Bankruptcy Medical Debt

Posted by Mike on Monday, 3 September 2012

Bankruptcy Medical Debt: What You Would like To Know
Bankruptcy because of medical debt is very common within the United States. It's a type of bankruptcy filed because of medical bills. It is the amount one reason why an individual resident file for bankruptcy next to job loss and poor usage of credit cards.

bankruptcy medical debt

What is Medical Bankruptcy?
Let us initial outline bankruptcy. Bankruptcy is a state wherein a sure person is unable to pay all debts from creditors. The debt can be a loan, personal debt, credit card charges, and therefore on. Conversely, medical bankruptcy may be a term commonly used to specifically talk to bankruptcy thanks to medical bills alone.
However, medical bankruptcy is not a legal term utilized in courts. The court continuously refers to “bankruptcy” as medical bankruptcy does not really exist. It will only be used during informal settings.

Bankruptcy and Medical Bills
The link between bankruptcy and medical bills were clearly presented after the statistical report of bankruptcies filed throughout 2007 with respect to the bankruptcies filed throughout 2001. The report was based mostly on questionnaires and telephone interviews conducted extensively throughout the United States.

According to the results, more than half of all the bankruptcies filed during 2007 were because of medical reasons and among them, a lot ofof them were found to possess health insurances. This reality has created it more appealing to American residents and up to now, it's still mentioned in each page on blogs and reports.

Can I File for Medical Bankruptcy?
Of course you can! Bankruptcy could be a government program that helps a bound individual cut loose from their debts at some purpose to start a brand new life. Sounds sensible eh?  Bankruptcy is also governed by its law to forestall abuse.

But can I file for my medical debts only?
 This question is usually asked and the answer to that is absolutely NO. Once more, medical bankruptcy will not very exist. If you would like to file bankruptcy thanks to large sums of medical bills, all alternative secured and unsecured debts can be included. Your creditors have the correct grasp be told about your action filing for bankruptcy.

Medical Debt Bankruptcy Drawback
You must bear in mind concerning the effects bankruptcy to your credit score. There could be a bound reduction of points from your current credit score relying on the degree of your case. It will take a while to bring it back to normal. In this situation, some creditors can not enable you to own debts and loans anymore. Additionally, you are not allowed to file for bankruptcy again for 6 long years.

Filing for medical bills bankruptcy will be a positive relief far from monetary hazard but you should be prepared for its consequences. Aside from bankruptcy, contemplate consolidation plans, debt counseling, and debt settlement as they are really useful. Treat bankruptcy medical debt as your last resort. Do not rush into it as you might need it more appropriately in the close to future.

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Using Life Insurance in Business Succession Planning

Posted by Mike on Saturday, 1 September 2012

Using Life Insurance in Business Succession Planning

Life insurance can play an important role in a business succession plan. Following are some of the common ways in which life insurance can be integrated with many of the tools, techniques, and strategies commonly used in business succession planning.

Estate Liquidity.
Some business owners will wait until death to transfer all or most of their business interests to one or more of their children. If the business owner has a taxable estate, life insurance can provide the children receiving the business the cash necessary for them to pay estate taxes. Using life insurance (owned by an irrevocable trust) to pay estate taxes is particularly useful to business owners because business interests cannot be readily liquidated. Life insurance is also a much easier (and less expensive) alternative to deferring estate taxes under IRC Section 6166. The children receiving the business may also need life insurance to pay estate taxes at their deaths. Typically, the insurance policy will be owned by an irrevocable life insurance trust so that the beneficiaries will receive the death proceeds both income and estate-tax free.

Estate Equalization.
A business owner can use life insurance to provide those children who are not involved in the business with equitable treatment. Leaving the business to the active children and life insurance (owned by an irrevocable trust) to the inactive children equalizes the inheritances among all of the children. It also avoids the need for the active children to purchase the interests of the inactive children – perhaps at a time when the business may be unable to afford it. Depending on the particular facts and circumstances, the insurance may be owned by an irrevocable trust for the benefit of the inactive children, and the insured(s) may be the business owner or the business owner and his spouse.

Buy-Sell Agreements.
A properly designed buy-sell agreement can guarantee a market and fair price for a deceased, disabled or withdrawing owner’s business interest; ensure control over the business by the surviving or remaining owners; and set the value of the business interest for estate-tax purposes. Life insurance is the best way to provide the cash necessary for the business or the surviving owners to purchase a deceased owner’s interest. In many instances, the cash surrender value in a life insurance policy can also be used tax free (by surrendering to basis and borrowing the excess) to help pay for a lifetime purchase of a business owner’s interest.

Nonqualified Deferred Compensation Plans.
A nonqualified deferred compensation (“NQDC”) plan can be used by a small business to provide members of the senior generation with death, disability, and/or retirement benefits. An NQDC plan may be particularly useful in those situations where the senior members have transitioned the business to the junior members and are no longer receiving any compensation from the business. An NQDC plan is also useful to ensure that key employees remain with the business during the transition period – a so-called golden handcuff. Because life insurance offers tax-deferred cash value growth and tax-free death benefits, it is the most popular vehicle for “informally” funding NQDC plan liabilities.

