The Insurance Bid Process-Reader Comment

Here is a question from a reader. I thought it might be of interest to others.

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Scott,

I receive your emailed newsletter regularly and find it very helpful. I noticed that on 5/6 you commented in "What the Best Do" that "4) They bid their insurance using multiple insurers and brokers every three years to assure the best coverage, service, and price."

I am in the midst of evaluating whether to switch brokers. My current broker runs a local agency and has provided very good service over the past 5-6 years such that we migrated all of our policies to him, even employee health plans. He has done well. However, we have grown significantly and, as a nonprofit, have been enticed by a larger broker from the Boston area who has a significant segment of clients in the nonprofit area and related expertise, plus a few other in-house services (primarily in risk management and access to specialty markets) that our local broker does not offer.

In evaluating this, both guys told me that they cannot really compete with one another in quoting as typically the broker of record is the one who gets best access to carrier quotes, particularly when there are a limited number of carriers in a market as is frequently the case in Massachusetts. The conclusion to this conversation seemed to be that shopping for a broker was a separate activity from shopping for quotes. Can you enlighten me more?

I appreciate your input.

Name Withheld, Massachusetts

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Here is my reply:

The competitive bid process results in the best coverage at the best price - when it is done correctly. As you point out, the broker selection process as part of the bid process is the toughest part of the equation. Get that wrong and the results are less than the best.

Garbage in, garbage out.

That said, you have to look at the needs of your organization and determine what is the best overall approach. To bid or not to bid. To stay where you are or to move the account based on bid or just broker selection.

Realize also that brokers would rather not compete on a bid basis - too much to lose with a great deal of effort.

Attached is a booklet I wrote that reviews the process. Others tell me it is helpful. Let me know what you think.

Of course, you get the best result when you bring in an expert .

Let me know if this has helped or just confused you more.

Regards,
Scott



Blog Readers,

If you'd like a copy of my bid booklet send me an email. The electronic version is free. Copies in booklet form are available on my website for $12.00

Home Security and Safety Tips

Here are some general home security and safety tips:



-How secure are your basement windows? Install window grills to prevent intrusion. Reinforce basement doors, too.



-Check your washing machine hoses once a month - look for bulges and leaks. A broken hose will ruin your day.



-Check your door locks. How substantial are they? Are the door frames rugged enough to withstand a kick? In new construction, have the doors open outwards, making kick-ins almost impossible.



-Check the support structure of your deck. Is the deck attached to your home with lag-bolts? Nails are not enough to prevent collapse.



-Walk around your house, thinking like you want to break in. What is the weakness in your security?



-Check your smoke alarms and the batteries.



-Consider an alarm system. Your home insurance company will help to pay the bill, with reduced insurance premiums.



-To prevent electrocution, use only ground fault interruption (GFI) electrical outlets in your bathroom. The garage too. If your home still has screw-in electrical fuses, get an electrician in to inspect your wiring.



-At least one phone in your house should be hardwired to allow for phone calls in a power failure. If you use internet based phones, make sure you can make emergency calls.



-If you have a pool, buy a motion detector alarm (about $20 from many catalog companies - Google "pool alarms") that will let you know someone is in the pool area.



-If you depend on a well for your water supply, have backup water in case the electricity goes out - both for drinking and for operating your toilets. Remember, you can pour water into the tank on most toilets for use in a flush.



-Have at least one fire extinguisher on each floor of your home. Check them every six months.



-Have a safe bolted to the floor in one of your closets. Keep spare keys, blank bank checks, social security cards, and other info useful to a thief locked up. Put your "good" jewelry in the safe too.



-Install a "Charlie bar" to prevent sliding doors from being forced open. A broom stick in the track is a poor second choice. Charlie bars are mounted in the middle of the door, offering greater protection. Intruders can see the bar too. Perhaps they will search out an easier mark.



-Ladders stored outdoors should be locked to prevent a thief from using your ladder to break into your house.

Homemakers require life insurance policies

Anju Grewal, a housewife in her mid-30s, agreed to buy life insurance after been chased by her cousin. Though she gave in to social obligations, she was not sure whether she should buy the investment- oriented insurance policy pitched to her.

Many people, including Anju, believe that insurance is a forced form of savings. Hence the key message thrust on them is that insurance will not only provide some cover to your family, but can also give you some amount on maturity.

“Do I need life insurance?” was Anju’s question. To find an answer, we must understand what life insurance exactly is. Life insurance is primarily a tool by which an individual can transfer the financial risk (to his/her family) of his/her early or untimely demise to the insurance company.

So what exactly is the financial risk in case of loss of life? The first question Anju should ask herself is : “Will my family have sufficient financial resources to maintain their lifestyle and achieve financial goals such as children’s education, marriage, if something were to happen to me today?”.

The answer to this question needs introspection as well as thorough analysis. Besides the emotional loss, there is also a financial loss that occurs to a family , when the breadwinner or earning member of a family dies.

Families are devastated; have to go through a lot of hardships and turmoil to make ends meet.

Even if you have plenty of money, poor planning (too many claimants, legal issues, and litigation) can ensure that your family sees tough days ahead.
Generally people buy insurance to demonstrate caring and to feel comfortable that they have indeed done something to secure their family’s future. Whether they need insurance or not is considered irrelevant.

For example, there is this celebrity who has been sold an insurance policy where he is paying premiums in crores. This celebrity does not even need life insurance as he is single, no dependents, and no liabilities, has lot of assets but yet has fallen prey to some life insurance product.

Life insurance is generally a very personal decision and should be bought only if there is some significant economic impact of your untimely death on your family.

Therefore, a housewife needs to ask herself the following questions

1. Is my husband’s income sufficient to take care of my children, liabilities and family goals?
2. Are there any immediate expenses or recurring expenses that would come up should something happen to me today?
3. Does my husband have adequate cover? If so, how much and what kind of expenses, liabilities and goals would I have to address in case of his untimely death?

Ensuring that your husband has sufficient cover is far more important for a housewife than ensuring that she has sufficient cover. Considering that the husband has sufficient life cover, there is no pressing need for a woman to buy life insurance.

However if one must buy life insurance , then you can opt for a simple term plan that will give a very good cover for a low premium.

Advice For Choosing Your Life Insurance Payments

Although it’s a responsible choice, the choice to purchase a life insurance policy isn’t required. Other than not wanting to think about inevitable death, many people choose not to purchase a life insurance policy because they don’t want to take on the extra payments for something they will not immediately use. Electric bills, for example, are less painful to pay every month. You use electricity every day. Life insurance policies, on the other hand, are usually only used in case of a financial emergency or the death of the policyholder.

