Spreading Risk Makes for Affordable Insurance

The insurance industry has been around for hundreds of years. Many moons ago, some forward thinker figured out that if the risk of loss was spread among many different people, that losses wouldn't be so devastating to one particular individual. If each individual paid in a small amount to a pool of money in exchange for protection from huge losses, then a certain level of assurance and certainty would be received by each individual. No single individual would be completely wiped out if a disaster occurred. Thus, the idea of insurance was born. Affordable insurance is available today due to this idea.

With insurance, individuals seeking coverage pay an annual premium to a third party, the insurance company in this case, in exchange for a promise of protection. Mathematical geniuses known as actuaries estimate the approximate cost that each person should chip in so that the company can afford to meet its obligations. Actuaries are able to make these calculations by estimating the anticipated losses based on historical experience. Investment experts take into account the investment returns that the insurance company can receive from holding millions of dollars of customer premium payments. Marketers can assess the number of customers that can be expected to do business with the company. Together, affordable insurance can be achieved when all of the elements work effectively.

Today's insurance companies operate in an environment rich in data. Property and casualty loss rates have been tracked for decades, so companies today can estimate with tremendous accuracy the likelihood of any given building to go up in flames. Companies understand what hazards can increase the probability that a loss will incur. Insurance companies are also heavily involved in risk management, which involves actively reducing the risk that losses may happen. Risk management can involve offering incentives for usage of smoke detectors and sprinkler systems, performing professional inspections of properties, and conducting educational sessions on how to prevent fires. On the life insurance side, actuaries can estimate with great certainty the lifespan of any given individual. Actuaries understand what health factors to look for that influence a person's number of years on the Earth. These health factors can include smoking, family history, health symptoms, and engaging in risky behavior such as motorcycle riding or certain water sports. The result of all of this knowledge is much cheaper life insurance. Insurance companies know how to earn just enough profit to keep the company earning an above average return, while also competing with other companies in terms of price. In the past 10 years due to the Internet, many traditional agents have been cut out of the picture, which has further reduced the cost of insurance. Agent commissions on insurance are typically extremely high, sometimes reaching as high as 50%. Companies like Geico allow consumers to communicate directly with the insurer, thus drastically reducing commission costs and therefore the total cost of insurance.

Affordable insurance is possible today more than ever. If you think you're paying too much for your insurance, you probably are. It's advisable to compare insurance costs and make the switch if a cheaper policy is available.

Bristy Voelkel has been an insurance specialist for the past 4 years. She has worked with several top insurance carriers, saving individuals shopping for free insurance quotes. Bristy is standing by waiting to assist you in comparing affordable insurance quotes & saving you hundreds. Get started today!

Company Directors Insurance - Can You Do Without It?

The untimely death of a Company Director is undoubtedly an extremely harrowing and emotional time for their family and friends but also their colleagues in business.

From a business perspective, the death of a Director or a large shareholder can cause major financial problems for;

1. The surviving Directors and the company at large, and
2. The deceased's next of kin.

1. Surviving Directors and the company at large

As well as the personal tragedy of the death of a Director, the surviving Directors and the company face a number of serious financial challenges.

Following the premature death of a Director their company shares will normally become part of their estate. For example, they could become the property of the deceased's spouse or one of their children. This can cause problems for the organisation, particularly if the deceased shareholder owns a large percentage of the organisation.

The new shareholder may have little business knowledge or indeed may wish to move the company in new and unwelcome directions. If for instance, the deceased shareholder owned more than 50% of the company, their next of kin would become the majority shareholder. This individual may be someone the existing Directors do not wish to have the final or indeed any say in the firms decision making process.

2. Next of kin

As well as the death of a loved one, their next of kin could face some very difficult decisions. They may be in full time employment in a different organisation and may not be interested in taking up the Director's role and prefer to take the shareholding's cash value. However, the company may not have the money readily available to buy out the deceased Director's shareholding from them.

As such, both parties are placed in a very unsatisfactory position.

Co-Directors insurance:

A simple solution to the business problems caused by the death of a Director is an easily available and relatively inexpensive insurance product: Co-Directors insurance.

Of course the upset and anguish caused by the death of a colleague can never be compensated for, but by taking out a Co-Directors insurance policy you can limit the financial damage and disruption caused by the untimely death of a Company Director.

The ultimate aim of a Co-Directors insurance policy is that it allows you to put the structures, processes and monetary agreements in place now, to protect your business financially in the face of a premature death of a Director in your organisation.

The main benefits of a Co-Directors insurance policy include:

1. The surviving Directors remain in full control of the business.

The policy proceeds from the Co-Directors insurance policy are used by the surviving Directors to purchase the deceased Director's shareholding from their estate. This ensures the continuation of the company's operations with the minimum disruption.

2. The deceased Director's estate will then receive the monetary value of the shareholding.

If you are the director of a limited company with other shareholders then you should really consider taking out a co-directors insurance policy to protect against the above eventualities. The policy itself is a simple life insurance or life assurance policy with a bit of legal structure on it informing of how the funds are to be used and what agreements are put in place should another company director die. Talk to you financial advisor today about Co-Directors Insurance.

Pol O Murchu is a leading Irish Financial Advisor, Insurance Broker and Mortgage Broker. His company Heritage Insurance Brokers provides clients with a range of Insurance and Financial Products to suit their every need. He specialises in Life Insurance, Life Assurance, Mortgage Protection, Pensions, Investments, Mortgages, Health Insurance and a range of both personal and business insurance products. To get more information on any of our products contact us today.

Full Protection To Landlords Through Let Property Insurance

The let property insurance

It is natural for a property owner to want to protect his or her property, whether it is a home or a company premises. The homeowners need protection to keep their family members safe while the need for protecting the company premises depends on the financial aspects. The let property insurance or landlord insurance helps to give financial support to the land owners. If a property is rented out, the landlord is earning through the property and hence it is necessary to get the property insured. There are many risks attached with the property that is given out for rent. The rented house may have many valuable items and any damage to these items will affect the landlord or the homeowner.

