Insurance
Estimate the Value of Your Home For Insurance Purposes
December 9, 2011 | 
Author 
Your home is an asset. It’s important to insure your house, because it is probably your largest investment, and if anything goes seriously wrong, you could lose a lot of money without coverage. Once shaping the quantity of homeowner’s indemnity coverage, indemnity companies take some factors into concern. You want to insure to the full replacement cost of your home, so that you can afford to rebuild from the ground up if the unthinkable happens.
Replacement cost means how much is needed to replace structure that is damaged or destroyed, without taking away depreciation. This is not your house’s market value. The definition of market value includes the price paid for the house as well as several variables such as market conditions, the home’s age, and the location of the home. Replacement cost changes as labor wages and cost of materials get higher or lower in your area, but they are always based upon the same criteria.
Once your house has been appraised, you’ll have the appropriate figure for the official replacement cost, which you can then provide. You just require creating a change bearing in mind the price increases rate for the structure equipment and effort. You should record all adjustments made to your home including any that increase the value: renovation, add-ons, installation of surveillance system, and others in your calculation of the cost associated with replacing the home.
However, certain insurance companies may actually choose to send a member of their staff in order to find the actual replacement cost of your home. There are questions that might better be discussed with your agent such as a guide to what it costs for replacements. If your home was specially made, check with the local builders’ association or builder with a fine reputation for an approximation.
If you’d like to estimate your home’s replacement value yourself, the internet has some replacement calculators. Sometimes you will have to pay something but most often they are gratis. Getting Insurance for Your House.com as well as Building-Cost.net are instances of spots with free cost calculators. Getting Insurance for Your House – you can go to this website and get a quick dollar value for replacing your home; all you need to know if the footage and location of your home. Building-cost.net has a more detailed approach; the homeowner answers a list of questions to give a replacement cost calculation broken down by things such as material costs, labor, and equipment.
If the outcome generated by these open substitution calculators are not enough to decide the insurance coverage of the house, then you can attempt using the fee-based substitution calculators. For instance, Xactware.com uses the same database used by insurance companies to settle on the substitute price of a house. InsuretoValue.com on the other hand, offers two kinds of substitute cost assessment reports: one based on zip code and another based on the detailed individuality of the house.
The main consideration is the price and cost of replacing your home and this should be calculated no matter what coverage option is decided upon. The coverage of your homeowner’s insurance mostly depends on the right calculation. Protect your home, which is an investment, by getting the best estimate for its replacement cost.
By: Renata Lavlor
Posted in Insurance | 
Tags: Add Ons, Approximation, Bearing, Calculators, Depreciation, House Value, Indemnity Coverage, Insurance, Insurance Companies, Insurance Purposes, Investment, Local Builders, Renovation, Replacements, Reputation, S Market, Several Variables, Surveillance System, Unthinkable, Wages | 
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ULIP’s – Life Insurance Coupled with Equity Returns
UNIT-linked insurance plan which is popularly known as ‘ULIP’ is the flavour of the season.
The conventional Insurance policies have a fixed relationship between the premium and the sum assured. Whereas ULIP allows the policyholder to choose his own sum assured within certain limits, for any given premium. The policyholder may then have the right to adjust his sum assured up or down, again within certain limits according to his circumstances.
Features of a Unit Linked Insurance Plan
Unit linked insurance plan (ULIP) is life insurance solution that provides for the protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). The policy value at any time varies according to the value of the underlying assets at the time.
ULIP provides multiple benefits to the consumer. The benefits include:
” Life protection
” Investment and Savings
” Flexibility – in Sum assured, to increase the sum assured, investment, etc
” Adjustable Life Cover
” Investment Options
” Transparency
” Options to take additional cover against – Death due to accident, Disability, Critical illness etc
” Liquidity
” Tax planning
Unit linked Insurance plan provides insurance protection against the risk of death combined with a provision for long term investment in the equity market, which are structured differently.