Key Man Insurance.
Many family businesses depend on nonfamily employees for the company’s continued success. To guard against financial loss due to the absence of an indispensable key employee, many companies take out key person life insurance.

Section 303 Redemptions.
IRC Section 303 allows an estate a one-time opportunity to remove cash from a corporation (equal to the amount of estate taxes and administrative expenses), at little or no tax cost, through a partial redemption of stock. To ensure that the corporation has sufficient funds with which to accomplish the Section 303 redemption, the corporation can purchase a life insurance policy on the shareholder’s life.

Hedge Strategy.
Life insurance can also be used to provide a hedge against the business owners premature death in connection with a grantor retained annuity trust. For example, if the business owner established a GRAT and died before the end of the set term, the life insurance could be used to pay the estate taxes on the GRAT assets that would be included in the business owner’s estate. In addition, if a sale with a private annuity is used, life insurance could provide funds for the business owner’s spouse (and/or other family members) since the annuity payments would terminate on the business owner’s death. Similarly, life insurance could provide funds for the business owner’s spouse and other family members should the business owner die prematurely after using a self-canceling installment note to sell the business interest. In all of these situations, it is advisable to have the life insurance owned by an irrevocable trust so that the insurance proceeds will escape estate taxes.

Family Bank.
When the decision is made to leave the business to both active and inactive children, it is usually advisable to leave the active children with voting interests and the inactive children with nonvoting interests in the business. In addition, put and call options can be given. Generally, a put option given to the inactive children allows them to require the active children (or the business itself) to purchase all or a portion of their interest in the business at a set price and terms. Without a put option, there may be no practical way for an inactive child to benefit from owning the business interest unless and until the business is sold. Conversely, a call option given to the active children (or the business itself) allows them to purchase the business interests of the inactive children upon a set price and terms. Without a call option, there may be no effective way for the active children to avoid the potential conflicts that can occur between the active children who are receiving salaries and bonuses, and the inactive children who are not. By having the active children own life insurance on the business owner’s life, a “bank” is created to provide the funds to satisfy any such puts and calls. Typically, the policy will be owned outside of the business entity, such as in a trust for the benefit of the active children or by a limited liability company owned by the active children.


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Personal Accident and Health Insurance in New Zealand, Key Trends and Opportunities to 2016

Posted by Mike on Saturday, 25 August 2012

Personal Accident and Health Insurance in New Zealand, Key Trends and Opportunities to 2016

· The report provides in depth market analysis, information and insights into the New Zealand personal accident and health insurance market, including:

· The New Zealand life insurance market's growth prospects by personal accident and health insurance categories and customer segments

· The various distribution channels in the New Zealand personal accident and health insurance market

· The competitive landscape in the New Zealand personal accident and health insurance market

· A description of the personal accident and health reinsurance market in New Zealand

Executive summary

The largest category in the personal accident and health insurance segment in 2011 was personal accident insurance with a 59% share, followed by health insurance which accounted for a share of 37.2%. The main distribution channels for personal accident and health insurance in New Zealand are insurance brokers and direct marketing. These two channels accounted for an 86% share of the total market commission in 2011. Rising healthcare costs, low penetration of health insurance products and anticipated reforms are expected to increase the role of private insurers which will support the growth of the segment over the forecast period.

Get your copy of this report @

Report Details:

Published: August 2012

No. of Pages: 203

Price:Single User License:US$1950 Corporate User License:US$5850


This report provides a comprehensive analysis of the personal accident and health insurance market in New Zealand:

· It provides historical values for the New Zealand personal accident and health insurance market for the report's 2007 2011 review period and forecast figures for the 2012 2016 forecast period

· It offers a detailed analysis of the key sub-segments in the New Zealand personal accident and health insurance market, along with market forecasts until 2016

· It covers an exhaustive list of parameters, including written premium, incurred loss, loss ratio, commissions and expenses, combined ratio, frauds and crimes, total assets, total investment income and retentions

· It analyses the various distribution channels for insurance products in New Zealand

· Using Porter's industry-standard Five Forces analysis, it details the competitive landscape in New Zealand for the personal accident and health insurance business

· It provides a detailed analysis of the reinsurance market in New Zealand and its growth prospects

· It profiles the top personal accident and health insurance companies in New Zealand and outlines the key regulations affecting them

Key highlights

· The personal accident and health insurance segment of the New Zealand insurance industry witnessed a steady growth during the review period of 2007-2011.

· According to a report produced by the Health Fund Association of New Zealand in December 2011, an increased reliance on government healthcare expenditure meant the deterring of private healthcare firms from investing.

· The treasury's briefing to the government that health spending grew at a faster rate than the economy as a whole for the past two decades confirmed the unsustainable levels of public spending on healthcare.

· Due to strong, country-wide distribution networks and high customer confidence, brokers enabled insurance companies to increase the penetration and demand for their personal accident and health insurance policies.

· Some clients used the internet or the telephone to make their purchases, driving a focus for online marketing. The rising demand for direct marketing increased the number of direct marketing distributors in the personal accident and health insurance segment.

· The leading personal accident and health insurance companies in New Zealand are: Sovereign Assurance, Southern Cross Health Society, Tower Health and Life, Partners Life, AIA New Zealand, AMP and Asteron.

