Life Insurance Australia Wide News

Fri, 05 October 2007
MBF To List On ASX
MBF Australia said it intends to demutualise and list on the Australian stock exchange in an attempt to grow and diversify its business.

The health insurer said its plans have been endorsed by the MBF Council.It said a share market listing is likely in calendar 2008.

The board believes that demutualising is in the best interests of policyholders, that it will maximise MBF's future growth potential and enhance its ability to compete in a rapidly changing environment," chairman John Conde said.

Thu, 08 November 2007
How much life insurance do you need ?
You might be asking yourself this question: "How much life insurance do I need?"

Some financial advisors will tell you to multiply your annual income by seven. Others will tell you to buy only enough life insurance to replace the income you are expected to make between now and retirement. Some might recommend you buy only enough life insurance to cover your present debts.

While you probably can do all of those calculations in a minute, they won't give you the right answer. Simply put, calculating your life insurance needs takes homework. It requires you to do an inventory of all of your finances, and to think long and hard about how your beneficiaries would maintain their lifestyles without you. You also must consider inflation and, if you have children, future college education costs.



Source: insurance.com

Wed, 28 November 2007
Life Insurance Defined
Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the policy owner's death. In return, the policy owner (or policy payer) agrees to pay a stipulated amount called a premium at regular intervals. Assets, Bills, and death expenses plus catering for after funeral expenses should be included in Policy Premium. Anyone whose assets equal more than the value of their primary residence should not be compensated beyond that value in case they cannot sell their house. In the case of those whose lost their spouse should be compensated also for one full year the wages of their spouse which would or should be included to avoid lawsuits.

As with most insurance polices, life insurance is a contract between the insurer and the policy owner (policyholder) whereby a benefit is paid to the designated Beneficiary (or Beneficiaries) if an insured event occurs which is covered by the policy. To be a life policy the insured event must be based upon life (or lives) of the people named in the policy.

Insured events that may be covered include:

death

accidental death

Sickness

Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; for example claims relating to suicide (after 2 years suicide has to be paid in full)(in India after one year Suicide is covered), fraud, war, riot and civil commotion.



Sat, 08 December 2007
Who needs it ?
If someone depends on you financially, chances are you need life insurance.

Life insurance provides cash to your family after your death. This cash (known as the death benefit) replaces your income and can help your family meet many important financial needs like daily living expenses, mortgage payments and college savings. What's more, there is no federal income tax on life insurance benefits.

Most people need life insurance. To figure out if you need life insurance, you need to think through the worst-case scenario. If you died tomorrow, how would your loved ones fare financially?

Would they have the money to pay for your final expenses (e.g., funeral costs, medical bills, taxes, debts, lawyers fees, etc.)? Would they be able to meet ongoing living expenses like the rent or mortgage, food, clothing, transportation costs, healthcare, etc? What about long-range financial goals? Without your contribution to the household, would your surviving spouse be able to save enough money to put the kids through college or retire comfortably?

The truth is, it's always a struggle when you lose someone you love. But your emotional struggles don't need to be compounded by financial difficulties. Life insurance helps make sure that the people you care about will be provided for financially, even if you're not there to care for them yourself.



Source: Life-line . org

Wed, 19 December 2007
Life Insurance- How much do I need
So, how much life insurance do you need? Well, the answer isn't really how much life insurance you need... it's how much investment capital your family will need at the time of your death. Their need for capital -- on a gross basis -- is really a function of two variables:

How much will be needed at death to meet immediate obligations; and

How much future income is needed to sustain the household.

The first category is fairly easy to estimate. It's the sum of final expenses (including uncovered medical costs, funeral expenses and final estate-settlement costs) and other lump-sum obligations (such as outstanding debts, mortgage balance, and college costs).

The second variable is a bit trickier. It involves calculating the "present value" of future needed cash-flow streams. By answering a few simple questions below, you can get a rough sense of the needs for capital that might exist at your death.



Source: Life Ewb site

Thu, 27 December 2007

While it might be considered straightforward, income insurance can vary to suit needs and budgets.

Your greatest financial asset is, most likely, your ability to earn an income. However, while the overwhelming majority of people insure their homes, their cars and their valuable possessions, few even consider income insurance. If you got sick or had an accident and were unable to work, how would you pay the mortgage, feed the family and generally have enough income to survive?

For some people the answer could be simple - they may have enough income-earning assets or savings to continue to support their needs; their superannuation may include salary continuance that pays an income while they are out of work due to illness or injury or, if they suffer a work-related injury or disease, they will be protected by WorkCover.

However, for many of us, if we don't work we have no income. When all else fails, you may be eligible for social security benefits - but will this be enough to meet your needs?

Income protection insurance pays you an amount of money, usually monthly, if you are unable to work because of sickness or injury. It can provide security. However, as with all insurance products, you need to consider whether you actually need it and, if you do, you need to ensure you get the right amount of cover at the right price.

Source:

Money Maker

Marilyn Smith

Thu, 03 January 2008
Everybody Wants The Best Term Life Insurance Quote


The information you need about the best term life insurance quote is only a click away when you search for term life insurance online. You don't even have to know anything about the insurance industry to get the best term life insurance quote from an online insurance company.

So many life insurance companies have an online presence that you can shop for anywhere from one year to 30 year life insurance terms. Term life insurance is cheaper than whole life insurance because your family only collects a settlement if you die during the term of the life insurance. If you are still alive at the end of the term, then you have to start looking all over again for the best term life insurance quote.

There are several ways to look at term life insurance. If you want to have life insurance as protection for your family, you can look for the best term life insurance quote online and then change over later to a whole life insurance that provide 30 year life insurance terms or one that lasts for your whole life. You might also want to look at universal life insurance that covers everything.

In getting a term life insurance policy you need to get the best term life insurance quote with monthly premiums that suit your budget. Usually term life insurance policies are for 5, 10, or 15 year terms, but it is possible to get 30 year life insurance plans as well. Since the longer term plans are more expensive, you are probably better off with a whole life insurance policy.

You should contact several life insurance companies in order to get the best term life insurance quote, you need to compare the quotes from different companies. This comparison not only involves the bottom line price, but the length of the term, the monthly premiums and the amount of the death benefit each policy offers. Only then can you make an informed decision about the life insurance protection you have for your family.

Some term life insurance companies will give you a policy with no medical exam. It really depends on your answers to various questions about your age, occupation, and health whether or not you get the best term life insurance quote for such as policy. The younger you are, the better quote you get. It pays to shop early for life insurance.

Looking for best term life insurance quote? Look online.



Source:Ocean Finance Loans UK

Sat, 12 January 2008
Principles of insurance

The timing or occurrence of the loss must be uncertain.

The rate of losses must be relatively predictable: In order to set premiums (prices) insurers must be able to estimate them accurately. This is done using the Law of Large Numbers which states that: The larger the number of homogenous exposures considered, the more closely the losses reported will equal the underlying probability of loss. If the coverage is unique, the insured will pay a correspondingly higher premium. Lloyd's of London often accepts unique coverages. (e.g., the insuring of Tina Turner's legs and Jennifer Lopez's buttocks)

The losses must be predictable on a macro level: Insurers need to know how much they would be required to pay when the insured-for event occurs. Most types of insurance have maximum levels of payouts, but not all do, notably health insurance.

The loss must be significant: The legal principle of De minimis dictates that trivial matters are not covered. Furthermore, rational insurance uses existing insurance when the transaction costs dictate that filing a claim is not rational.

The loss must not be catastrophic: If the insurer is insolvent, it will be unable to pay the insured. In the United States, there is a system of Guaranty Funds run at the state level to reimburse insured people whose insurance companies have become insolvent. [1] This program is run by the National Association of Insurance Commissioners (NAIC). [2] To avoid catastrophic depletion of their own capital, insurers almost universally purchase reinsurance to protect them against excessively large accumulations of risk in a single area, and to protect them against large-scale catastrophes.



Source: Wikipedia

Tue, 15 January 2008
Do you need long term disability insurance?
Serious illness or injury can harm more than your health-it can have an impact on your ability to work and meet your family's living expenses.

Disability income insurance helps you pay living expenses while you are unable to work. It offers paycheck protection-providing cash directly to you for spending on mortgage payments or rent, groceries, utility bills, car payments, or whatever else you choose. A policy also can pay for training or other assistance you may need to return to work. With disability income insurance, you can avoid depleting the savings you may have accumulated for your children's education or your retirement.