ULIPS are basically an investment type of plan, wherein the Life assured decides the quantum of contribution which he can set aside on a regular basis towards premium. He also has the flexibility to decide the risk cover, i.e the Sum Assured for his policy.
Based on the Sum assured and the contribution for the policy, insurer deducts charges towards life insurance mortality charges i.e, risk premium, administration charges and fund management charges. The rest of the premium is invested in funds that invest money in stocks or bonds.
The policyholder’s share in the fund is represented by the number of units held in his account. The value of the unit is determined by the total value of all the investments made by the fund divided by the total number of units.
At any point of time i.e., maturity or surrender, the cash value will be equivalent to the number of units held by the insured multiplied by the unit price. In case of death claim, it will be unit value, plus the sum assured if any under the policy.
Pricing of Units
Method of pricing the units depend on whether the company is purchasing or selling assets (stocks). While purchasing of assets the units will be priced on Appropriation basis and while selling of assets the Expropriation basis of pricing will be applied.
Different method of pricing is adopted to safeguard the existing policyholders from the inflow and outflow of funds due to purchase/sale of units.
Appropriation Price
This will be applied when the fund is expanding. In this method of pricing, the unit price is calculated as follows:
Unit Price = (Market value of fund + expenses for purchase of assets + current assets + income – charges – current liabilities) / Number of units in the fund.
Expropriation Price
Expropriation Price will be applied when the fund is contracting. In this method of pricing, the unit price is calculated as follows:
Unit Price = (Market value of fund – expenses for sale of assets + current assets + income – charges – current liabilities) / Number of units in the fund.
The bid/offer spread
There are two different prices for a stock. One is a Bid price and the other is Offer price. Bid price is the price at which you can sell the shares and the offer price is the price at which you can buy them. The first is always lower than the second, and the difference between them is called the spread.
Insurance companies offer a range of funds like Growth Fund (Equity Fund), Balanced Fund, Secured Fund, Income Fund etc. The insured can direct the company to invest his contribution in the fund of his choice.
Balanced Fund
This type of fund buys a combination of common stock, preferred stock, bonds and short-term bonds, to provide both for income and capital appreciation while avoiding excessive risk. Such diversified holdings ensure that these funds will manage downturns in the stock market without too much of a loss.
Growth fund
This fund aims to achieve capital appreciation by investing in growth stocks. They focus on companies that are experiencing significant earnings or revenue growth, rather than companies that pay out dividends. The hope is that these rapidly growing companies will continue to increase in value, thereby allowing the fund to reap the benefits of large capital gains. In general, growth funds are more volatile than other types of funds, rising more than other funds in bull markets and falling more in bear.
Income fund
This fund emphasizes on current income in the form of dividends or payments from bonds, rather than emphasizing growth. Income funds are considered to be conservative investments, since they avoid growth of stocks.
How is it different from conventional insurance plan?
Unit-linked insurance plans are distinct from the more familiar ‘with profits’ policies sold for decades by the Life Insurance Corporation. In conventional insurance plans, the sum assured is decided by both the insured and insurer jointly. Insured will opt for a sum assured based on his family’s requirements and the insured will agree to that sum assured based on the insured’s repaying capacity. ‘With profits’ policies are called so because investment returns (profits) are distributed to policyholders in the form of a bonus, which is declared on a yearly basis based on the Company’s performance in a year.
In ‘with profits’ policies, the insurance company credits the premium to a common pool called the ‘life fund,’ after setting aside funds for the risk premium on life insurance and management expenses.
Every year, the insurer calculates how much has to be paid to settle death and maturity claims. The surplus in the life fund left after meeting these liabilities is credited to policyholders’ accounts in the form of a bonus.
In both ‘with profits’ policies as well as unit-linked policies, a large part of the first year premium goes towards paying the agents’ commissions and other expenses of the management.
