Wednesday, July 25, 2007

Auutomobile Insurance is important

Why automobile insurance is important

If you are a car or truck owner or driver, you are exposed to risks. If you are a business owner and has a fleet, your risks are even higher. Risks like accidents causing damages to your own or other's car or truck, damages to properties, injuries to yourself, your passengers, drivers and passengers of other cars, trucks or motorcycles, cyclists or pedestrians. It may or may not be your fault, but finacial implications can be great. You may need to repair the damages to your own car or is liable to repair damges of other cars or properties, people involved in the accident and sustained injuries will need medical treatments which may involve huge expanses. If someone is killed, the financial implications are even higher, especially if it is a high income earner.

Because of such risks, it is wise to get automobile insurance. In most (I think all) countries, automobile insurance is important because a car owner or driver who is found liable to very high damages may be unable to pay, and the aggrived party or parties cannot get what is due to them.

Types of automobile insurance

There are many types of car insurance. comprehensive automobile insurance, third party, fire and theft, third party insurance and specialized car insurance of all kinds. It is usually the third party car insurance that is compulsory as it covers only damages and injuries to third party and is usually the cheapest for obvious reasons. It does not cover damages to your own car or injuries to the drive or passengers.

How to chose and buy automobile insurance policy

Considering the many types of car insurance, the number of insurance companies and their reputations, the conditions and the premium you have to pay for them, getting the right car insurance policy can be a hassle. To me, the best way to shop for, compare and purchase Automobile Insurance Policies is at home, online at the computer. You can comfortably get an auto insurance quotes, make comparisons and make your decision. If you are cost concious, you may want to try to get the best car insurance quotes.

Wednesday, March 28, 2007

Term Insurance and Finance

One thing connected to finance that everyone should get acquainted with is insurance, something that you should not try to get along without, especially if one has dependents who depend on the income you bring home. Insurance started with entrepreneurs organising long distance sea voyages from Europe to the Far East to trade. Such long voyages carry high risks, and a sunken ship may completely wipe out financially the entrepreneur. So they got together and put small amount of funds into a common pool so that if one is unfortunate to have met a misfortune, he gets reimbursed from the large common pool. Eventually such things got more organised, risk pooling spread to other areas like covering the risk of losing the income when a salary earner dies, etc. and insurance companies were born

Such pooling of risks are normally made by putting into the common fund which will cover a fixed period of time. If no untoward things happen, one doesn't get anything back in return. Such insurance policy are called term insurance. This makes term life insurance difficult to sell as many are reluctant to part with money with the prospect of getting nothing back in return. Elements of saving were then introduced and endowment life insurance policy was born. But rates for endowment policies are higher because part of the premium paid have to go towards saving to pay the policy holder at the end of the term. Also, insurance agents are rewarded via a commission basis, and they get higher commissions for helping to sell an endowment policy. The tendency is thus that they tend to recommend endowment policy irrespective of your actual needs.

In my opinion, endowment policies are a gimmick, and not worth buying as what seem to be a large amount insured may appeared big in the beginning, but with inflation over time, that amount becomes miniscule. I believe that if a breadwinner have dependents who depend on him to bring in income to survive, he should buy a term insurance policy which is just like a car insurance policy, and need only pay less in premium. If nothing happens to him over the insured period, he gets nothing back, but he can control the way he saves his surplus funds to take into account inflation.

AmericanDirect is an insurance company that specialise in term life insurance, and if my explanation of term life insurance is not clear to you, or you are not convinced, AmericanDirect have advisors are not rewarded on the basis of selling one policy over another. Their task is to make sure you get what fits your specific situation.

If my short discussion of life insurance is not sufficient AmericanDirect have a QuickCollege where you can get some quick education about life insurance.

You can get a quick online quote about the insurance you need from Quick Quote for up to $300,000 of affordable term life insurance that normally requires NO routine medical examination but only require you to answer a few health questions! You need to be truthful though, as giving false response may result in an invalid policy. Also, in some rare cases, they may require you to get a medical examination.

