Life insurance key part of plan

Most financial experts would argue that, for a typical Canadian family, a comprehensive financial plan should include some degree of life-insurance coverage, either through group plans at work or individual policies. But how much is appropriate for an individual, and how assured is the benefit? The Gazette addressed these and other questions to Frank Swedlove, president of the Canadian Life and Health InsuranceAssociation. Here are his responses.

Q: When should people consider life insurance?

A: It depends on an individual's circumstances. Obvious times to consider it are when you assume new financial obligations like a mortgage or need to provide income security for dependents such as a spouse or children.

In later life, it can be used to create a significant charitable gift, pay taxes on death or for more complex estate planning purposes. Any time you need to create, or preserve, financial value, life insurance can be a very cost-effective option. And like most financial arrangements that rely on investment growth, time can be on your side if you start early. You should also keep in mind that the price you will pay for life insurance reflects your medical history. Life insurers review that history when you apply for your policy, but can't ask for new medical evidence later on, unless you request certain changes to the policy. provide "guaranteed purchase" options, which will allow you to purchase additional coverage at specified intervals, without new medical evidence.

Q: What are the main types of life insurance and their distinctive features?

A: Most people think of three main types: term life, whole life and universal life.

Term insurance is intended to provide coverage for a period of temporary need. It is relatively inexpensive, so it is often the best way to maximize coverage for people on a tight budget. Premiums can be the same throughout the period you own the policy, or increase at five or 10-year intervals. It typically has no savings value, which means the premiums in later years can actually be higher than if you had originally bought whole life or universal life insurance.

Whole life is what your parents probably bought - permanent coverage with a level premium that includes a savings portion. This cash value can be paid out to you if you decide you no longer need coverage, although it may be partially taxable. "Participating" whole-life policies pay annual dividends that can be used to pay premiums, increase coverage, held on deposit earning interest, or paid out to you. You can also typically take a loan against the cash value and the value of any dividends held in the policy, or use the policy as collateral for a loan.

Universal life is more flexible, bridging the difference between whole life and term and separating the cost of coverage each year from the contributions to the investment portion of the policy. These policies typically have several investment options you can mix and match. Life-insurance companies also provide group-life insurance through employers, unions or even clubs or associations to which you may belong.

news source : http://www.canada.com/

Life insurance may cost more

SAGICOR POLICY HOLDERS may pay more for new life insurance coverage come next year due to the 2008 Budget imposition of a one per cent increase in insurance premium tax. The good news is the company is likely to absorb that cost in its general insurance line of business. In a statement to BARBADOS BUSINESS AUTHORITY last Friday evening, Sagicor Life Inc. chief financial officer Anthony Chandler said: "The recent Budget proposal for an increase in premium tax will result in an additional tax burden to life insurance companies writing premiums in Barbados.

"The premium tax increase is likely to result in an increase in insurance premiums to the consumer for new policies sold after the tax comes into effect." Prime Minister David Thompson has proposed an increase in insurance premium tax from January 1, 2009, that would raise $6.6 million for the year. Insurance companies would also pay a $20 000 yearly licence fee, up from $5 000, but Sagicor General Insurance Inc. chief executive officer David Deane said that "increased premium tax and increased licensed fees might not be punitive in themselves. . . . "I don't think that will cause companies to automatically say we will increase general insurance premiums."

"Life insurance policies sell long-term contracts; you contract for a premium which you expect to pay for a lifetime and the opportunity to change premiums does not really exist. "You have the ability to price new contracts appropriately and they can reflect the additional taxes," he said. Chandler emphasised that industry stakeholders needed full interpretation of legislation that would impose

news source : http://www.nationnews.com/

Hasa supports health insurance plans

The Hospital Association of SA on Thursday welcomed government's initiative to establish a National Health Insurance (NHI) system to provide health care cover for all South Africans. This proposal was put to Cabinet on Wednesday by Health Minister Manto Tshabalala-Msimang. "The private hospital sector fully supports the concept of a National Health Insurance," said HASA board member Biren Valodia in a statement.

"We believe that universal health cover for all South Africans, if properly designed and implemented, is one of the measures that can help increase affordability and access to health care in this country." Valodia attended the Board of Healthcare Funders (BHF) annual conference in Durban this week, where the NHI proposal was discussed and supported. He said the private hospital sector had a positive contribution to make, and looked forward to engaging the government and other health care stakeholders in this process.

However, Valodia reiterated the association's opposition to a draft legislation imposing a process of price regulation on the private health-care sector. He said HASA had not changed their view that the process set out in the draft National Health Amendment Bill amounted to price regulation and that the legislation be withdrawn. "The bill would result in the National Health Reference Price List, currently a recommended price guide, becoming the mandatory default price in the event that negotiations between hospitals and funders reach a stalemate. This is price regulation." The private hospital sector remained disappointed at the level of consultation and negotiation over the draft health legislation,

news source : http://www.int.iol.co.za/

Health insurance scheme launched

Dow University of Health Sciences (DUHS) launched the Health Insurance Scheme from July 15, 2008 for its faculty members and employees in agreement with the New Jubilee Insurance (NJI).

Addressing to the ceremony, Professor, Masood Hameed Khan, Vice Chancellor, DUHS, said that the University employees including their spouses and children are covered for treatment if they get hospitalised.

