The Asset Protection Against Judgments and Creditors You Gain from Life Insurance and Annuities

Creditors and judgments are a fact of life, especially if you’re wealthy. The more money you make, the more some people will try to get. A lot of our clients come to us looking to protect their assets from judgments and liens. At the same time, they want to be able to continue to grow wealth for the rest of their lives. Yield is important to them, but so is legal protection.

That’s why many of our clients use life insurance and annuities as part of their asset protection strategy. Life insurance and annuities have the rare advantage of being protected from most judgments and liens. While laws vary from state to state, often these insurance proceeds are considered uncollectible assets. As a matter of policy, they also bypass probate.

If protecting your assets from creditors is your goal, then life insurance or annuities might be the ideal financial vehicle for you.

Skipping Probate with Contractual Obligations

One of the benefits of using insurance and annuities is that they bypasses probate. Most of your assets will go through probate when you pass away, with your will determining their final disposition. However, life insurance and annuities don’t do that. These are contractual obligations between you, the insurance company, and the beneficiary. As such, the funds from those policies don’t go into your estate. 

This is important because anyone who brings a judgment or debt against your estate is going to be able to use its value to prove you have assets to pay the case. Life insurance policies, for example, aren’t considered part of that estate in probate court and are uncollectible as a result. But life insurance doesn’t just protect your money when your estate is being settled. It can also be used to protect your assets when you’re alive. 


How Life Insurance Policies Protect Your Wealth

In the case of judgments and liens, collectible assets are any assets with a cash value that aren’t protected by law. For the most part, these assets are just about anything you can sell for cash. So property, stocks, bonds, and other investments are considered collectible assets. If you were to get sued by a creditor, those assets could be claimed to satisfy the judgment. 

There are a few things that sit on the “uncollectible” end of the spectrum. Among those are insurance policies and annuities. Annuities and life insurance policies are considered protected assets in many states in the United States. Different states may protect different amounts from these policies. In some states, the cash value of the policy is protected. In others, only proceeds paid to beneficiaries are protected. Finally, in the best states, all the funds from the policies are protected. 

However, if you’re in a state where life insurance policies and annuities are considered collectible, then you may want to consider the use of a trust. The trust helps to provide an additional layer of insulation to the account by removing the funds from your name. As long as the trust is irrevocable, most states have held that the assets in those trusts can’t be used to satisfy judgments or debts. 

Of course, the key to asset protection is preparation. Life insurance is one of those products that’s best purchased when you don’t need it. Using it as a part of asset protection is no exception to that rule. 


When Do You Need Asset Protection?

The answer to when you need asset protection is the sooner the better. Just about all of our clients have assets that need to be protected, even those who are middle class. While the basics in your life, like the home you live in and the car you drive, might be safe from collection, many of your investment and cash accounts aren’t. The same goes for any vacation properties. 

The key is to use life insurance and annuities to protect these assets before you ever need to. Once you’re the subject of a lawsuit, then moving those funds around could be impossible. In some cases, if someone has enough assets, the court will prevent them from being able to move them if a judgment is imminent. 

People tend not to plan for this because they think it’s unlikely. The issue is that we live in a very litigious society. The wealthier you are, the more likely it is that people are going to try to claim you owe them money. Even something as simple as someone tripping and falling in your yard or a former business partner claiming you stole clients could cost millions. No one ever expects to be the subject of a lawsuit or creditor claim, but the ones who plan for it tend to do better in the long run. 

We use life insurance and annuities as a way to protect clients’ assets during and after their lives. Our strategies help our clients reduce the risk of asset loss while ensuring they’re also building a legacy. For more information on our asset protection strategies, contact us today at 800-DIE-RICH.

source:  howardkayeinsurance.com

Mortgage Insurance Vs Life Insurance

People often see their homes as their biggest investment, and naturally they want to protect that investment. On the other hand, people also worry about what would happen to their loved ones if they were no longer around to care for them. For both of these situations, there is life insurance and mortgage insurance. Both types of insurance offer benefits, but they differ in their nature and eligibility criteria. If you are considering one or both forms of insurance, here are some things that you need to be aware of before making a decision.