Source:Women's finance.com

Tue, 22 January 2008
How To Find Insurance Quote
By: Francis Lua

Health insurance plans or medical insurance plans can be confusing. Different agencies provide different tools to help you better understand the insurance plans. They trying to convince and suggest you the easiest ways for you to compare health insurance plans through the quote form they have.

If you are looking for an insurance quote, or are looking to purchase the plans online, this resource can help you significantly. Insurance quotes are tricky things, especially when considering finding group health insurance quotes. As a result, many people do not know how to find a health insurance online quote, and settle for a quote that is not as competitive as it might otherwise have been. Getting an approximate and affordable health insurance plan is not as difficult as many believe. All it takes is a bit of know how and comparing different plans, however you really need to look at the fine print.

There are a lot of sites for insurance plan information that covers different kind of topics such as:

1) Largest selection of individual plans and medical insurance plans.

2) Compare individual health plans and benefits to find the best match for you.

3) Assistance and advice from over 100 licensed individual plan agents and representatives.

4) Best prices available get a free instant plan quote

5) Safe, secure and easy online applications for individual health plans

Low cost health plan options are out there, though they often have to be unearthed. Large insurance firms are not necessarily the enemy, but it should be said that their premiums are often out of reach for many working families, who ought to pay more attention to the types of insurances that allow certain individuals children, the elderly to pay less for essential services.

Do not wait until you have what is called a pre existing condition since many health policy companies will not cover you in these situations. This resource was designed to help individuals and families find the quote online, because low cost plan options certainly exist.

It is advised to get the insurance as soon as possible to protect not only yourself but also your family. That is why before sign the health policy makes sure that you have read thoroughly the benefit section. Take note of any health care service that is not covered by your insurance policy. Also, pay specific attention to how the insurance policy is worded. Sometimes, insurance companies hide the health insurance coverage exclusion within the definition of words.



Wed, 30 January 2008
Types Of Insurance For Your Life
As you already know there are many types of insurance. Knowing which policies will best suit your needs is a key to protecting yourself and your family from unexpected events. BY having the protection that you need, when you need it, you give yourself and your family a tremendous advantage when things go wrong.

If you have a family or run a business, you certainly need life insurance. Life insurance comes in many different flavors and choosing the correct policy is often confusing. One thing is certain, however, and that is you want to provide for your family in the event of your death. The actual type of policy that will best meet your requirements is something that only you, your spouse, and the insurance carrier can decide.



Source:Peter Kenny

Tue, 12 February 2008
Income protection insurance
It's trite but true to say that for most people, their most valuable asset is their ability to earn an income. But how relevant is income insurance to most Australians?

Ask yourself what would happen if you woke up tomorrow and found you were incapable of working for an extended period.

Could you support your household?

Meet your loan repayments?

Save for the future?

Income protection insurance, also known as disability insurance, pays you an income if you are unable to work because of sickness or injury.

You can insure to receive payments (usually monthly) of up to 75 per cent of your current income while you're out of action.

Doesn't WorkCover or my super fund already protect me?

WorkCover protects you if your injury is connected with work. But it doesn't cover you for sickness or if you have an accident hiking on holidays.

It's worth checking on your super fund, though. Many super funds now provide salary continuance insurance which will pay you an income for up to two years if you're unable to work.

This may mean you can get away without income protection insurance, or opt for a cheaper policy.

How do I choose an income protection policy?

It's worth talking to an adviser (as opposed to a salesperson) about which one suits your needs. Most insurers have several products on offer and a range of options that come with each product.

The first choice is between an agreed-value policy and an indemnity policy.

With an agreed-value policy, you have to prove your income up front, but once that's done, you know exactly what you'll be paid if you're unable to work.

This type of policy is more expensive, but suits people like the self-employed who have variable incomes and want some certainty about their claims.

With an indemnity policy, the company generally insures you for what you say you earn up front, but asks you to verify your income if you make a claim.

Both types of policy can be increased each year for inflation, but if you're likely to have a rising income, it may also make sense to choose a policy that allows you to increase the sum insured without the need for new applications and medicals.

Income protection policies also come in basic and deluxe versions.

The basic version generally provides you only with income payments while the deluxe version can have add-ons such as paying nursing care or accommodation benefits or paying benefits immediately if you have an accident - rather than insisting on the normal waiting period.

It's also important to understand exactly when you can claim.

All income protection policies include definitions on when you are unable to work.

Some of the cheaper policies, for instance, say you can claim only if you are unable to perform your normal job; other policies will pay if you are unable to perform one or more of your important duties.

Policies also have exclusions - circumstances in which they won't pay - which are worth knowing.

There is also a range of choices to make on issues such as how long you're prepared to wait before making a claim and how long you want the income payments to go for if you do claim.

Is income protection expensive?

Premiums can vary significantly.

As a rule, women and blue-collar workers pay more, though the increase in stress-related claims by white-collar workers has resulted in higher premiums - especially for professionals such as doctors and lawyers.

Can I do anything to cut the costs?

Income protection insurance is tax-deductible, so the costs can be reduced by making sure you claim your premiums in your annual tax return. (But any claims you make will be taxed as income.)

Outside this, the simplest way to cut the premium is to opt for a longer waiting period or limit the period in which you can claim.

Waiting periods can extend as far as two years while income payments can be for as little as a couple of years or up to age 65.

Some insurers will give you a discount if you provide evidence of your income up front, and some offer lower premiums if you agree to a 12-month limit on payments for conditions caused by mental disorders such as depression or stress.

Many people also don't realise that they can insure for less than 75 per cent of their income - maybe insuring the full amount for the first two years and then 50 per cent after that.

Needless to say, you can also cut costs by not paying for extras that you don't think you'll need.

But bear in mind that the real test of the policy comes when you make a claim - paying a few extra dollars for certainty can be better than simply taking the cheapest deal going.

Source: http://www.financialservicesonline.com.au

Mon, 18 February 2008
Payday Loans Can Powerful Tool For Those In Financial Need
If you are in a tough financial situation, and find yourself needing cash and your next paycheck is several days away a payday loan just might be the solution to all of your financial needs. If your think you have seen those ads for the fast cash payday loans, and you and others you know assume right away that they are scams, maybe you should think again. Sure they do charge more interest than a more traditional loan for the cash that they lend you until your next payday, but you know what, there are plenty of people who need money immediately, and have been saved by a easy, simple fast payday loans that give you cash when you need it.

Yeah, I know that I am well off now, and really want very little in my life but this was not always quite the case, just as it is not the case for millions of Americans today that work hard and live from paycheck to paycheck. There was a time when I was on the edge of absolute abject poverty with not a thing in the world. It had gotten so bad that the banks were threatening to repossess my car, which would have meant that I would not have had a vehicle to travel to and from work, and if I lost my job I would only get deeper in debt and had zero income. I needed money pretty darn bad. So, I decide to look into getting money through a payday loan advance.

By money, I mean almost a thousand dollars. It's strange to have all that cash in transferred to your bank account when your used to your balance never being over a couple of hundred dollars, and knowing that you can not spend any of it on luxury items. It is all set aside for important bills, which I paid and I was no longer worried about losing my car, or anything else for that matter. The payday loan I received saved my job, and my car.

I had suddenly gotten enough to get back on my feet again. The process of getting my payday loan was really quite simple. I filled out the forms on the Internet and gave them all of the information they requested, including my bank account number and bank routing number. Very quickly I was informed my loan was approved and the money would be in my bank account within twenty four hours, and sure enough the money was tin my account the next morning. I did not have to beg a loan officer to ignore my bad credit, or convince someone that the reason I needed to borrow the money was for a good cause. There was absolutely no embarrassment on my part or judgments from the payday loan company. I did not even have to fax the payday loan company any documents, the whole process was just easy.

Several weeks after I got my loan, I paid it off. Since I paid the loan off on time the company let me know that I could get another loan with them without any problems if I needed it. I took the up on that offer several months later; I borrowed less money this time to make sure I had enough cash for my vacation. Payday Loans can be a powerful tool to help those in financial need, if used correctly.

Source: http://powerfulpaydayloans.com/



Tue, 04 March 2008
Why get an insurance quote
People who have the cheapest car and home insurance policies do so because they shop around for the best deals especially when theirs is coming up for renewal. For those choosing to accept their renewal quote each year, by letting your policy roll on you're probably paying far more than you need to when all you need to do is get a couple of quotes and see what deals are on offer.