However, most life insurance companies offer the ability to make life insurance policy payments four different ways – monthly, quarterly, semi-annually, and annually – and your life insurance agent will be more than happy to offer advice about each payment option.


Monthly
Sometimes making monthly payments on your life insurance policy is the best choice, simply because you have the money right then. However, if you pay monthly, you may actually end up paying more than you would if you paid quarterly, semi-annually, or annually, because many life insurance companies offer discounts for other payment options.

Quarterly
Quarterly payments are sometimes the most convenient option, because they allow you to save for a few months before sending payment.

Semi-annually
Semi-annual payments aren’t quite as large as annual payments, yet they do offer the ability to save and pay twice a year.

Annually
Making annual payments on your life insurance policy in the form of one lump sum may leave a lump in your throat, but depending on the life insurance company, you may actually save money this way.

Whether you’re considering purchasing a life insurance policy, or already have one, talk with your life insurance agent about life insurance policy payment options. While you may think one payment option is best for you, the advice your life insurance agent gives you may help you see that another payment option is actually better.

By: Elizabeth Newberry

A 4-step strategy to manage your insurance portfolio

While many individuals believe they are on a firm wicket with regards to their investments (read mutual funds, fixed deposits, small savings schemes, among others), they are usually tentative about their insurance needs. The reasons for this are not far to seek. For one, insurance has many options often confusing the individual. Secondly, ‘insurance awareness’ among individuals is very low, which when combined with mis-selling leaves them even more confused.
At a level, managing your insurance portfolio is a relatively straightforward task. It’s all about breaking the process down into simpler steps. Once you have the measure of these steps, you are home. Broadly, managing your insurance portfolio involves four steps:

1) Identify your needs
Like with shopping when a well-defined list helps you focus on the task at hand and avoid venturing into unrelated avenues, drawing up an insurance list can have the same effect. To avoid getting swayed by the plethora of insurance options, determine at the outset what you are looking for. Broadly, the insurance seeker can have one of two needs a) life cover (through a term plan) or b) investment combined with life cover (through traditional endowment or a unit linked insurance plan). Although the latter sounds like the convenient option, we recommend against it. Going for this option will deprive you of the benefits of selecting the two options i.e. insurance and investment in isolation. In other words selecting life cover or investment separately is more prudent than selecting a combination of both. At Personalfn, we maintain that over the long-term, you will be better off separating these two objectives.

2) Quantify your needs
Once you have decided why you need insurance its time to answer the question – how much insurance do I need? Of course, the answer to this question will depend on whether you wish to opt for a life cover or an investment plan. The reason is because these two questions will have very different answers.
To understand this better let’s take the first scenario i.e. you want a life cover. Typically this will involve planning for all future liabilities and commitments as also setting up a contingency fund. Those familiar with the jargon know that we are referring to the Human Life Value over here.
On the other hand, if instead of a pure risk cover, you want to opt for an investment plan, then you will first have to identify the investment objective like retirement or child’s education for instance. Once you have done that, then you will have to quantify the investment amount to answer the question – how much money do I want to save for my retirement? Or - how much money do I want to save for my child’s education?

3) Select the insurance advisor
As we mentioned at the beginning, one reason why insurance has turned out to be more complicated than necessary is because of the quality of insurance advice. Selling insurance as you are aware can be very remunerative. Not surprisingly, the advice is often biased in favour of insurance products that garner the highest commissions. So you have to be really sure that your insurance advisor is honest and competent. If you can’t ascertain this easily, insist on references whenever possible. Check his recommendations by asking for comparisons across insurance companies over various parameters. Understand why he is recommending one insurance plan over another. And if he is making claims that seem outlandish to you, don’t hesitate to either take it down in writing from him or get a confirmation from a company official.
Another problem with insurance advisors is that many of them are mutual fund agents on the side. While, this by itself does not pose a problem, clients often complain of how their insurance advisor is at times not keen on selling life insurance and invariably makes a pitch for mutual funds. The solution to this problem lies in identifying your needs. If you have decided to opt for a life cover for instance, make sure your insurance advisor gets the point. If he still insists on selling other products then its time to re-evaluate whether he is the right insurance advisor for you. At times, having sold an insurance policy, the insurance advisor is no longer interested in servicing the same. References can play a critical role in weeding out such advisors.

4) Conduct a review regularly
Like all other long-term activities, you must monitor your insurance portfolio closely to ensure that you are on track to achieve your objectives. For instance, if you have opted for a life cover (in line with your Human Life Value), then you will have to keep a close eye on your liabilities and financial commitments. If there is a discernible upward revision, then your existing life cover may not prove sufficient and you may have to consider taking additional cover. The solution to this problem is to opt for a slightly higher cover at the outset; since pure risk plans are relatively cheap, it will not prove to be expensive.

On the same lines, if you have opted for an investment plan for your child’s education for instance, then at periodic intervals (eg. annually) ensure that your investment plan is on course to achieving the desired result. Again, if there is a discernible deviation, it’s time to re-evaluate your investment.
By now you would have realised that managing your insurance portfolio isn’t as difficult as it appears. Like any other activity it involves taking decisions, implementing them and monitoring the results closely. Of course, your insurance advisor will play a key role over here, which is why it’s important to ensure that he is honest and competent.

Does your optional collision coverage cover rental cars?

Tom Raftery, a fantastic bankruptcy attorney who has answered many questions for me over the years, http://www.rafterylaw.com/, wondered whether he should sign the loss/damage waiver when he rents a car, or pay the extra charge for insurance. I too always have that concern before I hope for the best and initial the waiver at the car rental counter.

Judy Bearfield at DeGuglielmo Insurance Agency in Medford (my own insurance agent, who I highly recommend) told me that the standard Massachusetts auto policy covers rental cars in the United States and Canada. Other countries, including Mexico, are not covered.

I confirmed this by reviewing the current standard Massachusetts Auto Policy ("the Seventh edition" for those in the know). The optional collision coverage provides coverage for "collision damage to other private passenger autos while being used by you or a household member with the consent of the owner." This would include rental cars.

So the bottom line is that your auto policy provides collision coverage on a rental car to the same extent as it does on your own car. Keep in mind that collision coverage is optional; if you have a low-value car you may not have purchased it. In addition, the rental car company may argue that it suffered damages (for example, loss of the rental value of the car while it is being repaired) that may not be covered by the collision coverage of your policy.

Following up on Judy Bearfield's comment that rental cars are covered only in the United States and Canada, the "Where You Are Covered Provision" of the auto policy states that the Compulsory Bodily Injuries To Others (providing $20,000 in coverage if you injure someone else in a car accident) applies only to accidents in Massachusetts. All other coverages apply only to accidents in the United States or Canada.