The Scope Of Landlord Building Insurance

The scopes of these insurance policies are many. Consider the case of a fully furnished home or an apartment that is given out for rent. The theft of items in the house creates a financial burden to the landlord. Natural calamities can affect the structure of the building, puts the occupants life in damage and cause damages to the contents in the building. It is a necessity to have landlord building insurance to overcome such problems. If you take into account the breakage of any household property, then the landlord insurance company will give the expenses for replacing the locks and doors. In case of any accidents taking place to the tenant inside the premises, the insurance will be helpful in covering the necessary medical bills. If there is some misunderstanding between the tenant and the property owner and the matter reaches the court, then the legal fees for the property owner is covered by the insurance company. The landlord can avail the insurance also for meeting the expenses for repairing any damage to the interior properties like furniture and other utility items or any damages to the exterior caused by the tenant.

Getting The Quote

You can get the quotes for let property insurance or the buy to let insurance through online. You can request for quotes from the reputed insurance company by giving details about the property. After considering the value of the property, they will give you their best quote. You will need to get the quotes from two or three providers and you will be able to compare their rates online itself in order to choose the best quote. The online quotes and the ability to compare the policies and quotes make it easy for the landlords to purchase the best insurance according to their convenience.

Selecting The Policy

While selecting the policy, keep in mind the area of the property and the value of the items in the property. Do not go for cheap let property insurance as they may be insufficient to cover any damages to your property. Select insurance companies that offer best deals to the landlords. Compare the different policies available online and ask for quotes from different insurance companies. Go through the terms and conditions of every single insurance company. This will help you to find the best one in town.

Insurance Totaled My Car - What This Means

"Your vehicle is a Total Loss." These words, more often than not, spark immediate controversy between an insured and their insurance company. The main cause of controversy between an insurance company and an insured as it relates to total loss is that most people feel their vehicle is worth more than it really is.

A vehicle, though historically not a good investment, is very personal to us. Many of us spend a great deal of time in our vehicles each day and grow attached to our car. Many others ''trick out" their cars and inherently feel that their modifications enhance the value of the car.

I thought it might help some folks if they heard exactly how an insurance company views this and how they go about compensating you for your car should it be determined to be a totaled. There are typically two main things involved in understanding this process: What exactly is a Total Loss and how is the value of a car determined. In this article I am going to discuss and define a Total Loss from an insurance companies perspective.

So, what exactly does it mean when your insurance company deems your vehicle a total loss? In general, there are two types or measurements if you will when it comes to making this determination: Financial or Economic Total Loss and an Obvious Total Loss.

Financial or Economic Total Loss
A vehicle is often declared an Economic Total Loss when the cost of repairs exceeds the value of the vehicle, plus sales tax, less your deductible. I am sure you have heard that there is a percentage used to determine if a car is an Economic Total Loss. You have probably heard numbers from 50% to 70%, or more. This is true, however, it is important to know that not all states set an actual percentage and that for the states that do not set percentages, it is up to the insurance company to determine what that will be.

Although all insurance companies that are free to set this number themselves are all different, a common number you will hear is 70%. What exactly does that mean? I thought a quick illustration might help:

Market Value $15,000
Plus tax $ 1,050 (7% used as example)
Sub-total $16,050
Less Deductible $ 500
Total Loss Value $15,550

Cost of Repairs $11,662
Repairs are 75% of the value

In the example above, your insurance company would likely determine your vehicle to be an Economic Total Loss. One thing to remember is that if you are paid the value of your vehicle, the insurance company will retain the salvage or damaged vehicle and then sell it to a vendor. Most insurance companies have negotiated contracts with salvage buyers and will use that avenue to recoup some of the money paid out for the total loss. In the example above, your insurance provider would know that your car had a salvage value of $3,000 (example). So, when making their total loss decision, they would factor in this amount and subtract it from the total amount paid of $15,550, bringing their net cost to $12,550.

One other brief point to make that is worth noting is that your insurance carrier will also factor in estimated supplemental damages were your car to be repaired. From my experience as an adjuster and claims manager, there are often supplemental or additional damages/repairs identified once a car begins the repair process. These damages are often discovered on "tear down" or after parts of the vehicle are removed and additional damages are more visible. In many cases it is almost certain that there will be additional damages based on the visible damages, however, an adjuster will only write for what they can see and note that additional damages are likely.

Obvious Total Loss
An Obvious Total Loss or OTL is in which the damages to a vehicle are so extensive in terms of repair and/or putting the structural integrity of the vehicle at risk with a repair, that the car is determined to be an OTL. Some examples of an OTL are:

    Fire Damage
    Rollover
    A theft
    Extensive Water Damage
    High impact front-end collision
    T-Bone or hard hit to the side of a vehicle at the center-point

In most cases, a claims adjuster will not have the direct authority to determine a vehicle to be an OTL. The two insurance companies I worked for required a manager approval to make this call. With today's technology, that can be done easily in the field by simply sending some detailed photos to a Claims Manager or Property Damage Manager. In this case, there isn't a cost of repairs necessarily but the valuation process is the same.

Hopefully this helps you understand what is meant when you are told that your car is a total loss. Your insurance claims adjuster should explain all of this to you, however, having a basis understanding will certainly help should you find yourself in this situation.

Marc Berry brings over 8 years of direct experience in the auto insurance field, having worked for 2 of the largest and most respected insurance companies in the nation.

Questions About Selling an Insurance Agency

My firm works regularly with agency owners in the planning and execution of the sale of their business. Some key questions have been raised more frequently with the pending tax increases set for 2013, so I thought it would be helpful to address these to a broader audience in the dialogue that follows. The level of detail is significant but the intent is to provide a more complete discussion of such important questions. I hope you find this information useful in your business planning.

