Saving You Money For Life

Wishing you and your family a safe and Happy Halloween.

This is just a reminder to review your current policy once every 2-3 years to make sure you have the appropriate coverage. Life events such as a new baby should trigger you to purchase more life insurance.

If you’re in the market for life insurance, remember to use a life insurance needs calculator to make sure you’re family is properly insured.

As the title says, don’t let your life insurance decision haunt you. Make sure you have the right amount of life insurance for the right legnth of time.

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From a Public Relations Newswire report:

“One year after Hurricane Katrina swept across the Gulf Coast, hurricane victims, joined by the Academy of Florida Trial Lawyers (AFTL) and the Association of Trial Lawyers of America (ATLA), are today launching a national petition drive calling on insurance companies to put policyholders over profits by paying fair and just claims to area residents who find themselves near ruin.

AFTL and ATLA also released a report today, “Pattern of Greed: How Insurance Companies Put Profits Over Policyholders,” which shows the insurance industry has made a practice of collecting billions of dollars from policyholders over the years and then stiffing them in their time of greatest need after various natural disasters. Meanwhile, the insurance industry is making record profits.

There’s a good deal more rhetoric available in the news release – all of it purple with indignation about ‘insurance CEOs’ bulging bank accounts’ and so forth. There are also a couple of quotes from long-suffering and elderly homeowners in Florida. Nowhere in the release, however, is there any indication as how these petitions will be collected; to whom they will be delivered; or what impact they are designed to produce. Legislation? A penitent insurance industry? Bunnies dancing in the streets?

How about a flurry of additional lawsuits following the recent court decision denying standard coverage for Katrina damage? How many trial lawyers devote themselves to social reform? For that matter, how many trial lawyer organizations issue so-called ‘Reports’ pimp-slapping an entire industry – without a legal agenda? Answer: none.

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Freelancers Union, a New York based non-profit, has announced its launch of an insurance and retirement program to be available to independent workers around the country. According to Freelancers, that comprises 30% of the workforce.

The program has been in operation for ten years, serving the City’s independent workforce by providing them access to health, dental, life, and disability insurance as well as professional discounts and educational and advocacy initiatives. Nonetheless, according to a recent survey of New York’s independent workers 66% either went without health insurance or had only temporary coverage during the course of a year.

In addition, Freelancers Union is creating a new on-line community by offering Profiles, Freelancers Yellow Pages, & Gig postings, a marketing and business development initiative that will allow freelancers to advertise their services and help them find work.

More after the jump…

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Buy sell agreements are mainly for small businesss owners. They can be used to transfer ownership when one or more of the business owners retires or dies. They ensure that the ownership structure of the business is preserved, that the business will continue, and heirs will receive a fair amount for the previous owner’s business interest when life-changing event occur.

Consider Tom and Jerry, the owners of a sales company. Tom has the sales expertise and Jerry runs the operations side. Their profitability is due to their joint efforts. If Tom were to die prematurely, Jerry would have to hire a new employee to fill Tom’s position. With the new hire, it’s unlikely that they could duplicate Tom’s results. At the same time, Tom’s widow would want to continue to take the same money out of the business that Tom had received. Needless to say, it may be impossible for Jerry to continue a profitable business under such circumstances. However, such a situation can be avoided. A properly drawn and funded buy-sell agreement can prevent such a disastrous result.

The buy-sell agreement allowsthe surviving owner of the business to purchase the deceased share of the operation. When a buy-sell agreement is structured you should determine the purchase price to be paid or provide a formula for determining the price. More importantly, the agreement must have a way for providing the funds needed to make the purchase. This is where life insurance comes into play. For example, if Tom’s interest in the business is valued at $100,000, Jerry would have to raise the funds to purchase Tom’s portion of the business. A “first to die” policy should be set up to pay the death benefit on death of the first business owner, thereby ensuring that funds are available for the buy-out regardless of which partner dies first.

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In addition to your medical exam, insurance companies will track down your medical history through the Medical Information Bureau (MIB), a clearinghouse of medical information that insurers share. Privacy laws generally protect your medical records, but when you’re applying for life, health or disability insurance, you’re asked to sign a release allowing the carrier to review those records. You can refuse, but then you won’t get coverage.

Just as you would check your credit history for mistakes, you should also check your medical history for mistakes. A minor mistake could drive your insurance costs up. One mistyped diagnosis code could drive up your premiums.

Here’s a good article from Money Magazine that explains what you should look for in your health records and how you should set the record straight.

