As an agent, if I were to ask this question in an appointment, some may think it's just a selling tactic. On one hand they are right, we are having to sell to make a living and we make a living by selling insurance. On the other hand though:
-- The honest agents out there will sell you what you NEED, not what they want you to need.
-- It's a valid question.
There are many trains of thought on life insurance. Don't ever buy life insurance strictly as an investment tool. As an investment tool, it's really not all that good. Go out and find a high risk mutual fund instead. If you are purchasing it to suppliment income in case of an unexpected loss, you are on the right track.
Fact of the matter is, most put more value into their homes and cars than they do with their own lives. Why would you take the time and energy to shop and purchase home or auto insurance, but not even give insuring your own life a second thought?
------------------
http://ia.rediff.com/getahead/2008/jan/21reader.htm
Insurance: 'Is your car worth more than your life?'
January 21, 2008
We asked you to send in your experiences about the financial mistakes you made in 2007 and how you plan to make 2008 a financial success.
Ravindra G, a project manager and regular Get Ahead reader from Bengalooru talks about how he bought the right insurance policy despite pressures from his family and peers to buy another product.
Have you ever asked yourself 'How much am I worth'? I am not talking about your net asset worth, or your liability worth or your liquidity worth. I am asking about what the insurance company will pay your family in case of any unfortunate eventuality. The answer will come as a shocker to most of us. A majority of us will be worth around Rs 5-10 lakhs only.
I was living in the US for 5 years before coming back to India in 2001 and was looking for ways of investing money.
I talked to my aunt who is a banker and my mother who is a teacher. Both of them unanimously asked me to get an insurance policy as it would fetch me returns in the long term and moreover do what it is supposed to do, insure my life. Great, I thought and started talking to an uncle, a family friend, a friend's dad and a sundry more, all of them insurance agents.
Everyone had almost the same product to offer, Rs 5-10 lakh insurance cover with an accident rider, returns in the form of endowments, money back or pension and finally, the most important aspect of all, tax saving. All the products were more or less the same and had purposeful names.
I was armed with a lot of information and was ready to buy some policy or the other which would give me Rs 10 lakhs coverage and a lot of returns. Then a young insurance agent arrived and he changed the way I perceived insurance and investment. He asked me a lot of questions about my salary and my expenditure, my expensive gadgets, investments etc, made notes and left promising to get back to me the next day.
No one else had done this before, they just offered their products. This guy was great; he was selling to me what I wanted rather than what he wanted to sell. An excellent salesman!
He came back the next day saying that if something were to happen to me, my family would be able to continue with the same lifestyle provided my life is covered for Rs 40 lakhs. I was happy, "Yes, I am worth Rs 40 lakhs. I want that insurance, baby," was my initial reaction.
He also said that the cover was for 20 years and after that I would get back around Rs 50- 60 lakhs based on the then market conditions. However he did not commit the exact amount.
Then came the real scary part; the premium I had to pay would be Rs 1.2 lakhs a year. "Are you crazy, I have a salary of Rs 5 lakhs a year and I have to pay Rs 1.2 lakhs a year as insurance premium?" I thought.
I said that it was impossible for me to pay that much money. He immediately offered me the traditional Rs 10 lakh insurance saying that the premium would be lesser by around Rs 20-30k per year. I politely asked him for time and sent him away.
Then my mind set off rolling. I definitely wanted to get my life covered for Rs 40 lakhs as that is what my life is worth. But I did not want to pay a premium of Rs 1.2 lakhs. In the US my life was insured for one million dollars automatically the moment I started to work in my first company.
I did a lot of research and found out that the solution to my high life coverage policy with a smaller premium was term insurance. The cheapest insurance cover that one can buy and one MUST buy.
It is just the same as your home insurance against natural calamities and theft, your car insurance against accidents and theft etc. That is, you pay a premium and will get back the sum assured only in case of damage, accident or death in an individual's case.
This is pure insurance. This is how you can get high life coverage.
This is how you pay a minimum premium (mostly around Rs 250-300 per year per lakh).
This is how even the endowments policies and other money back policies work.
What I mean is when you go for an endowments/money back policy by paying premium of say Rs 10,000 for a life cover of Rs 5 lakhs, your premium amount goes for the following.
~ Rs 1,500 for buying primary insurance for Rs 5 lakhs. (Rs 250-300 per lakh)
~ Your friendly agent's commission. Around 35-50 per cent for the first premium and around 5-10 per cent for every renewal thereafter
~ The balance goes towards buying government bonds, infrastructure funds or in equity (as in the case of ULIPs)
And what are you getting in return? Paltry life coverage of Rs 5 lakhs! And a final return which might just be able to beat the inflation rate when your policy matures. But isn't it the life coverage that you were looking for initially?
Now you know why your insurance agent offers to give you a 30 per cent discount on your first premium.
Now you know why s/he sometimes pays the premium on your behalf and later gets it from you.
Now you know why so many individuals have left their full time jobs at the bank and other government organisations to become insurance agents.
Great profession I thought. In the US people do not sell insurance, insurance sells itself.
The bottom line is never combine insurance with investment.
If you get back money while you are alive, it is not insurance. You can get Rs 40 lakhs insurance cover for Rs 10,000 premium if you opt for a term policy.
You are paying Rs 10-15k per year insurance for your mid-sized car and never think of returns. So why do you always think what you should get back returns when you want an insurance policy. Is your car worth more than your life?
I discussed all this with my family friend agent and a couple of days later, my mom and aunt scolded me for not opting for money back policies. I wonder how news leaked so fast!
My agent uncle once asked me to take insurance as he was unable to meet his targets. He asked me to pay a couple of thousands as premium per year for Rs 2 lakhs insurance. His son, my mother, my aunt and many other relatives bought policies from him. I asked him to give me a term policy.
He never got back to me. He thought I was crazy as all the people he knew (and as a matter of fact I know) had insurance coverage of Rs 5-10 lakhs and were happily paying Rs 10-20k as premium every year.
Having said all that, here is a short take on why one must go for term insurance instead of money back policies.
Money back policies
Term insurance
High premium
Low premium
Low risk coverage
High risk coverage
Beneficial to agent
Beneficial to individual
Premium decreases with increase in term
Premium increases with increase in term
Beneficial to insurance companies
Beneficial to individual
Little risk to insurance company
High risk to insurance company
Encouraged by agents
Discouraged by agents
Incentives provided by agents
No incentives are provided by agents
This is not insurance but investment
This is pure insurance
Tax deduction
Tax deduction
There are two golden rules you must follow when you buy life insurance
~ Never combine insurance with investment, that is, money back policy and ULIPs
~ Do not forget rule number one above
Tuesday, January 22, 2008
Monday, January 14, 2008
What is your insurance company doing for you?
So obviously I talk to many people daily about insurance and finances. I am consistently reviewing coverages to determine if they have a good deal currently and if I can help them better their situation. Here are a few things I notice on a daily basis:
-- People don't know what their insurance coverages are. Do you know what your current Automobile coverages are? Did you know that the minimum requirements in the State of Texas are about to go up? If you were to accidentally hit the Lexus SUV with a mom and her kids, would you have enough coverage? One bit of advice...never have only the minimum coverages. Please. Also, it doesn't cost much at all to add on Uninsured Motorist coverage...just do it.
-- People tend to shop way too much on cost and not enough on value. Hey, as I tell most of my clients, we will sometimes beat the competition as far as price goes and sometimes we won't. For those who end up nickling and diming me as far as the rate is concerned, I tend to just say thank you very much and good luck. I can understand if someone doesn't like a higher rate when you are paying 4 or 5 hundred more per year, but when someone is shopping a rate around to better it by a few bucks, it makes me question what is really important. Remember, you get what you pay for...that is the same in insurance as it is anywhere else.