It is usually the case that if you stick with the same insurer for more than 12 months you will be paying over the odds on your insurance because there are always insurers and insurance companies offering attractive low cost rates in order to entice new customers to their policies and most offer you online discounts.

There are now insurance policies which allow you to insure yourself against almost any eventuality. There's car insurance, buildings insurance, contents insurance, health insurance, life assurance and critical illness insurance. Mortgage payment protection insurance (MPPI) and even the family cat or dog can be insured.

Source: http://www.insuranceguideuk.co.uk/

Sat, 08 March 2008
Various Kinds of Health Insurances for Your Family
Health insurances play several roles in helping people when they end up in hospitals. Uninsured people receive very less medical care when they end up having health complications; this actually becomes a burden for the family as they need to spend thousands of dollars for the medical bills from the hospital. Getting a health insurance also gives you lot of additional benefits and added services, so getting yourself insured aids you with timely coverage for regular or at least with annual health check ups. According to a medical institute, there are nearly about eighteen thousand deaths in uninsured adults. This can be due to numerous reasons, for instance most of them weren’t able to afford for the medical expenses. Uninsured adults habitually get very few screening or preventive services. Shortfalls are noticed for many kinds of condition or illness, which is including screening for cancer diseases related to breast or cervical. As they are uninsured they often tend to ignore medical check ups, and they are more likely to get diagnosed only at a later stage of the illness, when treatment is not much successful. Pregnant women who are uninsured use lesser services, and children and adults who are uninsured are less likely than their insured counterparts to report having a regular source of medical care, to see medical providers, or to receive all recommended treatments and health check ups. Shortfalls are predominantly notable for conditions which are chronic. For example, adults who are uninsured and having heart conditions are less likely to stay on with drug therapy for high blood pressure. So how your health insurance helps you indirectly? If you have a health insurance, you frequently visit the doctor for regular health check ups, as you need not spend money on your doctor or the medical expenditure is very minimum. If you’re insured and you come to know that if you have health complications, then you can treat yourself earlier to avoid further problems. But incase you are uninsured; you try to avoid health check ups since you need to spend lot of money. The biggest disadvantage of being uninsured, is that, if you end up having any disease then you need to shell out large amount of money. Today there are many health insurances available, which offer you great medical or health coverage.

Source: http://www.ezine-writer.com.au

Mon, 17 March 2008
Different Indemnity Insurance Covers
Taking adequate indemnity insurance is important for everyone in today’s competitive world. Professional insurance companies and firms can provide different kinds of insurance protection catering to different needs and requirements. It is the best way to get adequate financial compensation and tension free life when things actually go wrong. In this article, we’ll talk about these different types which are important in our day-to-day life:

Professional Indemnity Insurance

One of the prominent insurance is professional indemnity (PI) insurance that protects a person against his or her legal liability for losses and damages suffered by the customers as a result of your negligent advice.

Employers Liability Insurance

Under this law, employees have the facility to take adequate liability insurance protection with an approved insurer to protect them against any kind of claim from employees for accidents or sickness caused through work.

Public Liability Insurance

In this type of insurance cover, an employer is free to take adequate protection against damage caused to the people as a result of your business activities. It also covers any related legal costs.

Product Liability Insurance

Such insurance policy can be taken against any kind of injury or damage caused by faulty goods. It is important for a person who indulges into manufacturing, repairing or retailing of goods and services.

Property & Content Insurance

As a responsible person, you can seek insurance protection against business property, including premises, fixtures and fittings, stock, computers and equipment. Freelances can seek protection for equipment used for business purposes, contents insurance, or purchase specific business insurance.

IR35 & Legal Expenses Insurance

IR35 Insurance pays costs to cover professional fees relating to tax investigations covering.

Income Protection Insurance

In this arrangement of insurance protection, regular income can be protected in case of long-term sickness, paying their salaries during the period of incapacity.

Permanent Health Insurance

This insurance protection helps you to get compensation in case of health related problems. It covers general insurance to critical illness medical problems.

By: Editor 123

Article Directory: http://www.articledashboard.com

Wed, 02 April 2008
How to protect your life insurance policy while going through a divorce
Brooklynn Anderson

Expert advice on protecting your assets in difficult times

Life insurance, more than most things you buy, relates to the circumstances of your life. You buy life insurance to protect your family from financial loss stemming from your death. You tie the amount of your life insurance to the money your family will need to provide an income, pay off debts, put children through college and cover financial commitments.

But what happens to life insurance when you’re about to dissolve your marriage? How do you deal fairly with a soon-to-be ex-spouse, yet still make sure you have coverage for the future? Is there a way to provide for adult children of a previous marriage without going broke -- especially if you have children through a second or third marriage?

Here are a number of considerations you should be aware of:

- Don’t assume that your insurance agent or company knows about your circumstances. If you don’t change your beneficiary, your former spouse may receive the proceeds of your policy upon your death. If the designation simply reads, “husband of the insured” or “wife of the insured,” and there is no new spouse, the secondary beneficiary receives the proceeds.

- You may be able to transfer ownership rights of the policy as part of a property settlement or to ensure continuation of alimony payments. Your ex-spouse may not press as hard for more support or a greater slice of an ongoing pension if he or she remains the designated beneficiary on a permanent life insurance policy. Of course, you need to ensure that your policy remains a valuable asset by keeping up premium payments.

However, transferring an existing cash value policy (as opposed to a term policy, may carry with it the burden of federal gift tax, unless you transfer the policy prior to divorce. Be sure to discuss this option prior to the finalization of your divorce.

- Don’t overlook the possibilities life insurance may provide for dealing fairly with children from your previous marriage. If you’re paying alimony to your previous spouse and have a second family with your new spouse, adult children from your first marriage may sue your estate after you’re gone if they aren’t dealt with at least as fairly as the children from your subsequent marriage(s).

A permanent life insurance policy can be an immediate "estate replacer" to children from your first marriage -- it helps you replicate accumulated assets that you wish to pass on to the children of your first family -- but can’t afford to without neglecting the needs of your new family. Essentially, you purchase a permanent life insurance policy on yourself and designate your adult children as beneficiaries. When you die, proceeds bypass the probate process and pass directly to your adult children. Your immediate spouse and any children from that marriage are left with your accumulated property and assets -- so you’ve provided for both families.

If you’re contemplating divorce, don’t forget the options you may have with respect to your life insurance coverage. Divorce is tough enough -- don’t overlook the flexibility and security this valuable asset can provide..

About the Author



Sun, 13 April 2008
Applying For Insurance Online
Were you aware that you could apply for insurance right over the Internet? Believe it or not but it is true. Basically every type of coverage you might ever need may be applied for right over the web and a secure server.

This seems insane to many older people, but the Internet really is changing the way people and companies do business. As a result, when you need health, life, or auto coverage, just to name a few, you can simply open up your favorite browser and then begin searching.

You will find out in a hurry that it is a major time saver and that there are many websites that will allow you to fill out a form and then they will do all the searching for you.

This is really cool because you can actually get quotes from quite a few different companies by filling out one simple form. That is very nice and it makes finding the right coverage considerably easier simply because you have multiple quotes available to you at once.

The easiest way to begin searching for coverage is to open up your browser and search for "insurance quotes". If you are interested in a particular type like life or health then you may add these keywords to your search query in order to target your results better.

Once you receive the results from the search you can begin clicking and checking out different offers. You may choose to get several quotes and compare them as well as the deductibles, coverage, and the like.

Or, you might want to use one of the websites that collects some basic information about you including income, needs, budget, and the like, and then recommends the best policy for you based on your answers.

Many people find this is very helpful because they simply don't know what policy will work best for them based on their personal factors. Luckily, there are online calculators that can help you figure things out. It seems there is an online calculator for practically everything on the web these days!

Online Application

Once you choose the policy that you prefer the best then in most cases you can apply online. You will need to fill out a form of personal information like your name, address, phone number, birth date, and the like. You will also need to provide past experience with insurance and if you were ever without policy.

Once you are approved for the policy you can make the first month's payment or make the first quarter payment. You will find that it really is easy to apply for insurance over the Internet and hat when you do you will really appreciate how fast the process is.

As a result, busy people should consider shopping for their policies right over the web and apply and pay for them at the same time. It sure does make life a lot easier! So, go ahead and give it a try and you will see how great it really is.

By: Ajeet Khurana



Wed, 07 May 2008
Life Insurance To Meet Your Very Specific Needs
When most people set out to buy life insurance, they choose either a term or cash-value policy. But policy choices and strategies are much, much more diverse today. Here are some strategies to consider..

