Key reasons why a person needs life insurance
Insurance is designed to protect a person and the family from disasters and financial burdens. There are many kinds of insurance of which, the basic and most important is considered to be life insurance. It provides for the dependants after your death.
Since there are certain financial commitments you need to meet throughout life and do contribute in some way to the family income, you need to provide something even in death—to secure the home, help the family meet expenses for a while, protect dependant parents, or secure the children or spouse. Financial obligations could include funeral expenses, unsettled medical bills, mortgages, business commitments, meeting the college expenses of the children, and so on. How much insurance a person needs would vary, depending on lifestyle, financial needs and sources of income, debts, and the number of dependants? An insurance adviser or agent would recommend that you take insurance that amounts to five to ten times your annual income. It is best to sit down with an expert and go through the reasons why you should consider insurance and what kind of insurance planning would benefit you. As an important part of your financial plan insurance provides peace of mind for any uncertainties in life. 1. Life insurance correctly planned will on premature death provide funds to deal with monies due, mortgages, and living expenses. It offers protection to the family you leave behind and serves as a cash resource. 2. It secures your hard earned estate on death by providing tax free cash which can be utilized to pay estate and death duties and to tide over business and personal expenses. |
3. Life insurance can have a savings or pension component that provides for you during retirement.
4. Some policies have riders like coverage of critical illness or term insurance for the children or spouse. There are certain rules regarding eligibility for riders which you will need to determine clearly. 5. Having a valid insurance policy is considered as financial assets which improves your credit rating when you need health insurance or a home loan or business loan. 6. In case of bankruptcy, the cash value as well as death benefits of an insurance policy is exempt from creditors. 7. Life insurance can be planned such that it will cover even your funeral expenses. 8. Term life insurance has double benefits, it protects and you can get your money back during strategic points in your life. 9. Insurance protects your business from financial loss or any liabilities in case a business partner dies. 10. It can contribute towards maintaining a family’s life style when one contributing partner suddenly dies. Insurance is vital to good financial planning and security but you would need to assess your personal risk and long term commitments. Insurance stands a person in good stead throughout life and can be used in case of emergencies during a life time by requesting a withdrawal or loan. |
7 Things You Should Know About Health Savings Account Plans
ealth savings account plan offers lower premiums and lower taxes for many individuals. Before switching to an HSA plan, however, one would be well advised to seek the counsel of an experienced benefits specialist who is familiar with insurance companies offering high deductible policies that qualify for HSA account participation. In some situations, the lower costs anticipated may not be realized, or may not be worth trade-offs necessary to achieve those savings.
Health savings accounts (HSAs) are wildly popular. Since their introduction in 2004, approximately 2.5 million Americans have enrolled in these so-called consumer-driven health plans. But, alas, HSA plans are not for everyone. Here are some pointers to help you consider whether an HSA will benefit you and your family. 1. An HSA plan can cut healthcare costs by an average of 40% for many people. Nevertheless, some people will not realize any net savings. Those most likely to realize significant savings are people who pay all of their own health insurance premiums, such as the self-employed, who are relatively healthy with few medical expenses. 2.An HSA plan puts individual consumers back in control of their own health care. This also means that each individual must be more responsible for his or her own health care decisions. This approach of self-reliance is not always popular with or appropriate for everyone, especially those who have become comfortable with HMO-type "co-pay" plans. 3. Every dollar contributed into your HSA account is deducted from your taxable income in the same manner as contributions into a traditional IRA account--regardless of whether you spend it or just save it. Interest and investment earnings in a HSA accumulate tax-deferred, just like a traditional IRA. Unlike an IRA, withdrawals are tax-FREE when used to pay qualifying medical expenses. In many situations, new account holders are able to almost fully fund their HSA with money saved on premiums from a prior, higher priced plan. By stashing all or most of those savings into an HSA, the account holder realizes instant, additional savings in the form of reduced taxes. 4. You must have a properly qualified high health insurance policy in place first before you can open a health savings account. One of the biggest misconceptions about HSA plans is that any insurance policy with a high deductible will qualify the policyholder to establish an HSA account. IRS regulations, however, are quite specific. Not just any policy with a so-called "high deductible" will suffice. It is important to be certain that you are insured under a properly qualified policy. Your best bet is to work with a qualified and duly licensed health insurance broker who is experienced in marketing properly qualified HSA plans. 5. You must be insurable in order to qualify for the HSA-qualified health insurance policy. Because most people do not have a properly qualified high deductible insurance policy, they will need to switch insurance plans in order to become HSA-eligible. Unless coverage is being offered under small group reform laws (generally groups with 2-49 employees), the new high deductible policy will be individually underwritten by an insurance company. This means that some "pre-existing" conditions may not be fully covered. Alternatively, some companies may opt to cover certain "pre-existing" conditions in exchange for slightly higher premiums. |
Unfortunately, some health conditions simply render an individual uninsurable (examples: diabetes, chron's disease, heart attack, etc.). Underwriting requirements vary by state, which is another reason to rely on an experienced health plan broker.
