I write about key man insurance at least once a year. Why?Because it can make a break a business.
If you're a business owner, you should ask yourself: what happens to my company if something happens to a key employee or me?
The answer can decide whether the company survives the loss -- and whether a business owner puts his family at financial risk.
There are ways to provide protection, including key-man term life insurance.Such coverage takes over should income be interrupted.And it's not just business owners that need life insurance protection.The company's top salesperson should also be covered.In fact, companies should look at insuring anyone who is integral to its financial success.
If you lose a key employee, key man life insurance will pay you for your lost profits, thereby buying you some time to replace the individual and get the business up and running again.
The key man term life insurance policy can also serve as an incentive to retain key employees and use it as part of your benefits package.How? You can split the benefits from the life insurance policy any way you want.You can offer part of the proceeds to the employee's family.
How much key man life insurance coverage is needed?Typical benefits run between $250,000 and $1 million.There are two ways to determine the right amount of key person life insurance.You can buy 8 to 10 times the employee's salary or look at the economic value of the employee to your business and ask yourself, "How much money would I lose if something happened to this person?" The answer to that question will tell you how much life insurance to buy.
How much does it cost?That depends on several factors, including the age and health of the people.However, today life insurance rates are 60% less than what they were 10 years ago.In 1994 it cost $995 to insure a 40-year-old man with an average 20-year term life insurance policy.Today, that same policy would cost you less than $400 per year.
Most employers would say that their most powerful business asset is their employees.So, why wouldn't you insure your most important assets? Getting life insurance quotes is easy. Just use the internet to get several quotes in a matter of minutes.
I don't have any pets, but I often here people in the office talk about their animals getting sick.Veterinary Pet Insurance (VPI), recently analyzed its medical claims received in 2007 to determine the top 10 most commonly claimed conditions for dogs and cats. They said that for both canines and felines, the top 10 conditions accounted for about 25 percent of all medical claims received last year.
With the official start of hurricane season only a few days away, coastal residents need to make sure that they are properly prepared for the above average hurricane season predicted for 2008, according to the Insurance Information Institute (I.I.I.).
The 2008 hurricane season, which starts June 1 and runs through November 30 is expected to be an active one. London-based forecaster Tropical Storm Risk predicts that there is a 63 percent probability that hurricane activity in 2008 will be in the top one-third of years historically.
Colorado
State
University forecasters William Gray and Philip Klotzbach predict that there will be 15 storms in all (9.6 is the average), including eight hurricanes and four storms that could reach "major" status with Category 3 winds or higher. Experts at the NOAA Climate Prediction Center are projecting a 65 percent chance that the Atlantic Hurricane Season will be above normal this season-suggesting that more active and intense hurricane seasons will continue to be the trend.
To prepare for a hurricane and other disasters, the I.I.I. recommends the following five tips:
The popularity of life insurance for estate planning purposes is increasing among 's senior citizens. Here are some ways it can be used in estate planning according to an article by InsuranceNewsNet.com.
Life insurance can help reduce the impact of the huge estate tax your estate may incur.For instance, if a 70-year old man's heirs are facing a $2 million estate tax bill for his property, he can take out a policy with a $2 million death benefit. Assuming the insured is in good health, such a policy would cost about $54,000 annually. If he lives for 15 years, his total premium paid amounts to $810,000. In exchange, the heirs get the full $2 million death benefit to cover the estate tax.
·You can utilize life insurance to efficiently transfer wealth to heirs or charitable institutions by creating an irrevocable life insurance trust or a wealth replacement trust.
·Life insurance policies can be useful if you do not want to purchase private, stand-alone long-term care insurance because it is too expensive – especially if it comes with optional death benefits. Under this set-up you would pay for the cost of his or her long-term care. A life insurance trust guarantees proceeds of large amounts to pass tax free to beneficiaries even if you spend down your assets to pay for skilled services.
·Life insurance can provide for your children from previous marriages. In this approach you would name your children from a former spouse as the life insurance beneficiary while your current family would get your other assets.
Of the 1.5 million students receiving college degrees this spring, an overwhelming majority will have at least one credit card in their wallet and 32 percent of students will have four or more credit cards, based on a 2005 study done by student lender Nellie Mae.