*Combination of term and cash-value policies. Buying both types of policies is ideal when an individual or family wants a large amount of coverage and the savings benefit of a cash-value policy, but can't afford the high premiums.

Owning two types of insurance can work for first-time insurance buyers - or when owners of an existing cash-value policy want more coverage, but at an affordable price.

*First-to-die policy. Dual-career couples save 20% in premiums by buying one first-to-die policy, rather than two separate policies.

How it works: Death benefits are paid upon the death of the first spouse.

First-to-die policies can be cash-value or blended policies. Be sure the savings feature is worthwhile for your needs and that the policy's interest rate is favorable.

ESTATE PLANING

Life insurance can protect heirs in the event of death of the breadwinner and can help them pay estate taxes.

*Second-to-die policy. When one spouse dies, federal estate taxes are avoided because of the unlimited marital deduction. The death of the second spouse is another matter, and estate taxes can run as high as 55%. A second-to-die policy is indirectly used to pay the estate taxes due when the second spouse dies.

Important: Neither spouse can own this policy, or enjoy any of the powers of ownership, such as the right to change beneficiaries, The policy must be in the name of an heir or trust, which must also pay the policy's premiums.

*Credit shelter trust. This is to protect the lifetime exclusion of the first spouse to die, which is $1,000,000. A credit shelter trust is often used when an estate exceeds the exclusion.

Strategy: Name the credit shelter trust under your will as the beneficiary of your life insurance, or the surviving spouse may be able to disclaim proceeds into the credit shelter trust. Assets avoid taxes in both spouses' estates and are still available to survivors.

OTHER SITUATIONS

*Cash-value insurance policies offer protection against creditors in many states. Check with your lawyer or accountant. Another way to protect assets from creditors is to have a trust own your cash-value insurance policy. Trusts are untouchable when creditors seek assets.

*Funding divorce commitments. A spouse negotiating for alimony may want to have that covered by a term life insurance policy on the paying spouse. The beneficiary should own the policy to maintain control.

By: Carson Danfield1

Article Directory: http://www.articledashboard.com



Sun, 18 May 2008
Term Life Insurance. What Is It All About?
by: Donald Lusan

What is term life insurance? You have an interest in buying term life insurance, that is why you are reading this article, and you want to know how it really works. Right? Well, there are many types of term life insurance and I am going to give you a brief explanation as to how each one works.

Decreasing Term Life Insurance

Decreasing term life insurance is very popular with home owners and mortgage companies. The homeowners want to know that the mortgage is paid off if they should prematurely die, and the mortgage company want to be assured that they are repaid the money loaned to the homeowner. The face amount of these policies decrease in a uniformed manner each year as the balance owed on the mortgage decreases, and the premium remains level. This is very inexpensive life insurance.

Increasing Premium Term Life Insurance

This is initially the cheapest term life insurance you can buy. The death benefit remains level for the duration, however, the premiums increase every year and as a result this may turn out to be the most expensive term life insurance you can buy. If you should purchase this policy it would be wise to convert to a level plan as quickly as possible.

5 Year Level Term Insurance

The face amount of this policy remains level for the entire 5 year period and so does the premium. Upon death the face amount is paid either in one lump sum or in the form of an income. If you have a short term need for life insurance, like covering a bank loan, then this may be the plan for you.

10 Year Term Life Insurance

Like the 5 year term life insurance policy, the ten year term life policy can be used to cover a bank loan, but it can do considerably more. It can be used for family protection and a myriad of other needs. The face amount of the policy remains level for the duration and so does the premium. Some companies allow you to continue the policy after 10 years with an increase in premium.

20 Year Term Life Insurance

The 20 year term life insurance policy is probably the most popular of term life policies. The death benefit remains level for the duration and in some cases so does the premium. With some companies, however, the premiums increase after the first 10 years to reflect the cost of the additional risk to which the insurance company is exposed as the insured gets older. All in all, the 20 tear term life insurance policy is fairly inexpensive and does the job it is intended to do.

Unlike whole life insurance, universal life insurance or variable life insurance, term life insurance does not have cash values or earn dividends. There is a fairly new type of term life insurance policy, however, called a return of premium policy which returns all your premiums at the end of the term period, if you do not die. The premiums are so high it may not be worth your while to buy this type of term policy.



Thu, 29 May 2008
The 5 Common Mistakes Business Owners Make When Evaluating Their Insurance Requirements
Looking over your insurance premiums each year, you may be wondering how you could save a dollar or two on your next premium. As an intangible asset, it can be difficult to put a value on insurance ... until something goes wrong and you need to claim. Insurance specialist Brett Wrightson from Brian Bushell & Associates, highlights the five most common mistakes that business owners make when evaluating their insurance requirements:

Not Understanding Their Full Risk Profile

When reviewing your insurance needs, it's essential to sit down and determine what types of events could occur in your business that would create adverse impact. From there, you need to determine what would have the biggest business impact - in terms of dollars, time and effort. Then you need to work out how to ensure that you are adequately covered against these risks.

Often policy holders will do away with one part of a policy thinking that they can save money. For example, they will go for theft, fire and glass coverage, but not take out burglary even though it's a relatively minor additional fee.

It is Murphy's Law that the one thing you leave out is the one thing you need to claim for on your insurance. And it can be for the most oddest of items. The strangest story I've heard of is a fish and chip shop that was robbed of all their frozen fish. Although it was never proven, it was suspected that a competitor fish and chip shop, just around the corner, decided that they wanted a freezer full of product to sell without the set up costs!

Not Disclosing Everything!

Yes, it is true ... if you don't disclose everything upfront when you sign up your insurance policy, the insurance company is quite within their rights to not pay out on your claim. Worst still, they won't even refund your premium paid to date. Therefore, don't hold back. Disclose anything relevant to your insurance upfront to save any drama's at a later date.

nsuring Assets at Written Down Value Instead of Replacement Value.

It is essential that you insure your assets for REPLACEMENT value. In other words, how much would it cost you to repurchase the items insured at full price. A common mistake, particularly when purchasing an existing business, is to insure the assets at the "written down" (or depreciated) value, rather than replacement cost.

Being "cheap" on their premium

Don't get caught out by trying to save yourself a few hundred dollars on your insurance premium, to the detriment of being fully insured. Being cheap now could end up costing you thousands of dollars down the track.

Not listening to your insurance broker

Your insurance broker is the best person to advise you on insurance cover. Having seen many similar businesses to yours, they have seen other business owners go through the pain that you don't need to. Your insurance broker will know what works for your type of business and how to get it for the cheapest possible price. As an insurance agent, they know the ropes and can maneuver you through the subtleties in insurance policies which will save you dollars in the long term.

It's a quick, efficient and cheap way to grow your profits immediately!

Source:Tabitha Wellman

Wed, 11 June 2008
Insurance: Why worry?
During our lives all of us are exposed to the possibility of a variety of risk events such as:

Work accidents

Major illnesses

Death

House fire

Motor accidents

Theft

While death is of course inevitable at some time, some of the other risk events may never happen. Also the likelihood of some of these risks occurring may be greater at particular stages of our lives. For instance most major road accidents involve younger people while most major illnesses occur with advancing age.

Also at different times of our lives our financial plans and our dependents are more vulnerable to the financial effects of the risk events occurring. For example a family with young children, a large mortgage and only one breadwinner would experience tremendous pressure if the breadwinner became incapacitated for one reason or another.

The chances of being able to accurately predict when a risk event will happen are very slight. Occasionally there will be symptoms of the onset of a disease but usually these things come out of the blue.

Therefore, if our finances would be vulnerable to the consequences of a risk event, it would be wise to protect ourselves and our dependents against those consequences. This can be done in a number of ways, from taking steps to ensure that we are not endangered through to purchasing insurance that would compensate for the financial consequences of the risk event occurring.

Here are five steps that can help to manage personal risk:

1. Identify the risks that you are exposed to now and in the future.

You should look at the risks that may affect your body or that of your partner, such as death, disability, illness and the need for long term care due to aging. And you should consider risks from theft, fire and other misfortunes relating to any property you may have.

Another risk that some readers may need to consider is the risk that someone may decide to sue you for a loss that they consider you have caused them. This can particularly affect professionals and tradespeople. Often having adequate Professional Indemnity Insurance is a condition of operating in a particular field but if this affects you, you should ensure that your cover is adequate against likely successful claims.