Reasons to buy

· Make strategic business decisions using in depth historic and forecast market data related to the New Zealand personal accident and health insurance market and each sector within it

· Understand the demand-side dynamics, key market trends and growth opportunities within the New Zealand personal accident and health insurance market

· Assess the competitive dynamics in the personal accident and health insurance market

· Identify the growth opportunities and market dynamics within key product categories

· Gain insights into key regulations governing the New Zealand insurance market and its impact on companies and the market's future.

Source: Here
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Seven Inside Tips to Launching Your Career as a Financial Advisor

Posted by Mike on Tuesday, 21 August 2012

Seven Inside Tips to Launching Your Career as a Financial Advisor
By David Haslett

With 77 Million Baby Boomers contemplating retirement, the employment outlook for personal financial advisors is excellent! With this massive generation being, for the most part, unprepared for maintaining their lifestyle, many are looking for the assistance of a financial advisor.

Free time, flexibility, and excellent potential income are waiting for those who choose to follow this career path.

As with many things, there is a hard way and an easy way to launch a career as an advisor. One is a more difficult trail with obstacles along the way. It begins with an MBA degree in personal finance or economics followed by intensive study for one or more NASD examinations to become a registered representative.

Then, in order to launch your career as what was known as a stock broker, you'll need to seek employment selling securities for a wire house, broker/dealer, or insurance company. Despite significant competition and regulatory compliance oversight, you'll build your "assets under management" in order to satisfy your employer and/or qualify for assistance with expensive advanced certifications.

There is, however, an alternate route that doesn't involve such life changing career moves.

  For the Boomer, a fifty-something with the life expectancy of a Galapagos sea turtle but with less than two years of income saved for retirement, it's no longer about accumulating a portfolio of assets. It's about the other three quadrants of his or her balance sheet which have gone largely ignored.

1. How to get the most sustainable lifetime income from the existing portfolio of assets.

2. How to eliminate hidden and/or and unnecessary expenses.

3. How to eliminate all debt before retirement.

A true financial advisor should address these areas of concern and, to do so doesn't require a life changing career experience. There are new and innovative financial products and services which effectively address these issues, but are not securities and are not regulated by the NASD and SEC.

If you're contemplating a lucrative and rewarding career as a Financial Advisor, Here are some tips to help you down that path.

1. Be independent. No one financial entity that has all of the right solutions to all of the financial problems out there. As an Independent Financial Advisor, you'll have the freedom to choose the best financial products and services from a variety of carriers.

2. Be independent but don't walk the path alone. You need a system. Join an Independent Marketing Organization. They will, in exchange for an override commission from the carriers, provide turn-key systems including advisor training, product access, provider contracts, and assistance with licensing, marketing, and regulatory compliance. Many have spent years developing effective and predictable systems to support their network of advisors.

3. Build a professional referral network. Your clients will seek advice on a range of financial subjects including real estate, taxes, insurance, legal contracts, mortgage and consumer finance. Team up with some qualified specialists in your vicinity. Refer your clients to them and they will refer their clients to you.

4. Don't worry about your sales skills. Many successful advisors are numbers people and couldn't sell snow cones in Death Valley. It's all about positioning. The model of all successful business is the same. There is a problem. There is a solution. By positioning yourself between the two, you have value and people will recognize that value.

5. Don't talk about yourself or your business. Focus on your prospect/client and ask the right questions. How do you feel about ....? What do you plan to do about ......? If there was a way to ......, would you .....? The art of asking questions is critical to your success in attracting new clients.

6. Keep in communication with your prospective clients. It often requires six or seven exposures to build a successful client relationship. Set up an email system to keep them informed of the latest developments in your industry.

7. Test the water, first. Some new advisors run into difficulty because they get excited and spend too much money before they start making money. Keep your start-up expenses under $500. At the very least, you'll get a low cost financial education that you can apply to your own situation.

We are at the brink of the largest wealth transfer in history. There is a tremendous need for qualified financial advisors to lead this history making generation down the path to financial security. Those that choose this path will discover a career that offers an abundance of personal satisfaction as well as significant income potential.

Article Source: Seven Inside Tips to Launching Your Career as a Financial Advisor
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personal accident insurance

Posted by Mike on Monday, 20 August 2012

Personal accident insurance 


Personal accident insurance is provided in two ways:
as a stand-alone policy (these may be individual or group policies – for example, where an employer takes out a policy on behalf of its employees); or
as a benefit included as part of another product – for example, with travel insurance or with a bank account.

Most personal accident policies pay lump-sum benefits when the policy terms are met. These usually require the consumer to suffer death or bodily injury, that arises from an accident or unforeseen event. The consumer’s claim must not fall within an exclusion clause. And policies usually state that the consumer is not covered if the death or bodily injury is caused by “sickness, disease or any naturally occurring condition or process”.

Standard areas of cover are:
  • death; 
  • permanent total disablement; and 
  • loss of, or loss of use of, a limb. 

But some policies additionally cover permanent partial disablement, temporary total disablement and/or temporary partial disablement.