1) What are agencies currently selling for as a multiple of revenue?

While simplistic in nature, setting a value based on revenue is not realistic. The insurance distribution system contains a wide array of agencies and brokerages serving different market regions and segments. We have seen agencies sell for anywhere from 1.0 to 2.7 times annual commissions with an average guaranteed price range of 1.4 to 1.8. In our experience though, the value to a buyer is generally driven by pro forma earnings, risk and transaction terms, and all three are equally important. Multiples of revenue are generally the product of the expected price, and not the determining factor.

The pro forma earnings provide a buyer with a return on their investment and cash flow to cover any debt service. The risk assessment is a subjective measure of how well the buyer believes the investment will yield their desired return. And finally, the terms relate to how well the buyer can leverage their capital, such as when there is significant seller and/or third party financing, and also hedge any significant risks, such as with a portion of the purchase being paid on an earn-out contingent on maintaining revenue, earnings, accounts, etc.

The only way to ascertain a realistic market value of your agency is to have a professional valuation performed that is in-tune with your industry, the availability of financing and the market demand. Our firm averages 3-6 valuations per month in addition to completing a sale transaction every 1-2 months.

2) What steps can an owner take to enhance the value of their agency?

There are many steps that can be taken to enhance the value of your agency but they generally relate to maximizing the profitability and minimizing perceived risks to a buyer. Let's discuss maintaining or growing revenue first, as declining revenue generally erodes profitability. One suggestion that we often give to clients is to put in place methods to track sources of revenue. It could be tracking revenue created from different marketing or sales programs so you understand how effective your marketing dollars are being spent. Another is tracking new and renewal revenue by producers and product lines so you understand who/what is and isn't working for the agency, and perhaps what might be done to improve performance. The last thing to review under the category of revenue is your commission rates and contingent earning contracts with carriers. If the agency maintains low loss ratios, and high production and retention, there might be an opportunity to renegotiate your compensation with the carrier. It never hurts to ask and use a little leverage such as the hint that another carrier might be wooing your business with a better pay schedule.

On the expense side, personnel costs generally are the largest item and typically run an agency anywhere from 35-60% of revenue; therefore, it is important to keep a close eye on personnel and productivity waste. The most productive agencies leverage technology to improve workflow and minimize labor costs. They also develop performance-based compensation plans and weed out unproductive employees in a timely manner. The most profitable agencies maintain personnel costs at 30-40% of revenue. Buyers will typically discount the value of an agency if they need to come in and completely restructure the operation, staff and compensation.

Another major issue with personnel is addressing any ownership or vesting interest of employees or producers. If you don't own a book of business, then you can't sell it to an outside party. This can become a major problem if ownership with a producer needs to be settled during the sale process. The best solution is to either buy-out the interest before the sale process is initiated, or negotiate an equity swop in advance so that the producer will be paid on the sale.

There are many other minor expense items that can be shored up prior to executing a sale process. Such things might include renegotiating leases or contracts, canceling ineffective advertising and reducing any owner's discretionary spending such as personal meals, travel and entertainment.

On the risk side of the coin, you should address any specific revenue concentration issues with producers, carriers, product lines or accounts. Can business and account relationships be transferred from producers to staff members? Do you have good procedures in place for cross-selling and following up with clients before renewals? Are you over-exposed in any particular area that might be cause for a concern? Most likely any internal problems are known to the owner. The goal should be to round out the business and reduce your own risks, as well as that which might be perceived as one by a buyer.

3) How does an agency owner go about getting the best price and terms on a sale?

In short, by planning for the sale and executing a controlled sale process where multiple, qualified buyers are disclosed on the opportunity, provided with relevant details on which they can make a decision and encouraged to make offers in a short period of time. One thing to note is that when you lock into a negotiation with only one party, you end up negotiating against yourself. This is why it is best to provide accurate, relevant details in advance of receiving an offer so you can avoid an opportunity for the other party to renegotiate.

When representing a client in the sale of their agency, we conduct a pre-due diligence to flush out any issues and make sure the documentation is ready in advance. We also create a very detailed confidential summary of the agency that educates potential buyers about the operation and opportunity. Both of these steps add a great deal of value by speeding up the overall sale process and providing buyers with the information they need to feel comfortable in consummating a deal.

4) How do you find a buyer while protecting confidentiality?

There are two ways to solicit buyers: the reactive method and the proactive method. The reactive method involves placing discrete ads about the opportunity and waiting for prospects to inquire. The proactive method involves discretely marketing directly to potential prospects and asking them if they are interested. Obviously the former is much more effective than the latter and its best handled by a third party. When it comes time to solicit buyers, our firm has a database of over 1,200 pre-screened individuals and companies that have contacted us looking to acquire insurance agencies that we can contact directly.

Protecting confidentiality should be a top priority during the sale process as a great deal of damage can be incurred should your employees, customers or carrier reps learn that you are trying to sell. There are many would-be-buyers for insurance agencies, but only a small percentage are serious candidates for any given agency. Any prospective buyer should be required to sign a legally binding confidentiality/non-disclosure agreement and required to submit a statement of their financial worth, including cash available for a transaction, before receiving information on the agency. From an owner's perspective, it is very difficult to manage the buyer solicitation and screening stage while also running a business.

5) How long does it take to complete the sale of an agency?

The truth is that it can be as short as a few months to never depending on a number of factors including the agency, the asking price and terms, how buyers are solicited, how well the agency is prepared for sale and how well the process is managed. The buyer also makes a big difference. Some are inexperienced and unknowingly make promises that they can't keep in regards to how much they can borrow from a third party, while others intentionally lock the seller into a non-binding purchase agreement with the intention of renegotiating after due diligence is completed.

