• 1. Quit (Fill in the blank). Hopefully it’s not the same as last year’s.
• 2. Help at least one person every day
• 3. Lose (fill in the blank) pounds. Hopefully the number is smaller than last year’s.
• 4. Spend more quality time with my family.
• 5. Review my life and disability insurance policies to make sure my family is well-protected.
• 6. Eat more fruits and vegetables.
• 7. Watch less television.
• 8. Save more for retirement.
• 9. Only pass on GOOD news to others.
• 10. Praise others’ work when deserved.

Wishing you and your loved ones a Happy, Healthy and Prosperous New Year.

Accelerated Death Benefit Rider

This rider allows the insured person to use (a percentage of) the death benefit if he or she is diagnosed with a terminal illness that carries a prognosis of death within a year. If benefits are paid in this manner, the death benefit will be reduced by the amount of accelerated death benefit paid. Some insurance companies charge no extra premium for this rider.

Please note that receipt of benefits received in this manner can have a negative impact on any potential Medicaid or Social Security benefits.

Accidental Death Rider

This rider pays out an additional amount of death benefit due to an accident which was the direct cause of death. Normally, the additional benefit paid out upon death due to an accident is equivalent to the face amount of the original policy, which doubles the benefit. This is often called double indemnity when the additional benefit equals the face of the policy.

Child Rider

This rider provides a death benefit for children up to a specified age. Coverage can include multiple children with a maximum benefit for each (up to $20,000). Once the child attains the maximum age of the rider, the term plan can typically be converted to a permanent policy (usually up to five times the original face amount).

Waiver of Premium Rider

With this rider, the future premiums are waived if the insured becomes permantly disabled for a specified period of time (typically six months). While disabled, the insured is exempt from making premium payments. The definition of “totally disabled” can vary from one insurance company to another

Conclusion

Riders allow you to modify your life insurance policy according to your needs. When purchasing a new policy, discuss these options with your advisor to see if they fit your needs. Adding riders can significantly add to the cost of your policy, so it becomes an economic choice as well.

The way to prevent this from happening would be to secure life insurance on Santa’s life. In a rushed conversation with Ms. Claus (she was quite busy when I called), she informed me that she did, in fact, have a life insurance policy on Santa. I asked her if the proceeds from the policy would allow Santa’s business to continue should he pass away. She told me that the amount of insurance Santa had was barely enough to allow her and the elves to continue the mortgage payments on the North Pole home, let alone the retreat in Palm Springs.

For the good of mankind, I knew I had to come up with a solution. I couldn’t imagine a Christmas without Santa Claus. If I didn’t do anything, how would I be able to face my grandchildren in the future, knowing that I had a solution and didn’t do anything about it? With the prospect of losing the respect of my grandchildren looming heavily, I sprung to action.

I put my proposal together and went to visit with the CEO of Claus Enterprises, who, lo and behold, happened to be Ms. Claus. After I thawed out (I do live in Southern California), I sat down with Ms. Claus and explained key-person insurance to her. In insurance-speak, a key person is an individual who possesses a unique ability essential to the continued success of a business or firm. The death of this key individual could severely handicap the company. If Claus Enterprises had a policy on Santa’s life and he should pass away, the company would be able to hire and train a replacement for Santa (or several) to insure that “business as usual” continued. This could potentially include new custom made suits, reindeer retraining, etc.

Once Ms. Claus signed the policy, I turned to her and said, “Now about that life insurance policy that would barely cover your mortgage…” I walked out of her office with two signed applications and shouted to the elves on the assembly line, “Happy Christmas to all, and to all a good-night (I always wanted to do that)!”

Wishing you and your families a Happy Holiday season.

When it’s time to collect the proceeds from a life insurance policy, most people are not in a state of mind conducive to this kind of exploration. Being prepared before the event can save your family from compounding their grief with aggravation and frustration. Here is some great advice on how to organize your life insurance information to prevent this from occurring (from the Insurance Information Institute’s website - www.iii.org):

For each individual life insurance policy on your life, you should record the following information:

• The full name of the life insurance company that issued the policy
• The city and state of the home office of the company that issued the policy
• The name and U.S. headquarters of the group, if the issuing company belongs to a group of companies
• The policy number
• The date the policy was issued
• The amount of the death benefit
• The name and address of the agent/broker who sold you the policy
• The type of policy (e.g., term, whole life, etc.)
• The location of the original life insurance policy

You might have life insurance automatically from your employer. Your employer also might offer you the chance to buy additional life insurance under a group policy. And you might be eligible to buy life insurance under a group policy from your union or trade association or other group you belong to (such as a college alumni association or an automobile club). For each of these life insurance benefits, you should record the following information:

• The name of the employer or group that sponsors the insurance
• The office or person to contact when it’s time to file a claim
• The certificate number (comparable to the policy number under an individual policy)
• The date the insurance was started
• The amount of the death benefit

You’ve protected your family financially by purchasing a life insurance policy. You can also protect them from the pain and suffering from having to try to find out the answers to these questions in the event of your death.