-- People tend to put more important into their auto or home insurance instead of life insurance. Why? Do you really have enough money right now to take care of everyone if you were to pass away? I'm not talking about in 10 or 15 years when you've supposedly decided to take the money and invest it. I'm talking about right now... If you don't at least have a term life insurance policy to cover you right now while you are building your nest egg...you need to get one.
-- More and more right now are forced to call into a phone bank in another state when it comes to customer service or claims. Most companies have these call centers, even the big ones and the most respected ones, but are you with a company that doesn't also have local service? If so, you need to re-look at the situation. Is there claims and customer service close by? I know with us, I can sell someone in Houston or Dallas (I'm in the Austin area) and they can be helped customer service wise by a team of service people right in their area. That's important.
-- People sometimes stay with a company because they feel a loyalty to them. Loyalty is good, especially when it's deserved. If that agent is a great help, contacts you consistently, helps when needed and the service has been good...it's a good thing to have this loyalty. Unfortunately many have loyalty based on length of time with the company as opposed to actual service. Just because you've been with XYZ Insurance Company for 20 years doesn't mean they care more about you than they do the guy whose been there only for 5 years. Be loyal when it's a smart decision for you personally.
Let me know if I can answer any questions for you. Thanks!
-- People don't know what their insurance coverages are. Do you know what your current Automobile coverages are? Did you know that the minimum requirements in the State of Texas are about to go up? If you were to accidentally hit the Lexus SUV with a mom and her kids, would you have enough coverage? One bit of advice...never have only the minimum coverages. Please. Also, it doesn't cost much at all to add on Uninsured Motorist coverage...just do it.
-- People tend to shop way too much on cost and not enough on value. Hey, as I tell most of my clients, we will sometimes beat the competition as far as price goes and sometimes we won't. For those who end up nickling and diming me as far as the rate is concerned, I tend to just say thank you very much and good luck. I can understand if someone doesn't like a higher rate when you are paying 4 or 5 hundred more per year, but when someone is shopping a rate around to better it by a few bucks, it makes me question what is really important. Remember, you get what you pay for...that is the same in insurance as it is anywhere else.
-- People tend to put more important into their auto or home insurance instead of life insurance. Why? Do you really have enough money right now to take care of everyone if you were to pass away? I'm not talking about in 10 or 15 years when you've supposedly decided to take the money and invest it. I'm talking about right now... If you don't at least have a term life insurance policy to cover you right now while you are building your nest egg...you need to get one.
-- More and more right now are forced to call into a phone bank in another state when it comes to customer service or claims. Most companies have these call centers, even the big ones and the most respected ones, but are you with a company that doesn't also have local service? If so, you need to re-look at the situation. Is there claims and customer service close by? I know with us, I can sell someone in Houston or Dallas (I'm in the Austin area) and they can be helped customer service wise by a team of service people right in their area. That's important.
-- People sometimes stay with a company because they feel a loyalty to them. Loyalty is good, especially when it's deserved. If that agent is a great help, contacts you consistently, helps when needed and the service has been good...it's a good thing to have this loyalty. Unfortunately many have loyalty based on length of time with the company as opposed to actual service. Just because you've been with XYZ Insurance Company for 20 years doesn't mean they care more about you than they do the guy whose been there only for 5 years. Be loyal when it's a smart decision for you personally.
Let me know if I can answer any questions for you. Thanks!
Wednesday, January 9, 2008
Mortgage Applications up Last week
Everyone join in with me and say the following:
"I will not base my perceptions of my own personal real estate market on what the news media is reporting nationwide. I will not base my perceptions of my own personal real estate market on what the news media is reporting nationwide."
I almost didn't post this because of that very statement, but I figured good news being reported is ok. The fact of the matter is, the real estate market is not terrible in all parts of the country. Sure, it is struggling in some areas, but that is more of a market correction than anything else. There is no way some of the markets could stay as red hot as they were.
I will tell you this as well, and it's something that's not being reported. The subprime fallout, which has been bad, is not the cause of the housing crunch. The downturn in some of the areas of the country would have happened regardless. It's economics 101 people. The subprime market made up what, 16% of all mortgages? (my numbers are off here, but I'm pretty close) This had more to do with people in general purchasing homes they couldn't afford, subprime or not. It had to do with an amazing demand for housing that pushed housing prices above and beyond what they should have been and now the market is correcting itself.
Here where I live, in Central Texas, we have a very strong housing market. If you would like a referral for a good mortgage or real estate person, just let me know. I know these professionals in all parts of the country and I'd be more than happy to give you some names.
http://money.cnn.com/2008/01/09/real_estate/mortgage_applications.ap/index.htm?postversion=2008010907
Mortgage applications up last week
Mortgage Bankers Association's index says number of new requests for home loans soared 32.2% during the shortened holiday week.
WASHINGTON (AP) -- Mortgage application volume skyrocketed 32.2 percent during the holiday-shortened week ending Jan. 4, ending three consecutive weeks of sharp declines, according to the Mortgage Bankers Association's weekly application survey.
The MBA's application index jumped to 706 from 533.9 the previous week, which was also a holiday-shortened week because of Christmas. The index can be more volatile around the holidays, as volume tends to be smaller and seasonal adjustments are made. During the same period the previous year, the application index jumped 16.6 percent.
Application volume is still 13 percent less than it was four weeks earlier when it began a run of steady declines. The index stood at 811.8 for the week ending Dec. 7.
Refinance volume increased 53.9 percent during the week ending Jan. 4, while purchase volume jumped 14.7 percent. Refinance applications accounted for 57.7 percent of total applications, compared with 50.9 percent the previous week.
The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.
An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 706 means mortgage application activity is 7.06 times higher than it was when the MBA began tracking the data.
The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50 percent of all residential retail mortgage originations each week.
Application volume jumped while fixed interest rates tumbled. The average interest rate for traditional, 30-year fixed-rate mortgages fell to 5.73 percent from 6.05 percent the previous week. The average interest rate for 15-year fixed-rate mortgages, which are often used to refinance mortgages, dropped to 5.21 percent from 5.61 percent the prior week.
Rates for one-year adjustable rates rose slightly to 6.04 percent from 6 percent.
"I will not base my perceptions of my own personal real estate market on what the news media is reporting nationwide. I will not base my perceptions of my own personal real estate market on what the news media is reporting nationwide."
I almost didn't post this because of that very statement, but I figured good news being reported is ok. The fact of the matter is, the real estate market is not terrible in all parts of the country. Sure, it is struggling in some areas, but that is more of a market correction than anything else. There is no way some of the markets could stay as red hot as they were.
I will tell you this as well, and it's something that's not being reported. The subprime fallout, which has been bad, is not the cause of the housing crunch. The downturn in some of the areas of the country would have happened regardless. It's economics 101 people. The subprime market made up what, 16% of all mortgages? (my numbers are off here, but I'm pretty close) This had more to do with people in general purchasing homes they couldn't afford, subprime or not. It had to do with an amazing demand for housing that pushed housing prices above and beyond what they should have been and now the market is correcting itself.
Here where I live, in Central Texas, we have a very strong housing market. If you would like a referral for a good mortgage or real estate person, just let me know. I know these professionals in all parts of the country and I'd be more than happy to give you some names.
http://money.cnn.com/2008/01/09/real_estate/mortgage_applications.ap/index.htm?postversion=2008010907
Mortgage applications up last week
Mortgage Bankers Association's index says number of new requests for home loans soared 32.2% during the shortened holiday week.
WASHINGTON (AP) -- Mortgage application volume skyrocketed 32.2 percent during the holiday-shortened week ending Jan. 4, ending three consecutive weeks of sharp declines, according to the Mortgage Bankers Association's weekly application survey.
