Depending on the size of your estate, your family could have to deal with a large death tax payment after you die. Up to 55% of your estate!

If you properly structure the policy, the insurance proceeds won’t increase your estate taxes. To accomplish this, the owner of the policy must be another individual or several people (child or children for example) or it can be set up in an Irrevocable Life Insurance Trust (ILIT). The policy cannot be owned by the insured or transferred by the owner within three years of his or her death. If this is the case, the total proceeds are included in the estate.

For a good summarization of the estate tax treatment of life insurance, read this article from Scripps Howard.

Medicare has evolved into a program with a dozen supplemental insurance options and a new, baffling pharmaceutical program. The only sure thing is that Medicare by itself is inadequate. Dozens of overnight insurance companies have sprung up selling supplemental health insurance; a not-so-healthy proportion of them are scams. Enough of them are doing their advertising (fishing) through direct mail that the U.S. Postal Service has put out some consumer guidelines regarding direct mail solicitations for supplemental health insurance.

Highlights:

* Some policies offered to seniors through mailed advertisements and in other ways are offered by unscrupulous companies. Such policies will provide inadequate or inappropriate coverage. Don’t be like one 93 year old woman who thought she was purchasing a valuable health insurance policy, only to learn that she had bought maternity insurance.

* Reduce your chances of falling victim to health insurance fraud by carefully reading any sales promotion you may receive in the mail, including the “fine print” in the policy.

More after the jump…

Life insurance coverage can be sky-high or unobtainable for you if your driving record isn’t so great. Here’s how it works — and how you can cut costs.

A conviction on your motor vehicle record of driving while intoxicated (DWI) or driving under the influence (DUI) will usually result in higher life insurance premiums – even if the incident took place 3-5 years ago. And some life insurance companies will disqualify you from their best available rate if you have more than one moving violation in the past three years.

So, how do you find the best life insurance rate available for your specific medical history, recreational activities and driving record? Work with a broker that deal with multiple carriers and know the ins and outs of each of these life insurance companies and know which ones to take you to for specific situations.

South Florida has been having a protracted property insurance crisis in the wake of Katrina and back to back heavy hurricane years. Governor Jeb Bush and the Republican controlled state legislature decided that the best way to improve the insurance situation was to deregulate some of the rates. In fact, a couple of major insurance companies threatened to leave the state if they didn’t. Some Republicans may have to as a result of new legislation.

The Republican legislators caucused with the insurance companies, got promises of fair play in return for flexibility, and wrote a bill that Governor Bush signed. A few days before the signing ceremony, State Farm announced a statewide 60 percent hike in homeowner’s insurance, while Allstate went public with the cancellation of nearly 150,000 policies. All of this was legal under the new law, which slashed insurance regulation in the interests of bringing new insurance companies to Florida. It appears to be another example of the grand concept of competition resulting in fair pricing, sinking the entire market.

The Republican leadership says it’s the capitalist way, let’s clear the path for more insurance companies to come to Florida. The question is, how many Floridians are going to be able to afford the rates? That raises the specter of state support for property insurance, but they’ve already tried that. The state supported Citizen’s Insurance, supposed insurer of last resort, sank last year in a perfect storm of red ink. The new law shifts one billion dollars of the debt accrued by this agency to the Florida homeowners over the next ten years.

California Insurance Commissioner John Garamendi ran for Lieutenant Governor this year in the Democratic primary. He was opposed by two well liked and pretty well funded women, both State Senators. Early in the year while still wearing his Commissioner’s cap, he introduced a change in auto insurance regulations that would limit the insurer’s ability to tie geographic location to the cost of insurance premiums. Garamendi is apparently still holding to the increasingly archaic belief that auto insurance costs ought to be tied to driving records.

The insurance lobby in California is powerful, well organized and has been at odds with Garamendi for years. Their concern over the impact of his proposed regulations on the health and welfare of their customers led them to launch a two million dollar mail and TV campaign decrying Garamendi and his regulations, warning that the new rules could cause YOUR insurance rates to be raised arbitrarily. This ad campaign ran just before the election, oddly enough, and the Commissioner was infuriated.