But Unit linked polices has an edge over other forms of insurance because -
” Liquidity is high,
” Return on Investment is high,
” investor knows exactly what is happening to his money,
” investor can choose the assets in to which his funds are to be invested
” investor gets the same returns that the fund earns, he also bears the investment risk.
” transparency makes the product more competitive.
ULIPs claim to give an investor the best of both worlds – high returns and risk cover.
Top Ups
Insurance companies allow an insured to make lump-sum investments in excess of the regular premiums. They are called top-ups and are charged at a much lower rate – usually one to two per cent. The expenses incurred on a top-up including agent commissions are much lower compared to the regular premiums.
Some insurers, like Aviva, also give credit on top-ups. For instance, if you pay in Rs.100 as a top up, the actual allocation to units will be for Rs.101 instead of Rs.100. If we keep the regular premiums to the minimum and increase the top ups, we can save up on charges, enhancing returns in the long run.
Switching
Most of the Insurers provide switching facility. Switching refers to sweeping of funds either partially or fully from one fund to another. This is subject to certain charges and completion of minimum period from inception of policy. Normally insurers maintain multiple funds consisting of varied portfolios and the policy holder is free to choose his fund type.
After sometime if the assured wants to move his fund to another fund owing to the increased returns, security of funds etc. he is free to switch his funds.
Conclusion
In the changing scenario of economic development where the globe has shrunk to a village, everyone has to seek the ways and means of exploiting the opportunity to one’s best ability. Insurance companies give this opportunity to small investors who have money but lack intelligence in the field of investment in the capital market. Unit linked products help small investors also to play a role in the share market with minimum risk and maximum profit.
By: Rajalakshmi Satish Kumar
Posted in Insurance | Tags: Administration Charges, Asset Value, Conventional Insurance, Critical Illness, Flavour, Fund Management, Insurance Plan, Insurance Policies, Insurance Protection, Insurance Solution, Insurer, Investment Options, Investment Type, Liquidity, Long Term Investment, Policyholder, Premium Administration, Risk Premium, Tax Planning, Ulip | No Comments »
Business Life Insurance 13 – What is Fair Market Value?
There are several variations of the description of F.M.V. (fair market value) is defined.
Fair market values are the highest price that a willing payer will pay in open market to a willing buyer, both being informed of the qualities of the property concerned and both parties are not under pressure to conclude the transaction. Beware if the buyer is not aware of some aspects of the business or if the seller is under pressure to sell, then the price could very well differ than the settle price.
What is the best way to determine the F.M.V.?
1. Both parties need to agree on the present day value.
2. Willing to adjust to reflect the changing nature of the business at agreed upon interval.
3. Obtain a present day value by the services of a professional evaluator. With their investigation and experience, a value could be established that would, amongst other considerations, include the following:
a) The business assets.
b) Past performance obtained from the Financial Statements of the business
c) Future potential of the business.
d) Human resources in the company.
e) The fair market value of comparative companies.
f) The industry in particular and the economy in general.
g) Nature of such business.
h) Assets: a comparison book value, adjusted book value and forced sale value.
i) Combination of Assets and Earnings: a going concern evaluation combined with assets and an estimate of the goodwill value.
j) Earnings Capitalization: earnings multiplied by a number of years
and the other factors such as interest rates, financing, available markets, etc.
I hope this information will help. If you need more information of the above subject, please visit my home page at:
By: Kyle J Norton
Posted in Insurance | Tags: Business Assets, Business Insurance, Business Life Insurance, Capitalization, Comparison Book, Earnings, Economy, Fair Market Values, Financial Statements, Going Concern, Goodwill Value, Human Resources, Interest Rates, Interval 3, Nature Of The Business, Norton, Present Day, Professional Evaluator, Variations, Willing Buyer | No Comments »
A Full Array of Insurance Needs For Full Homeowner Protection
Moving to a new home typically brings great excitement to a family and it should. There are few life events that carry the impact of adapting an established lifestyle to new accommodations and new surroundings. It is a time of great discovery for all of you and especially for your children; this is where and how dreams are made and memories are formed. For adults, that discovery is tempered with the necessities of protecting that investment and preserving your family’s dreams. Even as you are unpacking your things and settling in, thoughts need to begin about the whole of your insurance needs.