2. Analysis of Risks.

The answers to the following three questions will provide a good basis for your risk management program:

What is the potential loss if the risk event occurred?

Who will suffer the loss?

How likely to occur is it?

The way they can work is illustrated in the following example:

Bill and Sue are in their early 30's and both have good jobs earning $50,000 and $40,000 respectively. They are paying $15,000 p.a. on the mortgage on their house and are saving $20,000 p.a., half in superannuation and half in other investments. Sue is about to leave the workforce to start a family and they need to consider what would be the impact of any reduction of Bill's earning capacity.

The answers to the three questions could be:

If Bill was completely incapacitated, the family income could reduce to zero, they could deplete their savings and in the worst case they could lose their house due to their inability to continue their mortgage payments. As well as their living expenses they need to consider the impact of medical bills which could make the situation worse. The situation could be eased if Sue were able to go back to work.

They would suffer these financial consequences directly. They could face extreme financial hardship which, of course, could drastically affect their child's future prospects. If Bill were to die he would not feel the financial effects himself but Sue would have to cope with the double whammy of financial disaster and grief at his loss.

In this instance, too much hangs on one person's health for it not to be vital to insure Bill against death and disability and to have good medical insurance for the whole family. However, his family medical history may give some pointer towards the need for particular protection.

Of course this is only one of the risks of death that this family is exposed to. They would also need to analyse the implications of any misfortune that could befall Sue. If she were to die or be disabled with a young family, the last thing Bill would need on top of his grief would be the extra financial costs of housekeeping and raising the children.

3. Reduction of Risks.

This is the process of doing something that will reduce the likelihood of a risk event happening. Again a set of three questions can be asked:

What precautions can be taken?

Are the precautions reasonable? (remember you have to live and

enjoy your life).

What will be the benefits of taking the precautions? These could be

reduced insurance premiums or other side benefits.

Often simple precautions like installing deadlocks or always locking the car can reduce the likelihood of loss quite considerably. And reducing weight, eating healthy food and giving up smoking can reduce the likelihood of early traumatic illness. You might even find that some of these actions (e.g. giving up smoking) can make your insurance cheaper too.

4. Consider Retaining Some Risk

It could be that the cost of obtaining protection might outweigh the benefits. Or the likelihood of the risk event occurring is very slight or its cost could be easily afforded. In these instances it may be prudent to retain the risk yourself, to self-insure.

Decisions on retention should not be taken until the previous three steps have been completed. It is also vital that we don't underestimate the consequences of the risk if we decide to self-insure. Remember we can't go back and tidy up once the event has happened. It is therefore prudent to get expert advice before taking this option.

However once a risk is identified, analysed and reduced as much as possible a rational decision to self insure may be considered. The questions to ask at this stage are:

If the event does happen what will be its financial impact? (can

you afford it?)

Can you afford the insurance premiums?

Can part of the loss be afforded?

Do the premiums represent good value?

5. Buy Protection Against the Financial Consequences of the Risk Event

When you have decided it would not be prudent to carry the financial consequences of the risk yourself you need to purchase appropriate insurance protection. This transfers the financial consequences of the risk event to the insurer and to compensate them for taking on that risk you pay them a premium.

The act of buying insurance does not reduce the likelihood of the risk event occurring but it does mean that the financial consequence is removed or reduced. In our earlier example, insuring Bill's life for a large amount will not reduce the likelihood of his death but it does mean that if that unfortunate event was to occur Sue and the family could cope financially.

The range of insurance cover that can be purchased is extremely broad. Cover for just about every conceivable risk is available. Some policies cover a number of related risks while others are very specific covering only the financial consequences of a very particular risk event. Some risks are covered by the policies of a number of insurers while for other more specialised risks only one or two insurers provide cover.

Different insurance policies provide a wide variety of different benefits which may include:

A specific lump sum of money.

A lump sum of money plus bonuses related to the company's

investment performance.

Cost of replacement of or repairs to a damaged or stolen item.

Provision of a stream of income

Meeting all or part of defined medical expenses.

Sometimes your premium will just buy cover for a particular period of time, at the end of which you have to renew your policy. In other instances the premiums are regular and may even have a savings/investment component built in.

Because the range of insurance on offer is so wide, you should shop around before you purchase. First you should find the policies on offer that cover the risks you need covered. Then you should read the policy to make sure that there are no exclusions relating to a particular risk you might face.

Also check that the benefits are in a form that will be appropriate should the risk event occur. And lastly you should look for the most cost effective of the products that would cover your particular risk need.

This can be very complex, so most people find it is very useful to purchase their insurance from an expert with specialist knowledge in that.

Source: Matt Davis



Sat, 21 June 2008
Protect Your Lifestyle With Income Protection Insurance
Income protection insurance can be a valuable product if you have mortgage repayments or credit card or loan repayments to meet each month.

No one knows what is around the corner and if you should become unemployed or have an accident or illness then you could be left struggling.

If you can get back to work very quickly then savings could get you by; however, if you should need months away from work to get back on your feet then savings would soon run dry.

A far better solution that does not have to be expensive is taking out an insurance policy that covers your income.

There has been much bad publicity surrounding payment protection products, of which income protection is one.

However, if you stick with a specialist in protection insurances you can be sure that you will be offered a quality product.

You can also make good use of the information that an independent specialist will make available on their website.

But by far the biggest benefit of going with an independent provider is the low premiums that are charged for cover, which will be based on your age and the amount of your income you wish to cover.

A specialist will allow you to insure up to a certain amount of your monthly income.

Income cover would usually begin to pay out tax-free amounts from between day 30 to 90 of being classed as unfit for work or unemployed.

The exact cover start day is stated in the terms and conditions of the policy, as is the length of time that the policy will protect you. This can be anything between 12 and 24 months to age 60, 65 or even for life, depending on the individual provider.

While in the majority of cases this would be enough time to recover and start earning again, occasionally the policy ends before the policy holder returns to work and this has to be considered.

You also have to be aware that there are certain terms and conditions that could mean income protection would be useless.

Exclusions have to be checked thoroughly.

Some are common to the majority of polices, while others are included by specific providers, so you have to compare individual terms and conditions that come with quotes when shopping around for the cheapest policy.

Working on a part-time basis, working for yourself, being retired or suffering from a pre-existing illness could all stop a policy being suitable.

However, exclusions are not clear cut.

Those who suffer from a pre-existing condition could be eligible to take out cover if the illness has not occurred within two years.

Self-employed individuals who have to stop trading on a permanent basis through involuntary reasons could also benefit.

A specialist provider will give the information in plain English so you can make an informed decision before tying yourself down to something that is not suitable.

Income protection insurance can give peace of mind and the financial security of being able to concentrate on getting better or finding a new job, but you do have to buy cover with consideration.

Source:

Sat, 28 June 2008
Do You Work For Your Money Or Does Your Money Work For You ?
The Poor Cash Flow Pattern

In order to understand the three basic cash flow patterns, you must first understand the difference between an asset and a liability. When you stop working for money, an asset is something that will put money in your pocket every month. A liability is something that will take money out of your pocket every month. This idea touches on the difference between earned income and passive income.

The first basic cash flow pattern is the poor cash flow pattern. Before most people even learn about money they want things, and so they learn first to work FOR money. As their income is earned it is just as quickly spent on their list of wanted items. The poor cash flow pattern has earned income flowing in and entirely back out to expenses.

It does not matter if you have a sizeable income, because money does not make you rich or poor. Money is just a tool. It is how you are managing the tool (money) that determines whether you become rich or poor. Even with a substantial income you are still poor as long as your focus is only to earn your income and pay your expenses.

You may make $500,000 a year, you may have enough income to cover all of your expenses, but if you were to stop working for money you would quickly realize that you are poor, and the idea that you were not was just a temporary illusion.

The Middle-Class Cash Flow Pattern

Eventually people get tired of this routine and begin to gain better understanding and control over their expenses. Enough time spent focused on working for money may produce extra income in the way of a raise or a promotion.

Most people still have not spent any time to financially educate themselves, so they don't know what to do with the extra money. They don't have any ideas of their own about financing their retirement, either. The extra money is usually used to buy a newer car, a bigger house, and anything left over usually accumulates as savings. Eventually most are sold on putting the extra money into a portfolio for their retirement, usually consisting of mutual funds.

These purchases make life more comfortable, and so feel like assets...but they create an expense every month for a very long period of time. The misunderstanding is made worse by bankers who ask you to list your cars and home as assets against loans. By definition, these purchases are liabilities.

