11 Essential Steps to Retirement Planning
Life Insurance
It used to be that Americans retired at 65 with a gold watch and a nice, fat pension. But times have changed, and now we're finding we have to take a more active role in preparing for retirement.
This new world of 401(k) plans and Roth IRAs leave many people confused and uncertain. A 2009 Employee Benefit Research Institute survey, for instance, found that only 44 percent of Americans have ever tried to calculate how much they need for retirement.
"Planning for retirement can be a daunting task, especially given the recent economic climate," said Insured Retirement Institute (IRI) President and CEO Cathy Weatherford. "And while by most accounts the financial forecast appears to be improving, millions of Americans have yet to begin preparing for their retirement."
According to the IRI and the U.S. Department of Labor, there are 11 steps you can take to ensure that you do not outlive your savings.
1. Select a target retirement date
This important step determines how much money you need. If you want to retire early--say at the age of 55--you need to have a good post-retirement income and a lot of savings because your retirement could last 30-40 years. You should also buy health insurance until Medicare kicks in at age 65.
The Department of Labor says most people retire at the age of 65-66, although many are continuing to work later in life. Key benchmarks that may influence your decision on when you ultimately retire:
* Age 59 ½: You can withdraw from retirement accounts without paying a tax penalty
* Age 62: The minimum age to receive Social Security benefits
* Age 66: Eligible for Social Security benefits if born between 1943-1954
* Age 70 ½: Face tax penalties if you don't start taking minimum withdrawals from retirement accounts
2. Calculate the amount of money you should accumulate by your target retirement date
This is largely determined by what your lifestyle, living and medical expenses will be during retirement. You should also take into consideration the cost of inflation. The Labor Department recommends you plan for a 30-year retirement, regardless of what age you retire.
Key questions to ask yourself:
* Will I still have a mortgage payment or will my home be paid for?
* How much will I want to travel?
* How much of my current monthly expenses continue after I retire?
* How much should I keep in investments? (financial experts recommend that you continue making investments that earn enough to cover the cost of inflation)
* Will I want additional health insurance to pay for services not covered by Medicare?
3. Figure out how to maximize your Social Security benefits
More than half of retirees start collecting benefits at age 62, but advisors note that your monthly payments may be a third higher if you wait until age 66 to start collecting. Those who wait until age 70 receive 75 percent more.
"Millions of Americans may not be aware of the financial advantages most people gain by waiting even a few years to begin receiving their benefits," Weatherford said.
4. Take advantage of tax-advantaged plans, such as employer-sponsored retirement plans, individual retirement accounts and annuities
According to Kiplinger magazine, many retirees who either lost money or lost faith in the stock market are purchasing insurance annuities to provide guaranteed income during retirement. With an annuity you pay an insurance company a large sum of money in return for a monthly check for a certain time period or for the rest of your life. For instance, a 65-year-old man could make $725 a month by purchasing a $100,000 annuity.
The Labor Department notes that some annuities make adjustments for inflation. It recommends you carefully review the terms of the investment and answer the following questions:
* Does the amount paid vary based on investment returns or is it fixed?
* What will you pay in related fees?
* How are the payouts taxed?
5. As that your employer start a pension or retirement plan if one doesn't already exist
Starting a retirement savings plan is easier than many small business owners might think. Retirement plans help to attract and keep good employees, and the employer's contributions are tax deductible.
6. Only use your savings for retirement
Many experts agree on this step. The Labor Department notes that if you dip into your retirement savings, you lose principle and interest, and you may lose tax benefits. Roll your 401(k) into an IRA if you change jobs.
7. Diversify your assets and be sure to include guaranteed income for life
Experts recommend you keep money in a safe, interest-bearing account, as well as some money-earning stocks. This spreads the risk. The Labor Department recommends the following distribution:
* Some money in savings or checking accounts with no risk
* Some in bonds, with a little more risk
* Some in stocks with a higher risk, but a higher return
Another way to diversify is by investing in index mutual funds.
8. Ask questions and get help by seeking the advice of a professional financial advisor
An expert can help you sort through all the investment opportunities and help you decide what's right for you. But avoid strangers on the phone or the Internet--retirees are frequent targets for scammers.
9. Start now and set goals
The IRS recommends you set up a "painless" payroll deduction, regardless of your age or how long you have until retirement. Other strategies:
* Maximize your pre-tax deductions at work
* Make catch-up contributions after the age of 50
* Work a few years longer than you might otherwise have
* Don't take on large debt during your pre-retirement years
* Hold off withdrawing Social Security benefits
10. Start a retirement plan and monitor your progress
A retirement plan can help set out your goals for saving and your strategies for reducing debts. Write down those goals and strategies. According to the Labor Department, people frequently alter future spending patterns if they record their expenses and have a plan for reducing them.