Life Insurance

Life insurance is a smart move for many people who have dependents. However, life insurance does not often come without a rigorous application process. Age is a critical factor in the monthly premium you pay and you often have to undergo a medical exam. If you have had any previous complications, then that could work against you. In short, the younger and healthier you are, the better your chances of getting a good premium. However, for those who don’t qualify for life insurance but still want to protect their assets, they have to look at other options.

Mortgage Insurance

Mortgage insurance is usually offered by the same lender providing you with the mortgage. This form of insurance covers your monthly mortgage payments in case you can‘t pay them with your regular income. While mortgage insurance is much easier to secure than life insurance, there is a higher cost. Also, while the premiums don’t change as time goes by, the benefits are reduced as you pay down your mortgage. If you have trouble qualifying for life insurance but still want some form of protection, then mortgage insurance might be a more practical option. However, if you change your lender, your policy will also change.

Which Is Better?

Choosing between mortgage insurance and life insurance depends on your situation. If you know that you may not qualify for life insurance then mortgage insurance may be the next best thing. That said, there are many life insurance plans that offer flexibility and require little medical examination (often just a short questionnaire). So it is best to fully explore your options.

At Northwood Mortgage, our agents can help you find the best solution for your needs. Contact us today for a free consultation and let us see how we can help you protect your assets and your loved ones.

source: northwoodmortgage.com

Auto Insurance Quote Considerations

Learn more about the car insurance is the best way to make sure you have adequate coverage and that you are also getting the best deal possible . Continue reading to understand how various factors can impact your auto insurance quote.

Buying a used car is a good way to save money on your insurance premiums, since the older models are not as valuable. If you want to keep this car for years, you should get an insurance policy that will cover most of the damage. Because insurance on a used car is cheap, you should get a comprehensive policy. However, if you do not plan to keep your car for a long time or want to save money on your premiums, you should consider dropping some items on your policy, as aesthetic repairs.

A new car is not likely to break, which means you probably do not need your policy to cover towing and similar expenses trucks. If the new car is fully paid, you should protect your investment with an accident coverage policy that might happen. And if you are still making payments on your new car, the financial institution that you are using will probably have a set of guidelines on the type of insurance policy you need to start. Otherwise, select such a comprehensive policy as you can afford to make sure that you can continue to make the payments.

If you have a good driving record and does not present any complaints, you can benefit from interesting discounts. Each insurance company has different discounts. You need to contact your insurance agent and ask about good driver discounts. You may really want to think twice before submitting a request for very minor damage that you could pay for yourself, since you will not benefit from the discount more good driver.

Other drivers can use their car if they have insurance on their behalf or if you add them to your policy. It is usually cheaper to add someone to your policy to pay for individual coverage. Contact your insurance agent to find out how to add someone to your policy will cost you. You should know that if you add your children to your policy, you can usually qualify for a good student discount if they have good grades.

Protecting more than one vehicle with the same policy is a good way to save money. This is called package insurance, and insurance agents will encourage you to take additional policies in his other car, your motorcycle or even your home. Before getting a package plan, compare coverage and price you get the other options. package plans come with good discounts but do not get the coverage that you do not really need just because you can get it at a discounted price.

Learn as much as possible about the car insurance is the best way to make informed decisions. You should take the time to compare your options to request an auto insurance quote and go about your policy carefully to make sure you are getting the best coverage you can afford.

source: autoinsurancequotes2.info

Are You Missing Out on Cheaper Auto Insurance? Implement the Switch to Save Strategy

Tis’ the holiday season and that means sales everywhere you look. This includes sales and discounts in the ultra-competitive auto insurance industry, where with only a few minutes of online clicking and typing you could literally save hundreds on your next auto insurance policy.

