Life Insurance Tax Changes

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Recently, the New Zealand Government altered the way life insurance companies are taxed. In brief, the change, which takes effect from July this year, will increase the tax that insurers pay on the profits that they make from life insurance sales.

The result of this change is that New Zealand life insurance premiums are likely to increase in 2010. No one knows what the exact increase will be, however an increase is extremely likely, and figures of around 20-30% have been suggested by industry commentators.

Based on most interpretations of the change, new policies set up after the change takes effect will have higher premiums immediately (so a plan set up the day after the changes occur will cost more than if the same policy were set up today). On the other hand, policies that were set up prior to the change will be likely to have a period of time (perhaps 5 years) before they are subject to the full increase. Also, some policies will not increase at all – many level life insurance plans have premiums that are guaranteed to remain totally constant – which makes these options very attractive to people looking for long term cost certainty in their life insurance.

Because the increase is going to be on policies taken out after the change is made, there is an opportunity to start life insurance now, and save yourself money over time. So if youre considering getting life insurance in the coming years (for example youre planning to buy a house or have a child), or if youve been meaning to get life insurance but havent gotten around to it – do yourself a favour and set up cover now. Also if you already have existing life insurance.

Understanding how to find Term Life Insurance Quotes

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term life insurance that fits all of your individual needs. The world of life insurance doesn’t have to be difficult. With the right advisor you can give your family the protection they need and have peace of mind. “>Factors that affect term life insurance quotes are:

Age – how old a person is, is a major factor. The older a person is, the chance of them passing away than a younger person is much greater. For this reason, term life insurance quotes for younger people are usually cheaper than those for older people. Therefore a 50 year old man will have to pay higher premiums to get coverage for a life insurance policy than a young man of 25 years.

Health – your health condition is an important consideration. The younger and healthier a person is, the cheaper will be the premium on the policy. This is because the insurance company doesn’t undertake as much risk as it would have as an older person with ill health. If you have a medical condition, you will have to pay a higher premium on your policy. Most insurance companies will ask you to provide them with this personal information. It is best to be honest when providing these facts.

Occupation – if someone’s nature of job provides a threat to their life, then the premium on their policy will be higher. Any dangerous job like that of a miner, fisherman, and construction worker will demand higher premiums on policy. This is because here, again, the insurance company is taking a risk. Safer jobs like that of a librarian, secretary or an artist will give these people the advantage of lower premiums on their term life insurance. The company is undergoing less risk with them as there is no threat to their life as far as their workplace is concerned.

Lifestyle – one’s lifestyle choices also affect the quote for term life insurance policies. These can be whether or not a person smokes, drinks, consumes drugs etc. All people who indulge in such things are prone to higher premiums. Also, your hobbies could influence your quote. If you enjoy life threatening and adventurous sports like mountain climbing, sky diving and bungee jumping; your premium could be higher. This is because you are putting yourself at risk. Here again, one must remember to be honest. In case you do not mention your involvement in such activities and lose your life while doing them, the insurance will be void. You would have spent all that money for a life insurance policy that turned out to be fruitless when your family really needed it.

My Insurance Expert will help you find term life insurance that fits all of your individual needs. The world of life insurance doesn’t have to be difficult. With the right advisor you can give your family the protection they need and have peace of mind.

How To Buy Equity Indexed Universal Life Insurance

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Don’t tell your stockbroker or mutual fund company, but the cash value portion of equity index linked universal life insurance (IUL) policies can be used to replicate a diversified portfolio, with lower cost and less volatility. James Garfinkel, founder and CEO of New Amsterdam Life has been extolling the virtues of equity Indexed universal life insurance for years, however it wasn”t until the recent market downturn that demand for these products really exploded. “People are gravitating to products that can deliver above-average returns with lower risk,” observes Mr. Garfinkel.
Model stock portfolio returns are based on always being in the market, and consistently buying, even in times of market turmoil. The reality is most of us are not always in the market and we typically sell during a financial crisis rather than buy, and then we buy after the market is “safe” — sacrificing much of the upside of a post-crisis bounce.
Is it any wonder your portfolio performance doesn’t match up to your fund company’s model?
IUL policies are linked to the performance of a specific index, like the S&P 500, so that if the index is up over a one-year period, the account will be credited a corresponding percentage up to a cap, currently in the range of 12% to 20%. If the index is down, the account will be guaranteed a certain base, or floor, usually zero to 2%. The policy does not directly participate in the market.
The combination of the cap and floor reduce volatility as opposed to owning the basket of stocks outright. Furthermore, there are no additional management or account fees.
While the S&P 500 is the most popular index, carriers provide the possibility of exposure to the S&P MidCap 400, Dow Jones Industrial Average, NASDAQ 100, Russell 2000, Dow Jones EURO STOXX 50, Hang Seng Index, commodity price indexes and others. Fixed-income exposure can also be added to the mix.
You can choose what portion of your cash value is allocated to any particular index, and how much is maintained in fixed income.
Further, you can choose to have your allocation made in equal monthly installments, so that you have a constant market exposure, as advisors suggest.
Books like The Investment Answer underscore that the best long-term performance is found in indexed funds, consistently invested and diversified, not in higher-cast actively-managed accounts.
IUL policies can provide such performance, along with tax-free internal cash value build-up, and, of course, death benefit protection that your beneficiaries will receive tax-free.
Try getting all that with your model portfolio…