In our experience, after a purchase agreement has been signed by the parties, the sale process typical takes two to three months depending on the sophistication of the transaction and financing involved. The due diligence phase alone can take two weeks to two months, depending on the complexity of your business. In many cases, the owner will also need to stay on with the buyer for a transition period which can range from a few weeks to a few years. Our average time from executing an engagement with a client to closing on the sale is five months, and our success rate is very high because of our pre-due diligence on the agency and potential buyer.

For most agency owners, the agency business is their most valuable asset. Having not sold an agency previously, many owners are unaware of the value of their agency, how to initiate a sale process, the amount of time, energy and emotion that goes into it, and the potential issues that can arise. To yield the best return on your investment, it is critically important to the perform this process properly and choose the right advisors because you only get one chance to get the sale right.

Our firm has helped dozens of clients reach their goal of exiting their agency. Should you have any questions regarding this subject matter, please don't hesitate to contact me. Thank you for your time and best wishes for a prosperous new year.

Term Insurance - the best investment for your family

You've always tried to give your family nothing but the best. Compromise is not an option. You would go out of your way to bring a smile on your near and dear one's faces. But life is all about uncertainties. What would happen if something unfortunate were to happen to you? Ever given it a thought? Who would take care of the liabilities left behind that are still waiting to be paid off? Your utmost priority is to secure the well being of your loved ones who have always depended upon you. Thought the emotional void cannot be fulfilled, you can plan and make sure that financially their life is secured.

This is where the role of term insurance comes in. A term insurance pay out can help ease worries on the financial front. Term insurance provides protection for a specific period of time. It pays a benefit only if due to some unfortunate incident, the policy holder passes away. Level term products are the most popular plans purchased today. You can choose a level term from 5 years to 30 years. Also, the premiums can be either guaranteed or not guaranteed.

When you buy a term insurance, make sure you are aware of the guaranteed* premium period. Once, all the formalities have been done and you pay the first payment, the insurance company is obligated to keep the policy in force as long as you keep paying the premiums. It's up to you to pay every month or not. But once you stop paying, the policy will lapse after usually a 30 day grace period. Some term insurance policies can be renewed when you reach the end of a specific period which can be from one to 30 years.

These days, to make it easier for you to calculate your premiums and compare different plans for this category, you can use insurance calculators and even subscribe to term insurance online. But before you subscribe to these insurance plans online, take a look at various other term insurance plans available. There are a lot of hidden costs which one tends to ignore. So make sure that you are aware of all the terms and conditions so that there is no surprise in store for you later on. Since buying a these kind of insurance plans costs much less than any life insurance policy, it's time you ensure a life of self respect and pride for your family.

Workers Compensation - The Insurance Side

Workers compensation is an insurance that your employer provides as a benefit to you as their employee. In the event that you need to file a claim, there are many things you need to know about what's happening on the insurance side of it. Here's a basic rundown of what's happening and what you can expect.

If you've decided to not seek the help of an attorney right away, the first person you'll be dealing with is an insurance adjuster. An insurance adjuster is a person that takes charge of the claim and all aspects of it- including your recovery. They follow your case closely and will keep in close contact with you throughout the process. Unfortunately, due to the fact that these people are employed by the insurance company, they have no need to keep you informed on your rights and what's best for you. It's going to be your job to know your rights and sometimes enforce them when necessary. This said, the adjuster is the person that decides whether or not you are entitled the benefits of an approved claim. Working with an adjuster is a team effort between you and them- and while it's their job to make sure they treat you with respect, it's your job to do the same for them.

It is important to stress that an adjuster has to motivation to make decisions based on your best interests. This needs to be handled by you. While they won't treat you poorly, they'll do their jobs. It's up to you to make sure you're getting the best end of the deal. If you feel like this may not be something you could handle, hiring legal help may be of great benefit for you. A lawyer or attorney will make decisions on your behalf that are best for you- and since they know the legal system and what your rights are, you'll be able to take full advantage of your rights through them. Of course, if you're comfortable handling this on your own, legal help may not be what you need.

When you file a workers compensation claim, you'll first hear from an insurance adjuster by letter. The letter will let you know what the immediate status of your claim is- whether or not it's been initially denied, accepted, or under further review. Adjusters typically do their best to contact the claimant right away to obtain facts from the incident and other pertinent information that they feel are associated with your claim. The most important thing to do when an insurance adjuster is taking a statement is to tell the absolute truth. This avoids conflicting statements and prevents the insurance company from considering denying your claim based on potentially erroneous facts. Due to the high amount of fraud committed with workers compensation insurance claims, insurance agencies are very diligent about making sure your claim is substantiated and that you are telling the truth.

What Are The Main Benefits Of Getting Landlords Insurance?

Many people today for various reasons have decided to lease their property. Renting out property carries risks that must be considered. Therefore, many people that lease out property carry landlords insurance as protection. There will be circumstances that would normally not be a consideration for owners occupying their own property.

Generally, the tenants will not be well known to the owner. There really is not an accurate way to gauge whether the individuals are likely to be destructive. Subsequently, damage to the property can occur, and traditional homeowners insurance would not cover any loss. Having the right insurance policy can cover loss of income if the tenants fail to pay, as well.

Additionally the renters may have visitors over and someone gets hurt, having insurance will cover such events. However, the insurance will not cover any loss of the renter's property. There may be natural disasters that prevent the renters from inhabiting the property. There are policies available that can cover the loss of income while the structure is being rebuilt.

Property owners may also need to hire contractors to perform work on the property. Injuries to the workers would be covered under the policy. It is important to consider the property as a business. Consequently, standard content insurance or fire protection will not cover many events when the property is classified as a business. Individuals that work for the property owners would be considered an employee.

