beneficiary http://www.artwoo.com Returned search results for beneficiary Copyright 2008 Thu, 04 Dec 2008 20:20:51 +0000 http://www.artwoo.com/rss/beneficiary Roth IRA Distributions At Death: Pitfalls To Avoid http://www.artwoo.com/article/roth-ira-distributions-at-death-pitfalls-to-avoid http://www.artwoo.com/article/roth-ira-distributions-at-death-pitfalls-to-avoid#comments Sat, 17 Mar 2007 14:19:06 +0000 ira distribution rulesroth iraira ownerira balancermdsirs requirementsole beneficiary http://www.artwoo.com/article/roth-ira-distributions-at-death-pitfalls-to-avoid Roth IRA is the ability to control the timing of the eventual required distributions. However, this ability mandates the withdrawals to be made within a prescribed set of rules.

The distribution advantages of a Roth IRA extend beyond the death of the . But to make sure the spouse and children can benefit, things have to be set up properly. Here is a summary of the Roth at death.

Many people do not like the requirement that a traditional IRA must start required minimum distributions () at age 70 1/2. Perhaps they don't need the income yet. Maybe they would just as soon let the IRA continue to grow. In any event, the RMDs are taxable. Depending on the circumstances, they may even make part of Social Security retirement benefits taxable.

RMDs during the life of the Roth IRA owner are not required. If and when income is needed, withdrawals can be made, but there is no .

When the Roth IRA owner dies, RMDs must begin. When they are required to begin and how the distributions are received is a function of several factors.

Your Spouse is the Beneficiary

If your spouse is the of your Roth IRA, your spouse can make an election to be treated as the owner of your Roth IRA. In this case, RMDs can further be postponed until the spouse's death.

Note the word "sole" beneficiary, as this is an area where a mistake could inadvertently be made.

For example, let's say you named your spouse and your children as beneficiaries. The spouse would be prohibited from making the ownership election and RMDs would be required over the life expectancy of the spouse, thus reducing (the spouse could die before their expectancy) or exhausting the Roth altogether. So much for your desire to leave part to the children.

If the Roth IRA owner dies before age 70 1/2, the spouse doesn't have to start the RMDs until the IRA owner would have reached age 70 1/2. Here is another area where the spouse needs to pay attention. If RMDs are not started when required (or less than the required amount is taken out), the penalty tax is a whopping 50% of the difference between what was required and what was withdrawn.

If your desire is to extend the RMDs all the way to the death of your spouse, here is another "heads up". Let's say you named a trust as the beneficiary of your Roth IRA. Even if your spouse is the sole beneficiary of the trust, the election to have the spouse treat your Roth IRA as their own cannot be made. There technically may be a work-around (a rollover), but why not just set things up right from the start?

A Person Other Than Your Spouse is the Beneficiary

In this case, distributions must be made over the remaining life expectancy of the beneficiary. If there is more than one beneficiary, the life expectancy of the oldest is used. If the beneficiary is a trust with multiple beneficiaries, the oldest beneficiary's life expectancy is also used.

Another caution: If an entity other than an individual is a beneficiary of an IRA (even if an individual is also a beneficiary), the IRA is treated as having no beneficiary. The distribution requirements for an IRA with no beneficiary are outlined below.

Probably the most common scenario involving a "non-person" is a charity. If you name a charity as one of the beneficiaries, the distribution rules are different and may be contrary to your desires. The solution is to roll part of your IRA over to a new one and name the charity as the sole beneficiary.

No Beneficiary

Where no beneficiary is elected, the entire distribution must be made over five years. This five year rule would also apply even if there were a beneficiary and the distributions were not started when the rules dictated they must start.

As I hope you can see, there are several ways to make mistakes which would have the distributions occur in a much different manner than your wishes. These examples are my interpretation of the rules and cannot be relied upon for tax advice. I would recommend sitting down with your financial planner, your accountant and an estate planning attorney to make sure everything is set up properly. Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". To subscribe and get the free video, "How to Sell Your Life Insurance Policy for More Than the Cash Value", go to http://theestatepreservationadvisor.com/freevideo.htm ]]> Roth IRA Distributions At Death: Pitfalls To Avoid http://www.artwoo.com/article/roth-ira-distributions-at-death-pitfalls-to-avoid http://www.artwoo.com/article/roth-ira-distributions-at-death-pitfalls-to-avoid#comments Mon, 23 Apr 2007 10:35:02 +0000 ira distribution rulesroth iraira ownerira balancerequired minimum distributionsrmdsirs requirement http://www.artwoo.com/article/roth-ira-distributions-at-death-pitfalls-to-avoid Roth IRA is the ability to control the timing of the eventual required distributions. However, this ability mandates the withdrawals to be made within a prescribed set of rules.

The distribution advantages of a Roth IRA extend beyond the death of the . But to make sure the spouse and children can benefit, things have to be set up properly. Here is a summary of the Roth at death.

Many people do not like the requirement that a traditional IRA must start () at age 70 1/2. Perhaps they don't need the income yet. Maybe they would just as soon let the IRA continue to grow. In any event, the RMDs are taxable. Depending on the circumstances, they may even make part of Social Security retirement benefits taxable.

RMDs during the life of the Roth IRA owner are not required. If and when income is needed, withdrawals can be made, but there is no .

When the Roth IRA owner dies, RMDs must begin. When they are required to begin and how the distributions are received is a function of several factors.

Your Spouse is the Beneficiary

If your spouse is the sole beneficiary of your Roth IRA, your spouse can make an election to be treated as the owner of your Roth IRA. In this case, RMDs can further be postponed until the spouse's death.

Note the word "sole" beneficiary, as this is an area where a mistake could inadvertently be made.

For example, let's say you named your spouse and your children as beneficiaries. The spouse would be prohibited from making the ownership election and RMDs would be required over the life expectancy of the spouse, thus reducing (the spouse could die before their expectancy) or exhausting the Roth altogether. So much for your desire to leave part to the children.

If the Roth IRA owner dies before age 70 1/2, the spouse doesn't have to start the RMDs until the IRA owner would have reached age 70 1/2. Here is another area where the spouse needs to pay attention. If RMDs are not started when required (or less than the required amount is taken out), the penalty tax is a whopping 50% of the difference between what was required and what was withdrawn.

If your desire is to extend the RMDs all the way to the death of your spouse, here is another "heads up". Let's say you named a trust as the beneficiary of your Roth IRA. Even if your spouse is the sole beneficiary of the trust, the election to have the spouse treat your Roth IRA as their own cannot be made. There technically may be a work-around (a rollover), but why not just set things up right from the start?

A Person Other Than Your Spouse is the Beneficiary

In this case, distributions must be made over the remaining life expectancy of the beneficiary. If there is more than one beneficiary, the life expectancy of the oldest is used. If the beneficiary is a trust with multiple beneficiaries, the oldest beneficiary's life expectancy is also used.

Another caution: If an entity other than an individual is a beneficiary of an IRA (even if an individual is also a beneficiary), the IRA is treated as having no beneficiary. The distribution requirements for an IRA with no beneficiary are outlined below.

Probably the most common scenario involving a "non-person" is a charity. If you name a charity as one of the beneficiaries, the distribution rules are different and may be contrary to your desires. The solution is to roll part of your IRA over to a new one and name the charity as the sole beneficiary.

No Beneficiary

Where no beneficiary is elected, the entire distribution must be made over five years. This five year rule would also apply even if there were a beneficiary and the distributions were not started when the rules dictated they must start.

