Personal Financial Tips

Archive for February, 2012

What is Final Expense Insurance?

Final Expense Insurance is a form of life insurance. It is mainly used to cover ones final expenses (like burial costs) after passing away. You can get plans from $2,500 to $50,000 in coverage. It can be used for just about anything. Burial costs, bill payments, mortgage, other insurances, or whatever else you may have a need for. Unlike standard Life Insurance, Final Expense Insurance is designed to pay immediately. Standard Life Insurance can take months before the beneficiary gets the payout. In fact, Final Expense insurance can take care of paying the burial costs for you and send you a check if anything is left over. This can be a very large benefit, when our loved ones are grieving for us.

What are your options??

When thinking and planning for our passing from this life, we have basically 3 choices

1. Do nothing. Let time pass and someone else will take care of it.

2. Have some form of Life Insurance

3. Get a pre-arranged burial plan from a funeral home

Option 1 is not an option in my mind. This is not about you! It is about the ones we leave behind…

Options 2 and 3 are much better choices. But, which one is the best. If you decide on Option 3 and go down to your local funeral home, you can purchase your entire funeral and burial in advance. This can be costly. A funeral can easily exceed $10,000. If you don’t have that kind of money to buy one up front, the home will generally allow you to make payments for a year or two on this. If you were to unfortunately pass away shortly after purchasing this plan, your loved ones would still be liable to pay off the remaining bill.

Option 2 is ultimately the best pick. You can still have the funeral and burial done the way you want it at the funeral home of your choice. The cost will be the same but with Final Expense Life Insurance you will just make small regular payments while you are alive. This could save you thousands of $$ in the event of an untimely death.

How do I get Final Expense Insurance?

Fill out a simple application, answer a few health questions, and that’s it. You do not have to go through any medical examinations to get this insurance. The payments are low and affordable.

A debt management plan can put you on the right track to start paying your debts. How to get the best from this plan? Search for a debt management plan from a company that can give you the edge on your efforts. Be sure that the company provides an advisor who can help you during all the process; from creating a budget, to making your monthly payments.

Getting the most from your debt management plan

As soon as you start with the company, make sure you have a budget in place and a repayment schedule. Your debt management company will work with your lenders to reduce some of the costs of your current debt, represented in reduction of interests and monthly payments. After this your repayment schedule will be created and a monthly fixed amount will be withdrawn from your account.

How to make it work

To stay on track with your debt management plan, follow these important points:

* Be sure you make your monthly payments on time each month. If you don’t, the special arrangements that were made for you will be lost. If you think you won’t be able to do a payment; contact your debt management plan advisor and try to find a solution.

* Respect your budget. Keeping your budget will be the difference between success and failure. This is the main tool for improving your financial situation, so pay attention to it.

* Search for extra income. If you can save some dollars or find ways to improve your income, these can help you to pay your debt faster.

A debt management plan can save you years of debt struggle, take the decision to follow it exactly as planned and for sure you will be rewarded with a debt free life.

With gasoline prices in the United States surging ahead at a breakneck pace, buyers who once embraced big oversized trucks and sport utility vehicles (SUVs) are turning away from gas-guzzlers, a move that’s putting the squeeze on both automakers and auto dealers.

None have been hit harder than Chrysler, which relies on trucks and SUV’s for 70 percent of its sales. They reported that sales were down by as much as 23 percent during the first four months of 2008. That may be why Chrysler was the first major automaker to offer what is clearly becoming the most popular incentive of the season-gasoline.

After that dismal 4-month downturn, the maker of Chrysler, Jeep and Dodge vehicles announced it would guarantee that their new customers would never pay more than $2.99 per gallon for gas for the next three years-no matter how high gas prices rise at the pumps.

In a creative marketing move, Chrysler has arranged for its customers to get a special credit card to be used for gas purchases. Customers using the card will be billed $2.99 per gallon to their charge account and Chrysler will pay the rest.

The guarantee, which is offered on 32 models, covers up to 12,000 miles annually for three years, and allows customers to buy gas anywhere they choose. The incentive also follows the vehicle if it is sold, allowing anyone that owns the car during the three-year period to take advantage of the gas incentive.

Suzuki, whose new car sales have been less affected, quickly followed suit by offering free gasoline to US buyers, but only for the summer of 2008.

Industry observers have stated they do not expect free or discount gasoline to take the place of the once most-favored incentive for new car buyers-cash rebates. As critics of the industry are quick to point out, gas giveaways do nothing to address the underlying problem. Gas prices will undoubtedly continue to rise and gas supplies will continue to dwindle.

The problem with this type of campaign is that it is not really solving the problem, but covering it up. With this promotion, Chrysler it seems, is actually encouraging people to go out and buy bigger trucks and SUVs simply because they get a rebate on their gas. But since these trucks and SUVs get much less miles-per-gallon than smaller vehicles, the buyers are going to have to fill up much more often than they would if they downgraded to a smaller, more fuel-efficient car.

Using more gas is only going to make demand for it go up. And when demand goes up, so does the price.

The only real, long-term solution to easing pain at the gas pump, most will agree, lies in developing vehicles that are more fuel-efficient as well as vehicles that use alternative fuel sources. Even though America only has 4% of the world’s population, it uses accounts for 25% of the world’s oil consumption. The smart thing to do is to try and use less gas, not use more at a cheaper price.

In the words of one industry observer, “The days of driving on cheap fossil fuels are as dead as the dinosaur.”

Debt pile-up is a normal happening in these days of easy availability of loans and credit cards. What has acquired importance is how to keep debts at manageable label. Debt management enables you in not only maintaining debts at a steady level but more then that it later reduces and eliminates debts. Debt management does it through either participating directly in borrowers’ financial problems or through playing advisory role.