Personal accident policies vary in terms of levels of benefit, the definition of key terms, areas of cover and exclusions. This note assumes that some typical combinations of policy conditions are included, but different outcomes may be appropriate where policy terms vary.

Because personal accident policies offer protection only against accidental death and bodily injury, consumers should carefully consider what type of protection is best suited to them. If the consumer wants protection for sickness or general disability, other forms of insurance may be more appropriate. If the consumer is being advised, the adviser should also take these considerations into account.

what complaints do we see?

Complaints that consumers refer to us most frequently are that the financial business refused to pay the claim by wrongly deciding that:
the death or bodily injury was not as a result of an accident;
the death or bodily injury was not solely and directly as a result of the accident (for example, there was an illness that contributed);
an exclusion clause should be applied; or
the consumer was not sufficiently disabled.

We also commonly see complaints from consumers that:
the financial business should have paid more to settle the claim; or
the policy was mis-sold.

was there an accident?

This is a requirement of the cover – but sometimes the word “accident” is not even used in the policy. Instead, the consumer may be required to suffer death or bodily injury as “the direct result of an accidental, external, violent and visible cause”, or words to that effect.

what does "accidental" mean?
If there is no definition of "accidental" in the policy, we generally apply the normal meaning of the word: an unforeseen or unexpected and unfortunate occurrence. It can either be the cause or the result that is unexpected, but at least one of them must be this.

what is an "external, violent and visible cause"?
We will look at the particular circumstances of the event in the light of the common interpretation of the policy wording. In many cases this will be straightforward: a car accident, for example, will be external, violent and visible whereas a heart attack may be violent and visible but not external.

However, events are not always so straightforward and, in particular, linking the death or bodily injury to a particular cause may be problematic. For example, was the heart attack the cause of the car accident? Or was the car accident the cause of the heart attack? Or in fact, was the consumer the victim of two unrelated events?

Consideration of these cases will typically involve establishing the actual sequence of events that led up to the death. There may also be difficult questions of "causation" – if the heart attack did happen before the accident, was it the accident that killed the consumer, or would they have died anyway because of the heart attack?

is the death or bodily injury "accidental" if it occurred in relation to surgery?
Claims made because a consumer died or suffered a bodily injury following surgery are often turned down by financial businesses on one or both of two grounds:
the death or bodily injury was not accidental; and/or
the accident was not the sole and direct cause of the death or bodily injury.

Again we adopt a common sense approach. All surgery involves some risk. Generally we try to distinguish between cases where the risks were explained to the consumer and they were simply unlucky – and those where something unexpected, unplanned or negligent happened before, during or after the surgery.

were there contributory causes?

Most personal accident policies require the death or bodily injury claimed for to have resulted solely and directly from an “accidental cause” – and state that the consumer is not covered if the death or bodily injury is caused by “sickness, disease or any naturally occurring condition or process”.

This means that financial businesses turn down claims on several grounds:
there were factors other than the accident that resulted in the death or bodily injury – for example, illness, disease or a degenerative condition;
the accident merely brought forward a death or bodily injury that would have occurred anyway because of an existing medical condition; or
the consumer was already disabled and the accident merely increased the level of disability.

Financial businesses usually refer to medical reports/records, the death certificate and/or the coroner’s report when turning down claims for these reasons.

what if there were factors other than the accident?
Our approach will be shaped by the circumstances of the case – in particular, the degree to which the accident contributed to the death or bodily injury that is claimed for.
If we are satisfied that the accident alone would have resulted in death or bodily injury, we generally do not consider that financial businesses should be able to avoid liability simply because there were other contributory causes. In these cases, we would normally tell the financial business to pay the claim.
If we decide that the accident was not a significant contributing factor to the death or bodily injury, we will not usually recommend a payment.
If we decide that it is more likely than not that the accident was a contributing factor to the death or bodily injury (even if it was one of many factors), we sometimes tell the financial business to pay some of the claim. We are likely to recommend a proportionate payment reflecting the general contribution that the accident (as opposed to the other factors) made to the death or bodily injury.

what if the accident brought forward the effects of, or worsened, an existing disability?
In some cases:
the accident accelerated the effects of a condition that the consumer already had; and
the existing condition meant that they would have died or suffered disability at some point in the future, even if the accident had not happened.

For example, a consumer might suffer with arthritis which would have caused permanent total disablement within ten years. They then had an accident which brought forward the effects, to the extent they immediately became permanently and totally disabled.

Some policies do allow for proportionate payments in these circumstances. But even when they don’t, depending on the circumstances, we may tell the financial business to pay the claim on a proportionate basis.

Similarly, if an accident worsened an existing disability, depending on the circumstances, we may decide that the consumer is entitled to some benefit. In these cases, we will usually require clear evidence that the accident did increase the consumer’s level of disability. We generally do not tell the financial business to pay the full amount of benefit in cases like these – instead, we may tell it to pay a proportion of the benefit.

was an exclusion clause applied unreasonably?

The main exclusions usually included in personal accident policies are that the consumer’s claim will fail if:
the death or bodily injury was due to the consumption of alcohol and/or drugs;
the death or bodily injury resulted from a deliberate self-inflicted injury or the consumer recklessly exposing themselves to danger; or
the death resulted from suicide.