The MBA's application index jumped to 706 from 533.9 the previous week, which was also a holiday-shortened week because of Christmas. The index can be more volatile around the holidays, as volume tends to be smaller and seasonal adjustments are made. During the same period the previous year, the application index jumped 16.6 percent.
Application volume is still 13 percent less than it was four weeks earlier when it began a run of steady declines. The index stood at 811.8 for the week ending Dec. 7.
Refinance volume increased 53.9 percent during the week ending Jan. 4, while purchase volume jumped 14.7 percent. Refinance applications accounted for 57.7 percent of total applications, compared with 50.9 percent the previous week.
The index peaked at 1,856.7 during the week ending May 30, 2003, at the height of the housing boom.
An index value of 100 is equal to the application volume on March 16, 1990, the first week the MBA tracked application volume. A reading of 706 means mortgage application activity is 7.06 times higher than it was when the MBA began tracking the data.
The survey provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers about 50 percent of all residential retail mortgage originations each week.
Application volume jumped while fixed interest rates tumbled. The average interest rate for traditional, 30-year fixed-rate mortgages fell to 5.73 percent from 6.05 percent the previous week. The average interest rate for 15-year fixed-rate mortgages, which are often used to refinance mortgages, dropped to 5.21 percent from 5.61 percent the prior week.
Rates for one-year adjustable rates rose slightly to 6.04 percent from 6 percent.
Tuesday, January 8, 2008
Taking a Good Look at Term Life Insurance
Speaking purely from a needs standpoint, you need to get some sort of life insurance. Unless you have so much money that you could sustain a horrible event that took away your income, you need something.
Term Life insurance is extremely inexpensive and is a good way for younger folk to get coverage.
---------------------------
http://www.currentargus.com/dailytheme/ci_7907202
Taking a good look at term life insurance
The Current-Argus
Article Launched: 01/07/2008 09:10:35 PM MST
Term Life Insurance is the original form of life insurance and is considered to be pure insurance protection because it builds no cash value. This is in contrast to permanent life insurance such as whole life, universal life and variable universal life which do build a cash value.
Term Life Insurance provides coverage for a limited period of time. After that period, the policy can be dropped or the insured can pay annually increasing premiums to continue the coverage. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is often the most inexpensive way to purchase a substantial amount of coverage at the lowest possible premium. The premium can be fixed for a period of up to 30 years.
Because term insurance is a pure death benefit, its primary use is to provide for covering financial responsibilities of the insured. Such responsibilities may include, but are not limited to, mortgages, consumer debt, dependent care and college education for dependents, and funeral costs.
Buying term and investing the difference is a concept involving term life insurance and investment strategies that provide individuals an alternative to permanent life insurance. Generally speaking, term insurance premiums are considerably less expensive in the short term than permanent life insurance for an individual for the same benefit amount. Permanent programs are more expensive because they typically combine some form of cash accumulation with the insurance program as a single package. Consumers making use of the "buy term, invest the difference" concept, separate their investments from their insurance by setting aside money every month equal to the premium that a permanent plan would require, then use a portion of this money for the term premium and place the rest in a tax-deferred investment vehicle.
A non-tobacco using 40-year-old male, in good health, can purchase $250,000 of term insurance for a 30 year term at about $35 per month, while a 30-year-old male in the same category can buy the coverage for about $23 per month. Yet, according to LIMRA International, 44 percent of American households either don't own life insurance and believe they should, or own life insurance and think they need more coverage.
Term Life Insurance is the most affordable way to protect you and your family from a premature death. As the saying goes "Don't leave home without it."
Alan Jenkins is with Montgomery Agency, Inc.
Term Life insurance is extremely inexpensive and is a good way for younger folk to get coverage.
---------------------------
http://www.currentargus.com/dailytheme/ci_7907202
Taking a good look at term life insurance
The Current-Argus
Article Launched: 01/07/2008 09:10:35 PM MST
Term Life Insurance is the original form of life insurance and is considered to be pure insurance protection because it builds no cash value. This is in contrast to permanent life insurance such as whole life, universal life and variable universal life which do build a cash value.
Term Life Insurance provides coverage for a limited period of time. After that period, the policy can be dropped or the insured can pay annually increasing premiums to continue the coverage. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is often the most inexpensive way to purchase a substantial amount of coverage at the lowest possible premium. The premium can be fixed for a period of up to 30 years.
Because term insurance is a pure death benefit, its primary use is to provide for covering financial responsibilities of the insured. Such responsibilities may include, but are not limited to, mortgages, consumer debt, dependent care and college education for dependents, and funeral costs.
Buying term and investing the difference is a concept involving term life insurance and investment strategies that provide individuals an alternative to permanent life insurance. Generally speaking, term insurance premiums are considerably less expensive in the short term than permanent life insurance for an individual for the same benefit amount. Permanent programs are more expensive because they typically combine some form of cash accumulation with the insurance program as a single package. Consumers making use of the "buy term, invest the difference" concept, separate their investments from their insurance by setting aside money every month equal to the premium that a permanent plan would require, then use a portion of this money for the term premium and place the rest in a tax-deferred investment vehicle.
A non-tobacco using 40-year-old male, in good health, can purchase $250,000 of term insurance for a 30 year term at about $35 per month, while a 30-year-old male in the same category can buy the coverage for about $23 per month. Yet, according to LIMRA International, 44 percent of American households either don't own life insurance and believe they should, or own life insurance and think they need more coverage.
Term Life Insurance is the most affordable way to protect you and your family from a premature death. As the saying goes "Don't leave home without it."
Alan Jenkins is with Montgomery Agency, Inc.
Monday, January 7, 2008
Senator Clinton is the queen of insurance contributions
Ah yes, the merging of politics and the financial industry. It's an election year so you knew these sort of stories would come out. I'm not surprised at all that the insurance industry gives to political candidates as it happens in every sector. I am a tad surprised that Democrats in general lead the charge in these sort of donations though. I think the more information that comes out regarding who is receiving what money in politics is a good thing.
I'm not one of those who thinks contributions from PACs are a bad thing. I think people should be allowed to do what they want (legally of course) with their money, so more power to them for the donations.
Anyway, I just found the article interesting...probably because I'm in the insurance biz...
-----------------
http://calibre.mworld.com/m/m.w?lp=GetStory&id=287768651
Sen. Clinton Enters Primaries as Queen of Insurance Cash
Raymond J Lehmann
Released : Monday, January 07, 2008 5:41 AM
As the 2008 presidential race kicks into full gear with this week’s New Hampshire primary, insurance sources have contributed $5.66 million to leading candidates, with Democrats pulling in 59.1% of the industry total, according to U.S. Federal Elections Commission filings.
Altogether, 10 presidential candidates -– including six Democrats and four Republicans -– each raised more than $100,000 from insurance industry sources through the end of the third quarter, including funds from corporate and trade association political action committees and contributions from individuals who identified themselves as employed by insurance-related firms.
New York Sen. Hillary Rodham Clinton – who leads most polls for the Democratic nomination – also led the pack with $1,080,768 in insurance funds. In sharp contrast to her 1993 health-care reform effort, which was strongly opposed by the now-defunct Health Insurance Association of America, Clinton drew nearly $250,000 in contributions from the health insurance sector, the most of any candidate in either party. Her totals included contributions from political action committees affiliated with MetLife, Independence Blue Cross, and Western and Southern Life Insurance Co., as well as significant contributions from employees of Citigroup Inc., Prudential Financial, New York Life, and Kaiser Permanente, among others.
That tally helped push her past second-place fundraiser Sen. Christopher J. Dodd, D-Conn., who was the favorite candidate of multiline, property/casualty and life insurers, as well as insurance agents and brokers. The chairman of the Senate Banking Committee, which holds primary jurisdiction over most insurance issues, Dodd raised $943,212 from industry sources.
