New Kid on the Block: Indexed Universal Life
Whole life insurance has been around for over 150 years. Universal life was introduced in the early 1980's. Universal Life offered the ability to increase or decrease the premium and death benefit and credited the cash values each year with a current interest rate. Variable life followed, which allowed policy owners to invest their cash values in equities. All three have their plusses and minuses.
Now there is a new kid on the block: Indexed Universal Life.
Here are the salient features:
1. Indexed Universal Life (IUL) is similar to Universal Life (UL); premiums and death benefits are flexible. You can increase or decrease premiums, or even stop them altogether. As your situation changes, you can decrease or increase (subject to insurability) the death benefit.
2. IUL is similar to Variable Life (VL) or Variable Universal Life (VUL) as the cash value is based on the increases of one or more stock indexes. The most common are the DJIA, NASDAQ 100 and the S & P 500.
Variable Life contracts allow direct investment in equities, much like a mutual fund. Indexed Universal Life policies do not invest directly in equities, so you do not have the same downside risk. The insurance company assumes all the risk.
If the index that you have chosen goes up over a given time frame (usually one year), your cash value goes up. However, if the index goes down, your cash value either stays the same or is credited with a minimum guaranteed interest rate, i.e. 2%.
3. How cool is that? If the market goes up, you get to participate in the growth. However, if the market goes down, your account doesn't go down; it stays the same. It gets even better. Any gains are locked in. They can never be taken away due to future decreases in the market. It's like walking up a flight of stairs. If the market goes up, you take a step up; if the market goes down, you stay where you are.
4. Indexed Universal Life has only been around for a few years. Only a few companies offer this contract. However, since 2000 the annual growth rate for this type of policy has been 24%.
When you speak with your life insurance agent about IUL, there are a few new terms you will need to understand:
1. Crediting Options
Crediting options are the math behind how the insurance company determines how much to credit your cash value at the end of each crediting period. The two most common are point to point and monthly average.
Point to point looks at the value of the stock index you chose at the beginning of each contract year and compares it to the value at the end of the point-to-point period. This is normally one year, but could be 2 or 5 years, depending on your contract choice.
Whatever happens in the interim doesn't matter. You could have a very high growth rate if the market and the corresponding index have a growth spurt during the last few months of the term. On the other hand, you could end up with a healthy loss if the index takes a dive during the latter part of your term with what to a regular investor would be a gain for the year.
The monthly average method takes a reading of the index each month. Then at the end of the year, adds them up and divides by twelve. This approach tends to smooth out the fluctuations.
Which one is better? It depends on your tolerance for risk and how the market performs during your policy's time frame. Since a life insurance policy is a long-term proposition, in the real world both should end up about the same over an extended period of time.
2. Participation Rate
Participation rate is the percentage of the increase in the index credited to your Indexed Universal Life policy each year. It could be, for example, 55%, 80%, 100% or 135%. Any given percentage rate is not necessarily better than another. It is simply the insurance company’s way of factoring in their downside risk and is a component that allows you to negate a cash value decrease if the market goes down.
3. Cap Rate
The cap rate is the maximum rate of return the insurance company will credit to your policy each year. For example, if the cap rate is 12% and the index you chose went up 10%, your policy is credited with a 10% gain. However, if the index increased 15%, your policy is credited with 12%, the cap. Not all Indexed Universal Life contracts have a cap. Participation rates and cap rates work in conjunction with each other.
Indexed Universal Life is an exciting new approach. If you are looking for a rate of return that is higher than traditional whole life or universal life, but don't want the market risk of variable life, indexed universal life may be for you. The fact that the cash values are based on the performance of the equity market, coupled with the feature that prevents loses and locks in gains should be enough to warrant further exploration.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate and to claim the free video, "How to Sell Your Life Insurance Policy for More than the Cash Value", go to http://theestatepreservationadvisor.com/rd/subscribe.htm
Great reasons to invest in Costa Del Sol
There are a few things in life that will make your heart truly happy. One of those things is to invest in Costa Del Sol. Boasting of 320 days of pure sunshine; it is easy to see why you should invest in Costa Del Sol. It is not only a great place to visit but an ideal location to buy some real estate, either for investment or for residence.
