Archive for June, 2010

Types of Life Insurance Policies

Tuesday, June 22nd, 2010

Life insurance is one of the most important investments a person can make. This type of insurance gives people a way to provide for their families once they have passed. They can help their family by paying off outstanding bills such as a mortgage or credit card bills. A well, it can provide for the children’s educational future.

There are many different types of life insurance policies available on the market. Before you select a insurance policy, you should be aware of the different types.

The following is a list of the different types of life insurance policies:

Term Insurance: Term life provides a death benefit for only a specified period of time. If one dies during the coverage period, the beneficiary will collect the death benefit. If a person lives beyond the set term period, the coverage will end and the policyholder will not get any of the money back. The number of years of coverage can range from one to thirty. Term life insurance is the most affordable insurance choice for young and healthy people. It is important to remember that if the policy expires and you want to renew, you will have to pay a higher premium because you will be much older, and maybe even have some health problems.

Whole Insurance: This type of insurance contains a fixed premium and is considered the most simple permanent life insurance policy. The premiums are paid once each year. It has a savings element that earns cash value. When making premium payments, one will pay more than is required to cover the current costs of insurance coverage. The surplus payment is put in a cash value account. The policyholder has no say in where the money is invested. Whole life insurance will remain intact for as long as the person is alive.

Universal Insurance: With this type of insurance, reducing or increasing premiums will effect the growth of the cash value element and maybe even the death benefit.

It allows the policyholder to transfer funds between the insurance and savings parts of the policy. The Premium rates are flexible.

Variable Insurance: This policy gives the policyholder control over how often and how much the premium payments will be. There is no guaranteed minimum cash value or death benefit. As well, this type of policy gives the policyholders control over where their savings are invested. This policy contains a number of investment choices called sub-accounts which are managed by professionals. If the cash value account goes over a specific amount, the death benefit will increase. Premiums with this policy are fixed.

Universal Variable Life: With this type of policy, the flexibility of universal life is combined with the investment control of variable life. The amount of the final death benefit and cash value depends on investment performance.

No matter which life insurance policy you choose, you get to decide how it can be used to help loved ones after you have passed. Understanding what types of insurance policies are available will go a long way in ensuring your loved one’s future will be sustained.

Full service brokerage offers corporate and personal insurance solutions. When looking for the best protection and information on Car insurance Whitby, Home Insurance, Life Insurance Whitby options.

Life Insurance FAQ:

Question: Life Insurance?
My father decided to buy life insurance on me and my daughter. I’m 21 and I’ve been married for 3 years and I was wondering if he bought it, would my husband be able to buy it for me too? I’m really confused to why my father decided to buy it for me.

Answer: Yes. Anyone who you give permission to, who has an insurable interest, can buy life insurance on you. There’s no “limit” to the number of policies you can have.

Question: What type of life insurance policy does the military offer?
I’m talking about the Army, in particular. Is it term life insurance, or permanent life insurance?

Answer: SGLI is considered term life insurance, since it only covers active duty service members during the period of active duty. It can be converted to VGLI, which is permanent life insurance.

Question: What is the difference between ordinary life insurance and term insurance?
I heard about “term insurance” whose meaning is not clear to me. Can anybody please explain what is the difference between ordinary life insurance and a term insurance? What are the advantages and disadvantages of the two?

Answer: Term Life Insurance provides death benefit protection for a specified period of time. Term life insurance is a good choice if you are young, can’t afford the much-higher costs of whole life insurance, and have financial obligations that will disappear in time, such as a car loan or mortgage.

Whole Life (Ordinary Life) Insurance provides protection for your entire life. The premiums are much higher than for term insurance, and they are stretched out over a period of time. Once your policy is paid up, the insurance company invests excess dollars for you. In addition to providing protection, the policy becomes part of your savings plan.

An ordinary life insurance policy is a combination of a term insurance policy and a “savings account.” The policy owner pays a level premium, which is usually higher in the early years, and excess amounts are used to fund the savings account (also known as the cash value). Ordinary life insurance allows the policy owner to choose one of the following options, even if the insured doesn’t die.