It is important for owners to understand their policy. There is actual cash value and replacement value insurance. Actual cash value only pays what the item is worth at the time it was stolen or destroyed. For example, a television set that is 10 years old has far less value than a new one. However, replacement value means regardless of its age, the item is valued at what it cost to replace at today's prices.

Property owners may provide washers and dryers, furniture and even ceiling fans for their renters. The appliances and fixtures may be stolen or damaged, as the renters abandon the property. Having the right coverage will ensure the owner is fully compensated for their loss.

Lawsuits are prevalent in today's society thus, property owners must do what they can to protect themselves. For example, a renter decides to rewire some electrical plugs. Through no, fault of the owner the renter sustains injuries. The tenant however, may feel it is the owners fault and brings a lawsuit against the property owner. Being well covered against liability at this point can prevent a financial disaster from occurring. Having landlord's insurance is one of the more critical necessities of leasing property.

Pipes can burst at anytime; the furnace may fail in the middle of the night. Owners can become overwhelmed financially without insurance. The renters may have paid on time and never posed any trouble. The owner may not have ever had a reason to enter the premises until after the renters had left. Owners may have assumed everything is ok. However, the property may very well be in shambles. This is where landlords insurance reveals its true value.

Tips on Evaluating Return of Premium Term Life Insurance

From the outward look, you wouldn't think twice about choosing a return of premium term life insurance policy over any other life insurance cover. However, ROP term life is not always a black and white matter as it seems. But this is not to say that it is a bad cover though, but rather you have to evaluate it based on a number of financial considerations that are specific to your case. This post gives you some of the tips to consider in your evaluation process, and at the end of it all, you should settle for a term insurance return of premium policy that you are comfortable with.

Evaluating the Cost

First, the name of this type of insurance policy might cause a little confusion in terms of cost since most people know that term life insurance is generally inexpensive as compared to whole life insurance. However, you should remember that of all insurance policies in this category, ROP term life insurance is arguably the most expensive that you will find. In fact, the premium of the policy could be as high as three times the cost of an average term life policy.

With that in mind, you have to evaluate if the cost of this policy is within your financial reach despite its net cost being zero. There are various term variations to it, and an idea could be to go for a shorter term of for instance 10 or 15 years. While the longer terms offer you cover for an extended period, the issue of sustainability of the premium should be factored in. Remember that you only stand to benefit from term insurance return of premium if you are able to see the policy through its end. However, if you want to get maximum benefit from it, then take a term of between twenty to thirty years.

Combine ROP Term Life With Other Investments

Return of premiums term life insurance is generally a good life insurance policy for any person to consider, whether young or old. However, since the policy is a bit costly, it might help to take a shorter term option and save some money on the same. The money saved can be put into other appropriate investment tools. Logically, a 30-year term policy would cost you more than a 15-year term policy. So, instead of stuffing all your money in the 30-year ROP term life policy, spread the risk of investment and take the 15-year option, and invest the remainder elsewhere. This is basically in line with wise investment decisions -spreading the risks.

Secondly, you could also consider taking a normal term life insurance policy, which is by far cheaper and then the balance be invested elsewhere. All these options depend on your individual circumstances and your investment plans. However, it might assist to consult your financial advisor before taking the right step.

How to Get Online Liability Insurance Quotes

Public liability insurances are imperative for any business venture, big or small. However, getting a public liability insurance is not as easy as 1-2-3. Owners need to determine the cost of insurance coverage for their company. There are conventional ways to do it like going to the insurance company directly or calling them one by one through phone. Yet, these ways are time-consuming. Business owners are busy people who need to attend to a lot of things. To make things easier and convenient for them, they can get online public liability insurance quotes straight from the net

In order for a business owner to get online public liability insurance quotes, they need to provide information regarding their business. The following which will be discussed are the 8 most important details needed by the insurance company. The first detail is the type of business. The next point is the incorporation of the business whether it is a sole proprietorship, partnership or, a limited company, among others. The third detail is the ratio of annual sales to the inventory.

The fourth information required are the particulars regarding any liability claims that the company had dealt with the past, if ever there are. It includes details on the case such as the situation, date of occurrence, and the cost paid. The next detail is the location of the business - whether it is in a commercial or an industrial area. It is then followed by points wherein the business will take in subsidiary organizations.

The seventh detail required to get an online quote is the information about the exact number of employees so as the agent can identify the premium. It includes the number of clerical employees, directors, and business partners. And the last, but definitely not the least point, is the preferred starting day of the policy.

After the completion of the public liability insurance online quote, the owner is expected to get a quote conformation sent directly to their e-mail address. Business owners can send information on their enterprise and get online quotes from several insurance companies. That way, they will have a chance of selecting the best insurance company that can provide their business the appropriate and most suitable public liability insurance.

Businesses and its owners should not be easily enticed to get the cheapest insurance policy: getting these types of offers are not all the time efficient as expected. Yet, expensive insurance policies are not advisable as well. It will be beneficial for them to make an online research for reviews on different online professional liability insurance quotes to get the best among the rest.

Matt Harmon has been a successful entrepreneur for over 12 years. His passion is for helping and protecting entrepreneurs on issues such as liability insurance. Visit his website for a great resource for general liability insurance information.

The A, B and C's of Most Business Insurance Policies

A Commercial General Liability policy (CGL) is a comprehensive insurance product that companies buy to protect themselves in case of losses such as fire, water damage, acts of nature, bodily injury, and damage to property or criminal activity. Purchasing this policy is the first step businesses take to protect their assets. This safety net is critical in a society in which the number of lawsuits and the value of judgment awards have increased over the years.

The CGL is subdivided into 3 sections - Coverage A, Coverage B and Coverage C.

Coverage A - Bodily Injury & Property Damage.