Wednesday, February 14, 2007

Year-end Health Savings Account Tax Strategies

Year-end Health Savings Account Tax Strategies
by: Wiley Long

Year-end Health Savings Account Tax Strategies

2007 is just around the corner, and there are several issues to consider if you currently have a Health Savings Account (HSA), or are planning on getting one in the near future.

100% of the deposit you place in your HSA is deductible on your federal income taxes. All but four states also make HSA contributions tax-deductible on state income taxes. If you are looking to reduce your 2006 tax burden and put away more money for retirement, your HSA is the first place you should put your money if you have not yet maximized your contribution.

The maximum you can contribute to your HSA in 2006 is the lesser amount of your deductible, or $2,700 for singles and $5,450 for families. Individuals who are 55 or older may contribute an additional $700. Note that contribution limits are pro-rated, based on the number of complete months during the year in which you have a qualifying HSA health insurance plan.

You have until April 15 (or later if you file for an extension) to make your 2006 contribution. If you do not fully fund your account for the current year, you cannot make a catch-up contribution for 2006 after this deadline. However, you can reimburse yourself in later years for qualified expenses incurred in 2006, even if you do not have the funds in your account to reimburse yourself at this time.

In 2007, the maximum annual HSA contribution will go up to $2,850 for individuals and $5,650 for families. Individuals 55 or older will be allowed to contribute an additional $800.

To maximize your tax benefit for 2007, it is important to have your HSA-qualified health coverage in place no later than January 1.

In order to pay for a medical expense from your HSA, it must be a qualified expense. Some of these qualified expenses include dental expenses, eyeglasses, chiropractic visits, over-the-counter medications, and sometimes even nutritional supplements.

Now is a good time to make sure you have an accurate record of your medical expenses for the year. Make sure you separate the expenses for which you have reimbursed yourself from your HSA from those that you paid for out-of-pocket. You'll want to keep receipts for all medical expenditures paid from your HSA with your 2006 tax records. Place the "non-reimbursed medical expenses" in a separate file, keeping them with the concurrent year's tax records in whatever year you decide to reimburse yourself.

The penalty for over-funding your HSA is a whopping 6%. You have until April 15, 2007 to withdraw excess funds for the 2006 tax year to avoid the penalty. Your HSA administrator may notify you of any over-funding, but they are under no obligation to do so. It is your responsibility, so make sure you check into this if you think your may have over-funded you account.

The minimum deductible for HSA-compatible health insurance plans in 2006 was $1,050 for individuals and $2,100 for families. In 2007 this will increase to $1,100 for individuals and $2,200 for families. If you currently have an HSA-qualified plan with the lowest eligible 2006 deductible, that deductible will automatically go up on January 1 to the new minimum.

Strategies to Maximize Your Tax Benefits

There are basically three different strategies you can take when deciding how to fund your health savings account.

1. Put no money in the account, except when you incur a medical expense. This strategy allows you to legally "launder" any money used to pay medical expenses. In other words, by depositing money into your HSA, then immediately withdrawing it to reimburse yourself for medical expenses, you are making your medical expenses all tax-deductible. You may want to use this strategy if you are on a tight budget and want to keep your cash outlay as low as possible.

2. Fully fund the account, or at least put in as much as possible based on your budget. Take money out of the account any time medical expenses are incurred, and let the rest grow tax-deferred. This strategy will maximize your tax deduction, while making your HSA funds available to pay any non-covered medical expenses before your deductible is met.

3. Fully fund the account, but pay all medical expenses from a non-HSA account. Reimburse yourself for medical expenses at a later date. This strategy will allow you to maximize your tax deduction, and will also allow you to maximize the tax-deferred growth of your HSA. You can then reimburse yourself, tax-free, at any time in the future for medical expenses incurred over the ensuing years.

To maximize the potential growth of your funds, you may want to make your 2007 deposits as early in the year as possible. Any growth in your account is tax-deferred, like an IRA. If possible, you should plan to make your deposit the first week in January.