-receive some of the premium back in the form of a low-cost policy loan
-surrender the policy for cash
-receive a reduced life insurance benefit at death
-continue the current life insurance benefit for a reduced time period

Question: What does it mean when your life insurance company asks for a claim form?
My dad passed away, my mom has sent in all the paperwork the life insurance company asked for. Now they are requesting additional info.. They say they need a claim form.Can anyone tell me what this means?

Answer: The person from the insurance company who’s asking for this additional information can probably tell you exactly what this means. Ask them what it is they want.

Question: Does life insurance cover someone who has been murdered while serving a prison sentence?
And what about the distribution of the proceeds of that life insurance if he is covered? Should some go to the victims of his crime as compensation? And also, if someone is proven guilty of another crime after his death, does that effect the distribution of his other assets–should his victims get some of this if they have suffered sufficiently from the crime?

Answer: Whether life insurance would be paid on a murder depends on the terms of the insurance. As to whether there would be money going to victims, that depends on any civil case against him and the terms of the insurance. If he has a named beneficiary to his insurance, the money goes to them, it does NOT go to his estate. If there is no beneficiary named, then his estate claims the money. If victims have a civil judgment against him, they will have access to the money. It is not automatic, and would only apply if there were a standing judgment against the criminal. Future victims found would not benefit. Once the money was distributed, presumably before another claim could develop, it is gone.

Question: What life insurance should I get for my mom?
I am 18 and have a steady income, it’s not a whole bunch but it is steady. My mom does not have life insurance, and says she can’t afford it. I have decided maybe I should get her some and I heard there is life insurance where I can pay between $20-70 a month. Is this true? Where do I look and start, and what company do you suggest?

Answer: Yes, you can talk to a life insurance agent/broker to learn more. Google one in your area.

However, is there a reason that your mom needs life insurance. Life insurance does not help her, it helps her heirs. If all her children are grown and supporting themselves there is little need for there to be life insurance on her. You may want to have a small funeral policy on her, to cover any funeral expenses.

If she will be responsible for your funeral expenses in the event that you pass away prematurely, you should either make sure you have enough money saved for that or have a small life insurance policy on yourself.

Remember, debt dies with the deceased, unless there is a joint account. Or the reason for the debt continues to be needed after the person dies (for example: a mortgage or car loan that someone else wants to keep the property).

Question: What is the difference between whole life and term life insurance policies?
My husband wants to take out an insurance policy on himself for our family due to the fact that he is the primary source of income. We have been researching life insurance policies..what is the difference between whole and term life? My husband is 8 years older than me so he wants to make sure that myself and our children are taken care of in the event of his death.

Answer: Term life insurance is just like car insurance. If you have a claim the insurance company pays and if you don’t your money is gone. The life insurance is just there in case you die.

Whole life is more expensive and has a savings portion called cash value. It is NOT an investment and should not be used for that purpose.

Term is cheap and whole life is not.

Question: Where can I get good life insurance with heart disease 3 years ago?
I had open heart surgery in 2006 and I need some affordable life insurance.

Answer: Surgery three years ago would probably not be sufficient cause for a decline, but it will likely eliminate any possibility of preferred rates. As long as you are relatively young and healthy, and the surgery was successful in correcting your condition, you should have little problem getting underwritten by any carrier.

How Living Within Your Means Can Make Life More Enjoyable

Tuesday, June 8th, 2010

With the recent downturn in the economy, many people are realizing that they cannot afford to sustain the lifestyle that they have grown accustomed to living. Fortunately, this does not mean life cannot be enjoyable. There are a number of easy ways to live within your means without hurting your quality of life. With a little planning and knowledge you can live on budget without feeling the financial strain.

The following are a number of ways to live within your means while making life more enjoyable:

1. In order to live within your means, you have to be able to bring in more money than you are spending. Create a monthly budget that includes how much you spend on essential items such as home and vehicle insurance, utilities, food, cable, phone, mortgage payments, gas, etc. Then, calculate how much you earn monthly. Subtract your monthly income from necessary expenses to determine how much extra money you have to work with.