During the holiday season auto insurance companies really ramp up their advertising and discounts because they know consumers are purchasing cars (new or upgrades) which need to be insured and the majority of auto insurance policies renew at the end and beginning of the year.  So take advantage of the lower premium prices by following these two simple steps:

1. Get a FREE, no obligation quote from the list of providers I have reviewed below. I get numerous emails from insurance brokers to list on this site, but the ones in the list below are the ones I currently recommend. They are nationally recognized, great companies and offer the best deals in my opinion. Other than AARP, I have had insurance will all these providers at some point. When you get the free auto insurance quotes, make sure you include similar characteristics (like deductibles, comprehensive coverage) so that you are comparing apples to apples.

2. Review the quotes to see which is the best deal for you, and then call your current provider. If you like your current insurance provider, encourage them to match or at least come close to matching the lowest price you found. Otherwise the decision is easy, switch and save! While it can be a little bit of a hassle to switch, saving a few hundred dollars can definitely ease the pain.

You will more than likely save money when/if you switch. Insurance companies know they have to provide you with a significant discount and reason to switch from your current provider. They call this an acquisition cost. Their hope is that when it comes time to renew, they can pass on higher premiums to you. That’s why you need to repeat the steps above and implement the switch to save strategy all over again.





Esurance - This insurance portal (recently acquired by All State) is now pretty well known thanks to it’s extensive advertising campaign on providing discounted car insurance quotes. They act like a broker between you and the other insurance companies and given their discount guarantee they are definitely worth visiting to get a free quote in this ultra competitive auto insurance market. Their one draw back is that they are not as strong as the other providers when it comes to multi-policy discounts. Getting or searching for insurance is ideal for those on a tight budget and happy to purchase/search online (i.e. no insurance agent!)


GEICO - This insurance company, owned by Warren Buffet’s Berkshire Hathaway, is well known thanks to it’s incessant advertising and actually does have one of the easiest to use websites, with clear guidance on key terms and coverage options.  I really liked their online feature that automatically obtained my vehicle and driver information from motor vehicle departments and other groups. This allowed me to get a faster and more accurate quote, without having to type in all my car information. It took me around 5 minutes to get a premium estimate (broken down by each insurance item) that I could easily customize to see what impacts changing one or more factors would have on the premium


USAA Auto Insurance - USAA membership is open to U.S. military service members, veterans who have honorably served, and their eligible family members. When you join, you get free financial resources, special savings and award-winning service. By switching to USAA Auto Insurance, you can save an average of $409 per year. If you are ex-military or an eligible family member this is definitely a company you need to get a quote from. I also like their flexible payment option feature which comes at no additional charge


“Safe Drivers Save up to 45% with Allstate” is the claim the company makes. So I went and tried it for myself. Unfortunately, I got well below the average savings but that's probably because I continually review my insurance and switch if I can save more than $50 by changing insurance providers. But I do think if you have multiple policies and are in certain associations/groups you could do quite well with them. Definitely worth getting a free quote from All State as a comparison point if nothing else, given that they are one of the largest insurance companies out there.


AARP (for drivers over 50) - If you are a senior citizen then it is hard to beat insurance offers provided by the AARP. The rates are up to 15% lower than average for eligible drivers with good driving records. If you (or your spouse) are over 50, I would definitely get an online quote from AARP to see if you can benefit from a seniors discount. They also have a great in-person customer service line if you have questions and feel more comfortable talking to a real person to get a quote or sign up for an insurance policy

source: savingtoinvest.com

5 Reasons You’re Paying Too Much For Home Insurance

Insurance is designed to offer you peace of mind in the event of a financial crisis; it shouldn’t put you in one. If you feel like you’re paying way too much for homeowners insurance, it’s possible you’ve made one of these common mistakes of home insurance buyers:

You didn’t compare rates

 

It’s the first step in any smart shopper’s process, whether you’re buying groceries, laptops or insurance. Don’t just purchase the first policy you find or become complacent with your current provider’s rates. Comparison shopping is the most effective way to get the most value out of your insurance and ensure that you’re not paying more than your neighbors for no other reason than you just didn’t do your research.