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It has been said that “There is no more zealous controlled growth advocate than he who has just closed escrow.” With something like that in mind, Lexington Insurance has announced a new kind of insurance coverage that protects the developer who didn’t quite cover all the bases or the building owner who isn’t grandfathered if his building gets Katrina-ed.

They are offering a ‘first of its kind’ insurance policy to protect commercial and residential real estate developers and lenders from losses due to changing zoning ordinances. The new policy, called Zoning Restriction Protector Insurance, has been designed for commercial and multi-tenant residential real estate owners and lenders who may incur significant damage to their property and cannot rebuild the same size building due to zoning issues.

“Zoning ordinances are constantly changing, leaving non-conforming commercial and residential properties vulnerable,” according to a Lexington spokesman. “If a property suffers enough damage that it must be rebuilt to comply with current code, it may result in less rentable square footage or lower density, which can cause a significant financial impact.”

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When you purchase life insurance you must demonstrate to the insurance company that your health is good. Even if you have life insurance today, it doesn’t mean you’ll be able to purchase more of it tomorrow unless your health is good. Since future insurabilitiy is always a risk, there are steps you can take to minimize that risk, including:

• Buy as much coverage as you can – if you think $500,000 is enough but the life insurance company is willing to give you up to $1,000,000 based on your age, health and annual income, consider buying the $1,000,000. With term life insurance as cheap as it is, $1,000,000 in coverage shouldn’t be unaffordable.
• Make sure the term policy has a provision that allows you to convert it to a permanent policy without having to show evidence of future insurability.

If you have any questions, be sure to ask your agent. He or she will be able to provide you in the right direction.

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Following the recent series of arrests in London that apparently foiled a plot to blow up a number of airliners flying out of Britain, one of the new security measures undertaken by the airlines was to ban carry-on luggage. Laptops, iPods and cellphones, jewelry and other personal items were relegated to the aircraft’s hold.

After the emergency ban on cabin luggage most insurance companies said that they would treat passengers sympathetically. But within 24 hours of the terror alert has the insurance companies have decided to harden their position.

Insurance industry insiders say that companies are reluctant to announce blanket payouts for loss of valuables in these special circumstances because they think that passengers will exploit any relaxation of policy and have a field day with claims. Consumer groups predict scores of complaints from passengers about insurance companies failing to meet claims for losses.

More after the jump…

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When you get divorced you may be faced with new financial obligations including child support or alimony. With these new responsiblities, you may want to consider buying life insurance to protect your child if you weren’t around to help with child support.

Most lawyers will agree upon this as part of the divorce settlement, but usually the amount settled on is only $50,000 – $100,000. We all know that divorce can be bitter, but when there’s a child involved remember the life insurance isn’t for your ex-spouse, but for your child. It’s so affordable these days there is no reason why you shouldn’t have 7-10xs your income in case something were to happen to you.

If your being named the beneficiary on behalf of your child, ask your lawyer to include a stipulation in the divorce agreement requiring your ex-spouse to provide you with an annual confirmation that the insurance is still in force and that you are still listed as the benefiicary.

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Many insurance companies have fled the state of Florida, but Coldwell Banker Residential Real Estate is coming in. Coldwell Banker officials said they would begin offering an array of personal lines of insurance from homeowner’s to automobile. They will use NRT Insurance Agency, a subsidiary of Coldwell Banker’s parent company.

Coldwell Banker began offering the insurance coverage Aug. 1. “With the issues surrounding homeowner’s insurance in the state, we really feel that strategically this service separates us from the competition,” said Budge Huskey, president and chief operating officer of Coldwell Banker Residential Real Estate, in a release.

He’s right. The death of homeowner’s insurance in Florida has been daily news in the state since last year’s hurricane season. Now, Coldwell Banker real estate agents will have one of those increasingly hard-to-find homeowner’s policies to sell to the anxious new homeowner signing all those papers across the table. “Buyers with pending transactions will be offered an opportunity for an insurance quote,” says Mr. Huskey. Any homebuyer in Florida is going to be primed for high insurance rates, so sticker shock shouldn’t be an issue – a true marketing coup for Coldwell Banker.

NRT Insurance is licensed in all 50 states, and has been operating as an insurance carrier for five years. It provides insurance through a number of providers including Chubb, American Strategic Insurance, ASI-Lloyds of London, Fireman’s Fund, Liberty Mutual and others. Initially, the company will offer residential property and casualty insurance as well as automobile and watercraft policies.

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