This section of the policy agrees to cover the costs the insured becomes legally obligated to pay due to property damage, bodily injury and products/completed operations. It will also cover all costs incurred to defend the insured against any/all claims that allege such damages. This section offers a wide range of coverage that protects the premises and the product. However, there are also many exclusions that are standard throughout most industries. Most common exclusions as follows:

Aircraft, auto, Watercraft
Pollution
Workers compensation
Expected or Intended injury
Recall of Products/work

There are 2 types of limits that coverage A defines.

Occurrence Limit - the limit insurer will pay for all damages resulting from bodily injury or Property damage from a SINGLE Occurrence

Aggregate Limit - the limit the insurer will pay for ALL claims during the policy period

Coverage B - Liability for Personal & Advertising Injury

Under this section of coverage, the insurer agrees to pay for damages as a result of personal and advertising injury. Examples of this coverage include libel, slander, copyright infringement, false arrest, using others advertising ideas and or slogans. The limit of liability is most often the same limit as the occurrence limit as per Section A.

Coverage C - Medical payments

This section of the policy covers medical expenses the insured is legally obligated to pay in case any person (other than insured) that is injured on the insured's premises or as a result of the insured's operations. It is important to note that this limit is just a small fraction of the limits provided in sections A & B. Atypical Medical expense limit is $5,000 on most traditional policies. This limit can be increased by way of a special agreement/endorsement with the insurance company.

By having a CGL in place, companies can relax knowing that they can conduct business without having to worry about a claim and how it will be handled. If a claim is filed against an insured business, the insurance company will conduct a thorough investigation to eliminate any claims that are proven to be unjust. Legal fees, including court costs, are covered under the policy. If the business is found liable and the incident is covered under the policy, their insurance company would pay the award amount up to the coverage limit purchased by the insured.

When considering business insurance coverage, one should consider the following:

    The coverage limits of the policy that will cover exposures related to your business
    Coverage should be customized to your unique business needs
    Additional policies or endorsements may be required to cover specific business activities and needs

Captive Insurance Company - Reduce Taxes and Build Wealth

For business owners paying taxes in the United States, captive insurance companies reduce taxes, build wealth and improve insurance protection. A captive insurance company (CIC) is similar in many ways to any other insurance company. It is referred to as "captive" because it generally provides insurance to one or more related operating businesses. With captive insurance, premiums paid by a business are retained in the same "economic family", instead of being paid to an outsider.

Two key tax benefits enable a structure containing a CIC to build wealth efficiently: (1) insurance premiums paid by a business to the CIC are tax deductible; and (2) under IRC § 831(b), the CIC receives up to $1.2 million of premium payments annually income-tax-free. In other words, a business owner can shift taxable income out of an operating business into the low-tax captive insurer. An 831(b) CIC pays taxes only on income from its investments. The "dividends received deduction" under IRC § 243 provides additional tax efficiency for dividends received from its corporate stock investments.

Starting about 60 years ago, the first captive insurance companies were formed by large corporations to provide insurance that was either too expensive or unavailable in the conventional insurance market.

Over the years, a combination of US tax laws, court cases and IRS rulings has clearly defined the steps and procedures required for the establishment and operation of a CIC by one or more business owners or professionals.

To qualify as an insurance company for tax purposes, a captive insurance company must satisfy "risk shifting" and "risk distribution" requirements. This is easily done through routine CIC planning. The insurance provided by a CIC must really be insurance, that is, a genuine risk of loss must be shifted from the premium-paying operating business to the CIC that insures the risk.

In addition to tax benefits, principal advantages of a CIC include increased control and increased flexibility, which improve insurance protection and lower cost. With conventional insurance, an outside carrier typically dictates all aspects of a policy. Often, certain risks cannot be insured conventionally, or can only be insured at a prohibitive price. Conventional insurance rates are often volatile and unpredictable, and conventional insurers are prone to deny valid claims by exaggerating petty technicalities. Also, although business insurance premiums are generally deductible, once they are paid to a conventional outside insurer, they are gone forever.

A captive insurance company efficiently insures risk in various ways, such as through customized insurance policies, favorable "wholesale" rates from reinsurers, and pooled risk. Captive companies are well suited for insuring risk that would otherwise be uninsurable. Most businesses have conventional "retail" insurance policies for obvious risks, but remain exposed and subject to damages and loss from numerous other risks (i.e., they "self insure" those risks). A captive company can write customized policies for a business's peculiar insurance needs and negotiate directly with reinsurers. A CIC is particularly well-suited to issue business casualty policies, that is, policies that cover business losses claimed by a business and not involving third-party claimants. For example, a business might insure itself against losses incurred through business interruptions arising from weather, labor problems or computer failure.

As noted above, an 831(b) CIC is exempt from taxes on up to $1.2 million of premium income annually. A CIC must receive premium payments of at least $350,000 annually to qualify for the favorable tax treatment under IRC § 831(b). As a practical matter, a CIC makes economic sense when its annual receipt of premiums is about $500,000 or more. A captive company commonly insures businesses outside of the captive's economic family, thereby increasing annual premium totals. A group of businesses or professionals having similar or homogeneous risks can form a multiple-parent captive (or group captive) insurance company and/or join a risk retention group (RRG) to pool resources and risks.

A captive insurance company is a separate entity with its own identity, management, finances and capitalization requirements. It is organized as an insurance company, having procedures and personnel to administer insurance policies and claims. An initial feasibility study of a business, its finances and its risks determines if a CIC is appropriate for a particular economic family. An actuarial study identifies appropriate insurance policies, corresponding premium amounts and capitalization requirements. After selection of a suitable jurisdiction, application for an insurance license may proceed. Fortunately, competent service providers have developed "turnkey" solutions for conducting the initial evaluation, licensing, and ongoing management of captive insurance companies. The annual cost for such turnkey services is typically about $50,000 to $150,000, which is high but readily offset by reduced taxes and enhanced investment growth.