I should add that with the recent deregulation of auto policies in Massachusetts, as of April 1, 2008 each auto insurer can file its own endorsements that change the optional portions of the policy.

Finally, some credit card companies provide coverage for rental cars--but, given the constant changes to credit card terms, even if you think your card provides coverage you should double check, and ask closely about the terms.

Small Biz Insurance Policy

The business owner's policy (BOP) is a simple package insurance policy designed for small business. Insurers usually limit the use of this policy form to retailers, office occupancies, and other low hazard enterprises.

The policy includes both business property and general liability coverage. It can cover commercial buildings or be used for companies that rent their location.

On the property side, the policies usually include special perils coverage and replacement cost evaluation. A variety of deductible options are available. Simple business interruption coverage offering both loss of income and extra expense coverage is usually a part of the coverage.

The liability coverage is very close to that offered in the comprehensive general liability form. It includes both premises liability and products liability coverage for bodily injury and property damage losses.

Optional coverage include flood, earthquake, non-owned auto, employment practices liability, and professional liability (for low hazard businesses).

These policies are simple for insurers to issue and agents usually can quote the premiums right from their offices.

Location-Location-Location

Most business insurance programs require that you list locations where you have property to be insured.

Review any other locations where you may have business property, such as warehouses and mini-warehouses. Consider equipment that may belong to your company that is at employees' homes. Telecommuters and executives with company computers at home may need to be listed on your property insurance policies.

Don't forget document storage facilities and property stored at customer's locations.

Buying Life Insurance: A Checklist

Life insurance can be an effective tool to make certain and protect your family’s financial future. It has been acknowledged universally as a method by which the breadwinner can substitute risk and uncertainty with timely aid for the family in case of their unfortunate death.

Since a life insurance policy will replace your lost income after your death, it is important to choose the right kind of policy. Hence, it is essential to find a company that will cover your insurance with the right amount, and at a reasonable price.

There are several reasons for an individual, specifically a breadwinner, to make out a life insurance policy. To assuage your concern for your family in case of your death, most life insurance policies offer various death benefits that take care of your family after your death:

For example, a member of your family may have some special needs. You can buy a life insurance policy that will act as an emergency fund in the event of your untimely death.
If you want to make sure that your child gets quality education even after your death, a life insurance can also work as a fund for your child’s education.
An insurance policy will ensure the maintenance of your family’s standard of living.
Your family can also use it to clear personal and business debts, after your death. Duration of insurance coverage: Before buying a policy it is advisable to ensure the duration for which you want life insurance coverage. You can take online help to decide the coverage duration. Need for a checklist After you decide on your specific need, and the duration of your life insurance policy, you can begin looking for a suitable policy. It is prudent to prepare a checklist before buying, as this will ensure that you end up purchasing the right policy.
The checklist must include various factors on which you can assess insurance companies, which includes various criteria set by insurance companies too. Here are a few pointers:

1. Before buying a life insurance policy, it is advisable to ensure that you have all medical information regarding your health, because most companies expect that, depending on your age and the duration of insurance coverage.
2. It’s a good idea to compare various life insurance companies on the basis of quotes that they have to offer. You can take the help of the Internet to compare the quotes based on your choice of insurance product and your age.
3. You can also take help from a broker through the telephone or the Internet and clear all your queries.
4. Once you decide on a particular insurance company, it is important to ascertain the company’s financial strength and stability.
5. It is also advisable to gather information about the options for renewal that various insurance companies offer, because some companies charge high premiums if you renew your policy.
6. Some insurance companies charge a penalty if you cancel your policy, so make sure that the company you choose does not demand a penalty on cancellation of policy.
7. You may also want to make some changes in your policy in due time, as your insurance needs can change with time. So, when you purchase your insurance policy find out if there is an age limitation for any kind of conversion of your policy, and whether the option of moving into a better policy is there.

By: Joseph Kenny
Joseph Kenny writes for the UK Loan Store and offer more information on payment protection insurance and other loan topics available on site.
Visit Today: www.ukpersonalloanstore.co.uk

Life Insurance Is Cheaper Than You Think

Trouble is, a growing number of people are getting married, buying first homes and starting families later in life. In fact, recent research from the Office for National Statistics (ONS) reveals pregnancies in women aged 40 and over have risen by almost 50% over the past decade.

That means the need for life insurance could surface a lot later than you might expect. But will you still be able to buy a value-for-money policy when you're no spring chicken!?

So why is life cover more expensive for older people?
The simple answer is because a claim is more likely to be made under the policy if you're older. The majority of people in their twenties have enjoyed a clean bill of health. If you took a 25-year life policy out at the age of 25, there's a high probability you will survive until the end of the policy at the age of 50.

But, if you're already 50 and you took out a 25-year policy, the chances of you surviving to 75, while still good, are undoubtedly lower. For this reason, life cover premiums for older people will be higher than for someone in their twenties or thirties.

How much does life insurance cost for older people?
Buying cover later in life won't necessarily be beyond your means. If you thought taking out life insurance in your forties, fifties and beyond would be outrageously expensive, think again.

Pick An Insurance Agent At Renewal

Some businesses don't want to get competitive bids at the renewal of their insurance but they want to interview and select a new agent/broker. Here are the steps in the insurance broker selection process:

Step 1 Select participating agents - five is a good number. This step is the key to the process. Good agents here will result in great options later.

Step 2 Have selected agents complete an information questionnaire/survey.

Step 3 From the questionnaire select participating agents to interview - 2 or 3 works well. However, you could interview them all if they are qualified.

Step 4 Interview the successful agents.

Step 5 Review and select the agent you believe is best - this is the hard part.

Step 6 Successful agent implements the program, gathers information, accesses insurance companies, and follows through on obtaining proposals.

Depending on the situation, this may be a good alternative for some companies. In the current market, however, getting multiple agents to actually bid usually results in lower insurance premiums, better coverage, and greater service options. Competition works.

Insuring Your Computers

Some property insurers segregate computers into a separate limit of coverage. Are your computers properly covered? Is the limit of insurance adequate? Is a computer virus a covered cause of loss? Does the policy include coverage for laptops and other computer equipment that is away from a covered premises? Is there coverage for PDAs and hand-held computers?

Change In Citation Rule Can Have A Big Impact

An issue that comes up frequently in construction defect litigation is whether a contractor's General Liability policy provides coverage for damages to the building itself caused by the contractor's faulty construction. Many such cases have to do with weatherproofing: for example, if a building's windows are not weathertight because the contractors made a mistake, will their insurance cover the cost of repair?