Dodd, who dropped out of the race following the Jan. 3 Iowa Caucuses, led the field with $118,912 from insurance PACs, including more than $5,000 each from Fidelity National Financial, Safeco Inc., Aon Corp., Aetna Inc., Axa Equitable Life Insurance Co., Chubb Corp., the Council of Insurance Agents & Brokers, First American Corp., Hartford Financial Services, ING America, LandAmerica Financial, Liberty Mutual, Massachusetts Mutual, MetLife, Nationwide Financial, Northwestern Mutual, Torchmark Corp. and Travelers Cos.
Dodd's totals also included more than $75,000 in contributions from members of the Independent Insurance Agents & Brokers of America, looking to counter the prevailing preference of most large contributors in favor of an optional federal charter for the insurance industry. The Big I, which also activated its Iowa grassroots forum on behalf of Dodd, are joined in their opposition to OFC by Aflac Inc., whose nearly $700,000 in contributions to congressional candidates topped all industry PACs.
"Last year was a busy year for the insurance industry in Washington, and a very successful year, particularly with extension of the Terrorism Risk Insurance Program, but 2008, because it's a presidential election year, will be a truncated session in Congress," said Charles E. Symington, the Big I's senior vice president for government affairs and federal relations.
Former Massachusetts Gov. Mitt Romney topped the Republican field in industry cash, raising $851,156 of the GOP’s overall haul of $2.31 million. A veteran of the financial services industry from his days as a partner with Bain Capital, Romney drew contributions from PACs associated with ING America, John Hancock Financial Services, and Liberty Mutual, while American Financial Group, Citigroup, ING, and Liberty Mutual were some of the largest employers of his individual contributors.
Placing second among Republicans and fourth overall was former New York City Mayor Rudolph Giuliani, whose $759,740 in industry cash included a PAC contribution from Colonial Life & Accident Insurance Co. and significant employee tallies from such companies as First American Title Insurance Co., Aon Corp., and Prudential Financial.
Sen. Barack Obama, D-Ill., placed fifth in the race for industry cash with $756,993, all of it contributed by individuals. Other candidates who raised more than $100,000 from the industry include Sen. John McCain, R-Ariz., with $472,224; New Mexico Gov. Bill Richardson, with $232,358; former North Carolina Sen. John Edwards, with $200,650; Sen. Joseph Biden, D-Del., with $132,075; and former Tennessee Sen. Fred Thompson, with $105,300.
The issue of insurance regulatory reform also appears to be playing a role in the race for control of Congress. Rep. Melissa Bean, D-Ill., primary sponsor of the National Insurance Act, topped all congressional candidates in contributions from financial services-related PACs, with $301,876. One of few incumbent Democrats to face a significant November challenge in the 2006 race, Bean is being supported heavily by members of such OFC-supporting groups as the American Insurance Association and the American Council of Life Insurers.
The bill's two Senate sponsors -- Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D. -- likewise placed in the top five in that chamber, while Sen. Jack Reed, D-R.I., topped all senators in 2008 financial services PAC cash. Widely considered Dodd's heir apparent for the chairmanship of the Banking Committee, Reed also is expected to sponsor the Senate version of the Nonadmitted and Reinsurance Reform Act, which passed the House unanimously in June 2007.
(By R.J. Lehmann, Washington bureau manager: raymond.lehmann@ambest.com)
Copyright 2008 A.M. Best Company, Inc
I'm not one of those who thinks contributions from PACs are a bad thing. I think people should be allowed to do what they want (legally of course) with their money, so more power to them for the donations.
Anyway, I just found the article interesting...probably because I'm in the insurance biz...
-----------------
http://calibre.mworld.com/m/m.w?lp=GetStory&id=287768651
Sen. Clinton Enters Primaries as Queen of Insurance Cash
Raymond J Lehmann
Released : Monday, January 07, 2008 5:41 AM
As the 2008 presidential race kicks into full gear with this week’s New Hampshire primary, insurance sources have contributed $5.66 million to leading candidates, with Democrats pulling in 59.1% of the industry total, according to U.S. Federal Elections Commission filings.
Altogether, 10 presidential candidates -– including six Democrats and four Republicans -– each raised more than $100,000 from insurance industry sources through the end of the third quarter, including funds from corporate and trade association political action committees and contributions from individuals who identified themselves as employed by insurance-related firms.
New York Sen. Hillary Rodham Clinton – who leads most polls for the Democratic nomination – also led the pack with $1,080,768 in insurance funds. In sharp contrast to her 1993 health-care reform effort, which was strongly opposed by the now-defunct Health Insurance Association of America, Clinton drew nearly $250,000 in contributions from the health insurance sector, the most of any candidate in either party. Her totals included contributions from political action committees affiliated with MetLife, Independence Blue Cross, and Western and Southern Life Insurance Co., as well as significant contributions from employees of Citigroup Inc., Prudential Financial, New York Life, and Kaiser Permanente, among others.
That tally helped push her past second-place fundraiser Sen. Christopher J. Dodd, D-Conn., who was the favorite candidate of multiline, property/casualty and life insurers, as well as insurance agents and brokers. The chairman of the Senate Banking Committee, which holds primary jurisdiction over most insurance issues, Dodd raised $943,212 from industry sources.
Dodd, who dropped out of the race following the Jan. 3 Iowa Caucuses, led the field with $118,912 from insurance PACs, including more than $5,000 each from Fidelity National Financial, Safeco Inc., Aon Corp., Aetna Inc., Axa Equitable Life Insurance Co., Chubb Corp., the Council of Insurance Agents & Brokers, First American Corp., Hartford Financial Services, ING America, LandAmerica Financial, Liberty Mutual, Massachusetts Mutual, MetLife, Nationwide Financial, Northwestern Mutual, Torchmark Corp. and Travelers Cos.
Dodd's totals also included more than $75,000 in contributions from members of the Independent Insurance Agents & Brokers of America, looking to counter the prevailing preference of most large contributors in favor of an optional federal charter for the insurance industry. The Big I, which also activated its Iowa grassroots forum on behalf of Dodd, are joined in their opposition to OFC by Aflac Inc., whose nearly $700,000 in contributions to congressional candidates topped all industry PACs.
"Last year was a busy year for the insurance industry in Washington, and a very successful year, particularly with extension of the Terrorism Risk Insurance Program, but 2008, because it's a presidential election year, will be a truncated session in Congress," said Charles E. Symington, the Big I's senior vice president for government affairs and federal relations.
Former Massachusetts Gov. Mitt Romney topped the Republican field in industry cash, raising $851,156 of the GOP’s overall haul of $2.31 million. A veteran of the financial services industry from his days as a partner with Bain Capital, Romney drew contributions from PACs associated with ING America, John Hancock Financial Services, and Liberty Mutual, while American Financial Group, Citigroup, ING, and Liberty Mutual were some of the largest employers of his individual contributors.
Placing second among Republicans and fourth overall was former New York City Mayor Rudolph Giuliani, whose $759,740 in industry cash included a PAC contribution from Colonial Life & Accident Insurance Co. and significant employee tallies from such companies as First American Title Insurance Co., Aon Corp., and Prudential Financial.
Sen. Barack Obama, D-Ill., placed fifth in the race for industry cash with $756,993, all of it contributed by individuals. Other candidates who raised more than $100,000 from the industry include Sen. John McCain, R-Ariz., with $472,224; New Mexico Gov. Bill Richardson, with $232,358; former North Carolina Sen. John Edwards, with $200,650; Sen. Joseph Biden, D-Del., with $132,075; and former Tennessee Sen. Fred Thompson, with $105,300.