Garamendi claims the insurance industry offered to call off the ad campaign if he would shelve his regulations. The insurance industry scoffs – if they return calls at all. From any perspective, it was two million wasted dollars because Garamendi won the primary with over 43% of the vote. One can extrapolate from those facts that if the insurance lobby REALLY wanted to damage Garamendi’s chances, they should have endorsed him.

If you have someone that depends on you financially, then you should have life insurance. It’s that simple.

Most families have coverage on both husband and wife. There are many financial pressures on a family after the loss of either parent. Beyond the obvious final expenses, the financial strain on a family after the loss of a spouse can be significant, even if the deceased spouse wasn’t working.

Often the surviving spouse will take time off work, or change jobs in order to spend more time with the children. Coverage for children is also available to cover final expenses and/or to guarantee insurability for the child’s future.

When deciding the face amount for your life insurance policy keep the well being of your family in mind. How much do you need to leave your family free of debt should you die today? Are you setting your family up for disaster or will the finances be taken care of should you be taken out of the picture? Keep in mind, a policy of $50,000 or even $100,000 will not last long if there is a mortgage or kids needing college tuition.

Life insurance isn’t one of those policies that you get a discount on from your auto/home insurer! In fact, most life policies offered through your property/casualty agent are typically overpriced relative to the competitive products offered by life insurance specialists. They get away with charging more because many people are drawn to the “convenience” of one source for all their “insurance”. This can be a costly mistake.

Take a look at the following example. Let’s say you’re age 42, in very good health, and are looking for $500,000 of 20-year level term insurance. If you went to State Farm, you would pay $680 per year, or $13,600 in total over the twenty-year term. If you worked with a multi-carrier broker, you would likely have found that the same exact coverage could have been purchased for only $460 per year or $9,200 in total over the twenty-year term. Savings: $220 per year, or $4,400 over the twenty years.

Bottom line: unless you want to overpay, before you sign on the dotted line for life insurance with your auto agent, shop around and you’ll find out that you can do better… a lot better.

Not many of us know this, but each of the four major credit card brands — American Express, Discover, MasterCard and Visa – offers some form of what the insurance industry calls “accidental death and dismemberment,” or AD&D, coverage on some or all of their consumer credit cards. Benefits vary by brand and card type, and can range in coverage from $100,000 to $1 million.

If your card offers it, you are automatically covered while traveling on what is called a “common carrier conveyance,” such as a commercial flight, boat, train or bus, as long as you paid for your ticket with the credit card that offers the coverage. Your spouse and dependent children traveling with you might also be covered, as long as their fares were purchased on a card that covers them.

The card companies began offering insurance products as value-added incentives in the mid-1980s. You’ll usually find your AD&D coverage buried well down the list of happier-sounding card member benefits such as purchase security, auto rental collision-damage waiver and concierge services.

More after the jump…

You wouldn’t buy a house without first checking the schools and neighborhood, or a car without taking it for a test drive. So why is it that so many people buy life insurance policies that don’t offer their families adequate protection?

Life insurance is not the kind of thing you should buy without doing a little research first. You need to make sure the policy you decide to go with is really right for you.

A good place to start is by getting versed on the most common mistakes people make when shopping for life insurance. They are:

1) Letting premiums define your decision.

The amount you’ll have to pay for a premium shouldn’t be your only consideration. It’s also important to factor in the financial strength/integrity of the insurance companies quoted, as well as important product features such as renewability privileges, conversion rights, available riders and how long the rates are guaranteed.

More after the jump…

The recent twists and turns in the health insurance business has led to increasing confusion over what constitutes quality coverage. “Consumer driven” health plans have become the latest, greatest product and the head-scratching is understandable. A tool to deal with it all has emerged on the internet in the form of www.healthia.com. The site provides the tools to do side-by-side comparison of health plans.

In addition to comparison shopping tools for health insurance, Healthia lets visitors shop for doctors and rate them on a star scale, much like Amazon.com customers evaluate books and DVDs. Coming soon will be a comparison tool for hospitals, which will enable visitors to weigh the cost of, for instance, a knee surgery at competing hospitals.

More after the jump…