I have been personally involved in several such cases, bringing one to the United States Court of Appeals. (B & T Masonry Constr. Co., Inc. v. Public Serv. Mut., Inc., 382 F.2d 36 (1st Cir. 2004).) The issue has always been whether approximately six exclusions apply, separately or together, to exclude all or some of the damages. The analysis can never be a quick one because each exclusion has to be analyzed separately under the facts of the case. The exclusions vary in the timing of when the damages had to be discovered, where in the building the damages were, whether the work was done by the insured or a subcontractor, and other factors. The exclusions overlap but don't always exclude all damages.

If a new citation rule announced in February by the Massachusetts Appeals Court had been in effect just a few months earlier, though, the entire exclusion analysis would arguably be unnecessary. The Massachusetts Appeals Court has stated in at least two unpublished Rule 1:28 decisions that a construction defect is not an occurrence. Mello Constr. Inc. v. Acadaia Ins., 70 Mass. Ap. Ct. 1004 (2007); Davenport v. U.S. Fidelity & Guar. Co., 56 Mass. App. Ct. 1109 (2002).

Rule 1:28 is a rule of the Appeals Court that allows a panel of Appeals Court judges to decide a case without circulating it to all the judges on the court. The theory is that such cases are so clear-cut that additional work by the court is unnecessary. Until February, citation to Rule 1:28 decisions was prohibited by the Appeals Court.

In a footnote in Chace v. Curran, the Appeals Court announced that Rule 1:28 decisions issued after February 25, 2008 "may be cited for their persuasive value but . . . not as binding precedent."

If the new rule had been in effect when Mello was issued, I would be much more likely to recommend that an insurer deny coverage outright based on the theory that a construction defect is not an occurrence, rather than relying on exclusions which, after a long analysis, may not exclude all damages.

So, although citation rules may seem picayune, they have far-reaching consequences.

The Insurance Bid Process - Steps to Success

Here are the steps in the process of bidding your business insurance:

Step 1 Select agents that you believe may be able to handle your account. Pick four or five.

Step 2 Have agents complete an information questionnaire to determine suitability.

Step 3 Select the participating agents for the actual insurance bid process. Two agents works well.

Step 4 Provide basic information about your business to the participating insurance agents and ask them for listings of insurers they would like to use.

Step 5 Assign which insurers each agent will be able to access. (A critical part of the process.)

Step 6 Provide full bid specifications and claim data to the participating agents.

Step 7 Agents interview you and gather additional information they need to provide bids.

Step 8 Agents present proposals. You review proposals and select the program you believe is best. (The tough part is measuring the combination of price, coverage, and service.)

Step 9 The successful agent implements the program.

If you have not bid your insurance in the past three years, consider doing it now. The insurance marketplace has never been more competitive. You will end up with better coverage at a better price and better service.

After the Fire...

After a fire (or other insured damage to your building) there will be debris that needs to be removed from the scene. Insurance coverage is usually limited to 25 percent of the loss. The amounts paid for debris removal do not increase the total limit of coverage for the whole claim. It is, therefore, possible that you can run out of coverage.

To help, insurers provide an additional amount of coverage (usually $10,000) to pay for the cleanup. Some insurance companies increase the additional amount to $25,000 or $50,000.

Consider your buildings. Will special disposal of rubble and debris increase the cost of reconstruction? Asbestos or other hazardous substances (found in older buildings) may point to the need for additional insurance.

Is this a topic your insurance agent has discussed with you? If not, what does that say about the rest of your insurance coverage? Is it time for a comprehensive review of your insurance?

Women & Money: Life insurance: How to find, buy the right policy

By Amy Dickinson
Those who depend on your income - from young children to elderly parents - also depend on you to have a life insurance policy. Luckily, buying one has never been cheaper or easier. Here's what you need to know:

Stick with term
With the exception of a few situations (supporting a special-needs child or sibling, for estate-tax purposes), the only kind you need is term. As the name implies, you buy a policy for a set period - from a year to 20 or more. Should you die during that time, your beneficiary gets the death benefit on your policy. If your goal is to protect children, choose a term policy that will give you coverage until your youngest is 23 or so. By that time, kids can support themselves.

Shop around online
Check out term insurance rates on reputable Web sites such as selectquote.com and accuquote.com.

Buy a generous policy
Specifically, one with a death benefit that equals 20 times your loved ones' annual needs. I know that sounds like a lot, but if a child or parent requires $50,000 a year for living expenses, that works out to a policy with a $1 million death benefit. I suggest replacing 20 times their annual expenses so that your survivors can invest the money conservatively and live off the interest rather than eat into the principal. The amazing thing is that a 20-year, $1 million policy for a 40-year-old woman in good health can cost just $850 or so a year, or less than $75 a month. Make sure your policy is guaranteed renewable: As long as you pay on time, it can't be canceled.

No minor beneficiary
No life insurance company will write a check to a juvenile. If you name your child as the beneficiary, he and his guardian will end up in court, where a judge will become the overseer of the money. Avoid that by setting up a living revocable trust and making the trust, not a person, the beneficiary. Whomever you have appointed as the trustee will be able to use the funds to take care of your child according to the directives you've laid out.

When a relationship ends, the money decisions typically center on how to split up assets‚ but what gets overlooked is how to sever all financial connections formally. Take these steps on your own to disentangle your finances, or get written verification that your ex has made the necessary changes.

Credit cards. Any joint accounts should be paid in full and then closed. If you have an unpaid credit-card balance and shut it down only to new charges, either party can reopen the card later, leaving the other person equally responsible for the new debt. Make it a priority to get the balance paid off so you can permanently close the account.

Loans. You need to establish who is responsible for any outstanding debts (typically, this is part of a divorce agreement). When that's been decided, the crucial final step is to make sure that the loan agreement and the title are switched to the person who assumes responsibility. For example, if your ex gets the house in the divorce, he is to refinance the mortgage in his name only and switch the title solely to his name. Failure to do so can ruin your credit score if your ex falls behind on payments.

Beneficiary designations. Update the person you have listed as your beneficiary on every investment, retirement and savings account as well as your insurance policies. No matter what your will or trust says, if your ex is still listed, he could inherit your assets.

Suze Orman is an Emmy award-winning TV host and author of the bestselling book, "Women and Money." For details, visit www.suzeorman.com.

Choosing a no-frills insurance plan

Some insurance companies offer return of premium and others offer plain products. It is advisable to take plain products and save on the extra premium, which can be invested in other avenues.
If you are looking for a no-frills insurance plan that covers you against risk to life, then a plain-vanilla term assurance plan may be your ideal investment. It provides basic life cover to an individual and compensates dependants for the loss of an earning member of the family, in the event of his death.

