Students Of Success

Life can change from certainty to uncertainty in the blink of an eye. It only takes a split second to have a car accident, fall down the stairs and break your leg, or find out you have a serious disease. Although it would be useless to spend hours worrying about the possibility of things happening to you, it’s also sensible to be prepared, just in case. It’s good to feel secure, knowing you have a plan in place. One of the easiest and most helpful things to put in place is health insurance. The tricky part is finding affordable health insurance, so you don’t end up with money worries as well as health concerns!

When you’re feeling fit and healthy, it’s very easy to think you’ll never need health insurance. Sometimes having a family prompts people to take out health insurance, in case the kids get sick. Most of us rarely consider we might need a stay in a hospital. And yet reality is that these things do happen, and if they do, it will probably be when you least expect it. And that’s the time you can thank your lucky stars you took out affordable health insurance.

When trouble strikes, you’ll be very glad you have a plan in place. Most of us never stop to wonder what it would cost us to spend 3 days in hospital. A lot more than you will want to pay out of your own pocket, that’s for sure! This is even more of a [roblem when you’re young - it’s easy to believe we’re indestructible at the age of 20, for example. And yet a 20 year old has a much higher risk of being hospitalised after an accident. Illness, too, can strike, even at that age. For example, a girl I was friends with in college became very ill with little warning. She was hospitalised, and found to have meningitis. Very serious. Even more serious, when she finally left hospital, was the bill for over seven thousand dollars.

Young or old, it doesn’t matter- it’s always wise to check out the options when it comes to health insurance. You can find an affordable health insurance plan online.

There are plenty of sites that can help you find an appropriate plan. With so many options out there, there will be an affordable health insurance plan that’s right for your circumstances. Don’t get into a panic about having to pay big dollars - chances are, if you’re currently healthy, that your payments won’t be that bad. One thing is for certain - if you suddenly find yourself in a situation where you need health insurance, you’ll be more than happy that you spent the money. Start searching for an affordable health insurance plan today. You can’t start too soon!

To discover more about health insurance, check out Health Insurance Zone Online.

Work-related stress is on the rise and according to Statistics Canada, the repercussions are numerous. Increasingly, individuals are finding that their job demands more of them- more hours, more flexibility, and more qualifications. The end result of such demands is more stress, and people are having a hard time coping with it.

Many individuals respond to workplace stress by working more. Attaining a sense of security in your job or receiving the praise that you deserve often requires that you exert more energy in order to differentiate yourself from the rest. Consequently, longer hours at work leaves less time for family and social responsibilities, thus adding to the list of stressful factors. For some, it may begin to feel like a vicious cycle that they are powerless to stop.

Enduring the difficulties of workplace stress can be more destructive than we may think. According to Statistics Canada, people suffering from high stress tend to develop chronic conditions such as arthritis and back problems. People’s minds and bodies do have a breaking point. As a result, thousands of Canadian workers are seeking help from specialized doctors and other non-conventional medical practitioners whose fees can become a financial burden.

Provincial health plans vary according to one’s province of residence, and not all plans are equal when it comes to coverage. Spending time talking to a trained psychologist can be beneficial, but can cost $120 and up for one 45-minute session. Unfortunately, regardless of the emotional benefit, a psychologist’s services are not covered by the Canadian government health plan. Many Canadians are avoiding these costs and easing their level of stress by purchasing supplemental health insurance to cover these extra services. Psychiatrists, physiotherapists, registered massage therapists, Osteopath, Naturopath, Chiropractors, podiatrist and other types of therapists all have coverage in many supplemental health insurance plans.

Plans vary and can be customized to fit individual needs. For example, the extended health care benefits of Flexcare would include coverage for the fees of a psychologist or an approved social worker. The benefits would cover an $80 maximum for your first visit and a $65 maximum for subsequent visits, with a limit of 10 visits per anniversary year.

An unhealthy work environment, competition and extraordinary long hours at work are worrisome factors that rarely go away on their own. In order to alleviate workplace stress, some people will consult a naturopath or visit a massage therapist whose costly charges can be covered by supplemental health insurance. The purchase of supplemental health insurance provides individuals with a variety of options, a sense of ease and a decrease in overall stress.

Shop around.

Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers. Get quotes from different types of insurance companies. Some sell through their own agents. These agencies have the same name as the insurance company. Some sell through independent agents who offer policies from several insurance companies. Others do not use agents. They sell directly to consumers over the phone or via the Internet. But don’t shop by price alone. You want a company that answers your questions and handles claims fairly and efficiently. Ask friends and relatives for their recommendations. Select an agent or company representative that takes the time to answer your questions. Remember, you’ll be dealing with this company if you have an accident or other emergency.

Before you buy a car, compare insurance costs.

Before you buy a new or used car, check into insurance costs. Your premium is based in part on the car’s sticker price, the cost to repair it, its overall safety record, and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. These include air bags, anti-lock brakes, daytime running lights and anti-theft devices. Some states require insurers to give discounts for cars equipped with air bags or anti-lock brakes.

Cars that are favorite targets for thieves cost more to insure. Information that can help you decide what car to buy is available from the Insurance Institute for Highway Safety ( http://www.iihs.org/ ).

Ask for higher deductibles.

Deductibles represent the amount of money you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15% to 30%. Going to a $1,000 deductible can save you 40% or more. Just remember, the deductible is the amount you pay before the insurance company pays anything. For example, if the accident costs were $3,000 and your deductible was $1,000, you would pay $1,000 and your insurance company would pay the remaining $2,000.

Reduce coverage on older cars.

If you are running an old clunker, you might want to think twice about collision coverage. It may not be cost effective to continue insuring cars worth less than 10 times the amount you would pay for coverage. Any claim payment you receive would not substantially exceed your premiums minus the deductible. Claims occur on average only once every 11 or 12 years. Auto dealers and banks can tell you the worth of cars. Or you can look it up online at Kelley Blue Book http://www.kbb.com . Review your coverage at renewal time to make sure your insurance needs haven’t changed.

Buy your homeowners and auto coverage from the same insurer.

Many insurers will give you a discount if you buy two or more types of insurance from them. Also, you may get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce premiums for long-time customers. But shop around; you may save money buying from different insurance companies despite the multi-policy discount.

Take advantage of low-mileage discounts.

Some companies offer discounts to motorists who drive a lower than average number of miles per year. Low mileage discounts can also apply to drivers who carpool to work.

Maintain good credit.

Your credit rating may affect what you pay for insurance. Credit makes insurance rates more accurate, fair and objective. While the use of insurance scoring varies from state to state and company to company, it is a fact that drivers with long, stable credit records have fewer accidents than drivers who don’t. Most people have good credit histories, so most people benefit.

Seek out safe driver discounts.

Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also qualify for a cut if you have recently taken a defensive driving course.

When you comparison shop, inquire about discounts for:

$500 deductible

$1,000 deductible

More than 1 car

No accidents in 3 years

No moving violations in 3 years

Driver training course

Defensive driving course

Anti-theft device

Low annual mileage

Air bag

Anti-lock brakes

Daytime running lights

Student drivers with good grades

Auto and homeowners coverage with the same company

College students away from home

Long-time customer

Other discounts

Don’t forget the key to savings is not the discounts but the final price. A company that offers few discounts may still have a lower overall price.

Joe Kahler is recognized as an expert on helping young adults successfully transition from home to being “out on their own”. His latest work has recently been assembled in his book, Out On My Own… Now What? Tips and Insights So You Won’t Be Left Hanging in the “Real World”!

Joe received his undergraduate degree from Whittier College in Social Sciences and his Masters in Education from Arizona State University. His experience includes teaching, coaching, running numerous businesses, investing, selling insurance and real estate AND attending numerous personal, “hard knocks” training classes!

http://www.outonmyown.com

One of my client’s wives paid me a visit to ask about life insurance, a product I was well acquainted with. She told me that she and her husband were visited last night by a life insurance agent. “Jan, what did he try to sell you?”

“A $90,000 whole life policy with an annual premium of $500. Is that okay?”

Knowing that few people really understand life insurance, I asked her if she really understood what the agent was talking about.

“I thought I did last night,” she replied, “but when I woke up this morning, I wasn’t so sure. That’s why I’m here. You once told me to never buy life insurance unless I talked to you about it. Well, I’m here. Could we chat about it?”