The employees will be issued a Health Insurance Card from NJI containing the employee’s name and family details. They would have to produce this card at the time of admission in the hospital, he added.

According to him, an employee who fails to fill the form will have to contact the concerned department at the DUHS.

The representative from NJI Company also addressed the faculty members and employees of DUHS. He explained the working details of the insurance policy to the audience.

The Vice Chancellor, along with Tahir Ahmed, Managing Director, NJI, distributed the health insurance cards to the departmental heads of 25 institutions working under the DUHS, Karachi.

news source : http://www.thenews.com.pk/

CATHAY LIFE INSURANCE OPENS IN VIETNAM

Cathay Life Insurance formally entered the local life insurance market yesterday with a total investment capital of US$60 million. Cathay Life, a subsidiary of the Cathay Financial Holdings Group (TAIEX:2882) of Taiwan, officially obtained its business licence in Vietnam in December 2007, and plans to maintain offices in both Hanoi and Ho Chi Minh City.

Cathay will provide insurance products for customers such as life, accident, annuity, health and risk-linked investments.

news source : http://www.tradingmarkets.com/

ING receives approval to start life insurance in Ukraine

ING announced today that is has received approval from the relevant authorities to start life insurance operations in the Ukraine. This will allow ING to enter the fast growing life insurance market in a country with over 46 million inhabitants and a rapidly growing middle class. ING considers Ukraine to be an attractive emerging market, with strong growth indicators and a huge potential.

Jacques de Vaucleroy, member of the Executive Board of ING Group, responsible for Insurance Europe said: "Starting this life insurance greenfield is in line with ING's sharpened strategic focus on banking, investments, life insurance and retirement services. Our aim is to build a leading position in the fast growing Ukrainian life insurance market. I am confident that by utilizing our experience in setting up successful operations in other countries in Central and Eastern Europe we will be able to make a swift and efficient start."

ING expects to launch its activities in the first half of 2009. The head office of the new life insurance company will be located in Kiev and will be headed by Veronika Korolev as Chief Executive Officer. ING has been present in the Ukrainian market since 1994 and offers leasing and wholesale banking services. Last month ING started with the rollout of a retail banking network, aiming to become one of the top 5 retail banks in Ukraine by expanding to a nationwide distribution network of over 250 outlets.

news source : http://www.euronext.com/

Term life insurance is the low-cost best bet for most people

Q I'm a married homeowner in my late 20s, contemplating life insurance. We want to make sure that if something happens to one of us the other would have some time to figure things out instead of selling the house and moving back in with parents. What do you recommend -- the more expensive comprehensive lifeinsurance that we can take money out of later or term insurance?

MELISSA

A There's really only one reason to buy life insurance: To financially protect loved ones from an untimely death. Some insurance agents will try to sell you a policy as a way to save for retirement or for children's college education. Forget it. The financial world offers far better and cheaper ways to salt away long-term savings, such as a 401(k), a Roth IRA or a 529 college savings plan.

I'm a big fan of term life insurance for most people, especially in circumstances such as yours. Term is a pure death benefit. Premiums are cheap if you're in good health, although the cost of the policy increases as you get older. It's a simple product and it allows for comparison shopping. You'll want a low-cost, plain-vanilla policy from a blue chip, financially stronginsurance company.

Permanent or "cash value" insurance comes with a tax-sheltered savings component, as well as life insurance. The investment returns are difficult to analyze. Types of policies include whole life, universal life, variable life and variable-universal. In general, these policies are expensive, with steep fees and commissions. Cash value insurance makes sense for some people, but for most of us, term is the way to go.

news source : http://www.startribune.com/

Survey: Health insurance, fuel costs among top small biz burdens

The rising cost of health insurance, fuel and energy and inflation are the top worries among small business owners, according to a survey done every four years by the National Federation of Independent Business and Wells Fargo.

The new Small Business Problems and Priorities survey shows 42.3 percent of American small business owners rank the cost of natural gas, propane, gasoline, diesel and fuel oil as a "critical" concern. That's up from 26.1 percent on the previous survey conducted in 2004. Both surveys rank the cost of health insurance as the No. 1 issue facing small business owners.

Half of the top 10 problems worrying small business owners deal with costs, with the price of health insurance continuing its 20-year reign as the number one problem for small business owners. More than 56 percent say it is a "critical problem." Other cost issues in the top 10 include fuels and electricity, supplies, inventories and worker's compensation insurance.

The remaining top 10 problems relate to taxes -- federal taxes on business income, property tax (real, inventory or personal property), tax complexity and state taxes on business income. Tax complexity, a new problem on this year's survey, ranks fifth on the survey and is a "critical" problem for 23 percent of business owners.

"For four years, the economy provided a good, stable foundation for small business owners to do business, but as it started to take a negative turn over the last several months, they felt the effects of rising costs of doing business as reflected by these results," said Bruce D. Phillips, senior fellow at the NFIB Research Foundation and co-author of the report. "As the economic outcome remains uncertain, small business owners are searching for innovative ways to reduce expenses and increase sales."

The survey results are based on 3,530 small business owner responses to a mail survey circulated in the first three months of this year.

news source : http://www.bizjournals.com/