Great return on investment: It is a good decision to invest in Costa Del Sol. It is reported that most investors secure a 40% hike in value. Those who invested in property back in 2001 reaped a tremendous return on their investment. Several years have gone by since then but the value of property in only on the increase. In comparison you will not find a better place to live than picturesque Costa Del Sol.
Great infrastructure: Earlier, many Europeans did not want to invest in Costa Del Sol due to its poor infrastructure. However, things have changed for the better. The location is easily accessible by road and air. Extensive motorways and an international airport add to the attraction.
Great facilities: To invest in Costa Del Sol is not a risky venture. You will find very good schools and colleges. The public hospitals and clinics are efficiently run. The quality of medical care is above average and you will have no difficulty in finding quality medical services.
Great economy and employment: The opportunities are endless so you can safely go ahead and invest in Costa Del Sol. The economy has been flourishing and you will find ample avenues to find good employment. The markets are filled with foreign imports so you can be assured of living a high standard of life.
Great entertainment: If you are planning to invest in Costa Del Sol, you will be glad to know that this location has several hot spots where you can enjoy your time. If you are a golf enthusiast you will enjoy the forty golf courses. For those who love to shop there are several malls that can keep you busy. If sport is to your liking then there are several activities that you can indulge which include boating and gaming. The leisure industry in Costa Del Sol is one of the finest anywhere. Experiences include yachting, sailing, runs along the beach and of course, a beautiful sunset. It also boasts of some of the finest nightlife on the planet. So do not hesitate to invest in Costa Del Sol.
Great retirement destination: A lot of people invest in Costa Del Sol not only because it is a wise investment decision but because it is a great place to retire. Blue skies and sunshine are property rights that everyone in Costa Del Sol gets free.
Great options: From townhouses and plots to apartments and villas, you have many options to choose from. To invest in Costa Del Sol, you just need to decide which is more suitable and lucrative for you. You can even invest in the second hand market. Be sure to get some expert advice before you take a final investment decision.
------
Steve Magill is the right source for more information on the Spanish mortgage market. He is a partner in http://www.buyspain.co.uk and a Fellow in the British Association of Entrepreneurs (FBAE). He holds international renown for having hands-on experience in this field.
Child Health Insurance - How to Get the Best Rate
From well-baby checks and vaccinations to ear infections and strep throats, kids spend a lot of time at the doctor’s office - even healthy kids. That is why you need health insurance for your child. How can you get the best rate for health insurance for your child? Here's how ...
Your Health Insurance Options
If you're lucky, your employer will offer health insurance you can purchase that will cover you and your family. Alternatively, you may qualify for public health insurance programs offered through the government. But if your employer doesn’t offer insurance and you don’t qualify for public insurance, you'll need to purchase private health insurance for your child.
Find the Best Rates
Private health insurance can be expensive. To help you get the best rate for your child health insurance, visit an insurance comparison website. On such a website, you can complete one simple form and get fast quotes from multiple A-rated health insurance companies.
The best websites even let you talk with insurance professionals online so you can ask questions and make sure you choose the best health insurance for your child. (See link below.)
Compare Plans
Once you have quotes from multiple health insurance companies, you can compare them to find out which is the best for your child. In addition to looking at which company offers the lowest rate, consider the following questions:
* Does the insurance cover well-baby and well-child visits and regular vaccinations?
* Does the insurance offer basic coverage only (hospitalization and inpatient /outpatient surgery), or does it also cover such items as doctor visits, preventative care, and prescriptions.
* Are dental and vision coverage included?
* What is the deductible and co-pay?
* Does your preferred doctor and hospital accept this insurance?
* Are there any limits on how much the insurance company will pay annually or over your child’s lifetime?
* If your child has any pre-existing conditions, will this insurance company cover treatment for it?
Visit http://www.LowerRateQuotes.com/health-insurance.html or click on the following link to get child health insurance quotes from top insurance companies and see how much you can save. You can also get more insurance tips there.