What Can I Do If I Miss Paying My Life Insurance Premium

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We all buy life insurance to protect the people we love after we’re gone. To maintain our coverage we must, of course, pay for our policies. Most people make monthly premium payments.

However, with the unemployment rolls increasing, more and more people miss an occasional payment. This article looks at how you can fix this problem.

If you miss paying any premiums your insurer will contact you and advise you that they haven’t received your payment. They do this because it could be a banking error or a simple oversight on your part.

They’ll also tell you that unless you pay your premium within a set amount of time – your grace period – they will automatically cancel your policy.

Pay Your Premium within the Grace Period

If you miss a life insurance payment most companies have a thirty to thirty-one day grace period within which you can make your payment and not suffer any negative consequences whatsoever. Even if you die within this grace period your beneficiaries will collect the death benefits. However whatever premium is due will first be deducted.

The bad news is that if the grace period ends and you still haven’t made your premium payment your life insurance policy will lapse. Some life insurance companies will permit you to reinstate your lapsed policy within certain timeframes. However you will first have to prove that you are insurable, pay off any outstanding loans you might have against your policy, and pay them all of your overdue premiums plus whatever interest has accrued.

And if you are accepted your premium will probably be higher because you will be older. In addition, if your health has substantially deteriorated your premium may be considerable higher. If the situation is extreme you might be uninsurable.

A Possible Solution – Have Your Payment Withdrawn From Your Cash Value

You may be able to protect yourself against your policy lapsing if you own a cash value policy. With your authorization your insurance company can withdraw money from your insurance policy’s cash value to take care of your payments. Keep in mind, though, that this will only keep your policy active if you have cash value.

An Additional Solution – Protect Yourself When You Buy Your Life Insurance Policy

If you want to preclude the possibility of losing your life insurance coverage you may be able to add a “Waiver of Premium” option to your policy. If you have this waiver and become unemployed or cannot work temporarily because of an accident or illness your insurer will take over the payments until you return to work once you have contacted them and informed them of the situation.

Life Insurance Quotes Keep An Eye Open Always!

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Life insurance ceased to be a once in a lifetime decision today. You can no longer sit back and relax once you have signed up for a good policy. And that is because you can never put a price on your life worth financially, that will hold good even later down the line. Life insurance is essentially your way of ensuring that your family is not left wanting even in your absence. While it is not possible to put an exact figure on a persons life savings, it is important to calculate the precise economic value of ones life time and not undersell yourself.
What is process behind calculating the right quote and not just settle for a cheap life insurance quote? While it is realistic that a person will go for the most affordable life insurance quote there is, the way most life insurance agents calculate it is to put an approximate value on the potential earning between the present and the rest of your working life. It is a common thing in todays world that most people are under insured and this is because there are either ignorant of the basics of insurance or insurance benefits. It is also the norm that people go by the insurance provided at their work place and do not look for anything more.
It is a fact that any average insurance policy buyer looks for the most affordable life insurance policy available. They look for the right amount of premium that they are willing to pay, but not for the right amount of death benefit their family ought to receive.
The industrys general rule to go by is to value your life insurance as ten to fifteen times the income you receive today. This is not the best solution as the sufficiency of the death benefit is also dependent on external factors like the inflation rate and even national economy. An internal factor that affects the death benefit amount is the lifestyle of the family at that particular situation.
Hence, it is important to keep vigilance and be aware of the nations economic state as well as the purchasing power of money. Be open to the idea of buying additional coverage to finally end up with the best life insurance quote there is. Insurance industry is constantly changing and coming up with lucrative deals to lure the customers, be sure not to miss them.