In its first role as directly handling debt problems, debt management service providers are directly involved in easing burden of debts. To do so they negotiate with borrower’s different lenders. Debt management service providers chalk out a plan of easing debts and put it before the lenders. Normally lenders are not interested in taking an expensive and time consuming route of repossession of borrower’s property. When a debt management service company asks lenders on behalf of the borrower for reducing interest rate for an early clearing of debts, lenders agree to it. Lenders may even waive off various charges like creditor fees and processing charges as well. When outgo on interest rate and fees etc gets reduced, the borrower saves lot of money that he can use in paying for debts.

Another effective way to debt management is opting for various techniques. Debt management companies suggest you these techniques of reduction in debts. These techniques include all possible ways of lessening debt burden including cutting various expenses. Prominent amongst the debt management techniques is debt consolidation. Debt ridden borrower takes fresh loan at least equal to all his debts including interest payable on it. This loan amount is used in one time clearing of all debts and borrower immediately gets rid of debts that were of higher interest rate. As the debt consolidation loan is taken at lower interest rate, huge monetary outgo is saved. Moreover, borrower saves time and money in paying monthly installment to one lender only instead of paying many monthly installments to different lenders.

Another way is taking home equity loan which is source of cheaper finance. Home equity loan is taken on the equity in the home and therefore the loan comes at very low interest rate. This loan can be utilized in clearing higher interest rate debts.

You may adopt any technique but make sure that you put all efforts into it as half hearted attempt may boomerang on you. Debt management is an effective tool in easing debt burden provided you implement its key aspects seriously in practice.

Final expenses are the costs attributed to a person’s estate, upon the death of that person. The most basic final expenses are those of funeral expense, probate, legal costs and any outstanding debts. These expenses are borne by the estate or any survivors of the estate and paid by funds available in the estate or funds supplied by the survivors of the estate.

Funeral expenses can run from as little as $2500 for a simple cremation, to as much as a person wants to spend. The average traditional funeral runs between $10,000 and $15,000. Many costs that people don’t associate with a funeral, are costs, such as a gravesite, the opening and closing, (digging), of the gravesite, headstones, newspaper announcements, wake luncheons, etc. It can result into a large amount of money.

Many people rely on the proceeds of life insurance to pay for those costs.

Another aspect of final expenses is the cost of probate. Probate is the term to describe the public settling of an estate. Bills and debts need to be paid, insurances need to be collected or other assets often require disposition. The executor is the person or corporation assigned the responsibility of doing what is required on behalf of the deceased person to settle the estate according to the terms of the will and the laws of the province of domicile. There is also a “probate” cost that is payable to the province in which the person was domiciled. It is usually a cost of thousands of dollars per $1,000 of value in the estate. Named beneficiaries proceeds of insurance and jointly owned properties of all type do not pass thru the estate for probate purposes, but in fact pass directly to the survivor or named beneficiaries.

A final income tax return must be completed and any taxes due payable. Capital gains taxes on investments other than a principal residence can be substantial.

A lawyer is usually retained and charges are made for the completion of all required paperwork. These costs can run into the thousands of dollars.

Depending on the size and complexity of a person’s estate, final expenses can run from a minimum of a few thousand dollars to millions of dollars.

The Benefit Guys work, with clients who have family businesses and large estate details, in conjunction with the client’s accounting and legal professionals. It is often a complex procedure to structure affairs and assure liquidity to cover final expenses in a large estate. On our ebsite, you will find more information dealing with some of the challenges.

Most people like to have permanent life insurance in place to assist with the costs of final expenses. Consult with your local Affiliate Advisor or contact our head office for further information on this topic.

Author: John Kovats, CLU

The Benefit Guys

April 2010

Although none of us like to think about it, at some point we all need to prepare for the fact that we are not going to live forever. Have you ever thought about what your funeral should be like, or how much you need to have set aside for the funeral? While your family members are grieving their loss, the last thing that you want is to give them the additional burden of trying to figure out how to pay the funeral expenses.

According to a survey that was conducted in 2007, thirty four percent of those surveyed that were over fifty had done some funeral planning, and twenty three percent had prepaid part or all of it. A typical funeral today can run anywhere from $6,000 to $10,000. For a relatively small amount of money, you can put some insurance into place so the burden does not fall upon your family.

These types of policies are referred to as final expense insurance policies. This is a special type of life insurance policy that is issued with a relatively low face value, typically in the range of $5,000 to $50,000. You can name anyone as the beneficiary of this policy, just like with any other type of life insurance policy. This person would then be responsible for paying your final expenses so the burden is not on your family to find the funds. Be sure that you trust this person to take care of the bills, though, because technically they are allowed to do whatever they want with the money. You don’t want this policy to be another source of stress for your loved ones.

There are two types of final expense life insurance that you can purchase. One type is based on “term life,” in which it will cover you for a certain number of years or until you reach a certain age, at which point it will expire. The other type is based on “whole life,” in which it will be in effect for the rest of your life. Most of the time these policies will be either “simplified issue” or “guaranteed issue.” With a simplified issue policy, you will be asked several medical related questions, but you will not be required to take a medical exam. With a guaranteed issue policy, you do not have to answer any medical questions at all, but the tradeoff is that guaranteed issue policies are usually more expensive.

Even if you have a known medical condition, you will still probably be able to attain final expense life insurance. If there is a serious medical condition, they may issue you a policy with what is referred to as a “graded death benefit.” This is a policy where the death benefit is gradually increased, and your family will receive a lesser amount if you die early in the policy term. You can also use any type of life insurance policy to pay for your final expenses, but a standard policy is usually not able to be issued in such a small amount of face value. If you have many other debts, such as a large mortgage, you will probably be better off with a standard term life insurance policy.