You should not switch to a HSA plan when the management of existing medical expenses is more important than saving up-front medical insurance premiums. Do not change health plans: in the middle of ongoing medical treatments; after a major health issue has been diagnosed; or if any family member is pregnant. Generally, it is relatively hassle-free to qualify, i.e. no medical exams, etc. Most insurance companies offering HSA coverage will issue based on your application answers, perhaps accompanied by a follow-up telephone interview. In some cases, medical records may be requested, and companies always reserve the right to order a paramed exam. 6. Although HSA insurance premiums are low, they are not always as low as you might expect. This happens for one main reason. Simply stated, the underlying insurance policy is just that—a health insurance policy. Although it has a "high" deductible, as required by law, the insurance company still must compensate for the risk it is assuming over the deductible amount, which it does by charging premiums. Many companies offer policies with “one deductible” that all family members contribute toward. With those plans, it is not uncommon for premiums for a 5000 family deductible with 100% coverage after the deductible to be comparable to a 2500 "per person" deductible plan with 80/20 coverage after the deductible. Lower premiums represent just one element of the lower net cost achieved with an HSA plan. The low net cost of an HSA plan is achieved after factoring in the benefits of lower taxes, made possible by the tax-deductible contribution to the HSA account. Thus, if obtaining the lowest possible gross premium is your main concern, you may wish to consider a high deductible, non-HSA policy, especially if you do not see the benefit to contributing to a tax-deductible savings account. 7. An HSA offers your best chance to keep a lid on health insurance rate increases. Make no mistake-you will have rate increases with your HSA insurance policy. Because an HSA qualified policy is still a health insurance policy at heart, there is no logical reason to presuppose that an HSA policy would be immune to rate increases required by an insurer to keep paying claims and stay in business. But what you can expect is that the actual dollar amount of any future rate increases will be substantially lower compared to traditional health insurance plans (regular PPO and HMO plans). This is true because insurers base increases on percentages, and the same percentage of a lower base premium results in a lower dollar increase. It's not a perfect solution-but it is the most cost-efficient solution for many qualified people. |
A Great new Investment Product Your Sanity!
Investing is a great way to make money. It’s nice to invest in something and see it grow and prosper until it’s worth much more than when you first bought it. That’s a basic principle of investing. But it doesn’t just apply to the stock market. It applies to your life and your sanity, too!
When you look at your whole life’s enjoyment, a UK personal loan may be one choice you want to make to increase that enjoyment. And since many people are choosing to make a UK personal loan part of their financial portfolio, you might want to make one part of yours as well. You can get a UK personal loan from many lending institutions that are eager to do business with you. Because they want to do business with you, they offer a variety of competitive interest rates and a huge range of available loan amounts for whatever your need. And, because they want to do business with you, they’re also able to offer a variety of repayment plans suitable to your situation. Often, the only determining factor of how much you can get is simply what your current job is and what future prospects you have. And there are many available online at the click of a link! |
It doesn’t matter what kind of credit history you have or what kind of financial situation you’re in. There is probably a loan option available to suit your needs. However, you should be aware that the better your financial situation and credit rating, as well as any assets you have to help you get a secured loan, could point you toward a better interest rate than other types of loans.
Be that as it may, having a loan can really turn your life around. Whether you are getting a loan to consolidate your bills or leverage your investments or simply to help you enjoy life a little more than you would other wise, a UK personal loan may be the right choice for you! Be sure to shop around, since some companies may be able to get you a better rate than others. And, once you’ve found a loan company who wants to provide you with a loan, it doesn’t hurt to go back to ones who gave you a higher rate before and let them know. They may just come back to you with another offer! Now that’s wise leveraging! So make an investment in your life with a UK personal loan. You’ll be glad you did! |
A Quick Guide To Understanding Your Individual Retirement Account
It's never too early to begin preparing for your retirement and one of the best ways to prepare is to set up an Individual Retirement Account (often referred to as an IRA).
The purpose of an IRA is to serve as a personal tax-qualified retirement savings plan. Anyone who works, whether as an employee or self-employed, can set aside a set amount in an IRA, with the earnings on these investments tax-deferred until the date of distribution. In addition, certain individuals are permitted to deduct all or part of their contributions to the IRA. Plus, as of 1998, certain individuals can also set up Roth IRAs, to which contributions are not deductible, but from which withdrawals at retirement won't be taxed. It doesn't take much to set up an IRA. The trustee (or custodian) can be a bank, mutual fund, brokerage house or other financial institution. You cannot be your own trustee. An IRA can be established and a contribution made after year-end, no later than the due date for filing the income tax return for that year, not including extensions. This generally means that you have until April 15th of the following year to make the contribution and deduct it on your tax return. The most you can contribute to an IRA in any single year (as of 2006) is the smaller of $4,000 or an amount equal to the compensation includible in income for the year. Those 50 years old and above will also be allowed to make additional $1,000 catch-up contributions to an IRA each year to help them save more for retirement. The same limit applies even if you have more than one IRA, or more than one type of IRA. When both you and your spouse have compensation, you can each contribute the maximum, which means $8,000 total ($10,000 if you are both 50 or over). In 2008, IRA contribution limits will be raised to $5,000, while the catch up contribution for those 50 years old and above will remain at $1,000. |
You do not have to contribute the full amount allowed every year. You may skip a year or even several years. You may resume making contributions in any subsequent year, but you cannot add additional funds to make up for those years when no contribution was made.
Contributions must be from compensation. This can be from wages, salaries, commissions and other sources of earned income. Contributions do not include such things as deferred compensations, retirement payments, or portfolio income from interest or dividends. You can contribute more than the allowable amount, however, a 6 percent excise tax penalty will be assessed. No contributions may be made to an inherited IRA, in a form other than cash, or during or after the year in which the individual reaches age 70.5. You must begin taking distributions from an IRA no later than April 1st of the year following the year in which you reach age 70.5, or the year in which you retire, whichever is later. This is a quick and general overview of IRAs. The rules are slightly different for Roth IRAs, which have their own contribution and distribution limitations. Before setting up an IRA, take the time to talk to your banker, accountant, or financial advisor to make sure you have a firm grasp on your options and set up the IRA which best serves your personal needs. |