The authors, Brian Stevens and Stacey Schifferdecker, have spent 30 years in the insurance and finance industries, and have written a number of articles on child health insurance.
Now there is a new kid on the block: Indexed Universal Life.
Here are the salient features:
1. Indexed Universal Life (IUL) is similar to Universal Life (UL); premiums and death benefits are flexible. You can increase or decrease premiums, or even stop them altogether. As your situation changes, you can decrease or increase (subject to insurability) the death benefit.
2. IUL is similar to Variable Life (VL) or Variable Universal Life (VUL) as the cash value is based on the increases of one or more stock indexes. The most common are the DJIA, NASDAQ 100 and the S & P 500.
Variable Life contracts allow direct investment in equities, much like a mutual fund. Indexed Universal Life policies do not invest directly in equities, so you do not have the same downside risk. The insurance company assumes all the risk.
If the index that you have chosen goes up over a given time frame (usually one year), your cash value goes up. However, if the index goes down, your cash value either stays the same or is credited with a minimum guaranteed interest rate, i.e. 2%.
3. How cool is that? If the market goes up, you get to participate in the growth. However, if the market goes down, your account doesn't go down; it stays the same. It gets even better. Any gains are locked in. They can never be taken away due to future decreases in the market. It's like walking up a flight of stairs. If the market goes up, you take a step up; if the market goes down, you stay where you are.
4. Indexed Universal Life has only been around for a few years. Only a few companies offer this contract. However, since 2000 the annual growth rate for this type of policy has been 24%.
When you speak with your life insurance agent about IUL, there are a few new terms you will need to understand:
1. Crediting Options
Crediting options are the math behind how the insurance company determines how much to credit your cash value at the end of each crediting period. The two most common are point to point and monthly average.
Point to point looks at the value of the stock index you chose at the beginning of each contract year and compares it to the value at the end of the point-to-point period. This is normally one year, but could be 2 or 5 years, depending on your contract choice.
Whatever happens in the interim doesn't matter. You could have a very high growth rate if the market and the corresponding index have a growth spurt during the last few months of the term. On the other hand, you could end up with a healthy loss if the index takes a dive during the latter part of your term with what to a regular investor would be a gain for the year.
The monthly average method takes a reading of the index each month. Then at the end of the year, adds them up and divides by twelve. This approach tends to smooth out the fluctuations.
Which one is better? It depends on your tolerance for risk and how the market performs during your policy's time frame. Since a life insurance policy is a long-term proposition, in the real world both should end up about the same over an extended period of time.
2. Participation Rate
Participation rate is the percentage of the increase in the index credited to your Indexed Universal Life policy each year. It could be, for example, 55%, 80%, 100% or 135%. Any given percentage rate is not necessarily better than another. It is simply the insurance company’s way of factoring in their downside risk and is a component that allows you to negate a cash value decrease if the market goes down.
3. Cap Rate
The cap rate is the maximum rate of return the insurance company will credit to your policy each year. For example, if the cap rate is 12% and the index you chose went up 10%, your policy is credited with a 10% gain. However, if the index increased 15%, your policy is credited with 12%, the cap. Not all Indexed Universal Life contracts have a cap. Participation rates and cap rates work in conjunction with each other.
Indexed Universal Life is an exciting new approach. If you are looking for a rate of return that is higher than traditional whole life or universal life, but don't want the market risk of variable life, indexed universal life may be for you. The fact that the cash values are based on the performance of the equity market, coupled with the feature that prevents loses and locks in gains should be enough to warrant further exploration.
Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate and to claim the free video, "How to Sell Your Life Insurance Policy for More than the Cash Value", go to http://theestatepreservationadvisor.com/rd/subscribe.htm
Great reasons to invest in Costa Del Sol
There are a few things in life that will make your heart truly happy. One of those things is to invest in Costa Del Sol. Boasting of 320 days of pure sunshine; it is easy to see why you should invest in Costa Del Sol. It is not only a great place to visit but an ideal location to buy some real estate, either for investment or for residence.