I was glad that Jan was here instead of Mark. I have learned that it is much easier to talk to women about life insurance than men. Women seem to better understand the financial consequences of their spouses’ death, especially if they are mothers. Most men, however, don’t want to face life insurance because they think that they will never die. Women know better.

I was no stranger to the murky world of life insurance. Throughout my 20 years as a CPA, I’d often locked horns with insurance agents and financial planners who wanted to sell garbage life insurance products to my clients. In my role as a CPA, I always believed that it was my job to act as a mother hen and protect my clients from the wolves.

I began by asking Jan a question that zooms to the heart of the matter. “Tell me Jan, why are you buying life insurance? What do you hope to accomplish?”

She answered, “To protect me and the children in case Mark dies.”

That quickly established the fact that Jan knew about the key issue: that life insurance has but one purpose: protection in case disaster strikes.

Then I asked her another question. “Just suppose that you knew for sure that Mark was going to die tomorrow. How much life insurance would you buy on his life —$90,000 or $450,000 — assuming the premiums were identical?”

She looked at me as if I was crazy. “I’d buy the $450,000 policy. Who wouldn’t?”

I then gave Jan a quick education about life insurance, explaining that there are only two kinds of life insurance, term and cash value. The problem is knowing which one of them is the better buy.

Term insurance is pure insurance ( protection) coverage. If you pay the premium and die , the insurance company will pay the face value of the policy to your beneficiary. It is available to age 95 and can be purchased yearly, or on a guaranteed level premium basis for 5,10,15, or 20 years. The product is uncomplicated and very inexpensive. The premiums, however, do increase each time the policy is renewed since the insured has grown older.

Cash value life insurance (sold as whole life, endowment, straight life, permanent life, universal, and a zillion other names) is the second type. It differs significantly from term because there is a savings or investment feature attached–the cash value. About 75% to 80% of every premium dollar goes to this cash value “kitty” and the remainder pays for the actual life insurance protection. These policies typically last to age 100 and the premiums remain level for one’s entire life.

Thus, in one slick package, a cash value life insurance policy claims to accomplish two worthy goals: death protection and family savings. It was my job to convince Jan that cash value insurance fails miserably on both counts and that she must, for her and her children’s sake, buy pure term life insurance and nothing else.

“Jan, there are two reasons why you must not buy that whole life policy or any other cash value product. First and most importantly, cash value life insurance is anywhere from five to ten times more expensive than the equivalent amount of term insurance. It’s like paying $75,000 for a $15,000 automobile just because you went to the wrong dealership.”

To keep their customer’s attention away from the high cost of cash value, agents focus their sales spiel on the investment feature, usually with the aid of reams and reams of incomprehensible computer printouts. This sales tactic has literally duped the American public out of trillions of dollars in the last 150 years, ever since cash value was invented.

“Jan, how much time did the agent spend last night talking about the actual insurance protection versus how much money you’ll earn from the cash value policy?”

She thought a bit before answering. “Well, he spent the whole evening going over a bunch of computer printouts that showed us how rich we’d be in fifty years when we retire, and how much we could borrow from the policy if we ever needed a loan.”

“But what did he say about your protection needs?”

“Come to think about it, hardly anything at all. After we told him that we could afford a $500 yearly premium, he looked in a book and said that he had found a great $90,000 whole life policy that we could afford. But about protection, he really said very little.” I could tell that she was starting to bristle in anger, a sign that I was doing a good job.

I then told Jan that people with children living at home should have, as a rule of thumb, about eight to ten times their yearly gross income in life insurance protection. For Mark and Jan, that translated into at least $475,000. The agent who met with them should have figured that out and done his utmost to assure such adequate protection.

“You see Jan, that agent’s sole emphasis should have been on your financial protection in case Mark dies tomorrow, not about making you a rich lady in 50 years. The agent’s decision to sell you the anemic whole life policy would literally rob you and your kids of $385,000 if Mark dies tomorrow.”

“But Mark is not going to die tomorrow. Don’t say that!”

“Jan, you don’t know that. He could die tomorrow or in a week from any one of a thousand and one different causes. And so could you or I. That’s why you must be fully protected right now. Life insurance is a today need.”

I continued…”Jan, remember when I told you that there were two reasons to avoid cash value life insurance?”

“Yes.”

“You told me Jan that the agent spent most of last night talking about the wonders of the cash value investment. Now I am going to give you the real scoop about that.” This one always puts the final nail in the cash value coffin.

