04 Jan 10 Term Life Insurance or Whole of Life Insurance Policy?
When buying life insurance its vital you get the right policy for your needs. With a plethora of web sites offering discount life insurance, it’s often easy to end up with a policy that is not suited to your unique needs and circumstances.
One of the questions that arise time and again is whether a term life policy or a whole of life policy is best, and what’s the difference between them.
Term Life Insurance:
Term life policies cover you a predefined term.
Term life insurance only offers protection for the duration of the mortgage, and can be of little value when once your mortgage is paid up.
Term insurance is also cheap, and can even become cheaper over time. There are also a number of different types of term life insurance to choose from as follows:
* The first is known as level term cover, and it’s the most common type. With this form of policy the premium costs are locked in for as long as you hold the policy. In other words, you will pay the same amount throughout the entire term of the policy.Unfortunately, it means that as time goes by you could end up paying more for your life cover. However, the nice thing is that you get the benefit of paying at today’s rates. However, bear in mind that over time these rates could fall instead of rise.
* The next form of term life insurance is escalating term cover. This policy can be more expensive, as you pay an increasing amount each year. However, the lump sum payable at death also increases. These are normally low cost policies, and are best suited to younger people.
* The third type is known as decreasing term insurance. In this case your monthly payments will stay the same, although the amount of cover you receive will reduce each year.
* The forth type of term life policy is known as increasing term insurance. With this type of term life insurance the benefit on death increases. However, in order to make up for this increase you will need to increase your premiums at certain times, for example on the birth of a child, or as your financial circumstances improve.
* The fifth and final type of term life insurance is known as convertible term insurance. This type of term life policy provides a way for you to convert your policy into an investment/insurance policy in the future. With this type of policy the price of your future investment policy is based on your health when you bought the cheaper term insurance.
Whole of Life Insurance:
Whole of life cover covers you right up until your death. Provided, of course, that you keep paying your premiums! It can pay out a substantial benefit to your loved ones when you die, and it can also accumulate a cash value over time.
Whole of life policies can be more expensive and more complicated than term life insurance. Also, the investment you make can earn some interest each year. Therefore, since your investment generally grows each year, your premiums can actually reduce over time. You may also reach a time where the interest gained covers all the future premiums, which means you may have no more premiums to pay.
However, it’s important to understand that the final cash-in-value of a whole of life policy may or may not equal the amount of money that has been paid into the policy over it’s full term.
Summary:
Buying a term life policy, or whole of life insurance is an important decision and one that needs to be made carefully. Before you take the plunge, you need to examine your needs, and exactly what you wish to achieve.
Term life policies are the simplest and cheapest to set up, and cover you only for as long as you need them.
On the other hand, you might like to consider a policy that grows in value over time, giving you a very nice nest egg which you can benefit from, while you are still alive.
Both types of policy have advantages and disadvantages, and that’s why it’s always a good idea to get advice from a competent insurance adviser.
Michael Pettigrew is an article writer for Best Insurance Quotes, a provider of quality cheap life insurance quotes. Visit Best Insurance Quotes to get a better life insurance quote
Tags: Family, Finance, general, insurance, investments, life insurance, mortgage
13 Dec 09 DIY Superannuation – How Much Control Do You Want?
The superannuation system is great for all of us. Our employer puts money away for our retirement, money which we never really see anyway so it does not impact our lifestyles. Then, when we retire, we have a massive pool of saved funds which we can enjoy.
One of the things I always despise about our retirement industry though, is the way superannuation funds take control of the investment decisions away from me. It is my money, yet I cannot make any investment decisions. The situation has improved over the years, but it is still not good enough. For this reason I set up my own Self Managed Superannuation Fund (SMSF).
All a DIY Super fund is, is a legal structure you can use to manage your own superannuation money. There are a number of responsibilities you must take care of, ensuring the fund meets its obligations in as much as superannuation laws go. Once set up though, you can be as involved as you want and outsource the parts you are not interested in managing. The things that need to be taken care of include:
Firstly, someone needs to be the trustee. The trustee takes legal ownership of and responsibility for the fund, and all the assets there within. Time wise, it is not onerous, its more of a legal responsibility.
Secondly, there is the administration and accounting responsibilities. This is a time intensive role, keeping the books up to date and preparing the annual accounts, lodging tax returns and preparing reports for members.
3. Audit – The auditor looks over all the accounts prepared by the administrator to ensure they comply with the existing superannuation and tax law. A successful audit will mean you maintain your status as a complying superannuation fund, so you can continue to receive the superannuation tax benefits.
d) Investing the money. Superannuation is retirements savings. Someone needs to make all the investment decisions within the superannuation regulations, in a way which maximises the future retirement benefits of its members.
Personally, I was just interested in managing my investments. All the rest was outsourced. I just wanted to be able to ensure the investment decisions I made were mine so I could feel responsible for any losses or gains that I made. There is nothing worse than when your retirement investments decrease over a year and you have no control whatsoever in the decisions made. I wanted to avoid this. Also, getting control of this meant that I could make investment decisions giving my whole portfolio consideration and not treat my retirement investment as if it were an island, completely separate of other investments I have. It is all part of my estate after all.
All other responsibilities I outsourced. To me, they were time consuming tasks which were better undertaken by experts in the relative fields. This left me with more time to research and make investment decisions.
Gnifrus Urquart appreciates controlling his retirement savings, as well as the leisure time outsourcing his DIY Super Administration affords him.
Tags: business, Coupons & Savings, Finance, investing, investments, mutual funds, pensions, Personal Finance, retirement, retirement savings, savings, superannuation
27 Aug 09 Property Management Help: Finding A Property Management Company
If you are tired of self-managing your property and have decided to hire the services of a professional property management company then you need to be careful and take your time finding a good company to hire.
