning, plumbing and electrical set up. As a buyer, you’ll want to know about potential issues and problems before buying property to decide whether you want to shoulder the improvement costs or negotiate a price adjustment with its seller.

Appraisal fee: An appraiser is an independent third party who can provide a report on the estimated fair value of the property you intend to buy and charge a fee for this. You’ll need this service to ensure buying at the best price possible.

Legal fees: You’ll have to shoulder the fees of your lawyer or conveyancer acting in your behalf in the purchase of your home. Fees can vary significantly so it’s best to shop around or ask your agent for a referral.

Title insurance: This is a policy that protects you against a defect in the title of your property.

Home and Contents insurance: This protects your property and possessions against damage or losses arising from fire.

Stamp Duty: This is a one-time tax computed as a percentage of the purchase price of the property and/or mortgage amount.

Closing costs: This may amount to 1.5% of the basic purchase price.

Other costs include prepaid property tax, homeowner’s insurance premium, rubbish disposal fees and survey charges.

With all the related costs of getting a mortgage, you’ll want to consider some ways to reduce your debt. The key is to decrease your principal debt so you decrease your interest obligation as well through any of the following methods:

* Increase payment frequency by paying bi-weekly instead of bi-monthly

* Prepay your debt when your means permit it by availing of prepayment features of your mortgage

* Increase your monthly payments by rounding off amounts or adding a specific amount to all

By increasing your payments and payment frequency, you can significantly reduce your interest payments and shorten your amortization period, leading to additional savings.

Computing Your Home Mortgage Costs is a post from: Finance Broker :: Financial Brokers

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Choosing the Right Investment Broker or Adviser

admin — Tue, 07 Sep 2010 05:38:51 +0000

Wealth creation experts reveal that one of the secrets of financial freedom is to invest in assets like shares of stock or securities that will generate income without spending too much time growing it. This is also known as passive income which is the preferred investment method because your money works for you even while you sleep or go on vacation.

Broker or adviser

You need not be an expert in securities transactions to start investing. Many successful investors were once beginners as well who only learned the basics and relied on advisers and market data for guidance. Getting someone like a broker or adviser to act in your behalf when investing or liquidating any investment should be your first step.

An investment adviser is one who is paid to give advice about investing in securities and must be registered with the state securities agency to act as such. An adviser may employ investment adviser representatives to work closely with you. These representatives must be licensed as well or registered with your state securities regulator.

A broker serves as the go-between of the buyer and seller in a transaction. He or she must be registered and licensed as well with your state securities agency. Unlike the financial adviser, a broker may not necessarily render advice as part of its services to you.

Choosing only a licensed or registered broker or adviser is highly important because if your unregistered broker goes out of business, you will not be able to recover your hard earned investment money even with court action.

Here’s how to verify their license and registration:

* Check the database of your state securities regulator

* Read their registration forms which generally contain plenty of information about the adviser’s business. When dealing with a new broker, always ask for this registration form or obtain a copy from your state securities regulator.

* If your adviser is also a broker, you may want to check the securities regulator’s database of brokers as well.

* Check for any violations or problems with your state securities regulator

Obtain the following information from your prospective broker:

* investor experience

* educational background

* recent employment history

* licenses and state registrations

* membership with a securities investor insurance system

* list of investment products and services being offered

* compensation for services—hourly rate, flat fee or commission fee

* history of violations with government regulators.

Don’t leave your hard earned money to chance. Retain the services only of reliable and licensed brokers and investment advisers.

Choosing the Right Investment Broker or Adviser is a post from: Finance Broker :: Financial Brokers

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How to Choose the Right Car Insurance

admin — Tue, 24 Aug 2010 11:06:21 +0000

Did you notice that most people stick with their car insurer for the long term? Is it always because the company always provides the best rates and insurance terms? You would be surprised that most of them do not really want to go through the hassle of trying out new processes other companies may offer.

Nowadays, we may find ourselves bombarded with so many companies advertising about their insurance policies and why you should choose them. With all the rates and conditions they promise, how do you know which insurance policy is best for your budget?

Here are simple ways to compare car insurances and get the best one for you. It all begins with knowing who the companies so that you can apply for the best rate for you.

Who are the car insurers?

One of the easiest ways to categorize these insurance companies is by their marketing efforts and company size.

Sales agents – There are companies that have chosen people to sell policies as agents. The agents meet with the customer personally or call them up over the phone. You can be assured of a good and personalized service at reasonable rates.
Company hotline – Companies that use a hotline sell to their customers directly through the use of marketing or advertising. Insurance policies are applied over the phone as there are no direct agents that go door to door just to look for new policy sign ups. The company mainly relies on their customers to contact their call centers or apply online. The service may not be as personalized as direct sales agent however you can be assured that you are getting your policy directly from the company with no false information.
Freelance agents – These sales agents offer different insurances from different companies. Their expertise lies on finding the best rates and offering the information to customers for a fee. They can also be consultants and offer solutions on how to overcome problems in getting approved for insurance.

Which one is the best car insurance?

A good insurer will have a good grasp of the whole picture before they create a policy for you. They will check your driving and credit history. To get a good rate, it is advisable to retain your good driving record. Most insurers analyze these factors before they calculate the rate they give to you.

Applying for an insurance policy can be a daunting task. But with good research and spending time on these matters will save you some money while your policy runs.

Get the best car insurance tips at Financebroker.com

How to Choose the Right Car Insurance is a post from: Finance Broker :: Financial Brokers

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