According to the U.S. Department of Education, nearly 25 percent of college students may be relying on credit card debt to help finance their tuition. On average, by the time they complete their bachelor's degree, students will be $19,300 in debt from student loans and credit cards. Twenty-three percent of students from private nonprofit colleges and 14 percent from public four-year colleges will graduate with $30,000 or more in debt.
The I.I.I. suggests that people, including graduates, can work to build a positive credit history in the following ways:
Use credit responsibly - It is important to establish a good credit record while in college. The longer and more stable your credit history, the higher your credit score. Do not keep more credit cards than you need and or use more than 30 percent of the credit that you have available to you on your credit cards. Use cash instead of plastic whenever possible, and try to pay off your credit card balance in full every month.
Set up a budget and stick to it - As a graduate, you should sit down and determine exactly how much money you are earning and how much you owe. Too often people make financial decisions based on how much they think they will earn, rather than what they are currently making. Many graduates also underestimate the cost of day-to-day living-try writing down all your expenses for a month or two to get a realistic sense of what you are spending, and where you may be able to cut back if necessary.
Pay bills on time - Pay all of your bills on time every time even if that means automating your payments to ensure you are never late. This will help to build a strong credit history. A pattern of late payments not only lowers your credit and insurance scores, but late fees and interest payments can add up and make it harder to pay down the balance.
Keep in touch with creditors - Graduates are often in transition, so once credit accounts are opened, let your financial institutions know if you are moving. You want to avoid having a credit card bill that was lost in the mail affect your credit record.
Monitor your Credit Report - Check your credit reports at least once a year. If there are mistakes, get them corrected quickly. If your report is less than stellar, take positive steps to improve your credit standing.
Consider credit counseling - If you find yourself in a financial bind, consider credit and money counseling. Information is available from the National Foundation for Credit Counseling or the
American
Center for Credit Education.
The National Foundation for Credit Counseling (NFCC) sent out a press release that offered some tips for surviving a layoff, should one occur. Some of them were worth mentioning so here you go:
Take advantage of any assistance your workplace offers. Many companies provide placement assistance, job retraining and severance packages. Make sure you are aware of all benefits offered.
Apply for any applicable government benefits. Your HR representative at work will be a good resource.
Don't be tempted to live off of your credit cards. Someone with a good line of credit could actually support the family at the current standard of living by using credit, but there's no guarantee a new position will materialize any time soon. One rule of thumb job counselors use is to expect one month of job search for each $10,000 of annual income you hope to replace. In other words, if you seek a $50,000 salary, it may take you five months to land that job.
Take a personal inventory. Consider all assets, income and expenses. Hopefully, you will not have to liquidate any assets to survive, but it is good to know what you have to fall back on.
Drastic times call for drastic measures. Nothing is off-limits. If necessary, consider selling the second car, or any recreational vehicles, real estate holdings, rental properties or jewelry.
After reviewing income versus debt obligations, if there is not enough money to make ends meet, calculate how much is needed to meet the basic household living expenses. Your goal is to pay everyone, but if you must make a choice, keep your home-life stable by paying your rent or mortgage, utilities, childcare, insurance premiums, health care, food and keeping gas in the car.
Tracking your spending is always a good idea, but when money is tight, it's essential. Write down every cent you spend. At the end of 30 days, review where the money went and make conscious decisions on where to cut back. You'll be amazed by how much you can save and not even feel the pinch.
Contact your creditors to arrange lower payments. Most major credit card issuers have in-house help programs. Explain your situation and what you're doing to resolve it. The creditor may be able to temporarily lower your monthly payment and reduce interest.
Call your mortgage lender or servicer and inform them of your situation. Be prepared to provide them with documentation of the setback, and have a resolution plan in mind. Since the average consumer doesn't know all of the loan modifications available, it is smart to first sit down with a certified housing counselor and map out a plan. This way, you'll know that you've selected the option that is best suited to your situation.
It looks like the federal government is yet again picking up the insurance tab, though this time it isn't a whole country, but just a major city within the borders of the United States. Denver, to be exact. According to Daniel J. Chacon at Rocky Mountain News, "the federal government has agreed to reimburse the city of Denver for liability and workers compensation insurance policies for police during the Democratic National Convention in August, the mayor's office confirmed this morning."