The wording and effect of these exclusions will vary between policies so we will always carefully examine the wording of the policy.

Many policies will also exclude claims for death or bodily injury resulting from activities such as driving a vehicle with fewer than four wheels, diving, mountaineering, rock or cliff climbing, pot-holing, parachuting, professional sports, boxing, racing and flying when not a fare-paying passenger.

Exclusions for various categories of war and invasion will also generally apply, as will exclusions for claims arising as a result of duties in the armed forces (although specialist forces personnel policies are available).

In each case, it is up to the financial business to prove on the balance of probabilities that the exclusion applies.

the alcohol and/or drugs exclusion clause
Most personal accident policies contain an exclusion clause so that if the death or bodily injury is caused by alcohol and/or drugs, benefit is not payable. Again, policy wordings differ and we will always check to see what the policy actually excludes.

There is an important difference between an accident occurring after someone has consumed alcohol and/or drugs, and an accident being caused by alcohol and/or drugs.

We will expect the financial business to show that it is more likely than not that the consumption of alcohol and/or drugs caused the accident (or failure to escape its consequences).

We will also look at:
whether the consumer anticipated the death or bodily injury. If not:
whether the death or bodily injury could reasonably have been anticipated, meaning that the consumer ought to have anticipated it.

If, for example, the consumer was run over because they were lying down in the road while drunk, it may be that death or bodily injury could reasonably have been anticipated as a result of the action.

If, on the other hand, the consumer was hit by a speeding car while crossing the road when drunk, we are less likely to decide that they anticipated, or could reasonably have anticipated, that death or bodily injury would occur. The accident probably would have happened whether or not the consumer was under the influence of alcohol – and so it is unlikely that the exclusion clause would apply.

the deliberate self-inflicted injury/reckless exposure to danger-exclusion clause
Some personal accident policies contain an exclusion clause, so that if the death or bodily injury resulted from a deliberate self-inflicted injury or reckless exposure to danger, benefit is not payable. Some policies instead refer to “needless exposure to peril” or “exposure to exceptional danger”.

The main issue that arises in these cases is at what point an action becomes a “reckless exposure to danger”. We will carefully consider the policy terms, examine the circumstances of the case and take a common sense approach in reaching our conclusion.

For example, some might consider cycling without a helmet a “reckless exposure to danger”, but it is a part of ordinary life. In contrast, to argue that base-jumping is not “reckless exposure to danger” would be difficult. But many of the cases that we see are less clear cut. For example, is quad biking a “reckless exposure to danger” and does it matter if the consumer was wearing a helmet or was on private land?

the suicide exclusion clause
Where the financial business turns down a claim because it believes that the consumer committed suicide, we will decide the case on the balance of probabilities. It will be for the financial business to show that suicide was the more likely cause of death.

Coroners have to be satisfied beyond reasonable doubt before they can record a verdict of suicide. If the coroner returns a verdict of suicide, we will decide that the death was not accidental. If the coroner is not satisfied beyond reasonable doubt, they have the option to record an open verdict.

Because we decide what happened on the balance of probabilities (which requires less certainty), it is still open to us in open verdict cases to decide that the death was not accidental. But we will attach significant weight to the coroner’s findings into the cause of death.

is the consumer sufficiently disabled?

When defining the circumstances when permanent total disability benefit will be paid, personal accident policies usually use one of the following criteria:
the consumer is totally unable to perform their own occupation;
the consumer is totally unable to perform any occupation for which they are suited (because of their education, training or experience); or
the consumer is totally unable to perform any occupation whatsoever.

When the consumer has a policy that refers to them being prevented from carrying on “any occupation whatsoever”, we generally do not consider that it is fair and reasonable to limit benefits to those rare situations where the consumer is completely unable to carry on any occupation whatsoever. Unless we are satisfied that the restrictive nature of the criterion was clearly brought to the consumer’s attention at the outset, we usually interpret the provision to mean “any suited occupation” by reference to the consumer’s education, training, experience etc.

putting things right

Personal accident
policies are "non-indemnity" insurance contracts. The aim is not to return the consumer to the position that they were in before the accident. Instead, they simply pay financial benefit in cases of death or bodily injury where the policy terms are satisfied. They do not compensate for loss of earnings or incapacity from working. Because of this, there is no limit to the total benefit that can be claimed by the consumer – that is, they can normally claim for the same injury under multiple policies. But there may be restrictions if the policies are with the same insurer.

If a disability is defined in the table of benefits included in the policy – and the terms of the policy are met – then benefit is payable. The table of benefits will vary between policies. If there is any disagreement about which category the consumer falls into, we will review the medical evidence and decide what is fair and reasonable in the specific circumstances of that case.

when is a proportion of benefit more appropriate than the full amount? We may decide that it is fair and reasonable for the financial business to pay a proportion of the benefit in circumstances that do not warrant payment of the full benefit. These cases include:
  • where the death or bodily injury was not solely as a result of the accident because there were other factors involved. 
In general we decide what proportion of the death or bodily injury, can reasonably be considered to be related to the accident – and we then tell the financial business to pay the benefit accordingly. If, for example, the medical evidence shows the accident caused only 25% of the injury (with the other 75% due to a degenerative condition), we may tell the financial business to pay 25% of the benefit. 