2. List extra expenses such as entertainment, recreation, and products you shop for in the home and on yourself such as clothing, personal care products, etc. Calculate how much you spend monthly on these items. You will then need to come up with ways to control your spending habits. This can include cutting down on the number of times you dine out each month, shopping for discounts at large department stores, second hand stores, surplus stores, etc. When shopping, look for deals, coupons, and sales. Never pay full price for an item. As well, you can often find great deals when shopping online.

3. Credit card debt is a major source of financial hardship. If you have several credit cards with high outstanding debt, you should at least pay the monthly minimum for each card, and then start to pay off the card with the highest interest rate. Owning fewer credit cards will make it easier to manage and remember. Always pay your bills on time to avoid having to pay any interest at all. To help wean yourself off of credit cards, start carrying cash with you at all times and pay using cash. Seeing the physical money literally change hands will help you consider needs vs. wants on a more regular basis.

4. If you are having trouble keeping up with debt payments, then maybe you should consider consolidating your debt in order to manage it better. Instead of making multiple monthly payments to several creditors, you can consolidate your debt and only need to make a single monthly payment. In addition to helping you get organized, this can also alleviate stress that is often associated with debt.

5. Clean up your credit score. Request a copy of your credit report from one of the following two major credit bureaus: Equifax, or TransUnion. Check it over for any inaccuracies. Look to see what debt is affecting your credit rating and work with a creditor to establish a repayment plan. Don’t ignore your creditors as they will send your debt to a collection agency.

At first, implementing a plan to live within your means can seem very unpleasant. You may miss a few of the luxuries you had grown accustomed to. However, once you get used to the plan, you will find life more enjoyable as you will not longer have the worry of how you are going to pay all of your bills. You may even realize that you are much happier living on a budget.

Adriana Noton is a freelance writer who specializes in providing great financial information for Canadians. When searching online for debt counselling or credit counselling, one of the many resources available is Consolidated Credit; offering a variety of debt counselling services and financial planning tools to help Canadians get their debts under control.

Debt Counselling FAQ:

Question: How to Utilize Christian Debt Counseling?
Can somebody please explain me how to utilize debt counseling?

Answer: They offer consolidation services that help you reduce your interest rate and monthly payment on some of your cards. They charge a monthly service fee when you enroll, and are also paid by your creditors. There are pros and cons to their service like any other debt services out there. There are other debt options out there, and to really get out of debt, you have to make sure you choose a solution that tailors to your needs. The main options out there are consolidation, settlement, and bankruptcy. All of them work, but they do not work for all. Its very important you understand each one from an un-bias source. Typically each company that offers one of those services will only praise their solution and degrade the others.

Question: What are the advantages and disadvantages of debt consolidation?
What is the best debt Counseling and debt consolidation services? Are there any debt or credit card consolidation services that are easy to use and secure and worth the time?

Answer: Debt consolidation can be good if you can get your interest rate below your other cards, which is often feasible since the balance will be higher, then they usually give you a lower rate. It’s never a good idea if you have to pay ANY consolidation fee or have to pay a higher rate.

You need to first examine and change how you manage your debt in particular and your personal finances in general. The biggest challenge of debt refinancing is to not go out and load up with more consumer debt because you have new room in your budget.

Question: I need suggestions on the best debt counseling services available, free or fee based.?
Before I have to file for bankruptcy or the bank forecloses on my home I would like to explore other options available.

Answer: Some options are:

Buy Dave Ramsey’s book, Total Money Makeover. Go through the Financial Peace University (you can go through it online now). It is a great tool for planning your way out of debt and to better habits for the future.

If you are working, chances are your company has some kind of an EAP program (Employees Assistance Program) for help with life’s problems. Mostly they refer people to counseling, but that can include debt counseling services. Whatever debt counseling program they refer you to will be a reputable one, and your benefits plan may cover any costs.

Check with a NFCC credit counseling service. These are legit, non-profit companies offering debt management programs for a nominal fee.