The Wealthy Cash Flow Pattern

A change of focus to passive income leads people down the path to a wealthy cash flow pattern. When you look at the pattern of the wealthy you may notice- they do not get their income from a job. Their cash flows in from assets.

Imagine spending your time figuring out a process that will automatically produce some income for you every month. Now imagine duplicating and improving upon that process until it automatically produces your ENTIRE income every month. Finally, you will stop working for money. That process is a business, and that income is a passive income.

From that point forward you will be financially independent. You will not work for money, you will have money working for you. It might take you 2, 3, or even 5 years to establish a system to that point, but once you do you can retire. Once you retire, you have all of your time to spend however you like.

This is the reason understanding the three basic cash flow patterns is so important. These patterns demonstrate the reason why you can become financially independent in just a few years working at a seven dollar an hour job. Your biggest obstacle in the beginning is controlling your expenses and changing your focus from earned income to passive income. Once you have become committed to these fundamental ideas, only persistence stands between you and great wealth.

Written by: Frank Hills



Mon, 07 July 2008
Reducing Your Insurance Rates Dramatically -- 4 Time-Tested Tips For Any Policy
There are many different ways you can save in different insurance policies.

However, some things that will help you save in one policy will have no bearing whatsoever on another policy.

Here are things that will help you save across all insurance policies...

1. If you want a discount, get your health insurance policy from the same insurer you bought your other policies from.

Every insurer will typically offer a discount if you buy more than one policy from them.

Nevertheless, all the money you may get as discount may still be much lower if weighed with savings you'll make by getting your policies from several insurance companies.

2. Take it upon yourself to ask your agent or broker about all the discounts available to you with your present insurance carrier.

There's a possibility that your broker has left one or two out.

The only way to be sure it's false in your case is by taking the time to ask your broker to list out all discounts that your insurer offers.

Do not be surprised if you discover discounts that you've never heard of.

3. You'll attract cheaper rates if you opt to pay your premiums yearly and not monthly.

Yes, monthly payments might be stressless but it is also less affordable.

There are transaction fees that are incurred when processing a check. .

While a yearly payment attracts a single check and therefore a transaction every year, monthly payments attract twelve.

You'll then have to pay the total of twelve transaction charges.

Apart from this there are also administrative costs that are incurred due to the monthly payment option.

A clear example of such is the cost associated with sending out payment notices.

All such cost to your insurer is eventually borne by you (that's in addition to their own profit margin for providing such a "convenient" option).

4. You will reduce your health insurance rates by a huge margin if you take out time to do extensive and thorough shopping..

You will start your shopping right if you make inquires from friends about their experiences with different health insurance carriers.

Doing this helps you avoid being led to just the provider with the biggest hype but to the carrier that gives the best price/value.

An acquaintance is more likely to tell you if they had an unpleasant experience with a provider.

If you ask your friends and acquaintances - you'll hardly buy from a bad insurer.

5. You might save some hundreds of dollars by simply obtaining and comparing quotes from about five insurance quotes sites. And, it will require just a total of 25 minutes.

Written:Matt Davis

Sat, 12 July 2008
The Weird and Wonderful World of Insurance
A lawyer in Charlotte, NC purchased a box of very rare and expensive cigars, then insured them against fire among other things.

Within a month, having smoked his entire stockpile of these great cigars and without yet having made even his first premium payment on the policy, the lawyer filed a claim with the insurance company.

In his claim, the lawyer stated the cigars were lost "in a series of small fires."

The insurance company refused to pay, citing the obvious reason: that the man had consumed the cigars in the normal fashion.

The lawyer sued....and won! In delivering the ruling the judge agreed with the insurance company that the claim was frivolous.

The judge stated nevertheless, that the lawyer held a policy from the company in which it had warranted that the cigars were insurable and also guaranteed that it would insure them against fire, without defining what is considered to be "unacceptable fire," and was obligated to pay the claim.

Rather than endure lengthy and costly appeal process, the insurance company accepted the ruling and paid $15,000.00 to the lawyer for his loss of the rare cigars lost in the "fires."

But... After the lawyer cashed the check, the insurance company had him arrested on 24 counts of ARSON!

With his own insurance claim and testimony from the previous case used against him, the lawyer was convicted of intentionally burning his insured property and was sentenced to 24 months in jail and a $24,000.00 fine.

Written by : Matt Davis

Sun, 20 July 2008
Insurance policy confusion
Insurance law experts have called on insurers to address the confusion surrounding the definition of permanent disability in insurance policies...

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TurksLegal financial services partner Alph Edwards said unclear language at critical places in insurance policies means it is harder for insurers and trustees to administer them, resulting in unnecessary costs to consumers.

“Currently, the wording in many life insurance and superannuation policies with cover for total and permanent disability (TPD) is causing lack of consistency and uncertainty for all involved – courts, insurers and consumers,” he said.

“Insurers and super trustees need to clarify this immediately.”

According to Edwards, the latest NSW Supreme Court decision (Mabbett v Watson Wyatt Superannuation & Anor) highlighted the need to address the issue.

While the court confirmed that the correct date for assessing the likelihood of an applicant’s future return to work is six months after leaving a job due to injury, a previous judgement suggested the correct date was when the insurer came to assess the claim.

“Here’s a case where the judgement is totally at odds with another judge’s decision on essentially the same thing… It’s not the judge’s fault. It’s a fundamental lack of clarity in what they are being asked to interpret,” Edwards said.

“This decision throws out a challenge for life insurers and super trustees to think about the words they use in their group life policies and make the necessary changes to make it absolutely crystal clear how you go about assessing TPD, including this time issue.”

Edwards said this was just one of several traps inherent in the definitions and that needed urgent attention.

SOURCE: Justin Lim - Money Management

Sat, 26 July 2008
Who wants to be a millionaire?
Australia now has more of them than Brazil or Spain. John Collett looks at the reasons why.Thanks to the resources boom, the ranks of Australia's millionaires swelled more quickly last year than in most other developed countries...

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The number of Australians with financial assets of at least $US1 million ($1.03 million), excluding the family home but including superannuation, rose 7.1 per cent to 172,000, according to a survey by Merrill Lynch and Capgemini.

Of the 71 countries surveyed, Australia ranked 10th by number of millionaires.

Australia has more millionaires than Brazil and Spain, despite those countries having much bigger populations. As expected, the US is still the richest country and is home to 3 million of the world's 10 million millionaires.

Yet the large emerging economies of China, India, Russia and Brazil are growing their ranks of millionaires much more quickly than countries with fully developed economies. China, which had 415,000 millionaires last year, is on the verge of overtaking Britain and its 495,000 millionaires.

However, the credit crunch and turmoil in world financial markets slowed the millionaire club's growth rate last year and is expected to affect this year as well.

Wealth in Australia has been generated in several ways, says Thomas Alexy, Merrill Lynch's head of global wealth in Australia. Certainly, the booming demand for commodities has helped, he says.

"But the wealth comes in a lot of shapes and forms."

Apart from the handful of lottery winners, the prerequisite for building wealth is either being successfully self-employed, having a job with a high income or receiving an inheritance.

Yet plenty squander their income without having much to show for it.

Those with discipline who get good advice and take full advantage of Australia's quite generous tax system for borrowing to invest tend to do the best, Alexy says.

He says successful long-term investors are those who preserve their capital with good asset allocation and "never try to hit the big home run".

Andrew Inwood, the founder of brandmanagement, which conducts market research for the financial services industry, estimates that one in four of Australia's millionaires was born overseas.

"Migrants with money used to be mostly from Europe but are now from Asia and even the Middle East and Africa," Inwood says.

He says another striking feature of Australia's millionaires is that about three-quarters own their own small or medium-sized businesses and more than 70 per cent are tertiary educated.

PATIENCE

Doug Turek, the founder of high-end financial planning firm Professional Wealth, says wealth is driven by age, income and a few habits or traits - the main one being patience.

"Barring a few dotcom or iron ore millionaires, it is very hard to accumulate assets quickly; you need time for these things to build. It doesn't necessarily matter if your investment focus is strictly shares or direct property, or a mix of those things or even building a business. The key is having a disciplined focus over a long period of time."

Turek has developed an online survey (www.wealthbenchmarkets.com.au) where people enter their financial details anonymously and in return are told how their wealth compares with others of the same age and income.

More than 90 per cent of the participants in the survey are male. "Males seem to be picking up higher income roles than females," Turek says.