11. Use whole life insurance to protect your family's finances
Purchasing a whole life insurance policy, which pays beneficiaries when the insured individual dies, is a way to ensure your family is financially protected should the breadwinner pass away and is no longer bringing home a paycheck. A whole life insurance policy can provide the funds necessary, so that your spouse doesn't have to go back to work during retirement, or that your children don't have to tap into their own savings to pay for a funeral. A properly sized policy can make sure your spouse has enough money to pay the outstanding principle on your home, finish paying for a child's college or cover other large expenses.
Thursday, May 6, 2010
Wednesday, May 5, 2010
Best Insurance Articles
Tuesday, May 4, 2010
New Artical Publish
Sunday, May 2, 2010
Parts of an insurance contract
Parts of an insurance contract
* Declarations – identifies who is an insured, the insured’s address, the insuring company, what risks or property are covered, the policy limits (amount of insurance), any applicable deductibles, the policy period and premium amount. These are usually provided on a form that is filled out by the insurer based on the insured’s application and attached on top of or inserted within the first few pages of the standard policy form.
* Definitions – define important terms used in the policy language.
Insuring agreement – describes the covered perils, or risks assumed, or nature of coverage, or makes some reference to the contractual agreement between insurer and insured. It summarizes the major promises of the insurance company, as well as stating what is covered.
* Exclusions – take coverage away from the Insuring Agreement by describing property, perils, hazards or losses arising from specific causes which are not covered by the policy.
* Conditions – provisions, rules of conduct, duties and obligations required for coverage. If policy conditions are not met, the insurer can deny the claim.
* Endorsements – additional forms attached to the policy form that modify it in some way, either unconditionally or upon the existence of some condition. Instead of allowing nonlawyer underwriters to directly customize core policy language with word processors, insurers usually direct underwriters to modify standard forms by attaching endorsements preapproved by counsel for various common modifications.
* Declarations – identifies who is an insured, the insured’s address, the insuring company, what risks or property are covered, the policy limits (amount of insurance), any applicable deductibles, the policy period and premium amount. These are usually provided on a form that is filled out by the insurer based on the insured’s application and attached on top of or inserted within the first few pages of the standard policy form.
* Definitions – define important terms used in the policy language.
Insuring agreement – describes the covered perils, or risks assumed, or nature of coverage, or makes some reference to the contractual agreement between insurer and insured. It summarizes the major promises of the insurance company, as well as stating what is covered.
* Exclusions – take coverage away from the Insuring Agreement by describing property, perils, hazards or losses arising from specific causes which are not covered by the policy.
* Conditions – provisions, rules of conduct, duties and obligations required for coverage. If policy conditions are not met, the insurer can deny the claim.
* Endorsements – additional forms attached to the policy form that modify it in some way, either unconditionally or upon the existence of some condition. Instead of allowing nonlawyer underwriters to directly customize core policy language with word processors, insurers usually direct underwriters to modify standard forms by attaching endorsements preapproved by counsel for various common modifications.
Insurance Policy
Insurance Policy.
In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for payment, known as the premium, the insurer pays for damages to the insured which are caused by covered perils under the policy language. Insurance contracts are designed to meet specific needs and thus have many features not found in many other types of contracts. Since insurance policies are standard forms, they feature boilerplate language which is similar across a wide variety of different types of insurance policies.
Insurance Policy
Insurance Policy
The insurance policy is generally an integrated contract, meaning that it includes all forms associated with the agreement between the insured and insurer. In some cases, however, supplementary writings such as letters sent after the final agreement can make the insurance policy a non-integrated contract. One insurance textbook states that “courts consider all prior negotiations or agreements … every contractual term in the policy at the time of delivery, as well as those written afterwards as policy riders and endorsements … with both parties’ consent, are part of written policy”. The textbook also states that the policy must refer to all papers which are part of the policy. Oral agreements are subject to the parol evidence rule, and may not be considered part of the policy. Advertising materials and circulars are typically not part of a policy. Oral contracts pending the issuance of a written policy can occur.
General features
The insurance contract is a contract whereby the insurer will pay the insured (the person whom benefits would be paid to, or on the behalf of), if certain defined events occur. Subject to the “fortuity principle”, the event must be uncertain. The uncertainty can be either as to when the event will happen (i.e. in a life insurance policy, the time of the insured’s death is uncertain) or as to if it will happen at all (i.e. in a fire insurance policy, whether or not a fire will occur at all).
