Family Income Benefit Insurance

 By Michael Markey 

Family income benefit or as it is sometimes known FIB is another kind of term insurance and is often used to provide life insurance coverage, but more specifically income based life protection. You need to understand the difference between family income benefit and other types of life insurance cover, so that you fully understand the type of life insurance you require.

Let's consider first the difference between the two types of life cover. Level term insurance will generally pay a lump sum during the policy term, while family income benefit will pay an income for each year that is left on the policy. It is important to remember this, as this can determine how much will be paid out in the event of a claim.

The best way to illustrate difference is to through an example. For instance Mr White takes out a £250000 level term insurance policy on a 20 year term to protect his family, because he has dependent children of a young age. Mr Black decides to take out a family income benefit insurance policy for £15000 per year over same term of 20 years, to provide cover for his own young family.
 
However, though £ 15,000 per year will add up to £300000 over the term of 20 years, this does not mean this amount will be paid out. If the cover pays out the first year this is fine £15000 will be paid for every year left on the policy i.e. 20 years. But what if Mr Black dies 18 years into the policy term, then only £30000 would be payable over the remaining period of the policy i.e. 2 x £15000. However if Mr.White died in the first, second or last year of his level term policy, his family would still receive £ 250000 as it does not matter so to speak when he dies, the level lump sum will pay same amount within the policy term,£250000

So you can easily work out from the example above that family income benefit insurance is a form of decreasing term assurance under another name. Who would buy family income benefit and why? Well people who want to save on life policy premiums might consider buying this type of cover. The price is usually lower than level term assurance, because the benefit is reducing each year as we have seen in our example above. Hopefully you will now see the difference between the two insurances and from our example, be able to decide what type of policy you need or want. It all comes down to cost and what you need life cover for in the first place. If you are on a budget then family income benefit is an option to consider, but compare it against other types of cover first, before deciding.

Article Source: http://EzineArticles.com/6555820

Invest in Fixed Income Fund for Long Term

By Nisha M Dixit 

Fixed income connotes a type of investment that does not deal with equity. Investments that are classified as such income, obligates the issuer/borrower to make regular payments at a pre-determined schedule.

Another meaning that can be derived from the term 'fixed income' is that it relates to a person's incoming cash flow that does not change with each given period. This may include incomes that are derived from investment instruments such as preferred stocks, bonds or even pensions that assure a fixed income. When retirees and pensioners are dependent on their post-retirement benefits as their only source of income, the term also carry a connotation that these retired people have limited discretionary income.

They are a good way by which one can diversify their investment portfolio. But, much clarity is required to understand what fixed income funds are?

Fixed income funds are a type of mutual funds that invest in municipal bonds, corporate bonds, treasury bills, etc. Fixed income funds come in many styles and shapes. In India, these funds are also referred to as income funds and debt funds.

Funds that are classified as fixed income typically make investments in debt securities which are issued by companies, banks, government or financial institutions. The various types of debt-securities in which a mutual fund invest are known as treasury bills and commercial papers of deposit. The instrument is categorized based on its maturity period. For instance, the debt securities are known as debentures and bonds, if their maturity period is more than one year; subsequently, if the maturity period is less than a year than they are referred to as commercial papers or treasury bills.

The borrower/issuer of these debt securities is obliged to pay the principal along with interest at the time period agreed upon.

These funds have a face value on which the rate of interest is calculated. Usually an investor who wants to invest in this fund is chiefly concerned with the face value, rate of interest, rate of interest payment, maturity value and time period. On an average, these funds are held till maturity unlike other mutual funds that see a lot of attrition.

In order to have long-term financial stability investing in gold funds is also the right thing to do. It is always advisable to have some amount of your liquidity to be invested in this precious metal. Gold has gained a reputation of acting as a hedge against inflation. As the rate of inflation rises, the money that you have will be less valuable. But on the other hand, gold being a rare and precious metal, its value will continue to ascend. That means the investment done in gold funds will never lose its value.

Article Source: http://EzineArticles.com/6575795



Need to Save Some Money on Your Insurance? Here Are Some Tips

 By Paul R Tetu 

With the economy still struggling to restore its former prominence, saving money wherever possible is one of the major priorities of Americans everywhere. Insurance is a necessary expense, but can also be very expensive. We've compiled tips from some of the insurance industry's more savvy experts to help you get as much of the cost of that pricy policy back into your pocket: where you need it most.