  • where the accident brought forward the effects of an existing disability.
Our approach is to assess the available medical about about how many years the death or bodily injury was brought forward by the accident. We generally then tell the financial business to pay a proportion of the benefit in line with this assessment. If, for example, the consumer’s total working life (what it would have been in the absence of the accident) is shortened by 10 years from 40 to 30 years, we may tell the financial business to pay 25% of the benefit. 

  • where the accident worsened an existing disability.
Our approach is to assess the available medical opinion about what proportion of the disability is attributable to the accident. We generally then tell the financial business to pay a proportion of the benefit in line with this assessment. If, for example, the medical opinion indicates that 25% of the disability is attributable to the accident, we may tell the financial business to pay 25% of the benefit. 

  • where the consumer has a permanent disability but is not totally disabled
Where a consumer suffers serious functional impairment as a result of an accident (although strictly speaking the impairment is not “total” and there is some residual function), we may consider it fair and reasonable for a proportionate benefit to be paid. We will consider whether, in all the circumstances, the consumer had a reasonable expectation that the policy would cover them if an accident brought about a life-changing disability. This is in line with the fair and reasonable approach taken by a large section of the insurance sector to such claims. We will assess specialist medical opinion about the extent of the consumer's disability and use any available guides and official calculators to determine what proportion of benefit, if any, is payable.
  • where the consumer has suffered only a partial disability and that disability was only partially caused by an accident
For example, a consumer has an accident which results in 80% loss of use of a shoulder, but only 50% of this loss was directly caused by the accident (the remainder was due to an underlying condition). In this case, we may tell the financial business to pay 50% of 80% of the relevant benefit – if that is fair and reasonable in all the circumstances.

Where the consumer has been deprived of money because the financial business wrongly turned down their claim, we will usually tell the business to pay compensation at our normal rate of 8% per year simple.

We see many cases where the claim under the policy is delayed. For example, in claims for accidental death, the estate may not be aware that there is a policy in place. As a result, the interest is generally payable from the date the claim would have been accepted, rather than from the date of the death or bodily injury. This is to reflect the fact that a financial business cannot accept a claim of which it is not aware.

compensation for distress, inconvenience or other non-financial loss In some cases we may decide to tell the business to pay compensation for distress, inconvenience or other non-financial loss that it has caused.

was the policy mis-sold?

There are several reasons why consumers complain that policies were mis-sold:
  • the consumer did not understand the nature of the policy they were applying for; 
  • the consumer thought the policy would provide benefits in circumstances other than when it does; or 
  • the consumer did not apply for the policy at all (for example, when sold over the phone in conjunction with another product). 

In relation to personal accident policies, the most common misunderstandings of terms in the cases we see are:
the consumer did not realise their policy does not cover them for illness; and
the consumer did not realise that an accident has to cause death or bodily injury in order for benefit to be payable.

Complaints about mis-selling generally against the seller who may, or may not, represent the insurer directly. The seller has an obligation to ensure that the policy is suitable for the consumer and that it is adequately explained to them.

When considering these complaints about mis-selling, we will examine the evidence available about the sale.

If the pre-sale and/or policy documentation is unclear about the cover provided, the consumer’s complaint would normally be against the insurer as the provider of the documentation. When considering these complaints, we will examine all of the documentation provided, to see whether it made clear what was covered by the policy and whether it highlighted any unusual limitations or exclusions.

Sometimes income protection policies require benefits under other disability insurance policies to be deducted from any income protection benefit payable. If we decide that the policy terms clearly allow the benefit from a personal accident policy to be deducted in this way, then there may be a potential mis-sale – if this significant limitation of cover was not made clear. In these cases, we will look at the sale of each policy, to see whether the potential impact of having both insurances policies was explained.

If we decide that a policy was mis-sold, we will normally say that there should be a refund of all of the premiums the consumer has paid plus interest of 8% simple per year. We will also consider whether a payment of compensation for distress and inconvenience is appropriate.

But if we decide that the exclusion was unfair or unusual – and that it was not brought to the consumer’s attention – or that the consumer would have been able to obtain a policy elsewhere which would have covered their claim, then we may tell the business to pay for the claim as if the restriction was not part of the policy terms.

Similarly, if we decide that the mis-sale meant the consumer was entitled to rely on statements and representations made by the seller, then we may decide that compensation should be paid either for distress and inconvenience or for the full amount of the consumer’s claim under the policy.

Source: Here

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Financial advisor for blended family

Posted by Mike on Sunday, 19 August 2012

Check this nice work video:

Be a niche market of little consequence for insurance advisors.

The truth is that blended families constitute a significant part of the American population, and may be both misunderstood and underserved by advisors and estate planners. When insurance professionals look back at 2010, many are going to remember the year for its historic and exciting planning opportunities for clients, especially blended families.

Today's American family may not resemble your grandfather's!

Most American households no longer fit the mold of the "traditional family" with a father, mother and children of that marriage. An ever-increasing number of households are better described as "blended families" where one or both spouses have been divorced or widowed, and then remarried.