Great return on investment: It is a good decision to invest in Costa Del Sol. It is reported that most investors secure a 40% hike in value. Those who invested in property back in 2001 reaped a tremendous return on their investment. Several years have gone by since then but the value of property in only on the increase. In comparison you will not find a better place to live than picturesque Costa Del Sol.
Great infrastructure: Earlier, many Europeans did not want to invest in Costa Del Sol due to its poor infrastructure. However, things have changed for the better. The location is easily accessible by road and air. Extensive motorways and an international airport add to the attraction.
Great facilities: To invest in Costa Del Sol is not a risky venture. You will find very good schools and colleges. The public hospitals and clinics are efficiently run. The quality of medical care is above average and you will have no difficulty in finding quality medical services.
Great economy and employment: The opportunities are endless so you can safely go ahead and invest in Costa Del Sol. The economy has been flourishing and you will find ample avenues to find good employment. The markets are filled with foreign imports so you can be assured of living a high standard of life.
Great entertainment: If you are planning to invest in Costa Del Sol, you will be glad to know that this location has several hot spots where you can enjoy your time. If you are a golf enthusiast you will enjoy the forty golf courses. For those who love to shop there are several malls that can keep you busy. If sport is to your liking then there are several activities that you can indulge which include boating and gaming. The leisure industry in Costa Del Sol is one of the finest anywhere. Experiences include yachting, sailing, runs along the beach and of course, a beautiful sunset. It also boasts of some of the finest nightlife on the planet. So do not hesitate to invest in Costa Del Sol.
Great retirement destination: A lot of people invest in Costa Del Sol not only because it is a wise investment decision but because it is a great place to retire. Blue skies and sunshine are property rights that everyone in Costa Del Sol gets free.
Great options: From townhouses and plots to apartments and villas, you have many options to choose from. To invest in Costa Del Sol, you just need to decide which is more suitable and lucrative for you. You can even invest in the second hand market. Be sure to get some expert advice before you take a final investment decision.
------
Steve Magill is the right source for more information on the Spanish mortgage market. He is a partner in http://www.buyspain.co.uk and a Fellow in the British Association of Entrepreneurs (FBAE). He holds international renown for having hands-on experience in this field.
Child Health Insurance - How to Get the Best Rate
From well-baby checks and vaccinations to ear infections and strep throats, kids spend a lot of time at the doctor’s office - even healthy kids. That is why you need health insurance for your child. How can you get the best rate for health insurance for your child? Here's how ...
Your Health Insurance Options
If you're lucky, your employer will offer health insurance you can purchase that will cover you and your family. Alternatively, you may qualify for public health insurance programs offered through the government. But if your employer doesn’t offer insurance and you don’t qualify for public insurance, you'll need to purchase private health insurance for your child.
Find the Best Rates
Private health insurance can be expensive. To help you get the best rate for your child health insurance, visit an insurance comparison website. On such a website, you can complete one simple form and get fast quotes from multiple A-rated health insurance companies.
The best websites even let you talk with insurance professionals online so you can ask questions and make sure you choose the best health insurance for your child. (See link below.)
Compare Plans
Once you have quotes from multiple health insurance companies, you can compare them to find out which is the best for your child. In addition to looking at which company offers the lowest rate, consider the following questions:
* Does the insurance cover well-baby and well-child visits and regular vaccinations?
* Does the insurance offer basic coverage only (hospitalization and inpatient /outpatient surgery), or does it also cover such items as doctor visits, preventative care, and prescriptions.
* Are dental and vision coverage included?
* What is the deductible and co-pay?
* Does your preferred doctor and hospital accept this insurance?
* Are there any limits on how much the insurance company will pay annually or over your child’s lifetime?
* If your child has any pre-existing conditions, will this insurance company cover treatment for it?
Visit http://www.LowerRateQuotes.com/health-insurance.html or click on the following link to get child health insurance quotes from top insurance companies and see how much you can save. You can also get more insurance tips there.
The authors, Brian Stevens and Stacey Schifferdecker, have spent 30 years in the insurance and finance industries, and have written a number of articles on child health insurance.