Sometimes it can be hard to discern between what coverages you need and which you can live (happily) without. If you drive a car with a lower market value (you can find out how much your car is worth from Kelley Blue Book), consider skipping collision and comprehensive coverage on your policy. Often times these coverages aren't worth the cost because your car's repairs may not even exceed your deductible amount (the amount you must pay before your insurance will cover the rest).

Speaking of deductibles, if you raise your deductible to a high amount -- something like $500 or $1000, you could save as much as 15-40% or more. Stay-at-home parents and experienced, careful, drivers who only travel locally may want to consider this. For local drivers, try to organize a carpool with co-workers and friends; so-called "low-mileage" discounts are common for the insured driver who drives less than the average American (usually about 10,000 miles annually). Beware of a high deductible on your newly-driving teenager's policy in the case that they get into an accident, as you could end up paying a lot more.

While I'm talking about teen drivers, remember to include your new driver on the family policy and not one alone by themselves. Teenagers with their own policies pay a significantly higher amount. Additionally, if your child has good grades or passed an acceptable driver's education class, you can also save some more money with most insurance providers.

Consider only purchasing the minimum personal injury protection required by California if your health, life, and disability coverage is strong enough. Overlapping medical coverage can cost a lot more than one may realize.

When purchasing a vehicle new-to-you, try to get as many safety features as possible. Everyone knows about anti-theft systems and air bags, but daytime running lights, anti-lock brakes, and electronic stability control (ESC, or traction control) systems also reduce the cost. A more subtle car will also get you some brownie points with your provider. The safer, less expensive to repair (and less expensive, in general), less-stolen cars will always be cheaper to insure than that convertible Ferrari you've been wanting. To find out how much of a risk your car or potential new ride might be, surf the web over to the Insurance Institute for Highway Safety.
Keep all your recreational vehicles, cars, trucks, and trailers on the same policy. To save even more, switch your homeowners, life, or even commercial (business) insurance to the same insurance provider.

Also pay attention to the condition of your vehicle. Cars that have been in previous accidents or with worn-out components may end up costing you a lot more than you realize. Make sure to keep up-to-date with your regular vehicle inspections and check-ups as a faulty or broken component could cause an accident, costing you a lot more than the price of fixing or replacing bad parts.

Drivers older than 50 to 55 or so (or retired drivers) may also be eligible for a discount. Safe-driver discounts are available to those who drive without incident (accidents or moving violations) for three years or more. Insurance policy-holders who stay with the same company for a significant amount of time usually also save money on their policy with their providers.

Article Source: http://EzineArticles.com/6486934

Important Tips for Savings and Investments

By Mark Oral 

Below is a discussion of several important tips for savings and investments that can be considered when developing a saving plan.

Save Regularly
No matter how old a person is, it is important to put money toward saving and investing regularly, as the benefit of accumulated funds is one of the most important factors of wealth accumulation. Even if only a small amount of money can be set aside at a time, regular contributions to saving plans will grow over time and will result in the accumulation of funds. Additionally, many saving vehicles include the possibility of the benefit of compounded interest, which can translate into the growth of a saver's contributions over time.

Diversify
While saving cash is great, especially if the cash contributions are intended for a short term saving plan, it is important for the saver to consider several different saving vehicles. Saving plans available vary, but in order to take advantage of the many benefits available, diversifying with several different strategies is most desirable and may result in even greater saving. Each financial portfolio should include safe, conservative options for the security of funds, and more aggressive options for growth opportunity. Not every investment type is right for everyone. It is important for the saver to consider his or her risk tolerance and long term financial goals.

Take Advantage of Tax Benefits
There are many programs and benefits available that will reduce the amount of taxes that are paid on a saver's income. The best advice is to seek out the investments and savings plans that offer the greatest tax benefits. Over time, these plans can result in great saving and lead to great financial growth.

Plan for the Long Term
Whether a person begins saving in the teenage years or as an adult nearing retirement age, the priority should be placed on a long term perspective. It is important that short term funds are available in case of emergency, but by committing to a disciplined approach to regular saving that is diversified and takes advantage of tax benefits, the funds will automatically be there in case of a financial emergency.
It can be challenging for families to find extra money to contribute to a saving or investment account. Living a lifestyle within, or even below, one's means may be required to achieve financial independence. It is crucial, however, that a specific plan is in place for an individual's financial security. Research into the many different options available should be conducted and it would be prudent to consult a financial professional for guidance.
By using the above tips, the average person can be confident that their money will grow over time and provide for his or her family needs. The most important tip, however, is to be disciplined and consistent. Only then can the greatest rewards be reaped.