The issue of insurance regulatory reform also appears to be playing a role in the race for control of Congress. Rep. Melissa Bean, D-Ill., primary sponsor of the National Insurance Act, topped all congressional candidates in contributions from financial services-related PACs, with $301,876. One of few incumbent Democrats to face a significant November challenge in the 2006 race, Bean is being supported heavily by members of such OFC-supporting groups as the American Insurance Association and the American Council of Life Insurers.
The bill's two Senate sponsors -- Sens. John Sununu, R-N.H., and Tim Johnson, D-S.D. -- likewise placed in the top five in that chamber, while Sen. Jack Reed, D-R.I., topped all senators in 2008 financial services PAC cash. Widely considered Dodd's heir apparent for the chairmanship of the Banking Committee, Reed also is expected to sponsor the Senate version of the Nonadmitted and Reinsurance Reform Act, which passed the House unanimously in June 2007.
(By R.J. Lehmann, Washington bureau manager: raymond.lehmann@ambest.com)
Copyright 2008 A.M. Best Company, Inc
Friday, January 4, 2008
Life Insurance: I'll never need it...
I found this article about life insurance. It's from a paper in the UK, but it more than applies here in the United States. Many don't think about Life Insurance until it's either too late or something terrible happens to someone else that they know. Isn't it amazing that sometimes, in all parts of ours lives, it takes a terrible event to force us to reevaluate our situations?
Fact of the matter is, life insurance should be a key component in anyone's financial plan. I'm not talking about life insurance as a form of investing, because it should never (in my mind) be about that. I'm talking about life insurance as mere protection, at least until you have the money saved up to offset the need.
http://www.thisismoney.co.uk/insurance/life-insurance/article.html?in_article_id=421905&in_page_id=36&ito=1565
Life insurance: It'll never happen to me...Helen Loveless, Mail on Sunday2 July 2007
That's what we all like to think, but if tragedy strikes will you have enough money to get through the bad times?
For Steve Steer, life was full of fun and promise. The 36-year-old was a keen mountain biker who raised thousands of pounds for charity. He had just launched a tool manufacturing business with his wife and was enjoying raising two young children.
That was until May 2006, when Steve fell while biking on Leith Hill, Surrey, breaking his arm and suffering internal injuries. The following day he suffered a stroke that left him paralysed and unable to speak more than a couple of words.
His life and that of his family was shattered. Now unable to work, his wife, Clare, was left to care not only for their children George, 10, and Emily, 8, at their home in Billinghurst, West Sussex, but also for Steve. The couple's new business had to be wound up.
The one cause for optimism was that only a few months earlier, Steve had taken out an income protection policy with Unum.
Clare, 37, a pre-school manager, says: 'People say it may never happen, but you never know what life will throw at you. With two young children, it was essential we had cover in place. I don't know what we would have done without it.'
S
teve has now regained some mobility and has even returned to cycling using a specially adapted three-wheel bike. In September, he will be taking part in a bike ride in Peru in aid of the Macmillan Cancer charity.
He receives income of £15,000 a year tax free, which he will continue to get until he reaches 60, unless his recovery is such that the insurer argues that he can resume work.
The Steer family were fortunate in that Steve had thought to put some protection in place, but for most of us, taking out insurance is just something you do to safeguard your home and car.
Far fewer protect themselves and their families from death and illness even though the loss of a parent, spouse or partner can cause huge financial and emotional stress.
Here, Financial Mail examines the pros and cons of various policies:
Life Insurance
This is the simplest form of protection, paying out a lump sum on the policyholder's death. Policies can run 'whole of life' or for a set term, such as 25 years. Level term insurance - also known as assurance - pays the same whenever you claim. A decreasing term policy sees the benefit reduce and the premiums are slightly less. For couples, cheaper life policies pay out on the party who dies first.
Over the past few years, life insurance premiums have fallen sharply as life expectancy has risen and competition amongst insurers has grown. But anyone outside the 'norm' - such as those who are overweight and those who smoke - will increasingly pay more for cover. According to financial website find.co.uk, a 20-year level term policy with a sum assured of £100,000 would cost about £13.50 a month for a 35-yearold male smoker. A non-smoker of the same age would pay about £8 a month - a saving of £64 a year or nearly £1,300 over 20 years.
Many employers offer a 'death in service' benefit, where the company will pay between two and four times annual salary on death of a current employee.
Family Income Benefit
For many families without insurance, the loss of income after a death can be the biggest burden. Family Income Benefit insurance pays dependants a regular monthly or annual amount.
Policies are taken out for a set term, for example, 15 years. If a claim is made after five years, the policy will provide an income for the remaining ten years.
Vital lesson: Melanie King wants to safeguard daughter Georgia's education
Teacher Melanie King, from Trowbridge, Wiltshire, lives with husband Rhiad, 35, and daughter Georgia, 8. Despite having a death in service benefit worth about three-and-a-half times her salary, Melanie, 34, took out two family income benefit policies last month through broker Lifesearch.
'I earn more than my husband and I was concerned that there would not be enough to live on if anything happened to me,' she says. 'Now I know they'll be secure.'
Melanie also wanted to make sure there would be money for her daughter's education. The first policy provides cover for 13 years, with an annual sum assured of £18,000. The second also includes critical illness cover for ten years and will provide an income of £8,000 a year. The two policies cost Melanie just under £18 a month.
Critical Illness Insurance
One in four women and one in five men will suffer a serious illness, such as cancer, before retirement age. We are also more than twice as likely to suffer a serious illness than die before the age of 60.
Critical illness insurance pays out a tax-free lump sum on diagnosis of a range of conditions. All insurers must cover seven core illnesses, including cancer, heart attacks and multiple sclerosis.
Injuries that leave people permanently disabled are also covered. Common exclusions include HIV/Aids, self-inflicted injuries and those caused by drug abuse.
The CI market has come in for much criticism with figures showing that one in four claims are rejected, leading to an eight per cent fall in the number of new policies taken out in 2006, according to a report by insurer Swiss Re.
Controversially, most insurers do not ask for medical records when a policy is taken out, but if a claim is made, insurers will demand records, in some cases going back up to ten years.
Financial Mail has criticised the approach for putting too much responsibility on consumers while giving a huge advantage to insurers. Legislation is now on the cards to limit the period when insurers can turn down claims on the grounds of non-disclosure.
Despite the shortcomings, CI is still worth considering, says Matt Morris of broker Lifesearch. 'Given that a large percentage of people will suffer from a serious illness at some point, protection is essential. For a married person with a family and debts, CI is a good option,' he says.
The cost varies widely. The older the policyholder, the more they will pay, as will those already in poor health or those who smoke.
Income Protection
This pays a tax-free income if you are unable to work due to illness or unemployment. Up to 70% of income can be covered, depending on the insurer. And unlike Accident-Sickness and Unemployment insurance, there is no limit on the number of claims that can be made and it will also pay out until retirement, if necessary. Again, policies can be taken out as whole of life or for a set term.
Because policyholders are covered until they reach retirement, IP is one of the most expensive types of cover.
Linton Penman, head of retail sales at Unum, which has two million income protection customers in the UK, says IP insurance is not used as often as it should be, partly because of misconceptions over the cost and how long it takes to process an application.
'
Financial advisers see it as being too time-consuming, but applications can be processed in a matter of days,' says Penman. 'It's also less costly than many people think, especially when you take into account that it could provide a benefit for up to 40 years.'
Earlier this month, Unum cut premiums on its individual IP policies by up to 20 per cent. A 35-year-old male in good health will pay less than £20 a month for an annual sum assured of £12,500 under a 25-year policy.
'No one else to help'
Whether consumers should opt for CI, life insurance, FIB, income protection, or a combination, will depend on their circumstances and finances.
Frank Emmel & and six month old Ben.