For individuals, term assurance is the first type of life insurance to be bought before they plan for any other kind of investment.

Of late, individuals taking home loans or other large obligations have started to opt for a term insurance policy along with the loan, in order to secure their family against the loan obligation in the event of their death. With expanding choices, premiums on term assurance policies have become very competitive.

A term policy can be taken to cover an individual alone or his/her spouse (joint life) or to cover business partners. Term insurance plans are non-participating policies. Therefore, if the insured survives the term, he will stand to receive no maturity value at the end of the term.
How to buy the term insurance

Term insurance is intended to compensate your family for loss of income. Assuming Mr Avinash, aged 25, earns Rs 5 lakh per annum and his yearly financial commitments total Rs 3 lakh, he has to plan for the sum assured based on the requirement. In this case, if the dependant can earn a return of 7 per cent per annum, he has to buy a plan for Rs 40 lakh.

A point to remember here is that most insurance companies offer term plans for a maximum period of 25-30 years and cover is provided till the age of 65 years.

Apart from one policy for income replacement, an individual can take separate policies for the other financial goals such as education and marriage of the dependant children. Separate policies can be taken for these and discontinued if the goal is reached.
Types of term insurance

Level Premium: Under this option, your risk cover and premium remain the same throughout the policy term. This type of option is considered to be best if one prefers to plan for income replacement, after one’s time. In the event of death, a lumpsum payment is made and the same can be invested to secure monthly income for dependants.

Decreasing cover: The sum assured gets reduced every year and becomes nil at the end of the term. These plans are ideal if linked to your home loan or to any other business loan. As the loan outstanding reduces, the cover will fall accordingly.

Single Premium: Several insurers allow you to pay a lumpsum premium at one go. This may factor in a good discount to your regular premium and is ideal if you have an irregular income stream and cannot commit to regular premia over time.
Riders

Term policies also allow you to add other riders or benefits on payment of additional premium. A few key ones are:

Critical Illness benefit: If one is diagnosed with any illness covered by the policy, a lump sum is paid and the critical illness rider then ceases to be in operation. However, the basic sum assured continues to be in operation.

The general rule is that if one survives for 30 days after the critical illness, the entire sum insured, including critical illness, is paid.

In comparison to general insurance, here the entire cover is paid, irrespective of the actual money spent on treatment. Some insurance companies offer a cover that is as high as Rs 50 lakh under this benefit.

Accelerated Sum Assured benefit: On diagnosis of any one of the critical illnesses, the sum insured is paid and the basic policy terminates without any value.

Accident death benefit: In case of demise by accident, an amount equal to the sum assured is paid in case of accident, or if death occurs within 90 days from the accident.
Choosing term plans

Some insurance companies offer return of premium and others offer plain products. It is advisable to take plain products and save on the extra premium, which can be invested in other avenues.

It is important to remember that taking insurance gets more expensive as you get older, therefore locking into a term plan early in your life makes sense. Premiums for term insurance policies are based on a number of factors, including age, gender, state of health and lifestyle.

Some insurance companies offer a discount on the premium for a non-smoker.

Therefore, it may be best to do some comparison shopping based on your requirements and select the provider who offers a competitive rate.

Tax benefit: The premium paid on your policy is eligible for tax benefits under the overall investment limit under section 80 C. In the event of death, the money received from the insurance company is tax exempted under section 10 (10D).

The premium paid for accelerated sum assured is exempted under section 80 D.

Hence, plan your requirement and select a term insurance policy as soon as possible because when it comes to term policies, early initiation translates into straight savings on your premia.

http://www.thehindubusinessline.com/iw/2008/05/18/stories/2008051850451300.htm

Age and sex and life insurance

This provision is a way for the insurance company to cover itself in the event that it (or you) made a mistake, listing you either as the wrong sex or as older or younger than you were at the time of application. The insurance company cites these two factors because they’re the two critical elements in how much it charges you for the protection. The insurance company adjusts the policy benefits for the correct age or sex.

Risky Biz - Nonprofit Board Service

You are exposed to risk in everything you do.



From the moment you get up in the morning until you go to bed, everything has the potential for risk. Any time your actions could cause injury or loss to someone else, you're exposed to the possibility of a lawsuit. The nature of your actions determines what type of insurance you need to cover the exposure.



Your personal liability insurance (part of your homeowner's policy) excludes business liability. Your work for your church, the Boy Scouts, or with your local Rotary Club is not a business activity. Therefore, most homeowner's insurance policies (and umbrella insurance) will provide protection—as long as the allegation is within the scope of the policy.



If you're working with a Girl Scout group and accidentally injure another volunteer you'll be covered under the "bodily injury" protection in most homeowner's policies. However, if you were sued for discrimination as a member of the board of the local Girl Scout council, you'll have no coverage: discrimination isn't included in most homeowner insurance policies.



The solution is a policy purchased by the organization you're volunteering for, directors' and officers' insurance. I won't serve on volunteer boards of directors unless the organization buys directors' and officers' insurance.



The policy pays for wrongful acts including poor decisions, employment issues (discrimination, harassment, wrongful discharge), and other events that don't result in bodily injury or property damage. Download my white paper on directors and officers insurance for non-profits.

Extra Extra Liability Protection

Umbrella liability insurance provides protection above and beyond what's offered by your general liability, auto liability, and employer's liability insurance. It's an inexpensive way to increase your level of protection against someone suing you. Premiums can be as low as $750 per $1,000,000 of coverage.

Consider $1,000,000 a minimum. Think about $2,000,000 - $3,000,000, or more. Review your liability limits as compared to your annual sales and total business value. Think of the daily activities of your business and the accidents or losses that can occur.

Recall that most liability policies have total aggregate limits of coverage so you can use up your insurance if you have multiple claims.

Contractors should be very careful of their liability limits. Look at your exposure to loss. A careless employee with a cigarette burned down a church in my town a few years ago. The total cost of that cigarette was many millions of dollars. It isn't just the "big boys" who cause big losses!

If you manufacture, bottle, or sell booze, try to get your liquor liability insurance included in the umbrella coverage.

New SJC Decision Holds Medpay Provides Coverage Before Health Insurance

Mike Tracy at Rudolph Friedman, http://www.rflawyers.com/, has forwarded to me a decision handed down on May 12, 2008 by the Supreme Judicial Court of Massachusetts, upholding a clause of a health insurance contract that requires Medpay to be exhausted before the health insurer is required to pay. Metropolitan Property and Casualty Ins. Co. v. Blue Cross and Blue Shield of Mass., Inc. (I should note that Mike, who is on top of everything relating to insurance coverage issues, actually forwarded this decision to me on the 12th.)