According to the 2007 U.S. Census, 1,300 new blended families are formed daily. Additionally, about 65% of remarriages involve children from one or both of the previous relationships, and may include children of the current relationship. Today's family includes single parent households (divorced, widowed, or unmarried); persons in heterosexual cohabitation (with or without children); and same-sex unions (with or without children).

Taken together, blended families and other non-traditional households outnumber traditional families. What many advisors may not realize is that blended families have very unique planning concerns and challenges.

Customizing the estate plan for blended families

Blended and non-traditional families share similar objectives, such as:
o Accumulating assets for a secure retirement
o Providing a fair and secure financial legacy for loved ones
o Transferring wealth in the most tax-efficient manner
o Avoiding disruption of family relationships

The bulk of a traditional couple's assets pass to the surviving spouse on the first death, and the children must wait until the second death before receiving their inheritance. This approach tends to focus on achieving zero estate taxes on the first death, financial security for the surviving spouse, and reduction or elimination of death taxes on the second death.

Formulas are often used in wills and trusts to achieve these results. By formula, the estate may be divided into two (or more) shares. The Marital Share to the surviving spouse -- outright or in a qualified marital trust (QTIP or QDOT) -- takes advantage of the unlimited marital deduction. An amount up to the deceased spouse's federal estate tax exemption is allocated to a Credit Shelter Trust (CST). The exemption is $1 million after 2010, but that may change if Congress intervenes later this year or next.

CSTs can provide three benefits: (1) elimination of federal death taxes on the first death; (2) elimination of death taxes on CST assets (including any appreciation) upon the second death; and (3) implementing specific instructions on the distribution of trust principal and income to the surviving spouse, children, and grandchildren.

In addition, Irrevocable Life Insurance Trusts (ILITs) can provide liquidity upon the first and/or second death through ownership of single life or survivorship life insurance -- further strengthening the legacy for the insured's loved ones. Finally, traditional clients may also take advantage of lifetime gifting and intra-family sales strategies.

Conventional techniques often don't work for blended families

For a variety of reasons -- some not so obvious -- planning techniques for traditional families may not work for blended families. This is precisely where an insurance advisor can bring a professional perspective to the planning process.

Advisors should review how the wills and trusts divide the estate, especially with respect to the use of Credit Shelter Trusts. If the Marital Share is overfunded, the CST's tax sheltering power may be underutilized. Clearly, fact-gathering is critical to get the planning process moving in the right direction. Inquire about current and previous marriages, children and any pre-nuptial agreements.

A major concern for blended families is a possible prolonged delay in the children receiving their inheritance, especially if the second spouse is closer in age to the children than the natural parent. This could result in the legacy not being distributed to the children until their retirement years.

Funding the QTIP Trust: How much is too much?

Almost routinely, advisors encourage the use of a QTIP Trust as the preferred technique for blended families with higher net worth. The idea is to fund the QTIP Trust with some predetermined amount that provides a lifetime income for the surviving spouse. The children would receive trust residue upon their stepparent's death. However, use of the QTIP Trust introduces the complicating factor of delaying or reducing the ultimate legacy for the children.

Using ILITs to help divide the estate fairly

The consultation process, frankly, is "part art and part science" when molding an overall strategy. While over-reliance on a QTIP Trust to support the surviving spouse may squeeze the children's inheritance, an effective solution is to incorporate an ILIT into the blended family estate plan.
In addition to the usual benefits of an ILIT, death benefits received by the ILIT (on a policy insuring the life of the natural parent of the children) can serve as a proxy for the children's inheritance. The insurance money can promote a sense of "family fairness" without upending the surviving spouse's expectations or conflicting with any obligations the natural parent may feel toward the surviving spouse.

For deaths in 2010, consider "over-funding" the Credit Shelter Trust

The year 2010 is an historic year in estate planning! It is the one time since World War II that wealthier Americans can die without federal estate taxes, unless Congress intervenes later this year with retroactive changes.

For deaths during 2010, it may be the only time in the foreseeable future when the decedent's assets allocated to the Credit Shelter Trust can exceed the exemption amount that would otherwise have applied prior to 2010 and after this year. In other words, the wealthier spouse in a blended household who dies this year can pass assets free from federal estate tax, even if the CST is funded with more than $1 million (or even more than last year's $3.5 million amount). In fact, the entire amount of the deceased spouse's wealth can be allocated to the CST without death taxes, provided the death occurs this year, and provided Congress does not retroactively enact an estate tax applicable to the date of the client's death.

This is an example of "gap planning," or taking advantage of a tax opportunity that exists between the zero federal estate rules of 2010 and 2011, with the return to federal death taxes on January 1, 2011. As the tax rules are currently written, clients who die after 2010 will face top estate tax rates of 55% (plus a 5% surcharge on larger estates); an exemption of $1 million; a flat 55% GST tax rate, and a GST exemption of $1.12 million. Overfunding the CST is one example of gap planning for a 2010 death. Other estate planning strategies might include retitling the couple's assets, revising the apportionment formulas, and adopting disclaimer provisions.

If the client adopts "gap planning" for a possible death in 2010, care should be given to react to two possibilities: (1) that Congress may retroactively enact estate taxes for a 2010 death; and (2) a client might live beyond 2010 when federal death taxes return.

