Most experts recommend 5-10xs your annual income. And, according to LIMRA, the average life insurance need is about $459,000, but the average amount of life insurance owned is only $126,000.

Before you simple pick a number, you should really evaluate all your needs. How? There are a few ways to do so. I strongly recommend talking to a licensed life insurance agent. However, if you don’t feel comfortable doing so, then check out a needs calculator. A needs calculator will look not only at your annual income, but also the percentage of income needed by your dependents, your age, the number of years the benefits are needed, your estimated annual inflation rate and an estimated annual interest rate.

When making your decision, keep in mind how inexpensive term life insurance is today. If you’re thinking of asking for a quote for $300,000 ask the agent to also give you a quote for $500,000 – you might be surprised at how little the price increases.

Stephen D. Barrett M.D. is a retired physician who has become a professional crusader against fraud of all sorts in the medical community. He has published several books and has established no fewer than twenty two websites with material relating to all aspects of this issue.

It’s pretty much a one man show. In the site’s own words, “Quackwatch is a nonprofit corporation whose purpose is to combat health-related frauds, myths, fads, and fallacies. Its primary focus is on quackery-related information that is difficult or impossible to get elsewhere. It was founded in 1969 as the Lehigh Valley Committee Against Health Fraud and was incorporated in 1970. In 1997, it assumed its current name and began developing a worldwide network of volunteers and expert advisors.”

More after the jump…

Where do insurance products fit into your retirement plan? Obviously, life insurance is a key element in any sound financial plan. This is the case because if you should die prematurely before having built your retirement nest egg, there is no substitute to replace the income you would have earned during the balance of your career for the benefit of your spouse and children. The immediate and substantial lump sum your family would receive if you had life insurance would be a critical component to their future. To satisfy this element, most people choose term life insurance because it is extremely inexpensive and is now available with level guaranteed premiums for as long as 30 years.

But what if you die financially, not physically? Yes, a total or partial disability that causes your income to disappear is often more financially devastating than death. About 48 percent of all mortgage foreclosures are due to a disability of the breadwinner, yet only three percent are due to a death of the breadwinner. The odds of a disability lasting over 90 days, between age 30 and 65, is over 40 percent. As such, disability insurance needs to be another key component in your financial plan. Typically, you can buy coverage that will pay you about 60 percent of your pre-disability earnings, and if you pay the premiums personally, the benefits are paid to you income tax-free. Since the definition of disability is not ‘black and white’ like ‘life and death,’ the contractual provisions, specifically those defining disability, are critical. Seek the advice of someone who writes a multitude of carriers and who will understand the differences between the various contracts available. A good disability contract can be costly however, but not nearly as costly as not having it if you ever need it.

What about savings? If you’re like most people, you may not yet be ready to risk your entire future savings in the stock market and all of its risks. But if you don’t, your savings may not keep up with inflation. And with safe, fixed rates on CD’s and other savings vehicles at 30-year lows, what choices are left?

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If you’re in the market for auto insurance, a little effort might be worth substantial savings. Online insurance companies have made coverage just a few clicks and a credit card number away, but you have no way of knowing if this is the best you can do. Dialogue with some actual insurance agents is probably worthwhile.

There are two types of insurance agencies. Certain companies will not appoint an agent without an agreement to sell only for them. These agents are called captive and they sell for companies such as State Farm and Nationwide. Other companies will appoint agents who write for their competitors. These are independent agents and they write for companies such as Travelers, Hartford, and AIG. Companies that sell direct usually don’t have agents writing for them, so they offer policies you can’t get through an agency. It’s worth your time to consult with one of each.

It’s also important to be comparing apples with apples. Settle on the coverage components you want. Determine what your state auto insurance coverage minimums are – every state has them, and they vary. Then decide what is acceptable to you; level of deductible, whether your car is worth comprehensive coverage, whether you need additional liability if yours is a no fault state. Set those requirements before all three types of providers, and see what comes back.

The Georgetown University Health Policy Institute has written A Consumer Guide for Getting and Keeping Health Insurance for each state and the District of Columbia. This gargantuan effort can be found at http://www.healthinsuranceinfo.net/. There are two drop down menus, each with a list of the fifty states and DC. From one, you can chose a state and read the guide online. From the other you can download a PDF file of that state’s consumer guide.

The guides were authored by the same group of people, who have presented differing state law regarding health insurance in a single format. Their approach is to take typical consumer questions regarding insurance coverage and answer them, including any specific applications there may be from that state’s particular law. The site pledges periodic updates on each state’s guide and indeed, for some of the states the guide is currently under construction for updating purposes.