MedPay is an optional coverage of motor vehicle insurance. It is not part of the PIP scheme, but provides medical coverage to an insured after PIP payments have been exhausted. I haven't run into MedPay issues very often. I think the main reason is that most people who have health insurance don't bother to purchase it, even though it can cover health insurance copayments or other gaps in medical insurance coverage. People who don't have health insurance, I imagine, tend not to purchase any optional coverages as they raise the price of their auto insurance.

In Metropolitan, Rice was injured in a motor vehicle accident. He had PIP and Medpay coverage under a Metropolitan auto policy and had health insurance with Blue Cross. Met paid the first $2,000 of his medical bills under PIP coverage. Rice submitted the remaining bills to Blue Cross.

Blue Cross denied coverage on the grounds that its subscriber certificate stated, "Unless required by law, coverage under this contract will be secondary when another plan [defined elsewhere to include MedPay coverage] provides you with coverage for health care services." Metropolitan brought a declaratory judgment action, seeking a declaration that it was not obligated to provide medical benefits to Rice after his PIP coverage was exhausted.

The SJC noted that by statute a health insurer may not deny coverage because of the existence of PIP benefits, but that no statute prohibits a health insurer from denying coverage because of the existence of MedPay benefits.

The SJC rejected Met's argument that if health insurance would not cover the additional medical bills, Met would cover it under PIP, not MedPay. The SJC stated that such an action would be illogical and contrary to the intent of the PIP statute of keeping the costs of compulsory PIP insurance low. The SJC went further and stated that when a health insurer denies coverage because of the existence of MedPay benefits, the motor vehicle insurer must cover those medical costs under MedPay, not PIP.

Monogamy

Having multiple wives may appear to have advantages. The reality is probably different. It's the same with having multiple insurance agents.

You'll get a better insurance program if one agent handles your entire insurance account. This is true of both your business and personal insurance. You may even want your business and personal insurance with the same agent.

Having one agent will save you both time and aggravation. Having one agent means that you make one call when you have a problem or a change in your life or business. Having one agent helps to prevent gaps and overlaps in coverage.

One agent means only one review meeting, saving you time. (You do have an annual review meeting with your agent, don't you?)

I've worked with several insurance buyers who thought that it was best to split the business up. Their idea was to let the two (or three) agents fight it out, scrapping for the business. I have never found that this works very well. Come claim time, it can be a nightmare when each points to the other for coverage.

If you currently have two agents, you know which one is the better service provider. Pick that agent and have him or her handle your entire insurance account.

Insurers Go Belly Up

Each year, insurance companies go out of business. In the last ten years 400 insurers became insolvent. Their clients were severely impacted. Claims went unpaid, cash values were lost, and annuity payments were reduced or cut off. Policies had to be replaced in a rush, resulting in lower coverage and higher premiums. Not a fun time.

Several organizations analyze insurance companies for soundness. The best known is the AM Best Company (www.ambest.com). Standard & Poor's also rates insurers. I rely on Weiss Ratings (www.weissratings.com) as a tough, unbiased source of information. They never accept fees from insurers. They utilize industry and regulator's filings in their analysis. They're tough graders; a B- is still considered good in their system.

A recent review of AM Best Ratings revealed that almost 90% of insurance companies receive a rating of "Very Good" or higher. Only 29% of insurers received a Weiss Rating of "Good" or higher. Weiss has a higher standard. When working with my client's money I want objective, tough, and accurate ratings.

Setting up special options

If you want to set up any other kind of payment option, that’s up to you and the insurance company. As long as whatever arrangements you want to make are legal, companies are usually willing to set them up. However, more than likely, they will charge a bit more for this creative arrangement because they may have to do some legal work.
As a rule, insurance professionals don’t recommend that you make up your own payment options unless you have an attorney review them. The insurance and tax laws include many nuances (and, of course, they’re constantly being revised); you can easily designate a creative payment program without realizing that you’ve created more obstacles for your beneficiaries than you want to. Many attorneys are quite familiar with other ways to designate how your heirs receive your death benefits.

Business Liability Insurance Overview

Business liability is also called "General Liability" or "Commercial General Liability Insurance." Abbreviations include CGL and GL.

The policy provides protection against legal action based on negligence for bodily injury and property damage. Includes coverage for products liability, completed operations, premises liability and personal injury.

Tips and Advice -

--Usually excludes damage caused by pollution.

--Review your list of exposures. Does the policy list describe all operations?

--Consider increasing your limit of umbrella liability insurance.

--Most policies exclude pollution. Liability from mold and mildew is also limited by most policies.

--Coverage for libel and slander is limited if you are in the advertising or publishing business. Some policies limit coverage for web developers too.

--Damage to data is excluded by most policies. If you cause a client's computer to crash, the general liability policy will not protect you.

--Malpractice and professional liability issues are excluded, as are "professional services." Doctors, lawyers, consultants, engineers, beauticians, funeral directors, technology service companies, property management, construction managers and travel agents all should consider professional liability insurance.

Consumer Smarts: Life insurance can buy peace of mind

By PHUONG CAT LE
Buying life insurance is about as thrilling as getting a root canal. Who wants to dwell on what might happen should you die too soon?

File this task in the dreaded-but-necessary category of things you need to do in life, but don't ignore it, especially if family members rely on you for financial support. Life insurance can provide you with incredible peace of mind knowing your debts, expenses and survivors will be taken care of in the event of your untimely death.

Q: What should I know about buying life insurance?

A: Decide what you want, how much you need and what you can afford to pay. Shop around and compare rates; with rates for term life dropping significantly in the past decade, it's a competitive market. Get at least several quotes, and check the financial strength of the company. Read your policy carefully and never buy one you don't understand. Don't cancel or let your old coverage expire until your new policy takes effect.

In Washington, the law gives you a 10-day "free look period" when you buy life insurance. If you change your mind and return the insurance policy during those 10 days, the company must give you back your premium within 30 days. Just be sure to get a dated receipt from the post office or the agent.

One of the biggest mistakes consumers make is buying life insurance when they don't need it, and not buying it when they do need it, said Robert Hunter, director of insurance for Consumer Federation of America.

"The only time you absolutely have to buy life insurance is when you have a dependent relying on your income stream," Hunter said.

You don't need life insurance if you're single, unless you have a sibling or parent depending on you financially. If you're married without children, consider whether each of you would be OK alone if the other person dies. If the answer is yes, you still don't need it, he said. If the answer is no, then you may need it.