A captive insurance company may be organized under the laws of one of several offshore jurisdictions or in a domestic jurisdiction (i.e., in one of 39 US states). Some captives, such as a risk retention group (RRG), must be licensed domestically. Generally, offshore jurisdictions are more accommodating than domestic insurance regulators. As a practical matter, most offshore CICs owned by a US taxpayer elect to be treated under IRC § 953(d) as a domestic company for federal taxation. An offshore CIC, however, avoids state income taxes. The costs of licensing and managing an offshore CIC are comparable to or less than doing so domestically. More importantly, an offshore company offers better asset protection opportunities than a domestic company. For example, an offshore irrevocable trust owning an offshore captive insurance company provides asset protection against creditors of the business, grantor and other beneficiaries while allowing the grantor to enjoy benefits of the trust.

For US business owners paying substantial insurance premiums every year, a captive insurance company efficiently reduces taxes and builds wealth and can be easily integrated into asset protection and estate planning structures. Up to $1.2 million of taxable income can be shifted as deductible insurance premiums from an operating business to a low-tax CIC.

Warning & Disclaimer: This is not legal or tax advice.

Internal Revenue Service Circular 230 Disclosure: As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Copyright 2011 - Thomas Swenson

http://swenlaw.com

Thomas Swenson practices law in the areas of asset protection, business planning and intellectual property.

Among his specialties are the design and implementation of offshore dynasty trusts holding private placement life insurance (PPLI). In full compliance with U.S. tax laws, an irrevocable, discretionary, offshore PPLI dynasty trust provides a life insurance benefit, tax-free investment growth, asset protection against all creditors, financial security, and perpetual tax-free enjoyment of trust assets by beneficiaries.

He also provides counseling and services to US business owners regarding captive insurance companies, which reduce taxes, build wealth and improve business insurance protection.

Does A Home Business Need Insurance?

Home businesses are growing rapidly thanks to the Internet and World Wide Wed. Countless consultants, work at home moms, independent contractors now operate their businesses from home. If you're one of these professionals doing business from home, there are some critical insurance issues you need to be aware of.

Chances are, you have a homeowners policy to cover losses related to your home and the contents within your home. But when it comes to your home business, homeowners policies are limited as to what they'll cover. In fact, most homeowners policies cover a maximum of $2,500 in business related losses at home.

Maybe you're not worried about having to replace a damaged or stolen PC or printer. But you still need to consider other liabilities that could leave you in a financial bind. What sorts of liabilities would a home business operator be subject to?

Well for starters, if your customers come to your home for meetings or appointments, they could be injured entering your house by something as incidental as tripping on your steps. This could lead to a lawsuit, and you guessed it -- the suit would likely not be covered by your homeowners policy. Perhaps someone delivering a package falls or has some other type of accident in your driveway? How you do cover yourself for situations like these that are business related in nature, but occur at your home since that's where you're doing business on a full or part-time basis?

There are a few ways to get covered for business related liabilities at home. The first solution is to consider a "combo policy" that covers the home as well as the business. Some insurance companies now offer these policies which combine homeowners insurance with policies like commercial liability insurance and more. By combining homeowners coverage with business insurance you can save money. Ask your insurance agent or broker about this type of policy if your business is operated from home.

A second strategy is to simply get what is called a business "endorsement" added onto your homeowners policy. This is basically a rider that is attached to your homeowners policy that extends your coverage to your business. Depending on the insurance company you work with, your policy endorsement can cover things such as theft or damage to equipment, inventory and even GLI (general liability insurance) which covers you for business related injuries or property damage. If your home business qualifies for this type of policy it can help you save money on your commercial insurance by limiting occurrences of duplicate coverage.

When shopping for a home business combo policy or a business endorsement, be sure to ask about exclusions so you know what is NOT covered. Also, make sure your policy has high enough limits to cover all your potential home and home business liabilities. Too many people buy business insurance then find after an accident or lawsuit that they did not have a high enough limit. If your losses in a claim, settlement or judgment are $1 Million and your policy limits were set at $500,000, you'll be responsible for coming up with the rest. What good is insurance at that point? One way to get higher coverage amounts is to buy an umbrella policy. This type of policy can increase your limits and save save you money in the process.

These types of policies do not cost much for most home business owners. In most cases for just a few hundred dollars a year you can add business coverage to your homeowners premiums, including general liability. You can do it for less if you shop around enough both online and offline.

While running a business from home seems easier than setting up a shop or office at another location, you are still subject to liabilities. The right insurance policies can help protect your finances, your home and your business.

Managing Risks For Schools and Academies With Academies Insurance in the Face of the Winter Weather

The festive season is getting under way and with it, comes the colder weather and as many well know, this comes with a new array of risks to contend with.

For those responsible for the running and safeguarding of schools, academies and their pupils' interests, this should merit their attention.

Every school is different, and so the risks faced will vary. Investing in the correct Academies Insurance policy is important for risk management and budgeting. The onset of colder weather increases the chances of accidents happening and it also increases the likelihood of infrastructure and buildings damage. All of these things, particularly infrastructure and buildings damage, can have a disruptive effect on the ordinary running of a school.

With government targets to meet and standards to adhere to, school disruptions and closures are the last things that school teachers and staff want to contend with. In the same way that businesses can have their operations interrupted by a lack of Internet access or power, so too can a school. So it is important for school governors to ensure that safeguards are in place to mitigate the effect of such an interruption; they also need to have the correct insurance cover in place to cover the costs of reparations

It is important then for academies and schools to seek out tailored cover. Often, academies insurance will cover a range of risks, including liability, buildings damage, and professional indemnity for staff, employer's liability and more. It is therefore critical, in today's uncertain economic climate, to strike an efficient, cost-effective balance between the cover required and the outlay for the policy.