Example: John and Sally are married -- a second marriage for both. John has two children from his previous marriage. His net worth is $6 million, and Sally's $1 million. If John dies this year (2010), all his wealth could be transferred to his CST without owing federal death taxes. To prevent disinheriting Sally, the CST would include provisions for a specified amount of income for her lifetime. The CST could also specify the time and amount of distributions to John's children. At Sally's death, the trust residue (including any appreciation) will be excluded from federal estate tax. If, however, John dies in any year after 2010, the amount funding the CST would be limited to the exemption amount then in effect.

What to tell clients in blended families?

Encourage all clients to get fresh advice about their opportunities for "gap planning" this year. Carefully review how the Marital and Credit Shelter Shares are to be divided, and how a QTIP Trust can strengthen the legacy to the children of the previous marriage.

Even if a client dies without federal estate taxes, remain alert about state death taxes -- the new concern in estate planning. At last count (April 2010), 17 states and Washington, D.C. imposed estate or inheritance taxes. [See, Richard E. Kait, "State death taxes: The new planning concern," Life Insurance Selling (February 2010)].

Although we don't know what the future holds, we do know that life insurance owned outside the taxable estate can hedge against uncertainty and provide liquidity at death. Insurance advisors now have a wonderful opportunity to reach out to blended families and help them plan through the current fast-changing tax environment.

Richard E. Kait, JD, LLM, CLU, ChFC, is Second Vice President, Advanced Sales, and Director of Premium Financing for Protective Life and West Coast Life Insurance Companies.

Source: Here

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What are the top car insurance companies?

Posted by Mike on Saturday, 18 August 2012

What are the top car insurance companies ranked by the number of insured drivers?

The National Association of Insurance Commisioners has useful info all consumers should consult, including statistics on the number of complaints each company receives.

I could not find the number of policies carried, but they do report the combined value of the policies carried, this should be a fair measure of relative size, these numbers were taken from a complaints report, the number in parenthesis is (the complaint index) a measure of complaints validated by the state.

Here's a short table of the big names. State farm is the monster of the group with $26 Billion in policies. they also have the lowest complaint index.

Company Name | (The Complaint Ratio Score) | Total Premiums

State Farm Mut Auto Ins Co (0.45) $26,220,888,338
Allstate Ins Co (1.30) $6,525,726,655
Geico Gen Ins Co (0.89) $5,035,009,345
Safeco Ins Co Of Amer (1.75) $697,848,064
Progressive Advanced Ins Co (0.52) $293,807,716
Esurance Prop & Cas Ins Co (1.73) $202,485,929

found the Commisioners connection here…

Car Insurance Prices Revealed by Your State

More Than 30 States Compare Insurer Rates

As well as being the definitive source of state insurance regulations, you state insurance commissionaire may the best sources for company and agent licensing information, agent recommendations and fraud alerts.

You may be able to ask your state insurance department specific questions about a provider:

· Whether or not the company is properly licensed;

· The length of time for which the company has been licensed;

· Statistic, regarding the number complaints brought against a company;

There's information available on these sites that may be valuable to persons living out of the states, including guides to getting the best prices and complaint statistics. More than 30 states provide insurance rate comparisons for various sample driver profiles, though some of the companies, and the location specific prices may not apply to you, these rate tables are still valuable indicators of 'the going rates', some rate differences between providers are as high as 4-1. Some states providing rate comparisons include: Alabama, Georgia, South Carolina, Montana, Louisiana, Texas. and New York State some data tables are online, others are in down-loadable insurance guide .pdf documents.

Example Rates Comparison of 16 Different Car Insurers
Insurance Providers; The Usual Suspects

Get The Facts on a Potential Insurer

In addition to getting online quotes in order to find the best price for your auto insurance, consider researching the quality of service provided by the insurer. The consumer has access to customer complaint statistics and reports on the financial stability of insurance companies, provided by independent agencies that monitor car insurance suppliers.

The National Association of Insurance Commissioners has used an aggregated database of information provided by individual state insurance commissioners to produce various reports available to the consumer. A part of the site particularly useful for consumes is a search-able complaints database. The graph below shows the number of complaints, by company, scaled to a national average complaint level of 1.0. The sample data is for providers operating in California.

(Some providers have multiple division, each with separate complaint data. These figures may not always be all that statistical precise, for example GMAC online, which provided .01% of U.S. market share, had a total of just 14 complaints.)

Check An Insurer's Finantial Rating

An exhaustive examination of an insurer may include a look at the financial condition of the company, as recommended by some state insurance Comissioners, although rare, along with te recent failings of financial institutions, insurance companies do fail on occasion. Several private rating companies will provide a limited number of reports over the phone free of charge, or on their web sites. makes their ratings available for no charge on their web site.

A.M. Best will provide up to 3 ratings per call at (908) 439-2200 ext. 5742.

Fitch provides free ratings for up to five companies per call at (800) 893-4824.

Moody’s will provide free ratings for up to five companies per call at (212) 553-0377.

Standard & Poor’s also provides up to 5 free ratings per call at (212) 438-2400. Reviews may also be requested from S&P via email

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