As I hope you can see, there are several ways to make mistakes which would have the distributions occur in a much different manner than your wishes. These examples are my interpretation of the rules and cannot be relied upon for tax advice. I would recommend sitting down with your financial planner, your accountant and an estate planning attorney to make sure everything is set up properly. Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". To subscribe and get the free video, "How to Sell Your Life Insurance Policy for More Than the Cash Value", go to http://theestatepreservationadvisor.com/freevideo.htm ]]> Roth IRA Distributions At Death: Pitfalls To Avoid http://www.artwoo.com/article/roth-ira-distributions-at-death-pitfalls-to-avoid http://www.artwoo.com/article/roth-ira-distributions-at-death-pitfalls-to-avoid#comments Tue, 06 Mar 2007 08:27:07 +0000 ira distribution rulesroth iraira ownerira balancermdsirs requirementsole beneficiary http://www.artwoo.com/article/roth-ira-distributions-at-death-pitfalls-to-avoid Roth IRA is the ability to control the timing of the eventual required distributions. However, this ability mandates the withdrawals to be made within a prescribed set of rules.

The distribution advantages of a Roth IRA extend beyond the death of the . But to make sure the spouse and children can benefit, things have to be set up properly. Here is a summary of the Roth at death.

Many people do not like the requirement that a traditional IRA must start required minimum distributions () at age 70 1/2. Perhaps they don't need the income yet. Maybe they would just as soon let the IRA continue to grow. In any event, the RMDs are taxable. Depending on the circumstances, they may even make part of Social Security retirement benefits taxable.

RMDs during the life of the Roth IRA owner are not required. If and when income is needed, withdrawals can be made, but there is no .

When the Roth IRA owner dies, RMDs must begin. When they are required to begin and how the distributions are received is a function of several factors.

Your Spouse is the Beneficiary

If your spouse is the of your Roth IRA, your spouse can make an election to be treated as the owner of your Roth IRA. In this case, RMDs can further be postponed until the spouse's death.

Note the word "sole" beneficiary, as this is an area where a mistake could inadvertently be made.

For example, let's say you named your spouse and your children as beneficiaries. The spouse would be prohibited from making the ownership election and RMDs would be required over the life expectancy of the spouse, thus reducing (the spouse could die before their expectancy) or exhausting the Roth altogether. So much for your desire to leave part to the children.

If the Roth IRA owner dies before age 70 1/2, the spouse doesn't have to start the RMDs until the IRA owner would have reached age 70 1/2. Here is another area where the spouse needs to pay attention. If RMDs are not started when required (or less than the required amount is taken out), the penalty tax is a whopping 50% of the difference between what was required and what was withdrawn.

If your desire is to extend the RMDs all the way to the death of your spouse, here is another "heads up". Let's say you named a trust as the beneficiary of your Roth IRA. Even if your spouse is the sole beneficiary of the trust, the election to have the spouse treat your Roth IRA as their own cannot be made. There technically may be a work-around (a rollover), but why not just set things up right from the start?

A Person Other Than Your Spouse is the Beneficiary

In this case, distributions must be made over the remaining life expectancy of the beneficiary. If there is more than one beneficiary, the life expectancy of the oldest is used. If the beneficiary is a trust with multiple beneficiaries, the oldest beneficiary's life expectancy is also used.

Another caution: If an entity other than an individual is a beneficiary of an IRA (even if an individual is also a beneficiary), the IRA is treated as having no beneficiary. The distribution requirements for an IRA with no beneficiary are outlined below.

Probably the most common scenario involving a "non-person" is a charity. If you name a charity as one of the beneficiaries, the distribution rules are different and may be contrary to your desires. The solution is to roll part of your IRA over to a new one and name the charity as the sole beneficiary.

No Beneficiary

Where no beneficiary is elected, the entire distribution must be made over five years. This five year rule would also apply even if there were a beneficiary and the distributions were not started when the rules dictated they must start.

As I hope you can see, there are several ways to make mistakes which would have the distributions occur in a much different manner than your wishes. These examples are my interpretation of the rules and cannot be relied upon for tax advice. I would recommend sitting down with your financial planner, your accountant and an estate planning attorney to make sure everything is set up properly. Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". To subscribe and get the free video, "How to Sell Your Life Insurance Policy for More Than the Cash Value", go to http://theestatepreservationadvisor.com/freevideo.htm ]]> Who Should Be The Beneficiary Of Your IRA? http://www.artwoo.com/article/who-should-be-the-beneficiary-of-your-ira http://www.artwoo.com/article/who-should-be-the-beneficiary-of-your-ira#comments Mon, 23 Apr 2007 22:15:03 +0000 roth irasole beneficiaryrequired minimum distributionsirsprobate courtbeneficiariesrmds http://www.artwoo.com/article/who-should-be-the-beneficiary-of-your-ira beneficiaries) for your IRA. Some are appropriate. Some are mistakes and can lead to delays and expenses in getting the funds to your desired recipients. Some may even exclude some of your desired beneficiaries. In addition, some elections are for estate planning purposes. Let's take a look at your options.

No Beneficiary

Not recommended. This mandates your IRA be distributed according to your will, if you have one. If you don't, each state has "intestate" rules that divide your estate up in ways you wouldn't ever want.

An IRA with no beneficiary must be distributed within five years. By contrast, a named beneficiary can spread the distribution out over the balance of their life expectancy.

Your Estate

Naming your estate as the beneficiary is the same as not naming one. The rules require a "named" beneficiary. Now your IRA goes through the probate process. This costs money, takes time and subjects your IRA to your creditors.

Why should you pay money to be represented by an attorney and have a judge in some decide whom your beneficiary will be? Why should your beneficiaries have to wait around for your estate to be closed? What if your will is challenged? What if you have a big estate with estate taxes due and the is questioning the valuation of your business? I have seen estates open for as long as ten years as the debate goes back and forth between your attorney and the IRS. The worst case I can think of is your IRA completely eaten up by legal fees inasmuch it may be the only liquid asset.

Your Spouse

This is the most common designation and makes the most sense for a number of reasons.

If the spouse is the , he or she can elect to treat the IRA as his or her own. This opens up the possibility of delaying the start of the (). This could be the spouse's age 70 1/2, or for a , all the way to the death of the spouse. It also allows further "stretching" of the IRA as the spouse can spread the RMDs over their lifetime plus the lifetime of a beneficiary.

If the spouse is more than 10 years younger than a non-Roth IRA owner, their life expectancy can be used. Beneficiaries other than the spouse, who are more than ten years younger than the IRA owner, are treated as being no more than ten years younger for RMD purposes. This is another "stretching" advantage for naming the spouse as beneficiary.

Children

If children are beneficiaries, they can take the RMDs over their life expectancy. Since the RMDs are very low at the younger ages, the account can grow substantially over the years. For example, a $100,000 IRA could distribute literally millions of dollars over the lifetime of a young beneficiary.

If there is more than one child named, the youngest age is used for RMD purposes. However, if the children are beneficiaries of a trust, the oldest age is used.

Grandchildren

Because grandchildren are even younger than children are, the lifetime income potential from RMDs would floor you. I can show you an example of the same $100,000 IRA used above as an example that would pay out 20 million dollars to a grandchild over their lifetime under the right circumstances.

Naming a grandchild gets into the generation skipping transfer tax area. But each person has a lifetime generation-skipping transfer tax lifetime exemption of $2,000,000 (in 2006). In any case, I would consult a tax attorney to make sure this beneficiary election coordinates with the balance of your estate plan.

A Trust

There may be some good reasons to name a trust as the beneficiary of your IRA. Your estate could be large enough so that you do not want your IRA to be subject to taxation twice. You may want to take advantage of the marital deduction, control where the balance of your IRA goes after the death of your spouse or have a spouse that is not a U.S. citizen.

These objectives need to weighed against the ability of your spouse to treat your IRA as their own with the attendant advantages. If a trust is the beneficiary, the spouse cannot make this election, even if they are the only beneficiary of the trust.