“The cash value,” I continued, “is not like an ordinary investment such as stocks, bonds, or a bank savings account.”

“But the agent said it was just like a bank savings account…”

“It resembles a savings account about as much as a shark resembles a goldfish. Tell me Jan, what do you think happens to the cash value—the promised pot of gold—if Mark dies? Who gets it?” The fun starts…

“That’s easy,” she replied, “I do…it’s our money…our investment…right? Marsh…tell me I am right!”

“Sorry, you are wrong. If Mark dies, the insurance company keeps it. That means that all that extra premium you paid for so many years goes up in smoke.”

“So what do I get if Mark dies?”

“You get the face amount of the policy…but you could have gotten that for a fifth of the premium with a term policy.”

“Marsh…you can’t be serious. In my worst nightmare, I would not expect something like this. Are you sure?”

“Very. But if you want some proof of your own, get the book What’s Wrong With your Life Insurance by Norman Dacey. That’s just one of many books in the library that echoes what I have been yapping about. Don’t think I am the Lone Ranger on this.”

Apparently she got fed up. Her voice rose as she said, “The agent never said word one about any of this! Are you telling me that he bent our ears off last night just to sell us a chump change policy that will leave me seriously underinsured just so he could make a bigger commission…and that they steal my investment to boot if Mark dies?”

“That about hits the nail on the head. And one more thing…when you tell the agent you want a term policy instead, expect another visit from him. Be aware that they are very well trained in changing minds. Plus, you might want to shop around for the best deal. Even among term policies there is a wide variance in price.”

End

Postscript:

It is this author’s hope that anyone in possession of this article pass it onto their relatives, friends, and neighbors. The information in this article can put many thousands of extra dollars in the bank accounts of those who need it most.

Copyright 2000
Marsh Kaminsky CPA (retired due to disability)
e mail: Thetermite@aol.com

Because of Multiple Sclerosis, I am a retired CPA. Besides my interest in life insurance, I have a very strong interest in early preschool learning.

If you’re planning a vacation you’ve probably already been offered travel insurance more than once. And if you’re like most people you quickly dismissed the idea and went about your business.

But don’t be so quick to decide. While travel insurance is not always a good idea, there are times when it can come in handy.

What is covered?

While coverage can vary from one carrier to another, travel insurance policies generally cover:

Trip cancellation or interruption due to weather, sickness, airline bankruptcy/strike, or terrorist activity.

Medical expenses incurred while in a foreign country. If you get sick while on African safari, you may find that your medical plan does not cover foreign care or that the coverage is severely limited.

Baggage and belongings that are lost, stolen, or damaged.

Accidental death and dismemberment if you are seriously or fatally injured while on vacation.

So when should I buy travel insurance?

Well, if you are going on a relatively inexpensive trip that is not likely to be canceled or delayed and you are young, healthy, and not planning on doing anything dangerous then you can probably skip it.

But if you are planning your honeymoon or a once in a lifetime trip, especially to a an area where weather is a concern, you should consider travel insurance. The small investment will be well worth it.

If you are elderly or in poor health you’re more likely to need medical attention while on vacation. Likewise if you are planning to take part in potentially dangerous activities such as rock-climbing or cliff diving.

Remember too that you don’t have to be doing anything risky to get hurt. You could be taking a lazy afternoon sightseeing drive and get hit by a reckless driver. If that happens, you’ll be glad you bought some extra insurance.

Mike Collins is the owner of www.thebeachesofaruba.com

Why Do You need Life Insurance Cover?

Who needs it?

Life Insurance cover provides either a lump sum or an income on the untimely death of an individual. Therefore, anyone who’s death would create a financial loss to another has a need for life insurance cover. This could/should include the following: -

Parties to a Mortgage or indeed a loan (mortgage life insurance cover)

Anyone with dependents (whilst a parent may not work, surely there would be a financial loss if anything were to happen whilst there are young children to be cared for)

Key Individuals. Where a business would suffer financial loss on the death of an essential employee.

In essence any situation where monetary loss would be incurred could possibly have a need for life insurance cover.