"There is plenty of other research to show that women, because of their time out of the workforce and inequalities in roles and promotion, are not as wealthy as men."

However, Turek says the marked predominance of wealthy males in his online survey may be partly because men are more comfortable than females in sharing their financial information, even though it is given anonymously.

"It is a male-dominated wealthy world," he says.

One of the key determinants of wealth is the family situation. "Being together and not divorced is a very strong success indicator because of the tremendous financial costs of separation over a lifetime," Turek says. "If you have been divorced, your net worth will only grow to three-quarters of those who are not."

PENNY PINCHERS

Inwood, whose company recently conducted a focus group with wealthy people, says some millionaires enjoy an extravagant lifestyle but most are modest in their spending. They tend not to spend that much on clothes and holidays, and are generally "tight" with money but will spend on quality things.

Turek says working overseas is also good for building wealth. "We have found that those that have spent time working overseas have a higher net worth than those who have not.

"You can think of professionals who have worked for a law firm in London or for an investment bank. Then there are those who have grown up in another culture and economy, and have come to Australia as a wealthy migrant."

It is not only those on particularly high incomes that have become wealthy.

Inwood uses a lower threshold for the definition of a high-net-worth individual than many other researchers. His definition is those with assets of more than $450,000 outside of their homes and superannuation. Recent research by brandmanagement shows that about half of them earn less than $100,000 a year.

They are those in their 50s and 60s, the baby boomer generation who have enjoyed rising house prices during the 1990s and 2000s and have good savings and investment habits. Home ownership has given them a springboard to borrow and invest.

Now that house prices are much higher than when the baby boomers first got onto the property ladder, it remains to be seen whether younger generations will fare as well.

SOURCE: John Collett - The Age

Mon, 28 July 2008
7 Cash Flow Steps to a Healthy Budget
The word budget can strike fear into even the strongest of people. If there is one thing very few people are ready for when they leave the safety of home for the first time it is dealing with money. There are not too many people who even know how to balance their chequebook after they open their first chequeing account. So creating a budget can be a scary proposition for anyone who isn't good at keeping track of their money.

But if we look at a budget in a different light then maybe it will be easier to live with what it is. And all it is is a cash flow plan. All a budget does is track where the money is flowing from and where it is flowing to. Cash flow; it's what makes the world go around.

Here are 7 steps you can use to plan your cash flow and before you know it you'll have built a budget. Start with a piece of paper and a pencil; you can save those fancy budgeting software packages for later.

1. Write down your monthly income. If you are a salaried worker this should be easy. If your income is not that steady then add up the past three months worth of income and average it by dividing by three. This will give you a good starting point.

2. Start writing down all your monthly expenses. Mortgage, rent, car payment, credit card payments, utilities, groceries, eating out, entertainment, and anything else you spend money on. For those expenses that fluctuate, such as groceries and gas, use the three month average method to get an accurate amount.

3. Here's the scary part for most people. Subtract the expenses from the income and see what's left. You will either have a positive cash flow or negative cash flow. Unfortunately in this day of increasing debt most people have a negative cash flow.

4. Once you have your monthly cash flow laid out in front of you you can start assigning your money to your expenses. As you make those payments throughout the month write them down to see how your spending lines up with what you have budgeted for that particular item.

5. If you have a negative cash flow then you can start looking at everything you have written down and find areas where your spending may not be in the best interest of you financial goals. As you do this you can free up money for more important financial considerations.

6. The first time you do a cash flow plan it probably won't work out quite right. It normally takes about three months to get everything working right while you figure out where your money has been going every month. Be patient with your budget and before long it will start working and you will regain control of your money.

7. Once you are comfortable with your written budget and you have better control of where your money goes and what it does then consider investing in some budget software such as Quicken. It can make your cash flow plan much easier and with the added features like retirement and tax planning it can give you a solid financial future.

By using these 7 cash flow steps you can begin your budget quickly and easily. Only by taking back control of your money can you improve your financial future for you and your family.

Written by:Andrew Bicknell

Tue, 05 August 2008
Choosing A Disability Income Protection Insurance Policy
People often make the mistake of shopping for an individual disability insurance policy the same way they would for a term life, or car insurance policy.

The concept seems simply enough, "If I get disabled, the insurance company should pay me." Therefore many shoppers spend time comparing quotes from different disability insurance carriers, and trying to find the lowest price.

The internet makes this task even easier when a shopper can simply search for disability insurance on Google, and request free quotes from the top ten search results.

According to statistics, 66% of the people who buy a disability insurance policy in this way will never have a problem because 66% will never become disabled for 90 days or longer before they retire.

However, 33% will become disabled before they reach the age of 65, and therefore will need to understand how the individual disability insurance policy purchased will work.

Buyer beware, not all disability insurance policies work the same way. In fact, no two policies are the same at all.

Definition of Total Disability

The first thing you need to compare is the definition of total disability. This will dictate exactly what the insurance company will pay out a total disability claim for.

While many carriers have slight variations on this definition, there are essentially three major definitions in use in the market today.

The most comprehensive is a Pure Own-Occupation definition of total disability. This definition will result in you being paid the total monthly benefit if a sickness or injury prevents you from being able to perform the material and substantial duties of your regular occupation, even if you are engaged in some other capacity.

The middle definition is a modified own-occupation or income replacement definition. The definition will begin the same way as a pure own-occupation definition does, except for the last sentence which will say so long as you are not engaged in any other occupation. This means the policy will pay you so long as you are not earning any earned income while on a claim.

The third major, and least comprehensive, is the gainful occupation definition which starts the same way as the previous two, however adds the language are unable to perform any occupation for which you are qualified by education, training, or experience. This means the insurance company could say that while you can not work in your current occupation they believe you could do something else, and therefore not pay your benefits.

As you can see, the three definitions are very different, and depending on your income and occupation, the price could be different as a result.

Residual or Partial Benefits

There are so many variations to residual or partial benefits that I could not possibly cover them all in this article.

If you take anything away from this article, make sure you understand when and how the residual or partial disability benefits pay in your individual disability insurance policy.

There are policies out there that allow professionals an unlimited recovery benefit as part of their residual benefits. This means that any fee for service professional would be paid under their residual disability rider for the entire benefit period until they financially recovered, not just until they physically recovered.

There are also policies that just pay a straight forward percentage of the monthly benefit depending on your percentage loss of income, and policies that pay a limited partial benefit.

The scope of benefits is extremely large, so make sure you understand the differences before selecting a policy on your own.

Inflation Protection

My feelings on inflation protection are mixed. It is something you always want to have if you are on an extended long term disability insurance claim, however if you only have a short term claim it is not going to help you.

If you are younger, I recommend purchasing this option every time because there is a longer period of time that inflation could affect your benefit amount while on claim.

If you are older, feel free to make your own decision. You can always buy it now, and drop it later on in life when inflation is not much of a threat to you.

I hope some of these tips help you make an educated decision when purchasing your own individual disability insurance policy.

It is not a contract where browsing by price will give you the best deal, it will only mean you bought the cheapest disability insurance policy out there.

Written by:Steven Crawford

Mon, 11 August 2008
How to Find Affordable Health Insurance
by: Dr. Deepak Dutta

Affordable health insurance - it seems, especially today, those words just don't belong together in the same sentence. Health insurance monthly premiums have become the biggest single expense in our lives - surpassing even mortgage payments. In fact, if you have any permanent health problems, such as diabetes, or have had cancer at one time in your family history, your monthly cost could easily be more than the house and car payment combined.

Shopping for affordable health insurance can certainly be an eye-opener. If you have always had a health insurance benefit where you work - especially a state or federal employee - and now have to buy your own, you may not be able to afford the level of health insurance coverage you have become used to.

Affordable health insurance, however, is definitely available -if you know how and where to look.

When you are looking for affordable health insurance, you want the lowest cost per year that will fit your budget, of course. But, even more importantly, you want a company that has a good record for paying without fighting with you on every detail. Just as there is a car for just about any budget, there is also affordable health insurance. You may not be able to afford a "Cadillac" policy - but then you probably don't need all the frills anyway.

Shopping for health insurance on the internet is the easiest and best way to find affordable health insurance. Here are five reasons why.

1. You don't need a local agent to help you submit the claims for health insurance. The medical provider does it for you. You save money because the health insurance company saves money by not paying the agent commission. This could amount to an 8% to 12% savings to you.