There are other beneficiary options beyond the scope of this article. I hope it is clear that there is no rubber stamp best beneficiary election. Prior to making a beneficiary choice, thought needs to be given to your estate, your family's circumstances, the rules and your wishes.

In many cases, you should consult a tax attorney. The examples I have used here are my understanding of the rules and cannot be relied upon as tax advice. Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". To subscribe and get the free video, "How to Sell Your Life Insurance Policy for More Than the Cash Value", go to http://theestatepreservationadvisor.com/freevideo.htm ]]> IRA Distribution Rules At Death: Critical Knowledge For Good Decisions http://www.artwoo.com/article/ira-distribution-rules-at-death-critical-knowledge-for-good-decisions http://www.artwoo.com/article/ira-distribution-rules-at-death-critical-knowledge-for-good-decisions#comments Thu, 15 Mar 2007 13:21:49 +0000 ira ownerroth irasbeneficiarytraditional iraschoiceswrong decisionrules of the game http://www.artwoo.com/article/ira-distribution-rules-at-death-critical-knowledge-for-good-decisions IRA owner depend on several things:

1. Did the IRA owner die before or after the "required beginning date"?

2. Who is the ?

In order to carry out the wishes of the IRA owner, evaluating both practical and estate planning implications of various decisions during the IRA owner's life is essential. Important occur when the IRA owner makes his beneficiary election and, if married, by the spouse after the death of the IRA owner.

If you do not know the rules as they pertain to your choices, you are shooting in the dark. The can cost money and likely cause the distribution of your IRA to be different than you would want.

Let's make sure you know the .

The first element is the required beginning date. For , SEPs, SIMPLEs, this is Aril 1st of the year after turning 70 1/2. This rule does not apply to , which have rules of their own.

There are several broad categories of beneficiaries:

1. The spouse.

2. A non-spouse beneficiary.

3. No beneficiary.

Let's take each of these beneficiary elections and see how distributions are treated, depending on whether the IRA owner dies before or after the required beginning date.

The Spouse as Beneficiary

If the spouse is the only beneficiary, he or she can make an election that has a bearing on when the distributions must begin. The election is to treat the owner's IRA as if it were their own.

Heads up: This election choice is unavailable if a trust is the beneficiary of the IRA, even if the spouse is the only beneficiary of the trust. A rollover may circumvent this problem.

If the IRA owner dies before the required beginning date, the spouse is the only beneficiary and the election made, the required distributions don't have to begin until the IRA owner would have turned 70 1/2. The spouse would probably elect to apply this rule if the IRA owner was younger.

If the spouse elects not to be treated as the owner, the required minimum distributions (RMD) start right away and are based on the remaining life expectancy of the spouse. When the spouse dies, the distributions continue using the remaining life expectancy of the spouse.

If the IRA owner dies after the required distribution date and the spouse does not make the election, the distribution must be made over the life expectancy of the spouse; however, the life expectancy of the IRA owner can be used any year it is greater. Taking the attained age of the IRA owner at death and looking in a table determines the life expectancy. Then each year you subtract one. The point here is that the spouse needs to make a comparison every year to obtain the longest pay out.

The "takeaway" from this is that knowledge allows for good decisions. The best choice will depend on how old the IRA owner is when they die, the age of the spouse, health status and whether or not there are children or grandchildren to provide for in a distribution.

Non-Spouse Beneficiary

Distributions are required over the remaining life expectancy of the beneficiary if the IRA owner dies before the required beginning date. If there is more than one beneficiary, the oldest is used.

Heads up: Let's say the IRA owner is a widow age 80. She names her sister, age 82, and her children, ages 55, 58 and 60 as beneficiaries. Her desire to help her sister causes the IRA to be distributed over the remaining life expectancy of an 82 year old--probably much quicker than desired.

If the IRA owner dies after the required beginning date, the distributions must be made over the longer of the remaining life expectancies of the owner or beneficiary.

No Beneficiary

If the IRA owner dies before the required beginning date, the entire IRA account must be paid out over five years.

If death occurs after the required distribution date, distributions simply continue over the remaining life expectancy of the IRA owner.

I think you can see there are a number of scenarios possible. When you combine this with the complexities of the IRA distribution rules, it makes good sense to sit down with your financial planner, tax attorney and accountant and make sure your IRA, SEP or SIMPLE IRA is coordinated with your estate plan and the most probable distribution pattern coincides with your desires. Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". To subscribe and get the free video, "How to Sell Your Life Insurance Policy for More Than the Cash Value", go to http://theestatepreservationadvisor.com/freevideo.htm ]]> IRA Distribution Rules At Death: Critical Knowledge For Good Decisions http://www.artwoo.com/article/ira-distribution-rules-at-death-critical-knowledge-for-good-decisions http://www.artwoo.com/article/ira-distribution-rules-at-death-critical-knowledge-for-good-decisions#comments Thu, 26 Apr 2007 06:20:02 +0000 ira ownerbeneficiaryroth irastraditional irasdistributionssepschoices http://www.artwoo.com/article/ira-distribution-rules-at-death-critical-knowledge-for-good-decisions IRA owner depend on several things:

1. Did the IRA owner die before or after the "required beginning date"?

2. Who is the ?

In order to carry out the wishes of the IRA owner, evaluating both practical and estate planning implications of various decisions during the IRA owner's life is essential. Important occur when the IRA owner makes his beneficiary election and, if married, by the spouse after the death of the IRA owner.

If you do not know the rules as they pertain to your choices, you are shooting in the dark. The wrong decision can cost money and likely cause the distribution of your IRA to be different than you would want.

Let's make sure you know the rules of the game.

The first element is the required beginning date. For , , SIMPLEs, this is Aril 1st of the year after turning 70 1/2. This rule does not apply to , which have rules of their own.

There are several broad categories of beneficiaries:

1. The spouse.

2. A non-spouse beneficiary.

3. No beneficiary.

Let's take each of these beneficiary elections and see how are treated, depending on whether the IRA owner dies before or after the required beginning date.

The Spouse as Beneficiary

If the spouse is the only beneficiary, he or she can make an election that has a bearing on when the distributions must begin. The election is to treat the owner's IRA as if it were their own.

Heads up: This election choice is unavailable if a trust is the beneficiary of the IRA, even if the spouse is the only beneficiary of the trust. A rollover may circumvent this problem.

If the IRA owner dies before the required beginning date, the spouse is the only beneficiary and the election made, the required distributions don't have to begin until the IRA owner would have turned 70 1/2. The spouse would probably elect to apply this rule if the IRA owner was younger.

If the spouse elects not to be treated as the owner, the required minimum distributions (RMD) start right away and are based on the remaining life expectancy of the spouse. When the spouse dies, the distributions continue using the remaining life expectancy of the spouse.

If the IRA owner dies after the required distribution date and the spouse does not make the election, the distribution must be made over the life expectancy of the spouse; however, the life expectancy of the IRA owner can be used any year it is greater. Taking the attained age of the IRA owner at death and looking in a table determines the life expectancy. Then each year you subtract one. The point here is that the spouse needs to make a comparison every year to obtain the longest pay out.

The "takeaway" from this is that knowledge allows for good decisions. The best choice will depend on how old the IRA owner is when they die, the age of the spouse, health status and whether or not there are children or grandchildren to provide for in a distribution.

Non-Spouse Beneficiary

Distributions are required over the remaining life expectancy of the beneficiary if the IRA owner dies before the required beginning date. If there is more than one beneficiary, the oldest is used.

Heads up: Let's say the IRA owner is a widow age 80. She names her sister, age 82, and her children, ages 55, 58 and 60 as beneficiaries. Her desire to help her sister causes the IRA to be distributed over the remaining life expectancy of an 82 year old=97probably much quicker than desired.

If the IRA owner dies after the required beginning date, the distributions must be made over the longer of the remaining life expectancies of the owner or beneficiary.