* Insurance contracts are generally considered contracts of adhesion because the insurer draws up the contract and the insured has little or no ability to make material changes to it. This is interpreted to mean that the insurer bears the burden if there is any ambiguity in any terms of the contract. Insurance policies are sold without the policyholder even seeing a copy of the contract.
* Insurance contracts are aleatory in that the amounts exchanged by the insured and insurer are unequal and depend upon uncertain future events.
* Insurance contracts are unilateral, meaning that only the insurer makes legally enforceable promises in the contract. The insured is not required to pay the premiums, but the insurer is required to pay the benefits under the contract if the insured has paid the premiums and met certain other basic provisions.
* Insurance contracts are governed by the principle of utmost good faith (uberrima fides) which requires both parties of the insurance contact to deal in good faith and in particular it imparts on the insured a duty to disclose all material facts which relate to the risk to be covered. This contrasts with the legal doctrine that covers most other types of contracts, caveat emptor (let the buyer beware). In the United States, the insured can sue an insurer in tort for acting in bad faith.
Structure
Early insurance contracts tended to be written on the basis of every single type of risk (where risks were defined extremely narrowly), and a separate premium was calculated and charged for each. This structure proved unsustainable in the context of the Second Industrial Revolution, in that a typical large manufacturer might have dozens or hundreds of types of risks to insure against.
In the 1930s, the insurance industry shifted to the current system where covered risks are initially defined broadly in an insuring agreement on a general policy form, then narrowed down by subsequent exclusion clauses. If the insured desires coverage for a risk taken out by an exclusion on the standard form, the insured can pay an additional premium for an endorsement to the policy that overrides the exclusion.
In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for payment, known as the premium, the insurer pays for damages to the insured which are caused by covered perils under the policy language. Insurance contracts are designed to meet specific needs and thus have many features not found in many other types of contracts. Since insurance policies are standard forms, they feature boilerplate language which is similar across a wide variety of different types of insurance policies.
Insurance Policy
Insurance Policy
The insurance policy is generally an integrated contract, meaning that it includes all forms associated with the agreement between the insured and insurer. In some cases, however, supplementary writings such as letters sent after the final agreement can make the insurance policy a non-integrated contract. One insurance textbook states that “courts consider all prior negotiations or agreements … every contractual term in the policy at the time of delivery, as well as those written afterwards as policy riders and endorsements … with both parties’ consent, are part of written policy”. The textbook also states that the policy must refer to all papers which are part of the policy. Oral agreements are subject to the parol evidence rule, and may not be considered part of the policy. Advertising materials and circulars are typically not part of a policy. Oral contracts pending the issuance of a written policy can occur.
General features
The insurance contract is a contract whereby the insurer will pay the insured (the person whom benefits would be paid to, or on the behalf of), if certain defined events occur. Subject to the “fortuity principle”, the event must be uncertain. The uncertainty can be either as to when the event will happen (i.e. in a life insurance policy, the time of the insured’s death is uncertain) or as to if it will happen at all (i.e. in a fire insurance policy, whether or not a fire will occur at all).
* Insurance contracts are generally considered contracts of adhesion because the insurer draws up the contract and the insured has little or no ability to make material changes to it. This is interpreted to mean that the insurer bears the burden if there is any ambiguity in any terms of the contract. Insurance policies are sold without the policyholder even seeing a copy of the contract.
* Insurance contracts are aleatory in that the amounts exchanged by the insured and insurer are unequal and depend upon uncertain future events.
* Insurance contracts are unilateral, meaning that only the insurer makes legally enforceable promises in the contract. The insured is not required to pay the premiums, but the insurer is required to pay the benefits under the contract if the insured has paid the premiums and met certain other basic provisions.
* Insurance contracts are governed by the principle of utmost good faith (uberrima fides) which requires both parties of the insurance contact to deal in good faith and in particular it imparts on the insured a duty to disclose all material facts which relate to the risk to be covered. This contrasts with the legal doctrine that covers most other types of contracts, caveat emptor (let the buyer beware). In the United States, the insured can sue an insurer in tort for acting in bad faith.
Structure
Early insurance contracts tended to be written on the basis of every single type of risk (where risks were defined extremely narrowly), and a separate premium was calculated and charged for each. This structure proved unsustainable in the context of the Second Industrial Revolution, in that a typical large manufacturer might have dozens or hundreds of types of risks to insure against.
In the 1930s, the insurance industry shifted to the current system where covered risks are initially defined broadly in an insuring agreement on a general policy form, then narrowed down by subsequent exclusion clauses. If the insured desires coverage for a risk taken out by an exclusion on the standard form, the insured can pay an additional premium for an endorsement to the policy that overrides the exclusion.