2. All the top health insurance companies are at your fingertips on the internet. Most local agents can only quote you from the few companies that they represent. They may not offer you what is best for you financially or health-wise but only what they happen to have available.

3. Health insurance companies have to be extremely competitive because it is so quick and easy to compare them with their competitors on the internet today. In the past you would have had to visit physically eight to ten agents to do a similar comparison. Most folks just didn't have the time or desire for that.

4. You can change your coverage, deductibles, and payment options with just a few clicks rather than going through the paperwork delay with a local agent (and then finding out he/she made a mistake - more delay).

5. Charging to a credit card means you aren't going to forget a payment and be without insurance. Also, it gives you another 30 days before you actually have to pay. Also, many companies today give an additional discount for "auto-pay".

The key, however, to finding affordable health insurance is realizing that the purpose of any health insurance is to protect you from a major financial loss - not to protect you from spending small money on clinic visits and sliver removal. These small expenses may be cumbersome but they generally will not hurt you. It's the $100,000 heart operation that will break you. That's the financial disaster health insurance was originally designed to prevent.

Also, keep this in mind. Health insurance, as with any insurance, is a gamble. You are gambling that you will draw out more than you pay in. Your health insurance company is gambling they will pay out less. The odds are in their favor for two reasons. They have all the facts for millions of families to average out, so they know the risk in advance. Also, they get to set the rules and the prices. The higher you set your deductible, the more risk you take. This is not a bad thing at all. You will most likely be the winner in the long run.

Yes, finding affordable health insurance is much easier than most people think.

Taking more of the risk with higher deductibles, spending a little time on the internet comparing eight to ten different companies, and deleting coverage that you will not likely need (such as maternity for many folks) will make it very possible to find your own affordable health insurance.



Mon, 18 August 2008
Which Credit Card is Right for You
If you're in the market for a new credit card, there is a bewildering array of cards to choose from. There are even more incentive offers, so how can you decide on the card that is best for you? Here are some of the factors to consider.

What Kind Of Payer Are You?

The most crucial question is whether you are a person who clears the credit card every month or whether you always leave a balance on the credit card.

If you pay up at the end of every month, then you can go for a credit card that offers an incentive. If not, then you need to look at the annual percentage rate (APR) on the card. If you know what your typical credit card balance is, look at the illustrations given by card issuers to give a guide to how much you might have to repay over time.

Taking An Interest

Even with interest rates, you need to be careful. Although your new credit card may come with a 0% balance transfer rate, this is not the only rate to think about. Look at the rate on purchases or other transactions to see what you might be paying. And remember that any payments you make are likely to pay off the transferred balance first, while any new spending accrues interest.

Compare Credit Cards

Want to know which card is right for you? Why not check out our credit card comparison page to view a table comparing features and benefits of some of the most popular cards. Click here.

Hand in hand with the interest rate goes the interest-free period. This is the delay between spending money on the credit card and being charged interest. This can vary considerably depending on the card you choose. The interest free period can be as much as 56 days. And it's how you use it that counts. If you put major spending on the credit card after the statement date, you have a month till the next statement, and then a few weeks to make the payment. This can be a good way of managing cash flow.

Look At The Fees

There are three types of fees that count with credit cards. The first is the cash withdrawal fee. Many credit card issuers charge you for withdrawing cash at an ATM. These fees can be around 2% of the transaction. The percentage is even higher when withdrawing cash abroad. If you must use the credit card, then you're better off making one large withdrawal so you don't pay the minimum fee each time.

Getting Some Cash Back

Some credit cards offer annual cashback deals which are great for people who clear their balance every month, but not so good for others. If you don't clear your balance, the interest charged will wipe out any cashback gains. There are also reward points schemes that allow cardholders to earn money from their spending – and spend it again with a variety of high street and online retailers.

Paying attention to these items will help you to choose a credit card that will match your financial situation.

Source:Amanda Cherry

Sat, 23 August 2008
How much is your life worth?
By Sarah Mills, ninemsn Money

Putting a number on your life can be a bit disconcerting, possibly even disappointing. The thought of mortality can be sobering and many people avoid the issue altogether. However, we are all going to die and it is common sense to address the topic of life insurance sooner rather than later.

By your mid-30s the chance of contracting a degenerative disease starts to rise sharply. Degenerative diseases include cancer, heart attack, diabetes, arthritis, Parkinson's, Alzheimer's and multiple sclerosis, to name just a few. Any of these can cause debilitation or death, as can an accident.

How much should I insure for?

Deciding on a life insurance payout can be tricky. Some might consider themselves priceless but insurance companies prefer to deal in specifics and they do have limits.

Generally, the higher the lump-sum payout, the higher the premium — to a large extent insurance companies leave it to the individual and market forces to arrive at a figure.

A $1 million term insurance policy, for example, will normally cost a healthy person in their late thirties about $70 a month or $840 a year. Many insurers put an upper limit of about $2 million on an average life. If you wish to insure for more than this, you may have to take out separate policies with different companies.

When calculating the amount of life insurance you want, the first step is to calculate your cost of living — mortgages, bills, food, rent, debt, clothing, transport and so on. This will help you determine how much money you will need to survive if you are unable to work because of a life-threatening condition or how much money your family will need to survive in the event of your death.

One quick method to estimate life insurance is to calculate your gross annual income and times it by 20 years. An average gross weekly family income of $1324 translates to about $70,000 a year or $1.4 million over 20 years.

However, insurance is needs based and the amount you insure for should primarily reflect your stage in the life cycle.

Single people

A single person with no dependants does not have a great need for life insurance. Any policy would only really need to cover net debts and funeral costs. Average personal debt outside home loans includes HECS debt, credit card debt, car loans and personal loans and averages $14,400.

Married couples

For those married with a mortgage, the stakes rise. If one partner dies, the capacity of the remaining partner to repay the mortgage is severely compromised. This is exacerbated by the fact the economies of scale on the cost of living available to couples are withdrawn. Any insurance would need to cover mortgage repayments, other debts and funeral costs, with something left over as a cushion to fund the grieving period.

Couples with children

Life insurance is critical for people with children. According to ABS statistics, 4400 parents die each year. While this is only a small percentage of the 2.7 million families in Australia, if you or your partner prove to be one of the 4400, that is little consolation.

A report by AMP and the National Centre for Social and Economic Modelling shows an average family is likely to spend about $448,000 in today's dollars to raise two children from birth to age 20. Another report in The Bulletin in 2005 estimated that the cost of raising a child to age 18 for a typical higher income family was just over $500,000.

It would be safe to assume then that the parents of a two-child family would need to be insured for at least $1 million. This would cover mortgage repayments, education, food, clothing and other expenses over the life of the child. Inflation also needs to be incorporated into the calculations. Those with businesses also need to calculate business debts and assets.

These figures assume a speedy death. For those suffering loss of income arising from a health problem, medical costs also need to be factored into the equation.

Life insurers offer a number of packages to meet the life stages of different individuals and they usually offer a lump sum or pension in the event of death, total and permanent disablement, accident and trauma. Working from an average figure like this, you will need to determine how much you are prepared to insure yourself for. If a family can't afford to insure both parents, the primary wage earner should be insured.

Types of insurance

How much you insure your life for will depend very much on the type of policy you take. Offerings usually fall under the following categories:

Term insurance

Whole-of-life insurance

Income protection insurance

Accident insurance

Mortgage insurance

Business overheads and insurance

Trauma insurance

Policies that mature and return a lump sum or a pension after a certain period are more expensive and have an investment component. They can be regarded not only as insurance but as savings.

Premiums

Your premiums will be set according to your risk rating. Insurers have four general risk categories:

Preferred

Standard

Substandard (this normally refers to those with a high-risk job or hobby)

Uninsurable (those with a terminal illness)

Beneficiaries

Insurance companies will issue a beneficiary form to new policyholders, asking them to nominate the payee. It is essential that this is completed, otherwise the lump-sum payout can get held up in the estate — sometimes for years, depending on how quickly a will is processed.

It means the proceeds will go directly to your nominated beneficiary as soon as the claim has been processed. This means your loved ones will have access to sorely needed funds in the shortest possible time. Under law, the person nominated on the insurance beneficiary form takes precedence over the benefactors of a will.

Joint or single insurance

Most couples have the option of taking out joint or single insurance. Joint life policies are cheaper but they usually pay out on the death of the first policy holder, leaving the second person uninsured at an age when the premiums shoot up in price. However, so long as all obligations have been met by the first payout, this may be worth it.

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