No Beneficiary

If the IRA owner dies before the required beginning date, the entire IRA account must be paid out over five years.

If death occurs after the required distribution date, distributions simply continue over the remaining life expectancy of the IRA owner.

I think you can see there are a number of scenarios possible. When you combine this with the complexities of the IRA distribution rules, it makes good sense to sit down with your financial planner, tax attorney and accountant and make sure your IRA, SEP or SIMPLE IRA is coordinated with your estate plan and the most probable distribution pattern coincides with your desires. Robert D. Cavanaugh, CLU is a 36 year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". To subscribe and get the free video, "How to Sell Your Life Insurance Policy for More Than the Cash Value", go to http://theestatepreservationadvisor.com/freevideo.htm ]]> Death Is A Part Of Life -- Be Insured! http://www.artwoo.com/article/death-is-a-part-of-life-be-insured http://www.artwoo.com/article/death-is-a-part-of-life-be-insured#comments Tue, 12 Sep 2006 02:27:05 +0000 life insurance policiesterm life insurancelife insurance policylife insurance companieslife insurance terminsurance term lifehttp http://www.artwoo.com/article/death-is-a-part-of-life-be-insured
As depressing as that sounds, there are ways to ensure the loved ones you leave behind are taken care of, or at least not left in financial ruins. How? By purchasing a .

A life insurance policy, like any other insurance policy, pays the policyholder (or, in this instance, the policyholder's beneficiary) in the event of an accident (an accident would be death for ). When you die, the money from your life insurance policy will be given to your beneficiary. Your beneficiary might be your spouse, your parents, your children -- whomever.

Unlike other insurance policies, life insurance policies can be used while you're still alive, too. If you find yourself and your family in a financial emergency, most allow you to cash in, or borrow from, you existing life insurance policy.

Life insurance policies come in two main forms -- and whole life insurance. Term life insurance policies cover you for a certain period of time. Some term life insurance policies can last as short as five years and as long as 30 years. Whole life insurance policies cover you for the rest of your life, and tend to be more expensive than term life insurance policies; however, they do carry certain benefits, such as savings components, that term life insurance policies lack.

Before you purchase a life insurance policy, do some research on term and whole life insurance. One of them is guaranteed to fit your needs, and for the rest of your life you can rest assured knowing that your beneficiary will be alright when your time for death comes. http://www.myquoteguide.com/Car-Tips.shtml http://www.ezquoteguide.com/home/ http://www.ezquoteguide.com/car/ ]]> Whole Life Insurance: Death Benefit Or Cash Value? http://www.artwoo.com/article/whole-life-insurance-death-benefit-or-cash-value http://www.artwoo.com/article/whole-life-insurance-death-benefit-or-cash-value#comments Wed, 25 Oct 2006 06:27:05 +0000 life insurance policywhole life insurancelife insurance policieswhole life insurance policiesauto insurance policydeath benefitbeneficiary http://www.artwoo.com/article/whole-life-insurance-death-benefit-or-cash-value Whole life insurance policies offer this nifty little perk called "cash value." A whole will accumulate a cash value over time, and the cash is tax-deferred, which means you will not have to pay taxes on the cash value your whole life insurance policy accumulates. Many people enjoy the cash value perk that whole offer; however, it must be noted that you cannot both reap the rewards of your cash value and have your receive your s.

This probably sounds a bit confusing, so let's break it down. Whole life insurance policy owners only get the cash value that their policy has accumulated in one of two ways. The first way the policy owner can obtain his cash value is by surrendering his whole life insurance policy early, in which case the cash value would be available to him while he is still alive. Once the policy owner surrenders his whole life insurance policy early, the policy owner no longer has that whole life insurance policy.

The second way a whole life insurance policy owner can obtain his cash value is by borrowing against the cash value. This is definitely a benefit in times of financial stress, but unless the policy holder pays back the amount borrowed, the death benefit is reduced. So, should the policy holder die before he pays back what was borrowed against the cash value, the amount of death benefits the beneficiary will receive won't be as much as it would be if there was no money borrowed against the cash value.

To sum up, a whole life insurance policy holder can not have all of his cash value and still have a death benefit for his beneficiary, nor can a policy holder borrow money against the cash value and still allow his beneficiary to get the full death benefits if the money borrowed is never paid back. http://www.ezquoteguide.com/home/ http://www.ezquoteguide.com/car/ ]]> What You Should Know About Probate http://www.artwoo.com/article/what-you-should-know-about-probate http://www.artwoo.com/article/what-you-should-know-about-probate#comments Wed, 26 Jul 2006 00:27:10 +0000 probate courtdeceasedbeneficiaryexecutorlife insurance policyorderly fashionpossessions http://www.artwoo.com/article/what-you-should-know-about-probate deceased's property, also known as their estate. When a death occurs, the debts, property, and money of the deceased will need to be dealt with in a legal manner and according the wishes of the deceased. There are few instances when probate is not needed in the event of a death. If the person is married, in most cases without a legal will, everything belonging to the deceased will be transferred to their spouse upon their death. If a will does not exist, the courts will need to ensure that all the property left by the deceased is legally distributed.

If a will does exist, the will names a person chosen by the deceased as an of the will. This is generally a family member or an attorney. The executor is responsible for following the instructions the deceased has written into the will and ensure that the probate process is followed as they wish.

When it comes to probate, the process will take place in what is known as . What will happen during probate will depend on where you live. However, the general aspects of probate court are as follows. The entire purpose of probate is to ensure that your debts are paid and your assets are properly transferred to your loved ones. Upon the death of a person, the executor is sworn in as such. All creditors, the public and heirs are notified of the death. Then all the property is inventoried and finally the estate is distributed in an .

It is important that you understand there are some possessions or property that cannot be presented to the courts. A good example is a . If there is a listed on the policy then this will transfer to that beneficiary. The only time this will not occur is if the named beneficiary is also deceased and no other beneficiary is named. Other types of assets and property that cannot be presented to the courts include anything that is payable upon death to named beneficiaries. These instances do not require probate because the deceased has already named who these assets are to be released to. This article is Copyright © 2006, Heather Colman. Find more Probate resources at: http://www.probate-notes.info ]]> When Purchasing Life Insurance There Are A Number Of Factors One Must Consider. http://www.artwoo.com/article/when-purchasing-life-insurance-there-are-a-number-of-factors-one-must-consider http://www.artwoo.com/article/when-purchasing-life-insurance-there-are-a-number-of-factors-one-must-consider#comments Fri, 15 Sep 2006 04:27:09 +0000 term life insurancepurchase life insurancebeneficiarydumb questionmoneyterm insuranceinsurance premium http://www.artwoo.com/article/when-purchasing-life-insurance-there-are-a-number-of-factors-one-must-consider beneficiary be? Lastly, when should I ? Some of these questions may never enter your mind. However, they are all important to your future.

How much insurance does one person need? Well, this is a hard question. How do you put a value on life? Yet, one must focus on the monetary considerations. How much would the funeral cost? Add to that the amount of wages you earn each year with tips and health benefits. All of this will be have to be replaced to your family. You should also take into consideration and subtract any life insurance you have from employers, banks, and others. However, this should only be done if the life insurance goes to your beneficiary after you die and not if the is simply to pay off your debts.

Second, you should consider whether you want term or whole life insurance. You see, is lower in payments. However, when you cancel , that is the end. The money then goes to the insurance company. Whole life insurance is a little higher priced. However, you retain a portion of the payment in an investment account. So, each life is actually insurance and investments in one payment. The decision is up to you and should be based upon your income, preference, and age.

Now, most people know who they want their beneficiary to be. Yet, have you though of what will happen if your beneficiary is no longer living? It would be wise to name a hierarchy of beneficiaries just in case something should happen to one. In fact, this is especially true for husbands and wives who have a higher chance of dying together.