The purchase of a home involves more than just considerations about Homeowners Insurance coverage. Here are some types of insurance that need to be reviewed and adapted to the needs of your recent move:
Homeowners Insurance
Insurance to protect this most sizable of assets is a must. The simple act of procuring a mortgage on your new home carries with it the necessity of purchasing adequate Homeowners Insurance; the mortgage company typically mandates it, as their stake in the property is as true as is yours. While this is typically a tough time to lay out more cash and accept additional financial obligations, you need to make sure that the amount of coverage that you procure will adequately protect you for all possible losses, and you need to do it immediately; unforeseen circumstances can come at any time and cause significant damage and loss from which it would be very tough to recover.
It all starts with procuring adequate “replacement cost” coverage on your property, and to ensure that damage or loss caused by calamities such as earthquakes, storms, wind and natural and man-made disasters of many kinds is covered. In the insurance industry, “replacement cost” is the computed value of an insured item. It is not tied to “market value”, but is instead the cost to replace an item or the structure itself at its pre-loss condition. A proper assessment of replacement costs will be suggested by your insurance company and you should feel comfortable that it will be adequate for your needs from the start.
In addition to purchasing enough Homeowners Insurance to cover the replacement costs of the home itself and the land on which it sits, Homeowners policies will also include coverage, with limits, for specific items (e.g. furniture, paintings, jewelry, etc.). If your possessions are of greater value to you than what is offered in the basic policy, you should consider purchasing a separate policy (a “floater” policy), in order to increase that coverage.
One more thing, don’t forget that the amount of replacement cost coverage you have is the amount that your insurer would have to pay, at the present time, to replace any one of its assets. Thus, it makes sense to conduct periodic reviews of the assessed value of your structure and personal possessions of value.
Flood Insurance
One common misconception for home owners is that their Homeowners insurance covers their home and personal possessions for flood damage. Also, it is commonly believed that only people living near rivers, streams or oceans warrant flood protection. The reality is that any residence in a low-lying area is subject to flooding at some point and, for peace of mind, those home owners need to consider purchasing Flood Insurance. Most companies that sell Homeowners Insurance also sell Flood Insurance, and discounts are typically available with the purchase of two or more lines of coverage.
Health Insurance and Disability Insurance
Typically, when thoughts turn to how to properly insure one’s home, considerations are often centered on damage caused by fire, theft, vandalism, storms, earthquakes, etc. It is a natural progression to think how you and your family will recover from damages such as these and Homeowners Insurance is specifically tailored to afford you such protection. However, there is another side to home ownership that has nothing to do with your home suffering structural damage or the loss of valuable possessions and that is how to best protect your ability to remain in the home, even in the face of unforeseen personal injury. The question for all homeowners is, how will you make your monthly mortgage and utility payments if you were unable to work due to an accident or illness? A Health Insurance policy with an endorsement for Disability Insurance will cover medical costs and pay you a monthly benefit to replace a portion of your income until you are able to work again. Many employers provide health & disability insurance for their employees. However, if your employer does not offer it or if you are self-employed, you should discuss with your local insurance provider how and where you can purchase an individual Health & Disability Insurance policy. Again, to preserve the lifestyle you worked so hard to give your family, a full range of protection is necessary.
Life insurance
Likewise, what if you were to die before your mortgage was paid off? How would your family be able to keep up with the remaining mortgage payments and remain in their family home? If at all possible, the tragic loss of life should never be exacerbated by the need to have your surviving family members uprooted and forced from the house and neighborhood it calls home, because it can no longer afford to remain. Life Insurance can provide your family with the funds to pay off their mortgage debt, and enable them to remain in their home relatively debt free. While many employers offer some level of life insurance coverage to their employees, the amount of company-provided coverage is typically not enough to preserve the home and provide financial security to your family. It is definitely a good idea to consult an insurance professional to help you assess your family’s life insurance needs.