Most people should buy life insurance when they have a child, he said.

There are two basic types of insurance: term and cash value (permanent). Term pays the face amount of the policy if you die during a specific period, usually one to 30 years.

Cash value -- such as whole life, variable life and universal life -- provides lifelong protection with a savings component; it builds up cash value on a tax-deferred basis. You usually can cash in or borrow against the policy.

According to Consumer Reports, cash-value insurance can provide both estate-planning and tax advantages for well-to-do people over 60. But most 20- to 50-year-olds should stick to a term-life policy because it's the simplest, least expensive way to protect yourself.

Cash-value policies also carry high fees and commissions, Hunter said.

"The only time it may make sense is if you've got some money, and you're talking about estate planning. A rule of thumb is if you don't have a fee-only (financial) planner, you don't need it," he added.

Rates on term-life policies have been dropping in the past decade, making it much cheaper for someone in good health to buy. A $500,000, 20-year guaranteed policy for a 35-year-old male nonsmoker in excellent health costs between $350 and $520 a year, according to an online quote check with Term4Sale.com. The same policy for a 40-year-old woman in average health may be about twice that cost.

Of course, online quotes only offer a guideline. The actual policy and premium will depend on your medical exam and other factors.

Hunter recommends getting a guaranteed renewable policy, so you have the right to extend it, even if you become sick in the meantime.

"It's important for people to evaluate what their insurance needs are," said Karl Newman, president of the NW Insurance Council, a nonprofit organization.

How much should you buy? Hunter recommends about five to 10 times your annual income. Ask yourself: How much income do I provide? If I were to die early, how would my family get by? Do I want to set aside money to help my kids through college, or cover final expenses and debts? Do I want to leave money to family or charities? Don't forget to factor in any group insurance where you work and Social Security or pension plan survivor benefits.

Insurance Companies target Military personnel

The Florida Office of Insurance Regulation is investigating claims that two insurers took advantage of our country’s bravest.

OIR wants American Fidelity Life Insurance and Trans World Assurance to address allegation that the companies used a US Marine to gain access to soldiers on a Florida military base.

The companies are also being investigated for imitating military personnel to sale insurance. OIR Spokesman Ed Domansky says his office is looking out for soldiers.

“The commissioner is committed to ensuring that military people aren’t targeted by such deceptive and predatory sales practices. He will remain vigilant to that extent.”

The companies have 21 days to respond or OIR could revoke their business licenses.

Making it last: Payments for life

Another payment option is a payment-for-life program. As in the interest-only option, your beneficiary gets a periodic payment from the death benefit, which is a means of budgeting the funds while maintaining an investment. However, the amount the beneficiary receives is based on the terms you set up, the total amount of the death benefit and cash value, and the length of time you specify for the payments. With this option, the beneficiary can’t withdraw the funds but is guaranteed a payment for a specified period of time or for his or her lifetime.
Table 10-1 is a sample Life Income Table that specifies the minimum amount your beneficiary will receive each month if you and your beneficiary opt for this method of payment. Note that the amount is based on the beneficiary’s age and sex and whether you specify a number of years of payment or whether you leave the number of years open. As long as the beneficiary is alive, he or she receives equal payments at the end of each monthly interval. If you choose a specific time period, then payments continue as long as the beneficiary lives or to the end of the certain period, whichever is longer. If the beneficiary dies during the specified period, that person’s heirs get a lump sum payment of any balance owed.

Insurance Terms-Earned Premium

Premium used in an insurance policy as the policy term progresses.

An annual policy that has run for 5 months has five-twelfths of its premium earned. In workers' compensation, premium is earned as the employer incurs payroll expense. Liability insurance may also be rated on a payroll or sales basis.

Class dismissed

A thumbnail sketch of PIP

In theory, PIP, or Personal Injury Protection, is a simple concept. It is Massachusetts' version of no-fault automobile insurance. Every insured driver's own insurance company will cover up to $2,000 in medical bills for that driver if he or she is in an motor vehicle accident, regardless of whose fault the accident is. If the driver doesn't have medical insurance, PIP will cover up to $8,000 in medical expenses. PIP can also cover lost wages and other expenses.


The counterpart to PIP is the "tort threshold", under which someone who has been injured in an automobile accident cannot bring a lawsuit against the other driver unless the injured person's medical bills exceed $2,000. If the person goes to trial and wins, the verdict will be reduced by the amount that was paid in PIP. That 's called the "PIP setoff."


There is also a scheme by which insurance companies reimburse each other for PIP payments, so that the insurer of the negligent party ultimately ends up paying. If X and Y are both injured in an accident and their respective insurers pay each of their medical bills through PIP, the insurers will decide who is at fault. If the insurers can't agree on who is at fault they will arbitrate the issue. If they decide, on their own or through arbitration, that X is at fault, X's insurer will reimburse Y's insurer the amount that Y's insurer paid on Y's behalf in PIP.


That's PIP in nutshell. In a future post I'll discuss what lawyers call "the PIP morass" (the complicated issues in this seemingly simple statute) and the related issue of why many top-notch personal injury attorneys can't answer seemingly basic questions about PIP.

Have The Will To Have A Will

Yes, I know, a will is not insurance. However, it certainly is a risk management tool.

Depending on your state law, dying without a will could lead to a delay in the settlement of your estate or forfeiture of part of your assets to the state.

If your will is more than five years old, get it revised. Failure to have a current, valid will means your estate won't be handled according to your wishes, but those of the courts or the state.

Check your life insurance too.

What The Best Do

Companies that successfully manage their business insurance plan follow the following best practices:

1) They meet at least annually with their insurance broker to review coverage, business changes, and plans.

2) They monitor and facilitate all claims, keeping their insurance company adjusters on track.

3) They manage risk to avoid losses.

4) They bid their insurance using multiple insurers and brokers every three years to assure the best coverage, service, and price.

When You Are Liable For Libel, Are You Covered?

Unlike commercial insurance, most homeowner’s insurance policies don't include coverage for libel, slander, false arrest, or invasion of privacy.

Several years ago, a “good friend” of mine was away on vacation. Neighborhood kids decided it would be OK to party at his home. The place was trashed. Upon returning home my friend pressed charges against the kids. My friend was also not timid about telling people what the kids had done. The delinquents’ parents threatened a lawsuit for defamation. I wasn’t worried—I mean my friend wasn’t worried—because he had truth and an insurance policy on his side.

Ask your agent. You may be able to endorse protection to your current policy or use a personal umbrella liability policy to fill the gap in protection.

Insurance Terms-Collision Insurance

Collision insurance is a part of your auto insurance.