Lastly, when should I purchase life insurance? This may seem like a . Yet, there are many young adults who think that they have all the time in the world. In fact, they may have 60 years to go. However, the time to plan is now. In fact, if you invest in a whole life insurance policy, you can have a pretty good sized investment by the time you retire, if you are young. There is no time like the present.

No one expects to meet their end when they are young. Unfortunately, accidents happen and it is better to be prepared so your family does not have to deal with a financial burden on top of your untimely death. What we have to remember is that this planning isn't to make our lives easier, it is meant to make our deaths easier to our families. Robert Michael is a writer for Fhl Insurance which is an excellent place to find insurance links, resources and articles. For more information go to: http://www.fhlinsurance.com ]]> Life Insurance Settlement - How Beneficiaries Get Paid http://www.artwoo.com/article/life-insurance-settlement-how-beneficiaries-get-paid http://www.artwoo.com/article/life-insurance-settlement-how-beneficiaries-get-paid#comments Thu, 16 Oct 2008 14:08:20 +0000 northwestern mutual life insurancenorthwestern mutual life insurance companynorthwestern mutual financial networknorthwestern mutual lifelife insurance companymutual life insurancemutual life insurance company http://www.artwoo.com/article/life-insurance-settlement-how-beneficiaries-get-paid life insurance company at that point.

To make certain that I don't miss anything I confirm everything with the claims department of the company before I go on the appointment. I then advise them that I will call from the beneficiaries home or place of business to to make certain all will goes well. As long as all the requirements are met the proceeds will be paid in a very short period of time. Most of my time on the field I was with the Insurance Company, now . Because they are so thorough at the time of application for the policy when the time comes to pay it takes about one week.

There are several choices an insured has when it comes to the payment of proceeds.

One Lump Sum

More often than not the proceeds of the policy is paid in one lump sum. If the policy is small that is fine. When the policy is for a large amount I don't recommend payment in this manner. It is much better to provide an income rather than a lump sum. Income can be paid in many different ways. There are many options.

Interest Income Option

Putting a large sum of money into the hands of one who is not used to handling large sums can result in waste. As a result the intentions of the insured goes for naught. His or her plan is not achieved. The beneficiary of the policy can leave the principal with the company just taking the interest earned at intervals. The principal remains in tact until you decide to take it.

Fixed Amount Income Option

The beneficiary has the option of taking the money in the form of a fixed income. The insured can stipulate that this is how it should be paid or s/he can leave that up to those who receive the money. S/he may say, "pay out $x per month to my family, named person or persons, until the proceeds are exhausted". The actual amount paid is usually considerably more than the lump sum death benefit itself.

Fixed Period Income

This option is similar to the fixed amount option in that the amount paid out is the same. You say to the life insurance company - "pay this money to them in equal amounts over the next 10 years", for example.

Life Income Option

Some people may choose to have life insurance proceeds paid in life income form. This is particularly effective when dealing with large amounts. There are several life income options.

You can have income paid for life but when the beneficiary dies no more income is paid. This is a way of providing the largest life income but I see it as a gamble. I much prefer to have the beneficiary take an income for life but with a certain, or guaranteed period. Let us say the person receiving the income wants a life income 20 years certain. The income will be paid for as long as the beneficiary lives but if s/he dies after 5 years, for example, the income still must be paid out to an heir for an additional 15 years. 20 years certain was an example you may choose 5 years, 10 years, or 15 years certain.

More details: Life Insurance SettlementFor more than 40 years Donald has been known for his extensive knowledge of the life insurance business. He has represented some of the largest and most admired life insurance companies in the United States as well as Canada. His advice is invaluable. Donald's website is: LifeInsuranceHub]]> Designate The Beneficiaries In Your Estate: Don't Cause Unnecessary Hardship To Those You Love http://www.artwoo.com/article/designate-the-beneficiaries-in-your-estate-dont-cause-unnecessary-hardship-to-those-you-love http://www.artwoo.com/article/designate-the-beneficiaries-in-your-estate-dont-cause-unnecessary-hardship-to-those-you-love#comments Thu, 02 Aug 2007 19:35:00 +0000 beneficiary designationsbeneficiariesretirement plansretirement planningbaby boomerslawyer barristerorientated http://www.artwoo.com/article/designate-the-beneficiaries-in-your-estate-dont-cause-unnecessary-hardship-to-those-you-love orientated culture we often do not take care of basic paperwork in terms of designating our of our estate.

It is often not appreciated that even such basic items as pensions and pension plans were seldom discussed or looked into until judgment day , as it may be called ,came to pass . America was a youth orientated culture on the go. It is only with the coming of the large scale retirements of the have issues such as , and estate divestment become areas of general talk and interest.





You have to remember that ultimately your goals are to provide for and make life easier for those you love and are concerned for.

By not taking proactive action in naming beneficiaries of your estate after you are gone you may well cause these same people or groups who you want to help undue discord, discomfort and aggravations and even hardship. Be proactive.





The purpose of naming a beneficiary is to ensure a quick, thorough and efficient transfer of assets upon a person's end of life. Be specific. If your intention is to leave assets or death benefit proceeds to a particular individual, relative, institution or organization

then name that person or group as your beneficiary. Lack of a specific name can result in needless delays in processing that claim potentially resulting in hardships to those you actually wanted to help. If there is land, real estate of stocks to divide indicates percentages. If you name more than one person as beneficiaries, it is important to name their shares. For example Aidun Smith 50 %, Shooter Labby 45 % and Greg Jones

5 %.





It is always best to discuss coordinating your will and the with your legal advisor, be it your lawyer, barrister or attorney to make sure that you work together and are coordinated. For example if the will divides an estate between two children , but only one child is designated as the beneficiary of the life assurance policy , did the parents intend for remaining child to get half of their estate plus the life insurance proceeds or should an adjustment made > Why leave such things for chance and debate ?





Consider designating a contingent beneficiary just in case the primary beneficiary predeceases you.





If you name a minor child as beneficiary, then make sure there is a provision for naming a trustee for the minor child in the will. The trustee will manage and distribute the money according to your wishes where a proper trust document has been established. Otherwise a publicly appointed representative might be appointed to manage the funds and estate that you worked so hard over your life to create , until such time as the child comes of legal adult age- then the remaining funds will be given to that child now legally and adult.



Generally , if a beneficiary , other than the "estate" , is designated then the assets from the registered account, segregated funds or the death benefits of life assurance policies may be distributed outside of the estate potentially bypassing administrative fees and some taxes and costs. Whether or not to probate fees is a question whose answer depends on the specific rules and regulations of your state of residence.





Remember though that naming a beneficiary is not a one time single events. It can change from time to time and over time. Significant life changes such as a change in marital status, death and birth necessitate a review of your situation and designations. For example if you are married, then you most likely have named your spouse as the beneficiary of your plans. Should you divorce, the beneficiary designations may well change, but only if you see to it. Changes do not happen automatically by themselves.





In the end it all comes down to forethought and planning. Not to plan is to be inconsiderate and cause unnecessary grief and hardship to those people who you care for the most. Be proactive. Amy U. Goodmann http://www.forexforexforexforex.com http://www.tratfor.com http://www.substantialincomes.com ]]> Collecting on a Life Insurance Policy http://www.artwoo.com/article/collecting-on-a-life-insurance-policy http://www.artwoo.com/article/collecting-on-a-life-insurance-policy#comments Fri, 22 Aug 2008 14:15:41 +0000 life insurance policieslife insurance policyselling life insuranceown life insuranceincurable illnessesperfect strangerdeath benefit http://www.artwoo.com/article/collecting-on-a-life-insurance-policy
Some authorize you to "speed up" the . This stipulation makes it achievable to collect on your previous to you dying. Some companies call this the "living benefit" condition.