Auto insurance
Finally, a home owner should positively understand the relationship between home ownership and being adequately protected for damages, injuries and death potentially caused through the use of one’s automobile. In the event of an auto accident caused by your negligence or impairment of any kind, all of your assets (including your home) could be subject to claims if the claim amounts exceed the liability limits of your auto insurance policy. It is a very good idea to assess the existing liability limits on your auto insurance policy and ensure that you have adequate coverage to protect your home. It is a good idea (and relatively inexpensive) to consider procuring a separate liability policy that would provide additional protections and which would specifically pay for damages that exceed the coverage limits on your auto and/or homeowners insurance policy.
By: Lenny Diwilliams
Posted in Insurance | Tags: Adequate Replacement, Array, Calamities, Earthquakes, Excitement, Financial Obligations, Homeowners Insurance, Insurance Coverage, Insurance Industry, Insurance Insurance, Man Made Disasters, Mortgage Company, Move Homeowners, Natural And Man Made Disasters, Necessities, Stake, Storms, Surroundings, Types Of Insurance, Unforeseen Circumstances | No Comments »
Rental Property Insurance is Market Value the Best Option For You
There are two different ways that rental property owners can insure their rental properties. Each possesses its own challenges and rewards. In order for you to make a educated decision on your rental property insurance you need to know the pros and cons of both. Here we will discuss the Market Value Approach.
Market Value:
Or Actual Cash Value: Some insurance companies will allow you to insure your rental property with the market value, which is what you would sell it for on the open market. Actual Cash value is replacement cost minus depreciation. There are several computer programs available to find out this number and all insurance agents have access to them. The most popular one is by Marshall & Swift.
Pros:
The pro’s to this is that you can purchase a older home in maybe a lower value area of town for a fraction of what it would cost to rebuild it today new. We all have those huge three course brick home with ornate wooden trim, hardwood floors that are no longer in the “in” section of town. The cost to rebuild such a home might be $500 -$600,000 thousand dollars, however the market value is only $125,000. Using the Market Value or Actual Cash Value lets you insure for a much lower cost, thus hoping for a much lower premium. The thought here is that if the home burns to the ground you would simple remove the debris, and sell the open lot and use the insurance money to buy or build someplace else.
Cons:
The cost savings on the insurance premiums for your Rental Property Insurance [http://www.groningerinsurance.com/rentalpropertyinsurance/tabid/41798/default.aspx], normally is not worth the effort unless you get the market value to be at least 50% of the rebuilding cost. Otherwise the premium difference just isn’t worth the downside. The biggest downside to this approach is a partial fire. Lets say the kitchen burns causing smoke damage and partial foundation damage to the house. Kitchens, especially to match a older old are very expensive, not to mention all the smoke and water damage. Now count in a little foundation problems or a larger fire walking up the walls and into the attic and now your stuck. You have a large protion of the building damaged and not enough insurance money to really fix it. Lets say the contractors cost are in the example above are $140,000, you insured it for $125,000. Now you have to pay the demolition cost to remove the entire building both good and bad, clean up and backfill the hole and you walk away with just the empty lot and $80-$90,000 dollars. However – here is the kicker, you still own the bank the $125,000. Your short. You either have to declare bankrupt if you incorporated or sell another asset to come up with the difference.
Bottom Line:
Beware of the Market Value type of policies for your Rental Property Insurance. The premium might be attractive but there are some serious downsides you need to consider. Talk it over with your agent. Have him give you a complete analysis of the pros and cons and now you can make a better informed decision.