About The Author
The Article is written by Wiley Long - President, HSA for America (Health Savings Accounts) - The nation's leading independent health insurance firm specializing in Health Savings Plans that works with Health Savings Accounts.

Copyright information.... This article is free for reproduction but must be reproduced in its entirety, including live links & this copyright statement must be included. Visit Health Savings Accounts for Health Savings Plans and Health Savings Accounts.

Friday, January 26, 2007

Getting the Most Return from Your Sales Time Investment (ROI)

Getting the Most Return from Your Sales Time Investment (ROI)
by: Joe Leech

Let's face it: you are probably working for far less than you need to. And the sad thing is, you may not even be aware of it or the options you have! As of now, we're going to change that for you, and possibly share with you not only a thought but a vehicle that can change your financial life.

We are going to show you how to get much more out of your sales time investment.

This probably applies more to the part time, home based business person than the professional...but we have seen, met, and talked with professionals who really are under- valuing their return on time investment. I know.. we are using that "time investment" word alot all ready. But you MUST consider it just as you do a cash or money investment.

In fact, it's even more important because once spent or invested, you can't ever get that particular moment or minute back. It's gone. You can always invest more money, but you only have so much irreplaceable time. Your sales time investment is one of the most precious ones you can ever make.

As we look at business models, we find on one end, the model that proposes high volume but low profit per sale.

Walmart has certainly shown this works, and many, many, many supermarkets work this same way. It will work if you have the ability to create large volumes of sales. The question is: Do you. If you are a individual sales rep or a small business, just how much of an opportunity do you have to create really large volumes. The appeal to the small business person is to do this by creating some type of a multi-level (also and probably incorrectly referred to as a pyramid) sales organization. In the ideal world, IF you can do this, you can create volume. But this could take years to accomplish, and still never guarantee any income or security because (1)The company behind it could go out of business, be taken over.. or any number of things, (2) The pay plan could change, or (3) The group suddenly dissolve, particularly if or when a heavy hitter or group leader decides to switch to another business and takes his distributors or sales force with him. Did you make a good sales time investment if you chose this model?

Of course you still have the ability to sell the product or service yourself, but (1) Can you do volume, and (2) Is the profit per personal sale worth your time?

The second business model, at the other end of the spectrum, is one that provides a relatively high profit or earning per sale. Sometimes we think of real estate people and car sales people in this category, as well as sales people of specialized capital equipment. But that's not the majority of us.

The downside here is that if we are thinking about selling a high ticket/high profit item, we have to ask (1) Is there a large market and prospect base? and if we are thinking in terms of an ability for a part time person--possibly a "stay at home mom", can this high ticket, high profit product or service be first mastered in terms of the technology, and second, is the customer prospect base readily accessible?

In most cases, the answer to those two questions is "no, not available".

But if it is or was, then here's a fact that can be virtually carved in stone:


Think about that! This is ALL relative to your sales time investment, and once more: It's the MOST IMPORTANT investment y ou have to make.

Ask yourself: "Am I working for pennies or dimes when instead with the right vehicle I could be working for dollars?"

If the answer is yes, and this is so true of particularly home based business entrepreneurs who are involved in sale of nutritional supplements, skin care, fad gadgets, etc., then ask yourself, "Am I doing this because I want to earn a nice income, and do it as quickly as possible... or am I kidding myself about that goal and I just want to get products wholesale or discounted and have some fun?"

Nothing wrong with that, by the way, if you have an hones assessment of what you are doing and why.

But..... If your goal is in the area of $4000-$5000 a month or more, and you also don't want to spend all your waking hours "working your business", then it's time to change.

As your article writer, I can tell you this is an article written from the school of hard knocks and one that really had us so emotionally involved with the businesses. Rah rah rah; recognition, pins, etc. Amway. Free Life. Primerica.