This provision may be built into the policy or presented as a rider.

It is proposed to let you use death benefits to compensate hospital or medical bills associated with fatal illness.

Normally, it necessitates you having a terminal illness, backed by a doctor's forecast that you will die within a set interlude of time (the amount of time will be specifically stated in the policy).

The policy may bound the dollar amount you can withdraw.

Be cautious! If you speed up and use the death benefit, there will be a smaller amount left in the policy for your relatives or other beneficiaries when you die.

What Are Viatical Settlements?

A viatical settlement is an contract to sell the possession of your to a different, unrelated person, who becomes both the proprietor and beneficiary of the policy.

Keep in mind, it is against the law for an outsider to take out an insurance policy on your life. The stranger has no insurable concern and could have an detrimental need to see you die earlier than nature intends!

Nevertheless, a life insurance policy is just like anything else. If you possess it, you can sell it, even to a who has no plausible insurable interest. That individual becomes the policy proprietor and can then name themselves as the beneficiary.

What Are Viatical Buyers And Sellers?

Buying and policies is the area of expertise of businesses that identify themselves as viatical settlement firms. The viatical firm purchases insurance policies from people with and sells them to financiers.

If I Do Not Sell My Policy, What Ensues After I Die?

When an insured individual dies, the beneficiary must file a claim to gather the death benefit. The company has sixty days to disburse the claim or inform the beneficiary of any setback with it.

The beneficiary should request a claim form from the life insurance agent or company. They will need:

- The name of the insured
- A policy number
- A certified copy of the death certificate.

Out of the ordinary circumstances may occur if the beneficiary is a minor.

How Will The Death Benefit Be Paid?

The beneficiary might have a selection of ways to obtain a death benefit. Settlement choices may comprise of the following:

- A lump sum imbursement (the company sends a check for the complete amount)
- An installment payment with interest
- A checking account (the company creates a money market checking account in the beneficiary's name; the beneficiary is given a check book and can remove funds when needed)
- The company could hold the benefit and reimburse interest

Will The Death Benefits Be Taxed?

You normally are not required to pay income tax on death benefits.

What Happens If There Is A Conflict Between Beneficiaries?

If there are contradictory claims (such as two people claiming to be the beneficiary) the company might turn the cash over to a court. The court will seize the money until it determines who the valid recipient is. This procedure is called an interpleader.

Can The Company Refuse To Pay On My Policy?

Life insurance companies can decline to pay death benefits, under definite restricted conditions, such as if you die within the initial two years of a policy. The company's basis could include the following:

- The insured (now dead) committed deception when applying for the policy
- The insured did not divulge a material fact on the application,
- The insured committed suicide.

Additionally, if a beneficiary deliberately killed the insured individual, the company can repudiate paying a death benefit regardless of how long the policy has been in effect. This is accurate even if a court has not convicted the beneficiary of the killing.Sarah Martin is a freelance marketing writer based out of San Diego, CA. She specializes in life insurance policies, companies, and advice, as well as finance and business. For a free term life insurance quote, please visit http://www.equote.com.]]> Term Life Insurance - Most Times It's All You http://www.artwoo.com/article/term-life-insurance-most-times-its-all-you http://www.artwoo.com/article/term-life-insurance-most-times-its-all-you#comments Wed, 28 Jun 2006 00:32:07 +0000 term life insuranceamanda paysabc companybeneficiarybenefitinsurance companyface value http://www.artwoo.com/article/term-life-insurance-most-times-its-all-you Term life insurance is a temporary life insurance covering specific period of time. In this type of policy the insured or the owner pays a premium for a period. The provides monetary to the in case of death of the insured during that period. It is the cheapest type of life insurance available to the general public. Usually the benefit received on death of the insured is income tax free.

There are four parties in term life insurance. The owner is the one who pays the premium. The Insured is the one on whose death, a death benefit() will go to the beneficiary. The beneficiary is one who will receive the proceeds of insurance on death of the insured. The insurer is the company providing the insurance. Premium is the monthly or periodic payment made by the owner to the insurance company.

For instance, monthly 50 dollars to for insuring the life of Bill (her husband) for a period of 10 years. In case Bill dies during the 10 years, ABC company will pay 6000$ to Jack (son of Bill and Amanda). Here the insured is Bill, the owner of the policy is Amanda, the beneficiary is Jack and the insurer is ABC Company. The premium is 50$ and the face value of the insurance is 6000$. In case Bill does not die during the 10 years, ABC Company will not be liable to pay any money to any of the parties involved. Often the owner and the insured are same. That is a person buys a policy to cover his own death and nominates a beneficiary.

Term life insurance is a legal contract with terms and conditions and assumed risks. Sometimes there are special provisions like suicide terms wherein on suicide of the insured there is no benefit accrued to the beneficiary. Term life insurance is based on two concepts, theory of diminishing responsibility and Buy Term and Invest the Difference (BTID). In Term life insurance the responsibility or liability of the insuring company reduces as the policy reaches its maturity. Term life insurance is the cheapest type of insurance policy available because there is no cash value at the end of the period. Studies have shown that the mortality rate in term life insurance policies is as low as 1%. Hence the concept of BTID. Rather than going for permanent life insurance (where on the expiry of period the owner will accrue some cash benefit and there is a savings component in it) it is considered cheaper to buy term life insurance and take care of the savings components by investing in other areas. With the present market giving good returns on investment, buying a term life insurance is a more attractive option than permanent life insurance. Term life insurance is available for a period of 5, 10, 20 years etc. As the age of the insured increases the premium increases. The premium is calculated based on mortality rate which is usually dependent on age, sex and whether the person uses tobacco. Most companies provide annual renewable term where in the term can renewed annually however the premium increases annually. Tyson J Stevenson writes on a wide variety of "every day" subjects, always with valuable news and reviews. Expect to see his name often. A related resource is http://best-term-life-insurance.info ]]> Making A Rational Decision About A Structured Settlement Annuity http://www.artwoo.com/article/making-a-rational-decision-about-a-structured-settlement-annuity http://www.artwoo.com/article/making-a-rational-decision-about-a-structured-settlement-annuity#comments Wed, 27 Sep 2006 12:27:07 +0000 life annuityannuitiesbeneficiarystructured settlementsrational decisionsheer volumeaghast http://www.artwoo.com/article/making-a-rational-decision-about-a-structured-settlement-annuity aghast by the of e-mails, web sites, tv and journal advertising and legal talk when considering the issue of or . We will investigate what, exactly, a structured settlement is so that you are better able to understand the concept and be able to make a .

To begin, let's explore just what a structured settlement is. It is simply a series of guaranteed disbursals - also known as annuities - made over a certain period of time and is usually the result of an injury settlement or another situation in which you are awarded access to a substantial whole amount of money. It is the alternative to accepting an upfront lump sum.

Structured settlements are individualized arrangements meant to help you cover present and forthcoming expenses. By working closely with an experienced attorney or financial advisor you can determine an effective structured settlement to give you the security of a fixed income over a set period of time. This can help you sleep better at night by taking a huge burden off your back.

There are various types of these annuities. You can learn more about them over at http://www.fixmyannuity.com, but here is a brief explanation of each. This is by no means a complete list, but should give you a fair idea of what is out there:

A certain Period Annuity has a certain period of time for the payments to be paid out. They can be made monthly, quarterly, semi-annually or annually. Upon your death, all remaining payments are made to you .

A will make periodic contributions for a guaranteed number of years (based on your life expectancy) or for life, whichever is up first. Again, the beneficiary receives any remaining disbursals should you die before the full whole amount is paid.

A Temporary Life Annuity will pay you for a designated number of years if you are still living, so your annuity ends when you die. There's no provision for a beneficiary to collect remaining disbursals.