By: Edward Groninger
Posted in Insurance | Tags: Computer Programs, Depreciation, Downside, Foundation Damage, Hardwood Floors, Insurance, Insurance Agents, Insurance Companies, Insurance Market, Insurance Money, Insurance Premiums, Kitchens, Marshall Swift, Partial Foundation, Pros And Cons, Rental Properties, Rental Property Insurance, Rental Property Owners, Smoke Damage, Thousand Dollars, Two Different Ways, Value Approach | No Comments »
How Much is Enough? What’s an Appropriate Amount of Homeowner’s Insurance?
Buying coverage for your home for flood, fire, or other disasters is an important decision to make, and an ongoing expense that’s part and parcel of home ownership. One of the first questions you should consider is how much coverage you should have. This is going to be a decision based off of three variables: The assessed value of your home, the amount you’re willing to pay on a monthly or annual premium, and how much of a deductible you’re willing to live with.
The largest variable is the assessed value of your home. Typical home owner insurance policies run from 70% of the value of the home to 90%; you have to specifically ask for more cover than that in the policy. The reason for the 70%-90% range is that actuarially speaking, most insurance companies expect that home disaster recovery will be part of a national emergency, like the flooding we experienced in 2008. In the instance of a national emergency, it’s a fairly safe bet that Government will get involved in some sort of recovery process, and will likely cover the gap.
While this is sound thinking actuarially, the lessons learned from flood insurance are that big enough disasters can exhaust even Government’s ability to intervene on the part of homeowners. From the perspective of a homeowner, it’s potentially a case of being penny wise and pound foolish. We recommend buying a policy that’s roughly equal to the assessed value of your home; if you’re in a home market where prices are rising, you may want to up this a bit to cover future assessments. The reasoning behind this is that you want to be able to replace your home, and your belongings within it, in case the worst happens.
However, getting a homeowner’s policy for the assessed value of the home will increase the premium and other costs for cover. There are other factors that influence the costs of homeowner’s insurance as well. Among them are the age and condition of your home, its construction methods and materials, its location, and access to fire protection services. Smokers pay a bit more for home insurance, because the single most common cause of home insurance claims are small accidental fires.
Your credit score will also be used as a barometer, and also the assessed contents of your home. What specific conditions your policy covers will add riders that increase the cost, say for flood insurance, coverage for jewellery and earthquake insurance (which isn’t terribly common in the UK.)
The higher your coverage costs are, the likelier it is that increasing your deductible will appeal. Increasing the deductible is essentially saying that you’re willing to take on more of the burden in case of a loss, and is one of the major tools at your disposal to reduce the cost of the policy, though it can get to nonsensical values quickly if you’re not careful. Other ways to reduce the cost of your home owner’s insurance is to bundle other policies with the same carrier, and be proactive on things like an alarm system (which may pay for itself in under two years with policy discounts.)
In the final cut, you’ll want to cover your home and its contents with the most cover you can afford. Talk to your agent about bundles and deductibles to get the best value possible.
By: Derek A Rogers
Posted in Insurance | Tags: Belongings, Construction Methods, Disaster Recovery, Disasters, Flood Insurance, Gap, Home Owner Insurance, Home Ownership, Homeowner Insurance, Homeowner S Insurance, Insurance, Insurance Companies, Insurance Coverage, Insurance Policies, National Emergency, Penny Wise, Perspective, Safe Bet, Variables | No Comments »
Home Insurance – Actual Cash Value and Your Home
Your house is covered for Actual Cash Value (ACV) in case you do not have the replacement cost coverage on your policy.
Actual Cash Value is the replacement cost minus the depreciation, which is the percentage for every year for the age of your home. For instance, if you bought a television for $1000, then the 5 years times the depreciation percentage of 7% a year, would mean that the television would be depreciated by $350. So the replacement cost of the television should be $1000, but since you do not have the replacement cost in your policy, the Actual Cash Value would be $650, and that is the coverage you would get.