You’ve purchased two policies from two providers

 

Most providers offer special bundle prices that could help you save as much as 20% on your premium. Consider consolidating your auto and homeowners insurance policies by purchasing them from the same provider. In addition to big savings, it’ll help cut the time it takes to manage your policies in half.

Your deductible is too low

Depending on how much you think you could afford to pay out of pocket in an emergency, raising your deductible could be a smart savings strategy for you. The higher your deductible is, the lower your premium will be, and vice versa. If your monthly payments seem way too high, take a look at what amount your deductible is set and work with a licensed agent to find the optimal balance for your budget.

You haven’t uncovered discounts

 

Do you have a squeaky-clean claims history? Have you installed smoke detectors in your home? Do you keep fire extinguishers around? If you answered yes to any of these questions and aren’t collecting discounts on your home insurance, you’re paying way too much. Work with a licensed agent to discover all of the discounts for which you could be eligible, and narrow down the lower premium you deserve.

You have several claims under your belt

 

If you have a history of filing large claims, you’ll probably have a higher home insurance premium than your neighbors. That doesn’t mean you shouldn’t file claims when you need to – that’s what your policy is for. However, if you find that your home is extremely accident-prone, it’s probably a good idea to re-evaluate your safety practices. It may also be to your advantage to make some improvements around the house to help prevent claims, such as reinforcing window shutters or repairing an older roof. In addition to helping to prevent claims, some insurers may offer discounts for some home improvements such as these.


Whether you’re shopping for a new policy or looking to find better rates, keep these common insurance mistakes in the back of your mind. It’s easy to find a better value and greater peace of mind when you know what not to do when buying homeowners insurance.

source:  http://homeinsurance.com/blog/2013/01/18/5-reasons-you%E2%80%99re-paying-too-much-for-home-insurance/

How Safe is Your Life Insurance Company?

Dear Insurance Adviser,
What should I do with a single-premium life insurance policy that originated in the 1980s? The interest on the lump sum I put in is better than I would get from money market funds or certificates of deposit, but I have concerns about the viability of the company. How can I find out if my money is safe? How can I learn about the health of the company? I am 77 years old and would like to leave the money where it is, but as I age, I have concerns. Thanks for your advice.
-- Singly Worried



Dear Singly,
Nothing helps with anxiety better than a few facts.

First, find out if your state has an insurance guaranty fund. Most states do. In the event that an insurance company fails and is declared insolvent, policyholders with claims against the insurer can collect from the state guaranty fund.

If your state has such a fund, make sure its caps on claims are high enough to cover both your maximum life insurance benefit and the cash value of your policy. Even if the limits are high enough, collecting from these funds is a painful and long, drawn-out process. It would probably take at least a year to get your money.

Second, go to the A.M. Best Co. website to look up the Financial Strength Rating for your life insurance company. A.M. Best has been rating insurance companies for more than 100 years and is considered the gold standard. Click on the link for consumers to check on insurance company ratings, and put in your company's name. If your company is rated A, A+, or A++, it's on solid ground. If your company is rated B or worse, pack your bags, and head for the hills!

I have a question for you: Do you still need life insurance protection? It sounds as though you are interested primarily in the investment part of the policy. You mentioned that your interest rate is better than you can get elsewhere. But that's misleading if you don't need life insurance. The annual "mortality and expense charges" for the life insurance need to be deducted from your interest earnings in order to measure your true return. Mortality charges for a 77-year-old would be quite large and would significantly reduce the earnings on your policy.

If you do need life insurance still, perhaps you don't need as much as you have. Most life insurance companies with single-premium policies will allow you to reduce your death benefit and still keep the policy and interest rate. With a lower death benefit, the mortality charges being deducted from your earnings would be much smaller, so your earnings would improve significantly. I recommend that you talk to a financial adviser to help you with this decision.

Good luck. I hope this helps.

source: foxbusiness.com