In a Life Contingent Lump Sum you'll receive a lump sum, provided you are alive on the due date. If you die before this date, your beneficiary is not entitled to the whole amount.

Finally, with Lump Sum Option you can set it up to receive the lump sum on a particular date, say, fifteen years from now. Your beneficiary will receive the lump sum on the future date if you have died before then.

So which type is right for you? The best advice we can offer is to do your fact-finding work. Discuss your situation with your financial advisor and family. That way when you make the decision you'll know what your getting and have considered all the options. Yvonne Volante, the author, is a big fan of annuities and proper planning and writes for fixmyannuity.com, which is the premier annuity resource on the internet. You can see all of the articles over at http://www.fixmyannuity.com ]]> Life Insurance: Beneficiaries to Life Insurance Policies Are Crucial http://www.artwoo.com/article/life-insurance-beneficiaries-to-life-insurance-policies-are-crucial http://www.artwoo.com/article/life-insurance-beneficiaries-to-life-insurance-policies-are-crucial#comments Wed, 15 Oct 2008 13:01:53 +0000 life insurance beneficiariesaunts and uncleslife insurance policieslife insurance policylife assurance policysocial security numberdeath benefit http://www.artwoo.com/article/life-insurance-beneficiaries-to-life-insurance-policies-are-crucial Life insurance beneficiaries are people you name in your policy which will receive a if you should die. If you choose not to name a beneficiary, then a death benefit will be paid out to your estate. This article takes a fast look at the beneficiaries of .

Life insurance is used for the purpose of providing a payment of money after the death of the person who was insured by the policy. The insured person is mentioned in the policy as being the person covered by it. The money payment from the policy in the event of the passing away of the insured is called the death benefit. It is paid out to beneficiaries mentioned in the policy contract.

What is a beneficiary?

This person is nominated in a contract to receive the death benefit. You are able to nominate a single person or more, a trustee, a charity or just your estate.

There are basically two types of beneficiaries. They are a primary and a contingent nomination. The primary person receives a death benefit if she can be contacted after your death. In case the primary person cannot be found, then the contingent person will receive the death benefit. If both are missing the benefit is paid to your estate.

The beneficiaries of your should be clearly identified to prevent possible confusion. You can include a for each relevant person you name. Provide full names of the people you choose.

There are more types of beneficiaries as well. Let us take a look at them.

Final beneficiary -- This person or entity will receive a death benefit if they outlive the other ones. This level is usually reserved for or a charity of your choice.

Multiple beneficiaries -- When choosing multiple individuals to receive the death benefit, it is important to state clearly how much each individual should get.

Many married people choose to name their spouse as a primary beneficiary. Be mindful when choosing to name an executor, creditor, or a minor to receive a life insurance policy death benefit.

It is important to regularly update your policy information with regards to the beneficiaries. This is especially important after events such as a divorce or child birth.

Be mindful of these tips to help you with life insurance beneficiaries.

* Designate both primary and contingency persons.

* Provide their full name and state their relationship to you.

* Clearly define how the death benefit is to be divided between the beneficiaries.

You should be certain to buy enough life insurance for your particular needs. You should also match the duration of the policy to your individual needs. Buy life insurance when you are healthy since this will ensure a lower premium.

The beneficiary receives a face value of the policy if the policyholder dies within the specified duration of a policy. If the insured person survives this period, then the beneficiaries may receive no benefit. This is the old motive for murder you regularly see on murder mysteries on television. In the case of whole life insurance, this is less of a problem since they stay in force for up to 100 years of age.Copyright 2008 - Dan Theron. Free whole term life insurance quotes online. Whole life insurance online quote.]]> Is Term Insurance Right For You! http://www.artwoo.com/article/is-term-insurance-right-for-you http://www.artwoo.com/article/is-term-insurance-right-for-you#comments Mon, 24 Jul 2006 02:27:16 +0000 term life insurancemailpermanent life insurancexyz companylife insurance termbeneficiaryinsurance company http://www.artwoo.com/article/is-term-insurance-right-for-you mail this time of year on the subject of "Life Insurance". Most want to know the benefits or pitfalls of over .

Term Life Insurance is by far the most cost effective way of securing a life insurance policy available to the general public. Term Life Insurance covers a specific period of time - normally the policy will run for periods of 5, 10, and 20 years. As the age of the insured increases, the cost of the premium will increase. Premiums are calculated on the mortality rate, which is usually dependent on the persons age, sex and whether that person uses tobacco.

This type of policy allows the insured or the owner to pay a set premium for an agreed period. The provides monetary benefits to the in case of death of the insured during that period. Usually, the benefits received on the death of the insured is income tax free.

There are four parties in term life insurance: (1) the owner is the one who pays the premium; (2) the insured is the one on whose death, a death benefit (face value) will go to the beneficiary; (3) the beneficiary is one who will receive the proceeds of insurance on death of the insured; and (4) the insurer is the company providing the insurance. Depending on the Insurance company you choose, the premiums can be paid monthly, quarterly or annually. For example, Fred pays $50 dollars monthly to for insuring the life of Margaret (his wife) for a period of 10 years. Should Margaret die during the 10 years of the agreement, XYZ company will pay $25,000 to Joe (son of Fred and Margaret). Here the insured is Margaret, the owner of the policy is Fred, the beneficiary is Joe and the insurer is XYZ Company. If Margaret does not die during the 10 years, XYZ Company will not be liable to pay any money to any of the parties involved. Often the owner and the insured are same. That is, a person buys a policy to cover his own death and nominates a beneficiary. Husbands and wives often insure each other in case of death.

What is Term Life Insurance? It is a legal contract with terms and conditions and assumed risks. Sometimes there can be special provisions in the agreement like suicide terms, wherein on suicide of the insured, there is no benefit accrued to the beneficiary. Term Life Insurance is based on two concepts: (1) theory of diminishing responsibility and (2) Buy Term and Invest the Difference (BTID). With Term Life Insurance, the responsibility or liability of the insuring company reduces as the policy reaches its maturity. What makes Term Life Insurance the most cost effective type of insurance available to the public is that there is no cash value at the end of the period. Studies have shown that the mortality rate in Term Life Insurance can be as low as 1%. Hence the concept of BTID.

Rather than going for permanent life insurance (where on the expiry of the agreed period, the owner will accrue some cash benefit and there is a savings component in it) it is considered cheaper to buy term life insurance and take care of the savings components by investing in other areas.

With the present market giving good returns on investments, buying a term life insurance is a more attractive option than permanent life insurance.

Have an opinion or a question you would like me to answer, then write me! http://www.CarlHampton.com Carl Hampton is the best selling Author of "From Credit Despair To Credit Millionaire" http://www.CarlHampton.com http://www.fcdtcm.com ]]> Term Life Insurance As A Charitable Gift http://www.artwoo.com/article/term-life-insurance-as-a-charitable-gift http://www.artwoo.com/article/term-life-insurance-as-a-charitable-gift#comments Tue, 01 May 2007 10:44:59 +0000 life insurance policyterm life insurancecharity charitieslife insurance policiesterm life insurance policybeneficiaryfederal tax identification number http://www.artwoo.com/article/term-life-insurance-as-a-charitable-gift term life insurance it is purchased while we are younger and just starting our families. After some years, a policy becomes old and outlives its original intention: perhaps your spouse no longer needs financial security or your children are now financially independent. In these cases, individuals decide to leave their term as gifts to their favorite charities. This is particularly beneficial to individuals who have large financial assets as they can use their contributions as tax deductions for their estates.

There are several ways in which to give a gift of life insurance to a charitable cause. First, you can purchase a new term altogether, leaving the charity of your choice as the . Or, you can simply change the beneficiary of your existing . Upon your death, the named charity would receive full face value of your policy.