Hire the right management company and you will have a lucrative rental. Hire the wrong management company and you will lose thousands of dollars.
One of the biggest mistakes owners make is that they just pick a property management company out of the phone book without first doing research on the company.
Don’t hire one of those big nationwide corporations that sell property. They do property management because they want to be the first company you think of when you want to sell your property. They lose money on property management, but make money when you are ready to sell your home. It’s never a good idea to go with a property management company that is trying to get you to sell your home because that’s where they make the big money. You want a company that specializes only in property management and nothing else. You don’t want a big corporation either. You want a small, local expert that has lived in your city for at least 20 years. You want a property management company that specializes in your local market only.
Check references, particularly the management companys other clients. Make a few phone calls to check references. Do not sign any agreement with the property management company until you know they have a good track record. Now here’s where owners blow it. They contact a property management company on their high up pedastool and they demand to see a list of all the property management’s clients so they can call them for a reference. Don’t do that. Humble yourself. Your home will only make about $50 a month for the property management company. If you are a pain, they will simply tell you to take your business elsewhere. The property management company will not release a list of “all” their clients. Not to you. Not to anyone. That is confidential and internal information. Think about it. Anyone could get a list of clients and then contact those clients and offer a slightly lower management fee and take all their business away. You would be hard pressed to find any business that would be willing to give you a list of “all” their clients. Just chill out. Ask for three references that you can call. Call the references and ask if they work for the property management company or know someone who does. Ask the references how long they have had their properties managed by this company, and just go from there.
Go online and check the company out. Do they have all the necessary licenses to do business in your area? Are they in good standing with the DRE? Most states require a property manager to also have a real estate license if they are dealing with single family homes.
Check the company’s insurance. If they are not insured, stay away from them. The company should have general liability insurance, professional liability insurance, and workers’ compensation. Remember, the management company will be collecting deposits and rent so they should have a bond on their employees to protect you in case of employee fraud.
Another big mistake owners make is that they do not ask the right questions when hiring a property management company.
Consider asking the following questions:
1 – Can you show me a list of what management services you provide?
2 – Do you have a home sales division?
3 – Can you tell me exactly what the monthly operating reports you send me will contain and when I will receive a monthly income check?
4 – How will you market my property?
5 – How quickly do you, and what is your procedure for, handling maintenance requests from renters?
6 – Who will actually manage my property? What are her qualifications? Is she licensed? How many properties does she currently manage?
7 – Can I have three references? Specifically, can I have the contact information for three clients of yours with rental properties that are managed by the same person who will be managing my property and that is similar in type, size, and location to mine?
8 – Do you have a maintenance division? If so, do you only charge the actual cost of labor and materials without any markups?
9 – Are you able to get discounts with vendors and if so, do you pass on those savings to me?
10 – Who gets the late charges? If you keep all the late charges, will you come down on my monthly management fee? If I get to keep the late charges, are you charging me a higher monthly management fee on my property?
11 – Do you have insurance on employee errors and theft? Specifically do you have an Errors and Omissions policy that covers at least $500,000? On your general liability policy does it cover at least $2,000,000?
12 – Do you have a $500,000 Fidelity bond and a Forgery and Alterations policy of at least $25,000 for all employees?
13 – Do you co-mingle different owners’ funds into one account? Did you know this is illegal in most states because of pyramid type schemes that property management companies have run in the past? Do you agree that keeping your owners money separate is important? If you deposit all owners’ money into a single bank account, do you keep owners’ money separate on paper so that Joe isn’t paying Sally’s expenses?
Tags: business, business and finance, education, home, House & Home, investments, Property Management, real estate, rentals
22 Jun 09 Plan Your Retirement With Gold Investments.
Gold has recently become an attractive investment asset for investors because of a typical phenomenon known as doom and gloom. Gold is also a hedge against all the bad news that brings the bear markets. Bear markets usually triggers the interest in precious metals and especially gold. However, the bad news is unlikely to be accompanied by economic inflation. There isnt any cause and effect relation between gold investment and inflation.
Gold investment, which is basically commodity investment, is not like wheat, oil or pork bellies. Since gold is not consumed, consumers prefer not to choose gold. Nonetheless, there are dooms and gloomers who can increase the price of gold with the fear of a downfall. They seem to believe that the investors would revert to the gold currency or standard. But if you consider the present market trend, you can always buy or sell gold or trade gold in your own retirement portfolio and this in turn would pose to be a hedge against the bear market. Start investing with 5-10% gold.
How to Trade Gold for Retirement?
You can now easily add gold to your retirement plan. You can start by purchasing gold bullions or gold coins from any reputed gold dealer. While this method seems to be handy, but it is not really a wise method since liquidity problems are likely to arise. You must as well make some special and secure arrangements for storing gold.
You can also invest in gold by purchasing exchange traded fund shares that go out to buy gold bullions and also store the same for the profit of their shareholders.
The third methods of gold investment for retirement is to own gold mining stocks individually. However, this is too tedious a job and risky as well as the mining stock prices are unlikely to track the prices of gold always.
Gold investments can also be done through exchange traded funds and through precious metals like platinum, silver and gold. Some of these methods of investments are easily available and can also give you decent performances at affordable rates.
Lastly, for more variety and minimum reliance on precious metals or gold, you can try investing in commodities fund as well that includes gold and other precious metals as well as commodity sectors. These are undoubtedly the best methods for planning your investments for retirement and more so if you intend to trade gold for retirement benefits.
Tags: buy gold, Family, gold, gold prices, invest in gold, investments, Personal Finance, personal wealth, retirement investments, sell gold, trade gold