Question: How Does Consumer Credit Counseling or Debt Affect Credit Rating?
I need to know how actually consumer credit counseling actually affect my credit rating.

Answer: Your credit score is affected by two things. Your payments and your debt to income ratio. So, if you have never been late on anything but your debt keeps increasing, then eventually your scroll will start dropping. Many people are so worried about their credit score and would rather drown in debt than have their score affected. This is why many people are against any debt solutions out there. Its like wondering why would any one have a perfect lawn, but the house on it not be live able. There are many debt programs out there that can help get rid of debt, but there are also many scams out there as well. Each as its pros and cons, and honestly not all affect your score. Some actually may help it in the long run. All the debt solutions out there work, but they DO NOT work for all. Meaning, you have to find a solution that is tailored to your circumstances and debt needs.

Question: What does debt relief companies do for me?
Can debt relief services affect my credit if I use them to lower my interest rate?

Answer: Yes they can negatively impact your credit.

Question: Does Chase, Bank of America, and Capital One give credit debt counseling/budgeting?
Like, advice on how to eliminate debt. If so, which ones and is it free?

Answer: I would just call and ask them. Almost all banks can offer debt consolidation if the client qualifies, which is one way to lower those rates and clear that debt.

Question: Where is the best place to go for individual debt counselling?

Answer: I have found that there are a few ways to get help, the CCCS seem a very good company as it is free and they don’t make false promises, national debt line have a good, informative website and your local CAB will help you budget as well.

Question: Can you explain the difference between a Credit Card Debt Relief program and Credit Counseling?
I’m trying to figure out which route to take with my financial situation. Are there any other options for a person who is still current with all payments but on the verge of possible financial ruin?

Answer: With Credit counseling, the credit counseling company works with your creditors to have your interest rates lowered so you can pay off your debt faster. You normally will make one payment to the company and they will distribute it to all your creditors. Usually takes 4-7 years to become debt free.

The Negative to credit counseling is that while your credit score itself will usually not be negatively effected by enrolling in a credit counseling program, your ability to establish new credit, or any use of existing credit for that matter, will be abolished. Throughout the duration of the program, it is unlikely that you will be able to qualify for a home loan, car loan, or any other credit.It is hard to get a loan or credit card during this period. Also, although interest rates are usually (but not always) lowered for consumers in credit counseling programs, the monthly payments typically will stay the same as your minimum payments, and sometimes more. That means, for consumers that are truly struggling or unable to make their minimum monthly credit card payments, this option will not provide cash flow relief.

With Debt Relief, the debt settlement company can help people that are truly struggling with credit card debt, by representing them in negotiations with creditors to secure settlements of anywhere between 40-60% of the amount of debt owed (at time of enrollment). Of the debt relief options, debt settlement is the least expensive, and shortest in length, with most debt settlement programs averaging between 24-48 months in length.

The Negatives to debt relief include negative marks on your credit for up to seven years. Also, most creditors will report the forgiven debt as income and will send you a 1099c form. You have to report this as additional income on your taxes which would increase the amount of taxes you owe on your tax return.

The Best Deal on Foreclosed Homes

Thursday, June 3rd, 2010

We often hear of families and businessmen who search for foreclosed homes for them to be able to buy it off in a lower price and sell it off in a much more expensive deal. These are a few of the tactics that real estate gurus do and this is where they are able to make a great deal of money. So why don’t we used this trick for you to be able to close a great deal.

If you are unaware, what are foreclosed homes? Foreclosed homes are homes which are previously owned by people who are not able to meet up with the agreed mortgage loan. Often times these loans, if not most of the times, these loans are with banks and therefore when loans are not paid on time and not kept up to date, they have the right to foreclose the home and sell it off in a lower price just to be able to get back the money that they have given for the previous owners loan.

These foreclosed homes are often times advertised on FSBO listings, bank ads, newspapers and even on the internet. There are several ways for you to find the home that you want. If you are new in the area, there are several dealers that will certainly be aware on where you can find a great deal for a foreclosed home. You can also opt to ask lending companies, mortgage companies and banks, they will surely be glad to share a few information regarding homes that are foreclosed.

