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Make significant charitable contributions By making a charity the beneficiary of your life insurance, you can make a much larger contribution than if you donated the cash equivalent of the policys premiums.
An MOT For The Body
By Catherine Harvey
 If you listen to all the health reports and warnings in the paper everyday you'd be a confused wreck. It seems we can't do right for doing wrong. We try to eat healthily but are bombarded with information that tells us what is good for us and what isn't, followed the following week by conflicting news about how certain health foods cause horrible diseases of one type or another.
Lifestyles, diet and health are some of the biggest issues that affect our life insurance premiums. Doctors are not huge fans of alternative therapies and prefer to go down the drug route. And this is how so many menopausal women have come to take hormone replacement therapy.
However, it would seem that HRT therapies are being held responsible for cancer cases long after the treatment is finished. The risk of breast cancer is still 27 per cent higher three years after treatment when compared with women who have never received this therapy and these are worrying statistics.
At the height of the debate of HRT and the knock on effects, over a million women in Britain ceased treatment, leaving them with the unpleasant menopausal toll on their bodies. Unpleasant, but better than cancer.
Heart disease is another impact of HRT and women are being advised to only use it if absolutely necessary and then for as short a time as possible.
Life insurance companies will be taking this into consideration which will leave you with higher premiums for longer than necessary, given that these women are trying to help themselves and relieve symptoms. It seems doctors can help one thing but this often leaves us vulnerable to other problems.
Medicine is big business and if you are concerned about your cancer risk after taking HRT you could always treat yourself to the new test that is available through private medical services. It is now possible to indulge yourself in a complete MOT for the measly price of 2,200. pounds.
The UK government are hoping to implement measures for monitoring the nation's health more accurately but the Biophysical 250 is the mother of all tests and promises to be a huge money saver for life insurance companies.
For the price of two tablespoons of blood you can have your prediction read as to whether you are likely to develop heart, blood or cancer diseases. How uplifting!
In your detailed report will be an idiots guide to your health. Of the 250 listed possible problems, there will be a colour coded guide. Red means immediate action required, amber denotes preventative action needed and green symbolises a low risk. It will cover illnesses such as heart disease, stroke, diabetes, rheumatoid arthritis, lupus, pneumonia, hormonal imbalances, vitamin and protein deficiencies as well as numerous types of cancer. Just what you want dropping through your letterbox on a Monday morning!
This comprehensive health check is being billed as an effective one stop health check but surely this is only wise if you have the private medical insurance or life insurance to cover such problems that may be thrown up. This also brings further into the light the class system so prevalent in this country.
For those who can afford private medical care, they can have the test and deal with any problems. The rest of us pay our taxes for the NHS, knowing it is completely overwhelmed already and the chances of us getting the test, or the medical aid we need, are very remote.
Wealthy people will not be affected by the hike in life insurance premiums that this brings about but the average person certainly would be. Will it one day be a case of life insurance companies insisting on us taking this test before it decided if or how it will cover us? And would this not be discrimination against those of us who can just about scrape together the money for life insurance premiums as it is?
Insurance expert Catherine Harvey looks at the effects on life insurance of new discoveries in the medical world.
Life Insurance Written In Trust Saves Millions
By Catherine Harvey
 Taking out a life insurance policy shows consideration and love to your nearest and dearest. It means you have the peace of mind that comes with knowing that, as much as possible, life for them will go on without added financial burden.
However, many people are making the mistake of not writing these life insurance policies in trust. This means that any life insurance payouts will be added to the inheritance of your family and could take them above the nil rate band for inheritance tax.
If a life insurance policy is written in trust this will enable the sum to be excluded from the overall estate of the policy holder, freeing it from inheritance tax liability. It also has the ability to speed up payouts, whether or not it would be liable for the extortionate tax.
Recent changes in the law mean that assets worth 300,000 pounds for individuals and 600,000 pounds for couples are the limit before any tax liabilities. Any assets over that amount would be subject to inheritance tax at a rate of 40%.