630,000 people in the UK will die this year* *source:National Statistics, Winter 2002

Types of Cover

Term Life Insurance

Term life insurance is as it suggests taken out for a specified number of years at outset. With this type of policy you are merely paying for the cover provided based on your age, health and the term. Therefore, it is important to obtain the most competitive term life insurance quote for the cover provided. It is possible to take out term life insurance that will pay level lump sums, decreasing lump sums (mortgage life insurance cover) or regular payments (income).

Whole of Life

As the name suggests, potentially, this type of policy will provide cover through an individuals life time. However, when obtaining a whole of life insurance quote, as well as level of premium there are other aspects to be considered, such as investment performance, effect of charges, financial strength of the company.

Which one?

There are good arguments for both type of policy. We would suggest that the following could make up the main considerations: -

Cost - Whole of Life insurance, as a rule of thumb is usually the more expensive type of product.

Period that cover is required - If cover is required for a specific period i.e. a Mortgage then Term cover could be more appropriate

Future Plans - If, for instance a family is planned, then whole of life can offer the flexibility to increase cover for this or other like events.

Note

Critical Illness(CI) now provides an equally important benefit and we would strongly recommend that you view the CI Factsheet.

Conclusion

This factsheet is meant merely as a rough guide to the needs and options surrounding Life Assurance. It is by no means a comprehensive outline to anyones particular requirements. It would be, therefore, wise to use this as a guide and seek more comprehensive advice, via a professional Independent Financial Adviser. All advisers are Regulated and Authorised by the Financial Services Authority (FSA) and are now required to explain their status to you (either independent and fee charging, independent but paid by commission only, or tied)

Cheap life insurance is out there, if you know what you’re looking for. That’s why it’s important to do your research. You’ve got to educate yourself on the various types of life insurance policies that are available, including additional benefits that may or may not be offered. Plus, you should make an effort to research your options as they relate to the various life insurance companies. It’ll be to your advantage to know what you want and need in terms of cheap life insurance before you start getting quotes.

Term vs. whole life

The first big determinant of cheap life insurance is the type you select. Term life insurance will almost always cost you less than whole life insurance. Term insurance is purchased for a specific period of time, for a specific face value. Whole life, as the name implies, provides life insurance benefits for the rest of your life, whether that ends up being 10 years or 50. Whole life insurance policies generally have a cash value aspect meaning you’ll pay more in monthly premiums. The amount over and above that which is necessary to cover the premium is used for investment purposes.

Even if you do choose whole life insurance, your costs can be lower if you look around for a policy that has lower fees. The fees you want to pay attention to aren’t really fees, they’re commissions. Commissions can eat away at the cash value of your whole life policy. When researching, look for the term, “low load” as that generally means lower fees.

But be careful. You’ll find this type of life insurance won’t be cheap if you withdraw funds. When the policy’s cash value is greater than the premiums paid, you’ll likely have to pay taxes. A loan against the cash value may have the same end result. Think long and hard about this type of life insurance policy; it’s not meant to be a substitute for a more traditional type of investment plan. And the premiums you’ll pay will be hefty.

Steer clear of guaranteed issue policies

Also when looking for a cheap life insurance policy, you won’t find it in a “guaranteed issue” type of policy. These policies are guaranteed to cover anyone, regardless health. No medical exam is required but that convenience comes with a big price tag. Because the life insurance company is taking a substantial risk by insuring individuals without knowing their state of health, premiums will be high. If you’re healthy, opt instead for a traditional term policy.

If you’re not healthy, taking steps to improve your health may help you find cheaper life insurance. Lowering weight, blood pressure, and cholesterol levels are beneficial steps. Kicking the nicotine habit is also advisable. The better your health at the time of application, the cheaper your life insurance premium should be.

Finally, to get cheap life insurance, purchase just what you need. Reevaluate your life insurance needs periodically and adjust upwards or down as necessary. The bottom line: Finding cheap life insurance is possible, but it does take work.

About the Author

Find Cheap Life Insurance in the UK. You will not believe our low rates.

This article comes with reprint rights. Feel free to reprint and distribute as you like. All that we ask is that you do not make any changes, that this resource text is include, and that the link above is intact.

What is Universal Life Insurance and how do I get the best Universal Life Insurance Quote?

Universal Life Insurance or “UL” as it is commonly referred to in the insurance industry is a relatively new concept. It is a permanent version of life insurance that is intended to be in force for as long as the client wants it to be in force. The determining factor in how long the policy lasts is the cash value, the amount of premium being paid, and the wording of the contract.