It's coverage for damage caused to the insured vehicle by an automobile accident or an upset of the vehicle. However, damage caused by collision with an animal or bird is covered by comprehensive automobile insurance and is not considered a collision.

Class dismissed.

Adviser to discuss benefits of life-insurance policies

Just how good of an investment is life insurance?

Bob Arms of Marotta Wealth Management Inc. in Charlottesville will discuss the differences and benefits of permanent and term life insurance from 7 to 8:30 p.m. Wednesday at the Tuckahoe Library on Starling Drive in western Henrico County.

The talk is presented by the National Association of Personal Financial Advisors Consumer Education Foundation, a nonprofit group.

Arms will discuss the pros and cons of both types of policies. His talk will center on how individuals can look at the two types of policies, their the returns and costs, and then make the best decision.

The key, he said, is to analyze life insurance as a piece of property and an investment tool, rather than something that remains stagnant.

Life-insurance benefits can be looked at as either life benefits or death benefits. The important thing is figuring out which is best for each individual, he said.

Arms said he will make his presentation as an adviser and has "absolutely nothing to sell."

He has sold life insurance for nearly 30 years, and each type of policy has its benefits.

"I'm not there to say one is right or wrong," he said. -- Louis Llovio

Max New York Life Insurance Launches SMART Assure™

A Unit Linked Life Insurance Plan Positioned to Provide Higher Returns on Higher Investments

Mumbai, Maharashtra, India, Monday, May 05, 2008 -- (Business Wire India)
Max New York Life Insurance today, introduced SMART Assure™, a unit-linked insurance plan positioned to provide higher returns on higher investments. The plan fulfils the customers’ primary need of protection, along with an opportunity for long-term wealth creation. The customer value proposition of SMART Assure™ is further strengthened with its unique features of efficiency, affordability and flexibility in handling the consumers’ complex financial needs

EFFICIENT

Up to 100% Allocation- SMART Assure™ offers the customer a choice of allocating up to 100% of premium paid beyond specified premium bracket. As the premium amount goes up, the allocation charges keep decreasing with no allocation charges levied on premiums upward of Rs. 3 lakhs. This strengthens the value proposition of the plan incentivising the customer to move to higher investments and get better returns.

Loyalty units on maturity- The plan allocates guaranteed Persistency Units to the customer’s Fund Value at maturity. The persistency units will be equal to a percentage of fund value at maturity.which increases with the term of the plan and thus promoting long-term saving behaviour.

AFFORDABLE

Increasing premium Option: SMART Assure™ offers an increasing premium option under which the customer has the choice to increase the annual premium by 5% of the initial premium on each policy anniversary and accordingly the sum assured also increases @ 5% per annum without any additional underwriting. This feature not only takes care of the inflation and future value of money but also enables the customer achieve a much larger fund value through a minimal increase in the premium amount each year.

FLEXIBLE

Wide Coverage- SMART Assure™ caters to wide customer segment with the entry age ranging from as low as 91 days to as high as 75 years and the maximum age at maturity of 85 years which makes it an ideal proposition for Senior Citizens seeking insurance coverage along with investments.. The customer has the flexibility to choose any policy term between 10 years to 30 years with regular payment terms. The minimum premium which can be paid under this plan iis Rs. 20,000/-.

Dynamic Fund Allocation- SMART Assure™ strikes the right balance between risk and return with respect to years remaining for year to maturity of the policy. When the policy is in its early stages, the fund would be more risk prone and the nature of the allocation changes to more secure options as the policy approaches maturity. All this happens automatically for the customers who opt for this feature and frees them from doing any manual switching of funds. Even more the asset allocation gets automatically rebalanced at every policy anniversary to ensure the asset allocation is in the right proportion at all times.

New Dynamic Opportunities Fund Introduction The company has introduced a new fund called the Dynamic Opportunities fund through which the funds will be allocated according to the market movements allowing the funds to be exposed 100% in equity when the markets are high and visa versa and thus offers stability in investments with an opportunity to harness market upsides. The investor now has a choice of shuffling his funds according to his risk appetite with six investment fund options to choose from.

Other features

The plan empowers customers to manage their investments by allowing

--Free switching up to six times a year.

--Premium redirection flexibility, free of cost up to three times a year

High quality of advice - Sold through certified agent advisors

Max New York Life has always focused on high quality of advice. To help customers better understand and manage their needs, the company has developed a special training programme for its agent advisors and employees. This certification course enables agent advisors to understand better the complex financial products, thus ensuring ethical selling and offering appropriate advice to customers based on their risk-return profile.

Announcing the launch, Max New York Life Managing Director and CEO Mr. Gary Bennett commented: We are excited to offer insurance products that respond realistically to consumers needs. With the growing need for adequate financial planning to meet requirements at different life stages it is important that people invest in instruments that are bundled with features which help in maximising their returns”

“With a range of flexible products backed by best in class services we have emerged as a leader in setting quality benchmarks, offering the most transparent documentation for our life insurance products with outstanding claims ratio. Launching SMART Assure™ is a natural progression in our journey to offer the consumer a complete choice of protection and wealth creation plans to suit their various needs.” He further added.

Mr. Debasis Sarkar. Director - Marketing, Product Management and Corporate Affairs “With this launch, we now have a customised unit linked product to meet the need of the people who want to invest a larger sum and derive maximum returns from it. This further strengthens our comprehensive Unit Linked portfolio for customers with different financial risk profiles.”

Max New York Life has sold well over 2.3 million policies with more than Rs. 70,000 crore in sum assured. It has more than 36,500 agents, who are widely recognized as among the best in the industry.

About Max New York Life Insurance www.maxnewyorklife.com

Max New York Life is a joint venture between Max India Ltd., one of India’s leading multi-business corporate and New York life, a Fortune 100 company. Max New York Life Insurance, incorporated in 2000, is one of India’s leading private life insurance companies. The company offers both individual and group life insurance solutions. It has established a wide distribution network across India. Through its wide network of highly competent life insurance agent advisors and flexible product solutions, Max New York life Insurance is creating a partnership for life with its customers in India.

Maintaining the principal: Interest-only payments

You can specify that your beneficiary get a periodic payment of the interest on the death benefit’s cash value. Because the beneficiary earns interest on the account, he or she must claim the benefit as taxable income. An interest-only payment option is a means of budgeting the funds while maintaining the investment. Beneficiaries usually have the option of withdrawing the principal (although generally not all at once), which defeats the purpose of this payment option. Or they can borrow against the principal by using it as collateral and get a better rate than they can get from a bank loan. Usually, the life insurance contract specifies a minimum interest rate.