The latest figures to be released show that over the course of one year, 11,000 insurance policies worth a total of 597 pounds million were subject to inheritance tax. Had all these policies been written in trust, you can be quite sure that inheritance tax would not have been applicable on any of them.
Will reading and distribution of assets can be a notoriously lengthy procedure. This can be put a huge financial strain on the family. With life insurance policies that are written in trust would be paid out immediately, making things a whole lot easier.
Not putting life insurance policies in trust is costing customers millions of pounds every year in unnecessary inheritance tax. Apparently, only 10% of people write their life insurance in trust. Even if you already have a life insurance policy in place, it is possible to easily put it in trust.
Whether you purchase your life insurance over the net, over the phone or through a shop, they should all come with the chance of writing in trust. It seems odd that so few people take up this opportunity. Maybe it is a case of not getting the right advice?
Life insurance comparison websites abound but there is concern that they are not serving the customer well. It has been found that many people will take out the cheapest life insurance but this doesn't necessarily mean that is the one that is most suitable to their circumstances.
The British Insurance Brokers Association have called for the Financial Services Authority to overhaul regulations regarding these insurance comparison sites. They believe that when people check out these sites, they barely take notice of the policy details, just the price. They even take this price comparison as 'advice'. This is a good case of cheapest not always meaning best.
Whatever happened to people taking responsibility for themselves? Surely, if they take out a policy without concerning themselves with the details, they are throwing their money away. Many people take out a life insurance policy with their mortgage as is necessary but instead of shopping around will go with the mortgage providers own insurance simply because it is easier.
Take control, by all means shop around to get the best life insurance deal, but don't take one purely on the cost of the policy because it may not help very much right at the time when it is most needed.
Legal expert Catherine Harvey looks at how we can benefit from life insurance policies written in trust. To find out more please visit http://www.theidol.com/
The Real Scoop on Annuities - Part One
By Steve Selengut
 Insurance companies have always been major financial institutions, and they could probably have claimed possession of the largest and safest investment portfolios on the planet. At one time, their role vis-a-vis Wall Street was clearly that of a giant customer for the securities that the investment banks and securities firms brought to market. Their real estate holdings were religious in size and quality. They were direct lenders to corporations, their owner-policyholders, and to other institutions. They were the Trustees who managed the private employee pension plans of the world.
Insurance companies sold life insurance policies and annuity contracts that contained guaranteed benefits that depended on their ability to invest safely and soundly. They sold investment management services that built upon their legendary reputation as an industry built upon guarantees, trust, and financial integrity. They were not known for the production of unusually high rates of return, but they were one of only three entities allowed to utter the sacred g-word, and the only one that marketed products that protected people from the financial vagaries of life and death. It was a simpler world then, one less prone to the conflicts of interest, scandals, and financial disruptions that exist on the modern Wall Street.
Today, it's difficult to distinguish one financial institution from another as they compete for an ever-growing pool of investment dollars. Insurance companies, now publicly owned, have become an integral part of an industry that seems uninterested in protecting anything other than their obscenely paid leaders.
The time-honored distinction of the annuity contract was the guaranteed retirement benefit it provided. The "you will never outlive your income" boast could not be uttered by any other financial entity! The annuity contract itself was never intended to be an investment product, although the disciplined savings element was given well-deserved emphasis. This was the original old age and disability retirement program--- a contributory, trustee directed, investment account that anyone could have for a few bucks a week. Like bank savings accounts and federal government securities, risk of loss was not a factor, and the guarantee was a benefit well worth the lower than market yield.
Over a hundred years, the concept became generic: Annuity = Guarantee--- safe, solid, and virtually risk free. Equities were nowhere to be seen; derivatives had yet to come of age; neither seemed necessary. The guarantee was enough--- it still is, but annuities are really best suited to retirees,and/or the healthy poor.
Annuities were developed for the protection of the indigent--- people without the assets needed to generate enough income to sustain them in retirement. An annuity is a series of identical payments made over a specific period of time. Any departure from a plain vanilla, one-life, annuity reduces the payout because of additional time, cash back, or life contingencies. In its purist form, a fixed amount is paid to the annuitant until his or her death. Any leftover funds belong to the company, and the company continues to pay those who live longer than predicted by the actuarial tables--- a simple concept, actuarially pure, easy to deal with, and with no surprises (until the government decreed that men are required to live as long as women).