How to Become an Insurance Agent
A successful insurance agent must be an excellent salesperson with an outgoing personality. The agent must also possess superior mathematical skills and constantly keep up-to-date on any changes within the Insurance Industry.
Familiarize yourself with the insurance field. Life, health, property and liability insurance are the areas in which most agents currently work.
Step 2
Receive a bachelor's degree in business or economics. Insurance companies prefer to hire individuals whose academic background includes courses in finance, math, accounting, economics, business and public speaking.
Step 3
Become proficient with the computer software used by the insurance industry.
Step 4
Work part time for an insurance agency while you're in college. Ask your guidance counselor if there are any agencies in your area that have training programs for college students.
Step 5
Expect to take your state's exam for the mandatory insurance license after an agency hires you. Classes for the exam are offered in pre-licensing schools of insurance agents associations and in offices of some insurance companies. Make sure you will meet all the licensing requirements of your state.
Step 6
Be prepared to take continuing education classes for years to come. Many states require these on a regular basis.
Step 7
Obtain certification to further your advancement within the industry. By taking intensive courses and examinations after you have had considerable experience as an agent, you can obtain the highly respected designation of Chartered Property and Casualty Underwriter.
Instructions
Step 1Familiarize yourself with the insurance field. Life, health, property and liability insurance are the areas in which most agents currently work.
Step 2
Receive a bachelor's degree in business or economics. Insurance companies prefer to hire individuals whose academic background includes courses in finance, math, accounting, economics, business and public speaking.
Step 3
Become proficient with the computer software used by the insurance industry.
Step 4
Work part time for an insurance agency while you're in college. Ask your guidance counselor if there are any agencies in your area that have training programs for college students.
Step 5
Expect to take your state's exam for the mandatory insurance license after an agency hires you. Classes for the exam are offered in pre-licensing schools of insurance agents associations and in offices of some insurance companies. Make sure you will meet all the licensing requirements of your state.
Step 6
Be prepared to take continuing education classes for years to come. Many states require these on a regular basis.
Step 7
Obtain certification to further your advancement within the industry. By taking intensive courses and examinations after you have had considerable experience as an agent, you can obtain the highly respected designation of Chartered Property and Casualty Underwriter.
Factors affecting insurance quotes
The life insurance quotes refer to the rates of life insurance policies. However these rates vary from company to company and from policy to policy. Though there many sources for information about the quotes it is better to collect from the company itself. If you can collect from more companies, well and good as it gives competitive edge. Read more from the article on insurance quotes.The article covers
* What are life insurance quotes?
* Where to get them?
* Factors affecting insurance quotes
* Best life insurance quotes
Life Insurance quotes are the prices at which life insurance policies are proposed to be sold. In that context a life insurance quote does not necessarily become the selling price of all life insurance policies as some are given at concessions in case if the individuals chooses to take other types of insurance policies from the same company. In case of group life insurance scheme special discounts are also offered. Life insurance quotes vary from company to company and from individual to individual.
There are several methods for obtaining the life insurance quotes. The insured can contact the company directly to collect the information. He may also visit the official website of the company and enter the required details. He will thus be able to obtain online life insurance quotes. Similarly the insured can collect the information from insurance agents. An insurance agent will not only offer you the quotes but also help you in deciding the one that is best for you.
It is recommended to get quotes from as many companies as possible. This will give you the details of many companies and also help in deciding the best options. You may also find the competitive edge by comparing one with the other. These insurance quotes are extremely useful to you. They help you to know how much you should invest exactly in an insurance policy.
* What are life insurance quotes?
* Where to get them?
* Factors affecting insurance quotes
* Best life insurance quotes
Life Insurance quotes are the prices at which life insurance policies are proposed to be sold. In that context a life insurance quote does not necessarily become the selling price of all life insurance policies as some are given at concessions in case if the individuals chooses to take other types of insurance policies from the same company. In case of group life insurance scheme special discounts are also offered. Life insurance quotes vary from company to company and from individual to individual.
There are several methods for obtaining the life insurance quotes. The insured can contact the company directly to collect the information. He may also visit the official website of the company and enter the required details. He will thus be able to obtain online life insurance quotes. Similarly the insured can collect the information from insurance agents. An insurance agent will not only offer you the quotes but also help you in deciding the one that is best for you.
It is recommended to get quotes from as many companies as possible. This will give you the details of many companies and also help in deciding the best options. You may also find the competitive edge by comparing one with the other. These insurance quotes are extremely useful to you. They help you to know how much you should invest exactly in an insurance policy.
Subscribe to:
Posts (Atom)