Frank Emmel runs his business, lolitadesigns.co.uk, selling hand-painted Martini glasses. He lives with partner Roberta, a project manager, and their sixmonthold son, Ben, in Ealing, west London.
Seven years ago, Frank, 42, took out a decreasing term insurance policy with Friends Provident, which included critical illness cover. The policy cost £12.47 for a sum assured of £45,000.
Not long after, he also took out an income protection policy, which will provide an index-linked benefit of £609 a month if he is unable to work due to sickness or unemployment. The monthly premium is £75.50.
Though the cover is not cheap, Frank believes it is worthwhile for the security it gives him and his family.
He says: 'Because I am self-employed, protection is even more important. I might be the only person that can make me redundant, but that means it is also up to me financially if anything goes wrong, rather than having support from an employer.'
Mark Jones, protection product manager at insurer Friends Provident says: 'Which form of cover is most appropriate will depend on circumstances. Straight life insurance is the biggest seller, but for many, ensuring a regular income may be more important.'
Fact of the matter is, life insurance should be a key component in anyone's financial plan. I'm not talking about life insurance as a form of investing, because it should never (in my mind) be about that. I'm talking about life insurance as mere protection, at least until you have the money saved up to offset the need.
http://www.thisismoney.co.uk/insurance/life-insurance/article.html?in_article_id=421905&in_page_id=36&ito=1565
Life insurance: It'll never happen to me...Helen Loveless, Mail on Sunday2 July 2007
That's what we all like to think, but if tragedy strikes will you have enough money to get through the bad times?
For Steve Steer, life was full of fun and promise. The 36-year-old was a keen mountain biker who raised thousands of pounds for charity. He had just launched a tool manufacturing business with his wife and was enjoying raising two young children.
That was until May 2006, when Steve fell while biking on Leith Hill, Surrey, breaking his arm and suffering internal injuries. The following day he suffered a stroke that left him paralysed and unable to speak more than a couple of words.
His life and that of his family was shattered. Now unable to work, his wife, Clare, was left to care not only for their children George, 10, and Emily, 8, at their home in Billinghurst, West Sussex, but also for Steve. The couple's new business had to be wound up.
The one cause for optimism was that only a few months earlier, Steve had taken out an income protection policy with Unum.
Clare, 37, a pre-school manager, says: 'People say it may never happen, but you never know what life will throw at you. With two young children, it was essential we had cover in place. I don't know what we would have done without it.'
S
teve has now regained some mobility and has even returned to cycling using a specially adapted three-wheel bike. In September, he will be taking part in a bike ride in Peru in aid of the Macmillan Cancer charity.
He receives income of £15,000 a year tax free, which he will continue to get until he reaches 60, unless his recovery is such that the insurer argues that he can resume work.
The Steer family were fortunate in that Steve had thought to put some protection in place, but for most of us, taking out insurance is just something you do to safeguard your home and car.
Far fewer protect themselves and their families from death and illness even though the loss of a parent, spouse or partner can cause huge financial and emotional stress.
Here, Financial Mail examines the pros and cons of various policies:
Life Insurance
This is the simplest form of protection, paying out a lump sum on the policyholder's death. Policies can run 'whole of life' or for a set term, such as 25 years. Level term insurance - also known as assurance - pays the same whenever you claim. A decreasing term policy sees the benefit reduce and the premiums are slightly less. For couples, cheaper life policies pay out on the party who dies first.
Over the past few years, life insurance premiums have fallen sharply as life expectancy has risen and competition amongst insurers has grown. But anyone outside the 'norm' - such as those who are overweight and those who smoke - will increasingly pay more for cover. According to financial website find.co.uk, a 20-year level term policy with a sum assured of £100,000 would cost about £13.50 a month for a 35-yearold male smoker. A non-smoker of the same age would pay about £8 a month - a saving of £64 a year or nearly £1,300 over 20 years.
Many employers offer a 'death in service' benefit, where the company will pay between two and four times annual salary on death of a current employee.
Family Income Benefit
For many families without insurance, the loss of income after a death can be the biggest burden. Family Income Benefit insurance pays dependants a regular monthly or annual amount.
Policies are taken out for a set term, for example, 15 years. If a claim is made after five years, the policy will provide an income for the remaining ten years.
Vital lesson: Melanie King wants to safeguard daughter Georgia's education
Teacher Melanie King, from Trowbridge, Wiltshire, lives with husband Rhiad, 35, and daughter Georgia, 8. Despite having a death in service benefit worth about three-and-a-half times her salary, Melanie, 34, took out two family income benefit policies last month through broker Lifesearch.
'I earn more than my husband and I was concerned that there would not be enough to live on if anything happened to me,' she says. 'Now I know they'll be secure.'
Melanie also wanted to make sure there would be money for her daughter's education. The first policy provides cover for 13 years, with an annual sum assured of £18,000. The second also includes critical illness cover for ten years and will provide an income of £8,000 a year. The two policies cost Melanie just under £18 a month.
Critical Illness Insurance
One in four women and one in five men will suffer a serious illness, such as cancer, before retirement age. We are also more than twice as likely to suffer a serious illness than die before the age of 60.
Critical illness insurance pays out a tax-free lump sum on diagnosis of a range of conditions. All insurers must cover seven core illnesses, including cancer, heart attacks and multiple sclerosis.
Injuries that leave people permanently disabled are also covered. Common exclusions include HIV/Aids, self-inflicted injuries and those caused by drug abuse.
The CI market has come in for much criticism with figures showing that one in four claims are rejected, leading to an eight per cent fall in the number of new policies taken out in 2006, according to a report by insurer Swiss Re.
Controversially, most insurers do not ask for medical records when a policy is taken out, but if a claim is made, insurers will demand records, in some cases going back up to ten years.
Financial Mail has criticised the approach for putting too much responsibility on consumers while giving a huge advantage to insurers. Legislation is now on the cards to limit the period when insurers can turn down claims on the grounds of non-disclosure.
Despite the shortcomings, CI is still worth considering, says Matt Morris of broker Lifesearch. 'Given that a large percentage of people will suffer from a serious illness at some point, protection is essential. For a married person with a family and debts, CI is a good option,' he says.
The cost varies widely. The older the policyholder, the more they will pay, as will those already in poor health or those who smoke.
Income Protection
This pays a tax-free income if you are unable to work due to illness or unemployment. Up to 70% of income can be covered, depending on the insurer. And unlike Accident-Sickness and Unemployment insurance, there is no limit on the number of claims that can be made and it will also pay out until retirement, if necessary. Again, policies can be taken out as whole of life or for a set term.
Because policyholders are covered until they reach retirement, IP is one of the most expensive types of cover.
Linton Penman, head of retail sales at Unum, which has two million income protection customers in the UK, says IP insurance is not used as often as it should be, partly because of misconceptions over the cost and how long it takes to process an application.
'
Financial advisers see it as being too time-consuming, but applications can be processed in a matter of days,' says Penman. 'It's also less costly than many people think, especially when you take into account that it could provide a benefit for up to 40 years.'
Earlier this month, Unum cut premiums on its individual IP policies by up to 20 per cent. A 35-year-old male in good health will pay less than £20 a month for an annual sum assured of £12,500 under a 25-year policy.
'No one else to help'
Whether consumers should opt for CI, life insurance, FIB, income protection, or a combination, will depend on their circumstances and finances.
Frank Emmel & and six month old Ben.
Frank Emmel runs his business, lolitadesigns.co.uk, selling hand-painted Martini glasses. He lives with partner Roberta, a project manager, and their sixmonthold son, Ben, in Ealing, west London.
Seven years ago, Frank, 42, took out a decreasing term insurance policy with Friends Provident, which included critical illness cover. The policy cost £12.47 for a sum assured of £45,000.