With cuts being made across the public sector, highlighted more recently by the proposed pension cuts for public sector workers, funding is certainly an issue. What school governors need to understand is that a good insurance policy can help them manage risks in a way that is financially beneficial. The cost of repairing a building outright, when compared to investing in schools insurance that covers buildings damage, is markedly different. Given the harsh winter weather the UK has experienced over the past three years, collapsed roofs and infrastructure damage is not out of the question.

Such a policy is also better for cash flow, as it is the insurers who will have to shoulder the costs of the incident as opposed to the school. Although, a successful claim depends upon appropriate measures and procedures being in place to ensure that the school cannot be held liable in a way that is not covered by their policy.

It is very difficult to foresee the occurrence of any accident or disruptive event, but preparations can be made that can increase the likelihood of a successful claim should something untoward occur. It is wise for school and academy managers to consult with a specialist Business Insurance Provider to understand their needs so that they know which kind of measures they need to put in place to adhere to their insurer's terms.

Here at aba we believe in offering only the best insurance products and services to businesses, ensuring you get only the cover you need and not excessive policies that you'll never make use of. As the economy begins to find its feet again, insurance will continue to be a cost that many companies will try to skimp on. Cut back on policy price, not quality.

Life Insurance Is for People of All Ages and Backgrounds

There used to be an image problem about items like life insurance with many considering them to be only for older people or people with too much money at their disposal. In recent times though, this perception has changed and the benefits of having good policies looking after a family in all circumstances are very much in vogue. Death and passing away is always going to be a difficult prospect to talk about for people but knowing that your loved ones are looked after is something that provides great comfort for many people. This is why these policies are now considered vital components of life for a great number of individuals.

It is never too early to start thinking about life insurance. When you are 17 years old with your whole life ahead of you, you are unlikely to spend too much time thinking about death and your loved ones being left behind, but the earlier you start, the better legacy you can leave them. When you start working, it is of benefit to start thinking about plans and policies because even a small amount of money put away each month can start to add up. As you progress through your working career, there will be opportunities to increase these amounts if your job and life circumstances dictate but remember that it is never too early to plan ahead.

It is also never too late to start thinking about a life insurance policy, which is something that you may need to consider. Yes, the levels of benefit that accrue from a policy that has been in place for many years will be higher than a short-term policy but any payment is likely to be better than nothing at all. Life circumstances can change at any moment and it could be that your family lifestyle may change in a short space of time. This is not a problem and there are policies and plans that can bring comfort to you and your loved ones, no matter how life turns out.

It is also fair to say that more and more people are deciding to leave Britain and try pastures new. Whether it is the depressing weather that drags you down or you think there are better career prospects abroad, there is no barrier to receiving a payout wherever you and your family are in the world. If you are contemplating emigrating, there is no need to be overly concerned about any negative impact that this would have on your life insurance policy, just ensure that you have discussed the options with your insurance provider to see what you need to do.

Another issue that people will have to weigh up with regards to their life insurance policy is whether the payment will be made on a monthly basis or in a lump sum payment. There are positives to both types of payment and every family will have their own opinions and a viewpoint on what is right for them. This flexibility is a great comfort for many people because it means that whatever situation their loved ones face in the event of a sad passing, there will be the ability to deal with it in a positive fashion.

Car Insurance for Teens

Teen drivers present some special situations regarding the expense of their car insurance. The following tips will help clarify considerations for teen car insurance.

Drivers are accustomed to considering many of the criteria auto insurance companies use in determining insurance rates including the vehicle, the driver's driving record and how far the driver will be driving. Car insurance for teens is expensive because teens are new drivers and as a group they are statistically at more risk to have accidents, making the insurance company liable.

When you are considering what is necessary for a teen driver, the age of the teen is very important. For most teens under the age of 18 executing a valid contract is not possible. Car insurance coverage is a contract and therefore they will not be able to purchase their own car insurance. If you are the parent of a teen who has a learner's permit you must call your insurance company to find out whether your teen needs to be insured under your policy. Many states do not require separate insurance for teens under the age of 18 who are driving with a learner's permit.

There are certain situations where teens are permitted to execute valid contracts. Most notably, in the instance of an emancipated minor the teen will obtain adult privileges such as the right to contract. In this instance the teen will be able to purchase auto insurance.

If a teen is engaging in risky behavior you cannot use your parental authority to get the teen's license taken away. Once the teen is licensed even if you are paying for car insurance, the most you will be able to do is stop insurance coverage for the teen. This is not wise because if the teen decides to drive the teen will have the legal difficulties of being an uninsured driver. Instead, delay allowing your teen to obtain his driver's license until the teen is 18 and can legally obtain his own insurance.

If you have a child who is older whom you still want to carry on your insurance policy, you can usually do this as long as you own the car. It is more difficult to obtain a policy for someone when you don't own the car. If you want to help an older child pay for car insurance for a car that child owns, you can privately provide funds for car insurance.

As a person gets older and has more driving experience his rates normally will drop. In the meantime, parents whose policy covers their teens can use traditional ways to lower insurance costs. Some auto insurers provide discounts if teens obtain good grades which can help save you a few dollars.

Sometimes teen auto insurance expenses can be reduced by having the teen take a defensive driving class. These classes are not available in all areas as a means of reducing insurance rates, nor do all insurance companies reduce rates if you take such a course. Check with your insurance company to find out whether this option is available to you.

Part of the driving experience for everyone, including teens, is the process of getting auto insurance. Consider using the above tips to choose affordable car insurance coverage for teen drivers.

To learn more about saving money on new driver auto insurance, visit Affordable-Auto-Insurance-Quotes.net. Quickly compare student auto insurance rates among the nation's top carriers using one fast form. Be sure to pick up your free gifts there too: Simple Car Care Tips, Financing Your Car, and our handy Auto Accident Report Card to keep in your glove box.