Denver agreed to spend $1.85 million on various security expenses related to the Democratic National Convention and now that money will come from the $50 million federal grant. The confirmation of the grant is allowing council members a long sigh of relief as the mayor's office could give them no more than an expectation of reimbursement, but no 100 percent guarantee.
Another insurance expense that Denver expects to incur due to the Democratic National Convention is a hefty car insurance bill. Not to exceed $2 million, it's still quite a bill, and more contracts are under consideration and being approved as we speak to secure the conference in August.
The short answer: in a way, yes. According to Karin Laub at the Associated Press, the United States government is apparently in the business of insuring whole countries now.
Well, not exactly, but close. She writes: "A U.S. government agency signed a political risk insurance deal with a Palestinian firm Thursday to help guarantee investments in the West Bank as part of an international effort to develop the beleaguered local economy."
Investors are a little concerned, it seems, with the prospect of plunging their money into the stormy deserts of Palestine thanks to the uncertain political climate at the moment. Right now, specifically, the outcome of the Israeli-Palestinian peace talks is questionable at best, so the United States has decided to step in and throw a few promises at the situation and back Palestine in the process.
A recent investors' conference that drew business people from around the world was the setting for the discussion of this proposal of insurance by the United States as well as more than 100 investment projects for Palestine.
Defaults on privately insured mortgages rose 37.2 percent in March, as a growing number of homeowners failed to keep up with loan payments. The Mortgage Insurance Cos of America said on that 58,131 insured borrowers were at least 60 days late on payments in March. That is up from 42,362 a year earlier, but down 4.6 percent from February's 60,911.
The March figures marked the first time in four straight months defaults had not exceeded 60,000.The number of mortgage holders who are late on payments is key because this is often a precursor to foreclosure.
Are you financially stressed? According to a survey of working adults commissioned by Workplace Options (WPO), nearly three out of four employees are.
The study says that those that are stressed say it's harder to do their job. Employees who are physically, emotionally and financially stressed are less able to contribute to the workplace and more apt to experience burn-out and reduced morale.
What can an employer do to help you if you're stressed?Will offering access to counseling and services related to financial issues help?Let me know your thoughts.
This article is by Lynn Adler and came from Reuters.As I was reading it, I thought about the history of foreclosures and how it used to be that 48% of all home mortgage foreclosures were due to a disability and 3% due to the death of the breadwinner.
Here's the article:
Home foreclosure filings surged 57 percent in the 12 month-period ended in March and bank repossessions soared 129 percent from a year ago, as homeowners struggled to make mortgage payments, real estate data firm RealtyTrac said on Tuesday.
For the month of March, foreclosure filings, default notices, auction sale notices and bank repossessions rose 5 percent, led by Nevada, California and
Florida , RealtyTrac said.
The rise in March to filings on a total of 234,685 properties followed a 4 percent decline in February, RealtyTrac reported.
RealtyTrac said the peak has yet to be reached.
"What we're really looking at is ongoing fallout from people overextending themselves to buy homes they couldn't afford and using highly toxic loan products to get into the houses in the first place," Rick Sharga, vice president of marketing at RealtyTrac, based in
Irvine, California , said in an interview.
"We're going to see quite possibly a record amount of foreclosure activity in the third or fourth quarter," reflecting sharp payment increases on adjustable-rate subprime mortgages in May and June, Sharga said.
One in every 538 households living in single-family dwellings received a foreclosure filing in March. The single-family dwellings can include condominiums.
There are three phases of the foreclosure process in most states -- an initial default notice, notice of a scheduled auction, and an "REO" filing if the property is not sold at auction but instead repossessed by the bank, Sharga said. REO refers to real estate-owned property.
I saw this article in Kiplinger's Personal Finance and thought it was very well written; therefore I wanted to share it with you.As the reporter, Erin Burt, says, financial planning doesn't have to be complicated. She provides an easy-to-follow strategy will help you meet your needs today and tomorrow.
Yesterday, we began a conversation about home inspection in the event of an earthquake. Our focus in the first post was on pre-earthquake assessment and preparation. Today, we'll talk about how to go about handling the earthquake itself: both the few minutes it lasts and the period of time directly following the rumble.