Not long after, he also took out an income protection policy, which will provide an index-linked benefit of £609 a month if he is unable to work due to sickness or unemployment. The monthly premium is £75.50.
Though the cover is not cheap, Frank believes it is worthwhile for the security it gives him and his family.
He says: 'Because I am self-employed, protection is even more important. I might be the only person that can make me redundant, but that means it is also up to me financially if anything goes wrong, rather than having support from an employer.'
Mark Jones, protection product manager at insurer Friends Provident says: 'Which form of cover is most appropriate will depend on circumstances. Straight life insurance is the biggest seller, but for many, ensuring a regular income may be more important.'
Thursday, January 3, 2008
Top 10 2008 Resolutions for Homeowners
I just found this article and thought it was a pretty good one. Personally for me, one of the resolutions I think most Homeowners need to make is to not freak out regarding the real estate market. Especially here in Texas, we are still doing very well. Please, please, please don't let all of the negativity coming out of the national media put a damper on our market. They are two totally separate markets altogether.
Also, I would guess the one I really disagree with on this list would be resolution #8. There are some really good discount brokers out there. There are also some that aren't so good. Just remember, just like in anything else, you get what you pay for.
--------------
http://rismedia.com/wp/2008-01-02/top-ten-2008-new-years-resolutions-for-homeowners/
Top Ten 2008 New Years Resolutions for Homeowners
RISMEDIA, Jan. 3, 2008-One of the best New Years Resolutions homeowners can make is to eliminate expenses that are unnecessary and have no benefit. This is a tall order for many of us, with implications ranging from how you finance your mortgage to the energy efficiency of your home. Nevertheless it’s a very worthwhile exercise which will affect your current and future lifestyle. Many have already made some of the following ten 2008 New Years Resolutions for American Homeowners, but few probably addressed them all.
Resolution #1: I will get my home finances in order.
Despite all the disaster stories about the mortgage meltdown, mortgage interest rates are relatively low and widely available to creditworthy homeowners. This is therefore a good time to review how you are financing your home. You may be able to save money, reduce financial risks, improve your financial status and/or use the opportunity to incorporate home financing in your long term financial planning. This is especially true if you currently have a subprime and/or adjustable rate mortgage.
If you have an older mortgage, there’s a pretty good chance you can get a lower interest rate - and therefore lower monthly payments - if you refinance your mortgage today. Since most of your mortgage payments in the early years consist of interest, you will also end up with a larger mortgage interest tax deduction with a new mortgage. If you don’t take any cash out and your new rate is lower, your actual monthly payments will also be lower. Paying less money while getting a bigger tax deduction is a good proposition. Also, the cost of private mortgage insurance (PMI) is also tax deductible for mortgages originated after 2007.
If you have an adjustable rate or interest only mortgage that has not yet reset, you have done well in this period of low mortgage interest rates. But don’t assume that your good luck will continue. The increase in monthly payments could be frightening when mortgage rates increase in the future. Worse, the large number of adjustable rate loans is expected to trigger as many as one million foreclosures when their teaser rate runs out in 2008. This may be the best time to refinance to a safer fixed rate mortgage if your current income will qualify you for the monthly payments.
If you have substantial home equity when you refinance your mortgage you can take cash out for worthy uses such as remodeling. Since the remodeling is financed through a mortgage, the interest on the cash you took out for the remodeling project is tax deductible. This is a big plus compared to using your credit card to pay for remodeling costs, because credit card interest isn’t tax deductible. If you currently have substantial high interest credit card debt and/or a higher interest short term second trust on your home, it may make sense to use the proceeds to retire those as well. However, there are limits on the mortgage interest deductibility if you finance for more than the original cost of the home plus improvements. Check with IRS (www.IRS.gov or 800-829-1040) or your tax advisor for the limitations before you take cash out.
Resolution #2: I will stop lending the government money interest free.
More than 101.2 million taxpayers got more than $229 billion in income-tax refunds in 2006. The average refund was $2,264. Refunds from IRS may sound like good news, but the IRS didn’t pay those taxpayers any interest on that refund, which accumulates through the year. Taxpayers who received refunds would have been better off if they reduced the amount withheld from their income tax every paycheck by enough to break even with IRS at years end, and put the extra amount in their paychecks into investments that earn interest or dividends. If they are also paying interest on credit cards (which isn’t tax deductible), it would probably make even more sense to use the difference to reduce their credit card balances.
Some taxpayers save their income tax refunds, but others blow it on things they could live without. The latter is a big mistake, especially with the growing number of economists who see a growing likelihood of a recession in 2008. It may be wise to hold off until next year on a purchase of a new car, boat or other major expense that can be deferred another year.
Resolution #3: I won’t let fears of dropping home values, the mortgage market meltdown, and the growing risk of a recession stop me from purchasing a home in 2008.
Many homeowners have decided to put off the consideration of a home purchase because of these concerns, but in many cases those fears are unwarranted. If you want to move in 2008 you should take a closer look, because this year could be an excellent time to buy a home.
As previously stated, the risk of a recession is certainly increasing, and this is certainly no time to push the limits of your financing ability. However, many homeowners are in a strong financial position, thanks to good savings habits and accumulated home equity. While they need to make sure they keep plenty of liquid assets against the risk of a recession, in fact many homeowners have more than sufficient liquid assets for that purpose and are in a position to buy a home if they wish to.
The direction of home values is of little consequence if you plan to stay in the same area. According to the National Association of Realtors, the median moving distance in 2006 was 13 miles. This means that if the value of your current home has declined, so did the value of the home you’ll be buying if you stay in the same area. The price difference will probably remain about the same in most cases (and this relationship holds true if homes are appreciating in your area). The future outlook for home values will also be about the same, so the direction of home values will have relatively little consequence for most home buyers.
The mortgage meltdown/subprime crisis will make home financing difficult for many who could only qualify for subprime mortgages previously, and more expensive for home buyers with impaired credit when they can get financing.
Despite this bad news for some homeowners, mortgages are still widely available at attractive rates for the majority of home buyers, who have excellent credit histories, and a good financial profile. In addition the government has begun to step in to help those at the margins - FHA loans have been made more accessible, Fannie Mae and Freddie Mac programs have been allowed to expand, and more proposals to help home buyers are in the works.
On top of all this, the inventory of homes for sale is at an all time high in many areas. Yes, that means you’ll have to work harder to sell your home, but it also means you will never be as likely to find a replacement that fits your needs exactly as you are today. Because homes are moving slowly in today’s market, it makes far more sense to first sell your home before you commit yourself to buying your next home. Even so, some sellers in this current soft market will accept a home sale contingency in a purchase offer, but usually only if they are first convinced that the prospective buyers will be pricing their home extremely competitively. That’s not unreasonable - pricing competitively is something you must do in this market anyway if you expect to sell your home. The bottom line is that for many, if not most homeowners, 2008 is a great time to buy a home, and the gloom and doom on the housing and economic front should not stop you from looking into it.
Resolution #4: I will increase my saving and reduce or eliminate high interest loans.
Refinancing your mortgage is often the first step in this process (see resolution #1), and curtailing your interest free loans to IRS the second (see resolution #2). Next, make sure you are taking advantage of all matching employer contributions to a company IRA if you have one and if at all possible make the full tax deductible annual contribution to your 401k, 403(b), regular or Roth IRA, or other tax-deferred retirement accounts.
In order to pay their mortgage off sooner, many homeowners make additional payments above the required monthly amount to their mortgage lender. They would have been better advised to get mortgage with a shorter term (15 years, for example), because they would have received a slightly lower interest rate as well. While debt reduction is a worthy goal, many homeowners would be much better off from a financial and tax standpoint to instead put extra money into tax-deferred retirement accounts. Not only would they get employer contribution matches in some cases, but the accumulated interest or dividends will either be deferred or tax free until you withdraw them at retirement. A 2005 study found that more than 38% of households would have earned 11 - 17 cents more on the dollar by investing in tax-deferred retirement accounts instead of prepaying the mortgage. Those extra earnings would have resulted in additional annual savings of almost $400 per household.