The cash value in a universal life insurance policy will build up on a guaranteed and a non-guaranteed basis. On the guaranteed side of the equasion, at inception the insurance company projects exactly what will happen to the cash value based upon known variables and minimally acceptable interest rates. If a policy has a guaranteed interest rate of, say, 4%, then the proposal for insurance will show what would happen to the cash value based upon 4%.

On the “non-guaranteed” side of the proposal for insurance (which becomes part of the policy), the cash value is shown in regards to the “current” interest rate that is being applied. This current interest rate fluctuates and is dictated by the insurance company through which you have the policy. The overall interest rate applied to new money coming into the policy as premium and the current cash values will never go any lower than the guaranteed interest rate but may go up to the current, assumed, non-guaranteed interest rate.

The amount of life insurance premium being paid into the universal life insurance policy is another factor in determining the longevity of the policy. UL is flexible in that you can put as much money into the policy as the MEC limit will allow (government regulates the amount of money you can put into a policy) and as little money as you want as long as you meet the company’s minimum premium requirements. If you only put the minimum premium into the policy, the contract will offer a death benefit for a shorter amount of time. If you pay the prescribed, sometimes referred to as “target premium” or “designated” premium, the policy should last until age 100. Putting more cash into a universal life policy than the target premium can come close to the “MEC” or Modified Endowment Contract premium. The effect on the UL policy that this will have is a potential increase in the cash values.

Secondary guarantees in modern universal life insurance policies add another layer of security to the universal life insurance policy. These secondary guarantees that are implemented by the insurance companies and included in the wording of the contract basically state that as long as the prescribed premium (usually target premium) is paid in a timely manner and there are no loans or withdrawls on the cash value of the policy, the policy will last as long as the insured is alive.

Carefully worded insurance policies, current and guaranteed cash value projections, and premiums being paid all have an impact on the longevity of a modern Universal Life Policy. Universal Life Insurance is a flexible contract that will allow as little as a minimum premium and as much as the governmental rules will allow. UL can be a good fit for anyone looking for a policy that would ensure long lasting, flexible coverage, with the potential for cash value and transferrability.

By: Ashley Brooks, CLTC

Ashley is the marketing Vice President for a quality Insurance Brokerage General Agency in South Carolina. Mr. Brooks has done an internship at Genworth, formerly known as GE Financial Assurance First Colony Life Insurance Company in Lynchburg Virginia. He is a member of his local chapter of SCAIFA (Association of Insurance and Financial Advisors), NAILBA, and Sub-Centers. His current projects include website marketing and insurance advertising via the internet.

Find out more about Mr. Brooks and get a Universal Life Insurance Quote at Universal Life Insurance.biz!

We are currently seeking Insurance Agents to grant highly competitive brokerage contracts to. If you are an insurance agent and you would like to work with an Insurance General Agent who cares about you and your clients, please contact us today!

As a businessman you might have public liability insurance and you insure your buildings, stock and vehicles. You may even have professional indemnity insurance and legal cost insurance. Is that all? What about your other primary assets – your key staff?

Key staff represent the heart of every businesses but no more so than the UK’s 3.9 million small, often family, businesses that have up to 4 employees. Prolonged absence through serious illness or even death can be terminal for some of these enterprises. The risks are the same for limited companies, a partnerships and sole traders.

In this context Keyman Insurance is a must. Keyman Insurance represents a group of insurance plans all designed to financially protect business from the affects of prolonged illness or even death of staff who are central to the prosperity of the business. The insurance can’t replace people but it can provide cash to buy time and cover the costs of temporary staff, recruitment, loss of profits or provide a cash injection.

The insurance falls into four categories – insurance to help your business recover during the extended period when your key personnel are unable to work or to train or recruit a replacement, insurance to protect profits, insurance to protect shareholders or partnership interests, and insurance for anyone involved in guaranteeing businesses loans or banking facilities.

Keyman Insurance on those who are central to your business.
Who are your key people? They are the ones who steer, create and drive your business. The people without whom your business would lose sales and profits or without whom even the basic viability of your business would be shaken. Look at the Directors, Partners, owners and beyond. Consider the roles of senior managers in sales, technical development and operations – the roles will change in every business but the candidates are sure to jump out at you.