Now let’s talk about the major coverages on a homeowners policy and we shall start with the dwelling amount. This is the coverage that you would need if you ever needed to rebuild your entire house. The prices nowadays are always rising, so you should always remember that the market value of your house is different from the replacement value, and you have to make sure that your policy guarantees you a replacement cost if ever needed.
You always have to be very careful so you do not end up under-insuring yourself. The replacement value is usually the 20 percent increase of the market value of your house. For instance, lets assume that the market value of your house when you bought it was $200,000, and the cost to rebuild it is $275,000. If your your house was burnt to the ashes, you will only be insured for $240,00 and what this means is that the extra $35,000 has to come out from your pocket. Now that is a lot of money to come up with when you file a claim.
You can avoid getting into such situations if you have a good idea about the replacement cost of your house. And that is not a difficult task at all! All you have to do is talk with your insurance agent and tell him to construct you a replacement cost value. You should keep in mind that the replacement cost only applies to what it would take to rebuild the home, it does not include the cost of the land, and in the event of a claim ever needing to be filed or in the process of considering which plan can offer the best coverage for your home in particular be sure to check online for the latest information and offerings in your area in particular.
By: Marcel A Johnson
Posted in Insurance | Tags: Actual Cash Value, Acv, Depreciation, Dwelling, Home Insurance, Homeowners Policy, Insurance, Insurance Agent, Money, Replacement Cost, Replacement Value, Television, What This Means | No Comments »
The Importance of the Open Market Option
Some people who have pension funds may not even realise what this phrase means, but understanding it can mean the difference between a good value pension and a poor one. In essence ‘open market option’ refers to the right of retirees to move their cash to a different firm so they can get a superior life income compared to their pension fund holder. According to law, an annuitant does not need to purchase an annuity from a firm which organises their pension fund.
The open market option exists thanks to the Finance Act 1978, and the holder of the pension fund has to use this option before they get any benefits from their current provider either via a regular income or lump sum.
Many people exercise their right to the option because insurance companies compete with one another to offer different annuity rates, meaning someone can choose from a number of different offers. People have been known to get 25 per cent more cash than would have been provided by the company which handles their pension fund.
Pension providers are obliged to admit that customers might get better annuity deals by looking around at what is on offer elsewhere. This is according to rules laid down by the Financial Services Authority. Providers must also properly explain the open market option, and also have to make it clear that there is no such thing as a perfect product which is the best for everyone in any situation.
Independent financial advice is advisable when seeking out a pension annuity, and companies who supply these products must also make sure getting advice from these professionals is a good idea. Selecting your annuity is not to be taken lightly, as the nature of the product means they cannot be swapped or changed after you have taken one. It is not possible to simply change your mind and go for a new annuity if you do not like what you have after a few years.
If you select the open market route it does not necessarily mean that you have to choose a particular type of annuity. Many people go for a conventional annuity, or fixed annuity, providing a consistent and predictable income right the way through their retirement. It does not matter if they die before the policy period. But the open market also contains annuities which involve investment risks, which potentially supply people with a handsome income. Because of the unpredictable nature of investments, these types of annuity can also not go quite so well in some circumstances and leave someone with less money than they would have liked.
There are also annuity deals links to your medical circumstances. These are known as enhanced or impaired life annuities and are designed to pay better rates to someone who is not expected to live as long as a retiree in perfect health. Common conditions which might qualify for this includes diabetes, types of cancer, and certain medical histories like prior heart conditions.
The open market option is therefore a possible route to your best possible retirement income. What is put on the table before you by your pension fund provider is not necessarily the best that is out there. Independent financial advice can help someone make the best decision. Annuities are normally for life, meaning the right deal is crucial if you are to make your pension fund go as far as it possibly can.
By: Steve A Wright
Posted in Insurance | Tags: Annuitant, Annuity Rates, Essence, Finance Act, Financial Services Authority, Independent Financial Advice, Insurance, Insurance Companies, Lump Sum, Many People, Nature Of The Product, Pension Annuity, Pension Fund, Pension Funds, Pension Providers, Perfect Product, Phrase, Right Move | No Comments »
Determining the Value of Your Belongings For Your Insurance
Something that is the same in every state when assessing the value of your home for home insurance is that you need to take time to assess what the value is of your home and your belongings. That might seem like an overwhelming task so let’s take a look at a few basic things to do.