People Come First
If someone was injured in the earthquake, help them before doing anything else. Safety is key and you may need to contact emergency medical services. Stay away from damaged areas and keep children away from them as well. Wait for emergency vehicles and personnel to come and help you if you are stuck, and help elderly neighbors, those who are disabled and infants if they need assistance. If first aid is necessary, give it. Don't move anyone who is seriously injured.
Leaks
Leaks are a common effect of earthquakes and easily overlooked due to their subtlety. Check plumbing and pipes; hose connections at your water heater, dishwasher, washer and dryer; and freon levels in your air conditioner. Even small gas and water leaks can wreak havoc in your home and to personal belongings stored nearby.
If you find a water leak, turn off the water to the house. If you find a gas leak, get out of the house immediately and call the gas company.
Aftershocks
The first, big earthquake will likely cause the most serious damage but aftershocks can be dangerous as well. A home already weakened by the first quake can crumble due to an aftershock so don't stand near or stay in unsecure structures after the first earthquake passes.
Pay Attention
You may be in shock or scared after the earthquake passes, but it's important that you stay aware of your surroundings to protect yourself. Stay inside if your home is stable and avoid the downed power lines and broken glass that will likely be outside. Use the telephone only for emergency calls. Listen to a battery- or crank-operated hand radio or television to get the emergency information. Open your cabinets and closet doors carefully in case the objects inside have shifted. If you live on a coast, be aware that tsunamis are a possibility.
Insurance
Insurance should be your last concern directly after an earthquake. However, after things calm down, insurance should be one of the first things you take care of. Go back to yesterday's post and re-check all the things that you took care of before the quake. Measure cracks, take pictures, make notes, catalogue all items broken during the disaster and fill out your insurance report as completely as possible to speed up your claim.
Insurance is so far from our minds most of the time that it often takes a natural disaster to remind us that we need to protect ourselves. Unfortunately, after the disaster, it is usually too late. But whether or not you have earthquake insurance coverage, it is imperative that you do a home inspection walkthrough before an earthquake occurs and assess the current state of your home for insurance purposes as well as safety. If you have an insurance policy that covers earthquakes, take a camera and a notepad with you for documentation purposes and go over your contract so you know the specifics of your coverage.
Cracks
If there are cracks in walls, ceilings or in the foundation of your home, you should fill it with sealant if you haven't already. Hold up a ruler next to it and the date and take a picture so that if an earthquake causes it to worsen, the insurance adjuster can determine just how much by taking a picture of the changes. A special note: if you see a crack in your chimney, have it inspected by a professional chimney sweep as it can cause a number of problems in addition to inviting trouble in the event of an earthquake.
Hoses and Connections
Water softeners, basement or garage sinks, hot water tanks, and washer and dryer connections have a tendency to come loose over time because they are so rigid. Replacing old connections with the newer, more flexible versions can help you avoid flooding and leaks in the event of an earthquake. In the same way, check the stability of air conditioners as well to make sure that you won't have a freon leak if the worst occurs.
Shelving
Whether it's a tall bookcase in the living room, small decorative shelves in the bedroom, a mantle or utility shelving in the garage, make sure that no large objects are placed precariously overhead. For larger bookshelves and armoires, it is recommended that you attach them to the wall they stand in front of to help keep them from toppling. Breakable items on your shelves are also at risk.
According to MetLife's Sixth Annual Employee Benefits Trends Study more than half of working Americans (52%) are now obtaining the majority of their financial and retirement products through the workplace – up from 46% a year ago. Growing financial concerns among employees are creating a greater interest in advice and guidance at the workplace – 44% of employees would like access to general financial planning advice at work, up from 30% last year. Nearly half (49%) of all employees also want their employers to provide retirement advice.
Also among the study's key findings:
Benefits, Loyalty, & Retention – Employers underestimate how important benefits are to employee loyalty; benefits are increasingly important factors in employees' decisions to remain with their employer.
Growing Focus on Retirement and Aging Workforce issues – Employer focus and spending on retiree benefits is expected to increase; employees have strong interest in retirement benefits.
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