Insuring these people will provide the extra cash needed to take on temporary staff or recruit and train a replacement.

Keyman Insurance to protect your Profits.

The effect of losing key staff goes well beyond simply the cost of their salaries and the cost of replacement. As they’re central to the businesses prosperity, their loss will knock on to the bottom line. You can insure for loss of profits too!

Keyman Insurance to protect Shareholders or Partners.

Here we are talking about insurance to protect interests in the event of long-term illness or death. Families may want to sell their stake in the business but the remaining members in the business may not want those stakes held by newcomers. Keyman insurance schemes can be implemented which provide the necessary finance to buy the shares from the original shareholders or their estate.

Keyman Insurance insuring those who provide personal guarantees.

When a business takes out a loan or raises bank finance the lender is quite likely to require a personal guarantee or a charge on their personal property. This especially applies to small and new businesses. So what happens if these guarantors become seriously ill or die? The lenders may well be in a position to call in the loan. What happens then? Again, Keyman Insurance is the answer. Insurance can be structured to pay-off the loan and thus free the business and the guarantor’s family, from major worry.

Most of the UK’s leading insurance companies offer Keyman Insurance as a development of their Life and Critical Illness Insurance interests. They have all the necessary paperwork available to implement the cover you need and ensure the taxman is kept at bay.

So, can your business afford to ignore Keyman Insurance? You’ll be either a brave or foolish man to say NO!

Michael is an exclusive financial writer who writes articles primarily about UK family finance. One of the websites he writes for is Express Life Insurance who offer life insurance quotes as well as critical illness insurance.

Additional reading - What is Income Protection Insurance ?

Additional reading - Can i get an Instant Quote ?

All types of Life Insurance fall into one of the four groups
explained below, which type you use depends on the type of risk
you wish to protect and the funds you have available.

Term Assurance

Cash lump sum paid out in the event of death

Straight term assurance is still a very cost-effective way of
providing financial protection for the family or business. A
lump sum is normally provided when a claim is made which is paid
into the estate of the policyholder.

In order to avoid complications with delays in probate or
inheritance tax, an appropriate trust can be used so that any
payment is made direct to the beneficiaries.

It is also possible to have the cover indexed according to
inflation, so that the level of cover remains the same in real
terms. Since there is no element of saving, the plans do not
acquire a surrender value. If you wish to include this option,
you could opt for convertible term assurance.

Family Income Benefit

A regular income paid following death during the term of the plan

This type of plan provides for a regular income to be paid out
in the event of the death of the life assured during the term of
the policy. With each month that passes, the liability which the
insurance companies is taking on decreases by a set amount. This
enables the costs to be kept down to a minimum and is often the
least expensive plan available.

The benefits can be written in trust to avoid legal delays and
any possible liability to inheritance tax.

Mortgage Protection.

This type of plan is also a term policy which covers the
declining balance of a repayment mortgage. This enables the cost
to be kept to a minimum but make sure that the interest rate
figure is high enough for any possible increases in the mortgage
rate.

Whole of Life Cover

Provides cover for the rest of your life

The main disadvantage of term cover is that at the end of the
term, cover ceases and any new policy has to be underwritten
according to the age and health of the policyholder at that
time. When a whole of life policy is taken out, the policyholder
has guaranteed insurability for the rest of their lives,
regardless of any change in their health.

This means that initial premiums are likely to be higher than
term assurance cover, but the plan has far more flexibility. It
therefore depends on your personal circumstances as to which
plan is likely to best suit your requirements.

Critical Illness Cover

Cash lump sum for those who die or have a critical illness

In recent years, the need for protection for those who actually
survive serious illness or accident has become more apparent. It
has been described as ‘life cover for the living’.

Most plans cover the common conditions such as heart attack,
stroke and most forms of cancer, but there is variation on more
rare conditions. In addition to specific illnesses, it is quite
common to have permanent disability cover. If you become
permanently disabled and unable to return to work, the plan pays
out. There is however, a wide variation in the definition of
‘return to work. Some plans would only cover you if you were
totally unable to work. Others have an own occupation? clause so
that if you were unable to return to your normal occupation, a
claim could be made. This is an extremely important fact to bear
in mind when selecting your insurer.

Roger Overanout