Most New York home insurance companies can provide you with a household inventory schedule which can be very helpful with this task. You should go through each room of your house and list every piece of furniture and fixture that is in the room. You will want to list sofas, tables, beds, TV’s, refrigerators and larger items. It is recommended that you keep the receipts of these larger purchases. You can also take photographs of these items. This should be done on an annual basis or keep your list up to date every time you purchase a larger piece of furniture.
Another suggestion is that you can make a video of all of your possessions. If you do this you will want to be sure to open the drawers and doors of your furniture so that you can have a record of the things that are stored in the drawers and cupboards. You will want to store this video away from your home so if something happens to your home you will have it.
Another thing that New York home insurance companies might do is make a physical inspection of your home when they first insure it. They will note if your home is made of brick or wood, the total area, number of floors, number of rooms and other things to give an accurate replacement cost value.
These are some basic tips to think about when determining the value of your home for your homeowner’s insurance policy.
By: Billings Farnsworth
Posted in Insurance | Tags: Accurate Replacement, Beds, Belongings, Brick, Cupboards, Drawers, Home Insurance Companies, Homeowner Insurance, Household Inventory, Insurance Policy, Inventory Schedule, Open Doors, Overwhelming Task, Photographs, Piece Of Furniture, Possessions, Receipts, Refrigerators, Sofas, Suggestion | No Comments »
Choosing Your Retirement Annuity – How Equity Indexed Annuities Can Help
Equity indexed annuities are relatively new products to the market and offer the best of all world’s to the investor. These retirement annuities increase in value when the market rises but they don’t lose money if the market drops. Instead, they receive a fixed interest rate promised in the contract. While not all equity indexed annuities are ties to the same type of index, many use the S&P 500 as their benchmark.
There is a price for the investor to pay when they use this type of retirement annuity. Since the company takes all the risk, they also get some of the reward when the market rises. Often contracts vary in the amount of the market growth that the company gives to the owner of the annuity. These are the annuity’s participation rates. Some companies offer as high as ninety percent of the growth while others offer as little as fifty percent.
However, if you think that the ninety percent is always the best deal, think again. Often the contracts with the lowest percentage of market participation make up for the difference by offering a higher guaranteed interest rate. If your contract runs during periods of extended down markets, the lower participation rate may actually pay higher because of the number of years the product used the fixed rate to calculate the return.
If you look for indexed annuities see if they offer an annual reset option. The reset option is particularly good in a down market. Every year, the policy resets the amount as the base. In up markets, of course, the company locks in and credits your growth each year. In a down year, the company pays you the guaranteed rate, however, they reset the baseline so that when the market volley’s back, you reap the rewards.
Some companies use a point-to-point contract. Most of the time, the company calculates the growth from the day you started the contract to the day when the contract term ends. While it’s not as advantageous as the annual
Some of the equity indexed annuities have a cap to the percentage amount you can receive as a gain. If the policy has an eight percent cap then even if the market jumps 22 percent and the investor has a ninety percent share of the growth, the maximum return he receives is still only eight percent.
Most people use equity indexed annuities as deferred contract, but you can use an equity indexed annuity as an immediate annuity also. The difference between the two is the time when you take payment. On a deferred contract, you expect a payout later, or never in some cases and the funds go to a beneficiary. In an immediate annuity, you begin a stream of income right away. An immediate annuity is excellent for someone that wants payments for the rest of their life, no matter how long they survive.
Equity indexed annuities are good for those that want to keep up with inflation but still require safety. Make certain you check not only how the company calculates the return, but also how often they do it, in order to get the best policy.
By: Jonathan M. Tyler
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