Herbal Life. Been there, done that. Made some money? Yes, but far, far, far less than in other options. And that's just the part time side of things we did to supplement our "real" job. Made some money, but had no security, and worked for far less than we could have been doing. Plus we just sold our time for money there. No residual income.. but that's the subject for another article.

We hope this has helped you focus some thinking and our resource block will point you to one tool that will let you change your life.

About The Author
Joe Leech has been involved in both conventional and home based businesses for over 40 years. He offers sound advice from his experience and at his website at Wide World Info he offers a way to do what he writes about.

Tuesday, December 12, 2006

Learn About Equity Index Annuities

Learn About Equity Index Annuities
by: Scott Walker

‘Save for a rainy day’ is a wise old saying and there are many ways you can prepare for the sunset of your life. Investing in an annuity is one way. An annuity is a long-term, interest-paying contract offered through an insurance company or financial institution. An equity indexed annuity is an annuity that earns interest that is linked to a stock or other equity index. Depending on how those stocks fare will determine what you gain. The equity index annuities, as in any kind of investments, have to be kept untouched for a long period. The typical time is a minimum of 7 years. This will ensure that you get the full benefit of having invested in an equity index annuity.

The equity index annuities are basically an option of investment that is offered by insurance companies. They actually provide you with the benefit of investing in the stock market without the associated risks of losing your money. So, in an equity index annuity, your principal is never lost and even in a worst case you may take some interest back home. The flip side of this however is that even if the stocks that the equity index annuity is invested in gives high returns, you will not receive the full returns but just a percentage. So you do not get the maximum returns for your equity index annuity but just a part.

This is however the compensation that the insurance companies who offer you the equity index annuities receive, for providing you with a safety net throughout the term of the annuity. The percentage of returns (i.e. the gain of the index) that your equity index annuity brings you is determined by the participation rate. This rate is pre-decided and varies and to know this you have to read the fine print prior to signing on the documents. The general participation rate offered for most equity index annuities is between 70 to 90 percent.

The equity index annuities are therefore seen as a conservative and prudent investment.

They became quite popular during the previous bullish run in the market and insurance companies saw them as an excellent means of combining the security of a guaranteed return with the boom of the stock market. All equity index annuities offer a minimum interest rate and its value also does not fall below the guaranteed minimum percentage of the premium paid i.e. 90 percent at least.

However to achieve maximum benefits, your equity index annuities should not be withdrawn before the term. If you do even a partial withdrawal it will definitely affect the interest you receive. Like all investments, this is best kept for a long term. This will also help your equity index annuities even out and recover if the index plunges. As we know the stock market is volatile and this needs to be kept in mind when investing. Also there are definite withdrawal penalties that you would have to pay as well.

How then do the insurance agencies benefit from offering equity index annuities? The insurance companies reinvest the premium amounts that you pay and this is usually invested into bonds. Since the participation rate is fixed, they have to pay only those set rates of interest to the investors of the equity index annuities and the insurance companies profit the balance.

Equity index annuities are generally affiliated to a particular stock market index such as the S&P 500 or the Dow Jones Industrial Average. However as the equity index annuities combine features of a typical insurance product with the traditional security they do completely fall into each of those specific categories.

As a typical insurance product you are guaranteed minimum return and in terms of securities your investment is linked to the equity market. However it all depends on the features that your equity index annuity provides and it may or may not be a security. The typical equity-indexed annuity is not registered with the SEC.

So then how does one know which equity index annuity is best for oneself? The only way is to find out as much as you can about the equity index annuity before you decide.

Ask a lot of questions like which stock market index does the equity index annuity use? What participation rate is being offered to you? Are there any hidden charges in terms of any fees or deductions payable? You have to run through a number of equity index annuity offerings before making your decision.

So save for a rainy day and do it the equity index annuity way!

About The Author
Scott is a consultant at Equity Index Annuities, a directory listing site with all your annuity and finance needs. If you have any other annuity questions please visit Vietnam Biology (close new window/tab to get back to this page).