Article Source: http://EzineArticles.com/6402010

Unit Linked Insurance Plans

 By Jennie Kakkad 

Higher the rate of inflation, lesser is the value of money. This is a thumb rule to be kept in mind while making any long-term investment. Generally, at the time of making the investment, the return promised at maturity, usually 10-20 years, looks attractive. But when the realized amount is received on the maturity date, its value normally gets reduced to peanuts. This is because the rate of return could not match to the rate of rising inflation and other economic variables.

To overcome such glaring gaps, a Unit Linked Insurance Plan (ULIP) is introduced that help investors to get a fair return on their investments. It is a type of an insurance policy where the value of the policy changes with the market trends. It is basically a combination of an insurance policy and a mutual fund aimed at providing both flexibility and stability for the investment. In simple words, it can be said that the returns are market-linked in a ULIP.
In a ULIP, the policy taker receives a certain number of units, according to the amount of investment he wishes to make, at their existing net asset value (NAV). The amount invested in the plan is further re-invested in different portfolios like that of stocks, debentures, futures, etc. Therefore, as the value of the portfolio changes, the NAV varies accordingly. For instance, in a bullish market, the NAV will increase thereby increasing the value of the units and the overall ULIP.

ULIPs are ideal for investors who prefer secured investments but are ready to take a small degree of risk for better returns. Just like in any pure life insurance contract¸ the money is paid to the beneficiary in the event of death of the policyholder. Similarly, in a ULIP, the money is benefits of the plan are extended to the family or other beneficiaries in case of the unfortunate happening.

A wide range of ULIPs, with different features and benefits, are offered by almost all the insurance companies. You can choose a plan depending upon the desired investment amount, tenure, and the expected return. The companies have a team of professionals who can visit you personally and explain the benefits of different policies.

Article Source: http://EzineArticles.com/6607321

Are Mutual Funds a Smart Investment With Limited Funds?

By Mark T. Sullivan 

 

When someone has little money to invest with, they want to be very careful about where they choose to put the funds they have. This is understandable, since there are always risks involved with making an investment. Mutual funds, for many reasons, are a fairly smart investment for someone who is not working with very large amounts of money.

Someone who does not have a lot of money to invest may be in that situation because they are new to the investing game. Mutual funds are great for these beginners because most companies go out of their way to make it as easy as possible to do business with them. Investors have the option to handle their finances either over the phone or online. In addition, they can buy or sell their mutual funds on any business day.

One benefit that investors with a lot of money have is that they are usually able to hire a money manager to keep an eye on their stocks. A mutual fund comes with a fund manager that keeps up with what is going on with all of the stocks in the fund. This is a great way to level the playing field for people who otherwise would need to manage all of their own investments and may not have the knowledge to do so properly.

One of the best ways to protect against risk in investments is by building a diverse portfolio that provides a safety net if one stock happens to fail. However, by the time someone purchases a variety of stocks and pays all of the transaction fees, it could cost a fortune. A single, easy to buy mutual fund could hold hundreds of securities, allowing an investor to diversify their portfolio without breaking the bank.

A mutual fund is also a great idea for someone who does not have a lot of money to invest because they often have low minimum investments. With some stocks, the minimum investment could be upwards from twenty-thousand dollars, and this is just not possible for many people. It is often possible to invest in a fund for just a few thousand or even a few hundred dollars.

Just because someone does not have a ton of money to play around with does not mean that they cannot get involved with investing. Mutual funds are an excellent option for someone who wants to invest with minimal funds. They allow investors to diversify their portfolio and manage their money effectively without spending more than they can afford.

Article Source: http://EzineArticles.com/4638112

Over 50s Life Insurance Cover

 By Kevin McNally 

Before taking out any kind of over 50's life insurance cover it is a good idea to look at a number of different policies first. Today it is very simple to get a number of quotes from a number of different companies online for this particular type of insurance cover.

In most cases the policies now available to the over 50's will cover the applicant fully and in the event of their death a lump sum will then be paid to their family. However, this some will only be paid if a person dies during the term of the policy and not after it has ended.

This form of insurance can either be taken out by one person or by couples and this will then be in joint names. However, on a couples policy if one person dies then only one payment will be made to the other if it happens during the term of the policy.

These policies are ideal if you want tobe in a situation of leaving your family some cash after you have died which can then be used to pay towards the funeral expenses. Sometimes a person or a couple may take this type of policy out in order to ensure that any outstanding debts that they may have are paid off. But whatever reason you choose to take out such a policy it is crucial that you spend some time doing a little research and getting a number of quotes before making that all important final decision.

Article Source: http://EzineArticles.com/1199333