So this is the best time to find a great deal of home to purchase; this is because banks are not mean when it comes to selling off real estates. So they have the tendency to sell it off in a much lower price. So if you and your family are on a budget and looking for a home that will suite you, this is the best option. But before you head on to search for that home that you are looking for, you must first consider a few things.

Without a doubt foreclosed homes are cheaper than other homes listed on the FSBO listings and as much as you would just want to close the deal on one, you must make sure that you have looked into the papers and the deal behind the foreclosed home. It is also best to consider the vicinity of the home, though the home may be bought in a very good deal, the area might not be a good one for your family. So be sure to look into every detail first.

When you have chosen the home that you want, you can now approach the dealer or the bank. Ask them regarding the deal and how much is needed to pay off the home. It is best that you be informed regarding the previous deal that was broken between the company and the previous owner for you to avoid such a thing. They may not disclose the name of the previous owner, but they will certainly be able to answer your other query. So don’t be afraid to get to know more about the foreclosed home for you to be able to get a successful and safe foreclosed home deal.

Learn how to sell your own house here: For Sale By Owner

If you’re looking to buy a home from an FSBO listing check here: FSBO Listing

Foreclosed Homes FAQ:

Question: Where can I find a list of foreclosed homes for sale in Ontario Canada?

Answer: There is none. You must go through a real estate broker. A good broker will keep you in the loop

Question: If your home is being foreclosed in B.C, Canada can you remove your appliances?
my parents are having their apartment foreclosed and sold. They have nice appliances they bought and want to move with them. Does any lawyer or someone who knows the law know if they can?

Answer: Yes if they purchased the appliances they can keep them.

Question: Why is it so easy to find foreclosure homes in America, but not in Canada?
Even on Google its possible to now find homes that are foreclosed and for sale, but not in Canada. WHY?

Answer: Foreclosures have been much less prevalent in Canada, as the mortgage rules were never as relaxed as they were in the US. Try searching for Power of Sale houses in Canada.

Question: Where would I find a list of foreclosed homes in canada, specifically newfoundland?
Is there a webpage showing a list of foreclosed homes in canada?

Answer: In Canada they’re referred to as “power of sale” when the bank is forcing the sale to pay off the debts. Working with your real estate agent would be the best way to find this information. Since you’ll need an agent to look at the homes and to draft the offer letter and such anyway, you might as well start off with an agent now – it’s all included in the commission they will get anyway, so might as well use all their services.

Question: Can I sue the ex for unpaid mortgage and condo fees?
The ex and I jointly own a condo – we are both on title, both on the mortgage, both on the condo plan and tax roll, and both on a home equity loan. The ex essentially walked out, and refuses to pay her ‘half’ of these obligations (almost $1200 a month). I will likely pay the amount, because I don’t want the bank to foreclose and ruin my own credit. My plan is to send her a payment demand letter at the beginning of each month, and then when the total reaches over $5000 to take her to court. I know I likely need a lawyer, but what are your thoughts on all this? We are in Canada.

Answer: That’s a solid plan, I’d go with it. Her only recourse would be to file bankruptcy. Make sure she is NOT deducting anything as far as taxes seeing that your paying everything, only you can take any deductions.

Question: If I foreclose on home in michigan, can the lender come after me, garnish wages, in Canada, where I now live?

Answer: If Michigan allows deficiency judgments, certainly.

Question: If I foreclose on my house in the U.S.A. will that affect my credit in Canada?
I have an investment property in the U.S.A. that will need to be refinanced in two years. I currently have an ARM, but will not be able to get the rent to cover the new payments. If I foreclose on this property, will it affect my credit here in Canada? I want to buy more homes in Canada in the near future.

Answer: Probably not. US and Canadian credit doesn’t usually cross over. If the lender has facilities in both countries, though, you might have a problem. Wouldn’t it be better to sell the property rather than just abandon it?