Many of the callers had purchased homes with no down payments and sub-prime mortgages and many had recent rate adjustments that put their payments out of reach. The callers that got my attention were several who were losing their homes due to the death of a working spouse. With one income in the family, it was now impossible to keep up with mortgage payments. When purchasing the homes, these couples calculated that both incomes would be needed in order to continue making the mortgage payments.

While saving people from the ticking time-bomb of sub-prime mortgages is the subject of many blogs, the solution to avoiding losing a home due to the death of a spouse can be stated in one sentence – if you purchase life insurance to at least pay off the mortgage in the case of an income-earners death, you can ensure that your family won’t lose their house.

With the cost of term life insurance at its lowest in history, it’s inexpensive enough to protect your family from compounding the loss of your life with the loss of their home. If you can’t afford the life insurance on top of your mortgage payment, your mortgage payments are too high.

Protecting your loved ones from losing their home is as simple as purchasing a term life insurance policy. If you don’t have life insurance, the Internet has made the process simple. Visit www.ifeinsure.com to learn about life insurance and purchase a policy today.

According to the Insurance Dictionary, Life & Health Edition, Insurable Interest is the interest arising when one person has a reasonable expectation of benefiting from the continuance of another person’s life or of suffering a loss at his or her death.

In life insurance, a person generally is considered to have an unlimited insurable interest in himself or herself. However, a person must have an insurable interest in another person at the time of application in order to insure the other’s life. Where no insurable interest exists, policies obtained by one person on the life of another are not enforceable by law since they are considered contrary to the public policy.

Who has an insurable interest? A spouse would certainly qualify, as would dependent children. A business partner would have an insurable interest, as would a business owner taking out a policy on a key employee. The test is would you suffer a financial loss if the insured person were to die? If the answer is yes, then there is most probably an insurable interest.

According to the survey, the average breadwinner’s policy has a death benefit of $300,000. When asked how they would use the proceeds of a life insurance policy, the respondents’ first answer was typically to replace the breadwinner’s salary. Others indicated they would use the proceeds to fund retirement or pay for college expenses. However, when these costs were tabulated, the total life insurance necessary to cover these expenses came closer to $600,000, almost double the cost of the life insurance death benefit. Apparently, a wide gap exists between the perception and reality of what the correct amount of life insurance one should have to adequately protect one’s family.

How does one determine the correct amount of life insurance one should have so this gap won’t exist? Life insurance companies typically recommend anywhere from 10 to 20 time one’s gross income, depending on your age. A life insurance agent or broker can perform a needs analysis to help you come up with the right amount of coverage. Many life insurance websites, including www.LifeInsure.com have life insurance calculators to help you determine the appropriate amount of coverage you should have.

The process typically begins with an application and medical exam. The application contains a myriad of questions about your health, tobacco use, lifestyle and family health history. The medical examiner will typically take blood and urine samples, blood pressure readings and height and weight measurements. They will usually ask additional health questions. The application and medical exam results are forwarded to the insurance company, where it will be assigned to an underwriter.

The underwriter will review your application and exam results. They will typically gather additional information from your physician, the Motor Vehicle Bureau, the Medical Insurance Board (for more information, visit www.mib.com), and, possibly, a consumer credit reporting agency.

The underwriter will then evaluate this data against the data in the company’s rating manual and assign you a Health Class (Preferred Plus, Preferred, Standard Non-Tobacco, Standard Tobacco, etc.). Each company adheres to a very standard process that allows for few, if any, arbitraries.

Your premiums will then be determined based on your age and health class. This may or may not be the same quote you received from your agent when you first applied.

Some websites, like www.lifeinsure.com use a health class analyzer to “predict” the health class each insurance company would place an applicant in. It requires such information as the applicant’s sex, tobacco use, height and weight, as well as estimated cholesterol and blood pressure history. By using a health class analyzer, the only reasons the final quote would differ from the original quote would be if medical records reveal medical situations or if the applicant miscalculated height and weight, blood pressure or cholesterol readings.

Being as forthcoming as possible on the quote engine, one stands a better chance of receiving the same premium upon approval as when applying.

While most would survive without the daily lattes and watching movies at home doesn’t have quite the excitement of seeing the latest blockbuster on the big screen, canceling a life insurance policy could prove to be a recipe for disaster, according to the LIFE Foundation. “Without life insurance to replace the income a family depends on, they are going to be worse off than before,” said Marvin Feldman, chief executive officer of the Life Foundation in Arlington, Va., a nonprofit insurance education organization.

Before you cancel your life insurance policy, you have to ask yourself the difficult question, if times are difficult now, what would it be like for my family if I were to pass away and leave them without the financial protection of a life insurance policy?

Rather than eliminating life insurance from your budget, perhaps you can look at ways to reduce the premiums you pay. Term life insurance premiums are at an all-time low. When was the last time you researched rates? Maybe you can reduce premiums by purchasing a new policy and replacing your old, more-expensive policy. A review of your current needs might also reveal that you are over-insured and should purchase a policy with a lower benefit or shorter term period.

Include life insurance in your revised budget and you will be keeping a very important safety net in place for your family. And if you save money by finding a lower-cost policy, celebrate and have that latte.