Annuitants would never outlive their income, but absolutely nothing would be passed on to their heirs; a dismal prospect for the kids, but a valuable benefit for the retiree. I don't know about you, but this sure sounds like a great way to fund a Social Security program! The companies make enough money on the plain vanilla variety to pay their salespeople between 8% and 12%. Typically, they lock-up the money for eight to twelve years with large penalties and pocket most of the additional income that their actual investment and expense experience produces--- but for those who can't fund their own retirements, this is entirely acceptable. A mandatory, fixed annuity based Social Security really needs to be considered to replace the counter-productive system in effect today.
Enter the modern day Variable Annuity oxymoron, sold by an industry that has lost touch with its noble roots, if not the realities of the stock market. The sales pitch emphasizes the prospect of gains in the market rather than the safety and security of the contract. Hundreds of insurance-annuity companies sell their Mutual Funds to unsuspecting retirees, in the form of a much-more-speculative-than-meets-the-eye retirement program. In it's zeal to claim its share of the investment dollar, the industry has rationalized away the risk of equity investments. Financial Planning computer models are programmed to include variable annuities in their asset allocations, shifting the retirement income risk to the consumer. And it's such an easy sell because what the customer hears is: a guaranteed retirement income plus stock market appreciation.
Unfortunately, the stock market never has been able to generate guaranteed levels of income, and sometimes fails to move higher just because we think it should. Serious problems occur when mutual funds are packaged with annuity contracts and the critical differences between them are either overlooked or undisclosed, perhaps innocently, perhaps not. The founding fathers of the annuity contract would not be pleased with today's glitzy versions. Let's back up a century and consider some basics. Just who needs an annuity anyway?
Keep in mind that the annuity produces the largest possible commissions for the salesperson and the largest potential penalties for the purchaser. The variable variety adds the commissions from the mutual funds to the package, and uncertainty to the income benefit. Here's how to determine if an annuity makes sense economically. Is it clear that there is no such thing as a guaranteed variable annuity? The key suitability numbers are easy to develop and to analyze.
The most important number in the equation is your personal expense estimate. How much income is needed at retirement? Always estimate conservatively (that means to use numbers higher than you really expect). If you need a calculator, you're making it too difficult.
Let's pretend that the number you decide upon is $48,000, or $4,000 per month. Next, subtract the amount of any guaranteed income you expect to receive from all sources, including social security, pensions, etc. Do not include the value of your investments or properties you plan to sell in this calculation. Again, be conservative, keeping your estimate a bit lower than what you actually expect, and make sure you know why investment earnings should not be included. Let's say that this number works out to be $27,000.
That's it. Now all you have to do is to determine if the investment portfolio can safely generate the difference of $21,000 per year in income (dividends and interest only, please). For the purposes of this analysis, the current market value of the portfolio is used, so make sure that you include the value of everything that is marketable. At today's interest rates you could get the job done safely with under $300,000 but not with normal equity mutual funds or any form of Index Fund.
It is totally irresponsible (actually, its worse than that) to rely on equities to provide retirement income. BUT, if the numbers are just short, and (a) a "windfall" (inheritance) is anticipated within a few years, or (b) the retiree is in poor health, an annuity is the last thing that should be considered! You should be able to invest the money conservatively, generate adequate income and have an estate left over for the heirs. Remember to satisfy the income need before looking at equities. There are no exceptions.
So here we have a last resort product, designed for the poor, that the industry has chrome plated, spit-polished, and supercharged for marketing to people who should know better than to include equities in an income portfolio. Why? Is it because financial pros really think these products are universally suitable? Is it the commissions? Or is RISK just a board game that they played in college?
Steve Selengut
Sanco Services
Value Stock Index
Author: "The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read" and "A Millionaire's Secret Investment Strategy".
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