The Institute is a non-profit venture based at Georgetown and supported by grants from, among others, The Henry J. Kaiser Foundation and AARP. While the consumer guides are the principal focus of the website, the Institute also produces a newsletter about changes in the industry. The current edition and archives can be found at http://www.healthinsuranceinfo.net/newsyoucanuse/intro.html. There is also a short list of links to sites that provide consumer support for specific insurance problems such as records privacy, disputes with your insurance company, and a summary of key consumer protections that are – or should be – included in every policy. It’s a valuable, well-focused website.

The most basic feature of a life insurance policy is the death benefit: the lump-sum payment your beneficiaries would receive if you die. It’s usually the main reason people own life insurance – but it’s not the only one. The life insurance policy that is right for you will depend on two things: your budget and how long you think you’ll need the coverage.

Life insurance that pays only a death benefit and offers protection for a specific period of time is called term insurance. This type of coverage has premiums that are designed to remain level for a period of 5, 10, 15, 20, 25 or even 30 years and it typically offers the greatest coverage for the lowest cost.

Permanent life insurance initially carries a higher annual premium than term life insurance, but provides lifelong protection and you can accumulate cash value on a tax-deferred basis. This cash account can be used for a variety of purposes such as supplementing your retirement income. However, your initial premiums would be much higher than a term insurance policy with the same face amount.

More after the jump…

As we head into September, you’ll be hearing a lot about Life Insurance Awareness Month. I wanted to take some time to share with you some interesting statistics. While reading them, think about your own situation. Are you underinsured? What would your family do if the unthinkable were to happen. Some of facts from LIMRA International for Life Insurance Awareness Month

Millions of Americans have no life insurance coverage.

• Only 61 percent of adult Americans have life insurance protection, a decline from 70 percent in 1984.
• Only 41 percent of adult Americans have individual life insurance. Many rely on group insurance, leaving them vulnerable if they lose a job.

Most people who have insurance coverage don’t have enough.

• The average life insurance need is about $459,000, but the average amount of life insurance owned is $126,000. The average underinsurance is more than $300,000.

More after the jump…

A Louisiana judge is going to be asked to combine meteorology with contract law when the first homeowner’s lawsuit against an insurance company goes to trial this week. Police lieutenant Paul Leonard had taken out homeowner’s insurance long before Katrina pulverized his house, but it was of little consolation when his insurance company blamed the damage on water, not wind. Leonard has sued and his action will be the first legal test for insurers who claim their policies don’t cover floods. They contend that Katrina’s storm surge was water pushed by the force of the wind.

Leonard and his wife, Julie claim Nationwide Mutual Insurance Co. denied their claim without thoroughly investigating the damage to their house, which is several hundred yards from the Mississippi Sound. The Leonards purchased their policy more than a decade ago, when – they claim – that their insurance agent had assured them that they didn’t need to buy flood insurance for their home because their policy would cover all hurricane damage.

Misrepresentation by an insurance agent is a common issue in courtrooms. The delineation between flood insurance, which is usually separate coverage, and windstorm insurance, which is a common component of homeowner’s coverage, it what’s at play here. Was Katrina a windstorm that happened to push water around, or was the home damage the result of the storm plus additional factors such as location, making the high water a non-insured catastrophe? Stay tuned…

There’s been lots of news lately on life settlements and non-recourse premium financing. The million dollar question for many older folks is “should I sell my life insurance policy?”

It sounds good…supplementing your income by collecting fees from investors who wish to bet on your life expectancy. You no longer need your policy because your kids are grown up, so why let it lapse. Why not make some money?

With more than $9 trillian of life insurance in force, Sanford C. Bernstein & Co. estimated last year that the market for “used” policies already topped $13 billion and it could hit $160 billion by 2030, depending on whether Congress kills the estate tax, which is the motive for many purchases of high-dollar life insurance.

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If your view of corporate America includes some degree of skepticism or downright mistrust, there’s a website that will help you find products and services provided by companies that meet your profile of an acceptable vendor. Idealswork.com is a website dedicated to helping you find a company that meets your criteria for social, political or corporate responsibility: http://www.idealswork.com/home.asp?from/index.asp.

Idealswork provides a drop down menu from which you can select the service or product you’re seeking. Appliances, clothing, tools, travel, electronics, etc. – and insurance. When you select insurance, you’re presented with a page of criteria, each with a check box next to the term.

Categories include:
* Environment
* Women’s issues
* Minority issues
* Gay/lesbian issues
* Human rights
* Questionable corporate practices
* Labor issues
* Workplace
* Animal rights
* Nuclear energy
* Weapons
* Addictive products