When you list a charity as your beneficiary, you will need to have the following information:

1.The full legal name of the charitable organization. 2.The charity's permanent mailing address. 3.Your charity's . 4.Your relationship to the beneficiary: to be listed as "charity"

Charities always have someone in charge of organizing and accepting gifts and donations. You can be certain that they will be happy to help you should you have any questions on the gift giving process or need help in filing any forms.

Rules for Paid or Unpaid Policies

If you choose to name a charity as the beneficiary of an already existing paid-in-full term life insurance policy, you may be able to deduct an amount equal to the fair market value of the policy, or your cost basis, whichever is less. Since your charity becomes the owner of your policy, the proceeds will not be included in your estate for tax purposes.

If you are still making annual premium payments on your policy, you may be able to deduct an amount equal to the approximate cash value of the policy or the policy's cost basis, whichever is less, in the year in which you make the gift. Again, the proceeds will not be included in your estate for tax purposes. You may also be able to deduct any future premium payments.

Group Term Life Insurance

If you participate in a group term life insurance policy through your workplace, you can donate your excess coverage to your favorite charity as well. Many employers provide generous life insurance coverage as a fringe benefit to their employees. However, most employers do not tell you that you are also required to pay income tax on the cost of coverage over $50,000.00.

How do you avoid paying these taxes? There is a special rule that excuses this extra tax if you donate the excess coverage to charity. "Excess coverage" is an excellent way to donate to your favorite charity. The best part is that you pay no out of pocket expenses for premiums. You get all the benefits of giving while also saving money in taxes at the same time. For more information on "excess coverage" contact your company's benefits department.

Using your term life insurance policy as a gift to your favorite charity enables you to make tax deduction and/or to gain other financial benefits to your estate. Be sure to talk to a financial advisor to ensure that both your family and your favorite charity both benefit by your financial decisions. Sharon Taylor is a veteran author and writes about life insurance and other financial management topics for http://www.equote.com, a leading Internet resource for free life insurance rates, quotes and information. ]]> Senior Term Life Insurance http://www.artwoo.com/article/senior-term-life-insurance http://www.artwoo.com/article/senior-term-life-insurance#comments Tue, 08 Aug 2006 14:27:08 +0000 life insurancepremiumsstateacceptance lifebeneficiarybenefitaffordable insurance http://www.artwoo.com/article/senior-term-life-insurance life insurance at an older age is more expensive than purchasing it while very young. In an attempt to provide to meet the life insurance needs of older insureds, some companies are now offering Guaranteed Insurance.

Guaranteed Acceptance Life Insurance policy rates are less expensive than the traditional term insurance policies. As the name implies, you are guaranteed to be accepted for this life insurance. There are no health questionnaires to complete and no physical exams to take. As long as you pay the , the policies cannot be cancelled. Additionally, you may lock your premium rate for the policy amount you want. Your rates will not change for as long as you keep your insurance.

Where's the catch you may be asking. Well, the policies are written for a limited period of time. For example, Colonial Penn's policies are for a two-year limited period. They are available for people between the ages of 50 and 85 (This age range varies depending on insurance company and regulation).

Generally, if death occurs during the first few years, a reduced benefit is paid or the company may return the premiums paid plus interest. For instance, with a Gerber Life policy, if death occurs by natural causes within the first two years (during the limited benefits time), the will receive all of the premiums paid plus 10%. However, if death was a result of an accident, or if death due to natural causes occurs after the two years, your beneficiary will receive the full benefit amount. In the event of suicide (with certain state exclusions), the beneficiary will receive the amount of premiums paid only.

Most life insurance companies offer a Guaranteed Acceptance Life policy for seniors. There may be variations from state to state, but the basic premise is the same. They all offer an affordable insurance option for seniors.

Please see our list of recommended insurance quote providers below to get free insurance quotes from many providers. These sites also offer pages and pages of free insurance information. http://www.myquoteguide.com http://ezquoteguide.com/home/ http://ezquoteguide.com/car/ ]]> Using Letters of Credit to Accomplish Your Inventory Financing Needs http://www.artwoo.com/article/using-letters-of-credit-to-accomplish-your-inventory-financing-needs http://www.artwoo.com/article/using-letters-of-credit-to-accomplish-your-inventory-financing-needs#comments Thu, 09 Oct 2008 09:08:27 +0000 international trade transactionscommercial invoicerepayment obligationskorean manufacturerissuing bankbill of ladinghindrances http://www.artwoo.com/article/using-letters-of-credit-to-accomplish-your-inventory-financing-needs hindrances often lies in providing the supplier with proof that they will receive payment. Without that proof, it can be a challenge to secure the inventory the business needs to generate its own sales. A Letter of Credit (LC), usually issued by a financial institution, acts as an irrevocable guarantee of payment to the beneficiary. In other words, if the company ordering the inventory cannot meet their , the bank will pay.

The LC is also used as a source of payment for a transaction, as in the case of an exporter who is guaranteed payment with the redeeming of the LC. These are primarily used in between a supplier of one country and a customer in another. Generally, the supplier would be required to present proof of a shipment in the form of a or , as well as insurance against loss or damage during transit, in order to receive payment.

Consider this example:

Calculators Plus, based in the U.S. imports products from a called Calculator Manufacturing, which banks at a Korea-based Bank. Calculators Plus banks with a America-based bank. In this example, Calculators Plus serves the role of applicant. Calculator Manufacturing is the beneficiary. The America-based bank is the and the Korea-based bank is the advising bank.

Calculators Plus desires to purchase $50,000 worth of products from Calculator Manufacturing, which agrees to sell the merchandise and gives the company 60 days to pay it with the condition that they provide a 90 days LC for the full amount. The applicant would have to take the following steps to secure a LC:

Request a $50,000 LC from the America-based bank with Calculator Manufacturing as beneficiary.

The issuing bank goes through its full underwriting process. Although the bank is not advancing money, they are extending credit on the behalf of the applicant and are taking on a contingent liability. As long as the company qualifies from a credit standpoint, the LC is issued.

Issuing bank sends a copy of the LC to the advising bank, which notifies the beneficiary that payment is available and they may ship the merchandise ordered by the applicant with full assurance of payment.

Once the required documents have been presented and compliance with the terms and conditions of the LC has been met, the issuing bank transfers the $50,000 to the advising bank, which credits the account to the beneficiary for the full amount.

As mentioned before, the LC itself can also serve as the source of repayment of the transaction. Say for example that the Korea-based bank is interested in receiving payment as soon as the merchandise is shipped. The LC would then indicate that payment should be made as soon as Calculator Manufacturing can present proof of shipping.

The above example describes the simplest of LC transactions. Although there are other factors involved such as the role of correspondent banks and confirmations, the issues a business owner should most be aware of is expediency and the fees involved, which can cost between 1.5% to 8% of the value of the LC.

There are several types of letters of credit which a business should be aware:

Revocable Letter of Credit: The LC can be revoked by the issuing bank without the agreement of the beneficiary.

Irrevocable Letter of Credit: The LC cannot be cancelled or amended without all parties in agreement.

Revolving Letter of Credit: This type of LC is established when there are regular shipments of the same commodity between supplier and customer; eliminating the need to issue a LC for each individual transaction.

Stand-by Letter of Credit: A payment or performance guarantee used primarily in the United States. These LCs are used as backup should the buyer fail to pay as agreed. Thus, the Stand-by LC allows the customer to establish a rapport with a seller by showing that it can fulfill its payment commitments. Stand-by letters are generally less complicated and involve far less documentation requirements than irrevocable LCs.AmericanMomentumBank.com provides a wide array of personal banking and business banking options and banking solutions tailored to your individual needs. For more information, please visit AmericanMomentumBank.com.]]>