Make sure that both your tax deferred accounts and investments are diversified and you aren’t overly exposed in any one investment, including holdings in your employer’s stock. Even sound, well managed companies can take a beating in the stock market. Make sure you invest in mutual funds or stocks with consistently good performance records. For example the Lipper Reports tracks mutual fund performance by category (i.e. large caps, energy, etc.) over 1, 3, 5, and sometimes even 10 years. If there are 100 funds in that category invest only in those that are consistently in the top quartile (which would be the top 25 if there are 100 funds in the category) over each of those periods, and you should do pretty well. Review your investments annually (or even better quarterly) against that standard to make sure they are maintaining their track record.
Review your annual Social Security Benefits statement to make sure that your earnings have been accurately reported and that no one else is using your Social Security number. If they have, they may also use your social security card to get a drivers license and credit cards in your name as well. You can order your statement online at www.ssa.gov.
Resolution #5: I will review my homeowners and other insurance to make sure I’m adequately protected.
Review your coverage with your agent to make sure you have enough insurance. The insured value of your home should reflect its current replacement value, including any additions or improvements, as well as the value of its contents.
Make sure you are covering all important circumstances. Insurance against flooding may not cover internal pipe backups or wind damage during a hurricane for example, and many insurers won’t provide flood insurance (in such cases you may be able to get flood insurance through the National Flood Insurance Program). Many policies also have standard fixed limits on certain types of contents (jewelry and furs, antiques, cameras, electronics, etc.) so you may need an additional “floater” policy to fully insure your home’s contents.
Life insurance needs change throughout your life. They are highest for young couples with children, far less for empty nesters with enough savings for their retirement. Depending on your situation you may be able to cut back on insurance costs.
Resolution #6: I will reduce my home’s energy consumption.
There are many ways to reduce your home energy costs. The American Homeowners Foundation has a free home energy audit. All it takes is a ten minute tour of your home with the audit questionnaire and a few simple tools you probably already have, and you will likely find numerous ways to reduce both your energy costs and global warming. For a free copy, e-mail AHF@AmericanHomeowners.org , and put “Free Energy Audit” in the subject line. We will e-mail you back the free home energy audit.
Among some of the “no-brainers” are replacing old manual thermostats with programmable thermostats, which typically will pay back their costs in several months, and replace standard light bulbs with compact fluorescent bulbs, which have dropped in cost recently. Also make sure your exposed hot-water pipes are insulated, furnace filters are changed regularly, leaky faucets are repaired, and run only full loads in the dishwasher and clothes.
Resolution #7: Whenever appropriate I will take advantage of new options to reduce real estate services costs when I buy or sell a home.
Internet-based real estate service companies will provide rebates of as much as 2% of the selling price of the home you buy if you use them to assist you in your home purchase (state real estate associations have managed to make real estate commission rebates illegal in several states, but the U.S. Department of Justice, the Federal Trade Commission and consumer groups like the Consumer Federation of America and the American Homeowners Grassroots Alliance are working to repeal those laws). Try to get an exclusive buyers agent (EBA) to represent you when you buy a home. EBAs represent only buyers, never sellers.
Many of the state real estate associations have also managed to convince their legislatures to allow traditional real estate brokers to simultaneously represent both the buyer and the seller of the same home, creating a potential conflict of interest you want to avoid if possible. This practice is called “dual agency” and in those states a real estate agent may refer to himself as a “buyer’s agent”, even though the brokerage is actually representing the seller of the property you’re considering.
With the market as soft as it is, buyers should consider selling their present home before buying its successor. There’s a large inventory of unsold homes in most areas, so finding your next home shouldn’t be a problem. Selling your current home will probably take much longer, especially if you don’t want to be forced to accept an unusually low price. For that reason most sellers aren’t willing to accept purchase offers contingent on the sale of your current home, unless you are pricing your home very competitively and/or only asking for a month or two to sell it. While it is inconvenient, moving into a short term rental if necessary after you sell will allow you to take full advantage of your negotiating leverage when you buy the next home.
Another tool that can simplify some of the chores related to buying are service aggregator Web sites that let you compare rates from different local providers of electricity, local, long distance and cellular telephones, oil and gas, TV and Internet services, and newspapers by zip code. Some aggregator Web sites charge a fee for their services and all of services providers in each area may not be available on each Web site.
Resolution #8: I will look for economical ways to increase the value and livability of my home.
If you are like most, you probably have a list of things that need to be fixed or upgraded in your home, and a remodeling project may be on the list as well. Many of the things on the list may have been on the list for many weeks, if not months. You may have noticed that those jobs seldom get done by themselves, and some conditions get worse over time.
Start by putting your home “to do” list in priority order. Put on top the kinds of repairs that can cost more if neglected (a leaky roof for example), or which will continue to cost you money until they are fixed (a broken refrigerator seal, leaky faucet or toilet, etc.). Usually the parts are the least expensive part of a repair. If you are at all handy force yourself to take the time to fix things yourself.
If you’re not handy or won’t have the time to fix everything in the next few months call a handyman or specialist for the things you can’t handle. A good independent handyman should be able to do most things you need at a far lower rate than a plumber would charge to fix your toilet or an electrician would charge to fix a broken appliance. Ask your neighbors for recommendations of good handymen, and find out their hourly rates. The handyman franchises, which advertise heavily in local media, can cost as much as a specialist, however. If you can get a specialist (i.e. electrician or a plumber) for about the same price, that’s a smarter choice. Reporting services like Angies List, which carry consumer ratings on local contractors, can be very helpful in identifying which contractors are the most reliable and least expensive.
More extensive remodeling projects will probably require a remodeling contractor. Many projects can return 100% of the investment when you eventually sell your home, and improve your lifestyle in the meantime. Another plus of remodeling is that if it will make the home better suit your needs in the future, it can be a lot less expensive than selling your home and buying another which has features. By the time you finish selling your home and buying another, you can easily spend 10% of your home’s selling price on real estate commissions and various settlement costs for both homes. You can do a lot of remodeling for that amount.
The best candidates for a good return on your remodeling investment are things like updating badly dated kitchens or baths, or adding a second bathroom in a one bath home. The National Association of the Remodeling Industry periodically publishes return-on-investment data on most types of remodeling projects. Don’t over improve to where your home’s value substantially exceeds that of the neighbors or you’ll have trouble recouping your investment when you eventually sell. You can also help keep costs down if you are willing to do some of the easier finish work yourself, like painting or trim work.
Check the references of remodeling contractors thoroughly. Consumer complaints regarding remodeling contractors consistently at the top of the Better Business Bureau’s and the American Homeowners Foundation’s complaint list. To avoid disputes always use a comprehensive contract when you hire a remodeling contractor.
Resolution #9: In the face of growing signs of recession, I will be cautious in 2008.
Because of the growing threat of a recession, 2008 is not a good year to become over extended. Whatever else you do, make sure that you have enough cash or liquid reserves to weather unforeseen events, such as company layoffs or family illnesses. If that means waiting until next year to buy a new car or new home, so be it. Prices and interest rates may be a little higher next year, but so will your savings. A little wait to avoid a significant financial risk is well worth it.
Resolution #10: I will engage in the political process to influence issues of economic impact to me and my home.
Home ownership is a nonpartisan condition, yet the votes of legislators and rules of regulators will have a lot to do with your economic future. Home equity is the single largest form of savings for most homeowners and many of those votes will impact the value of your home. Those votes will also impact your mortgage interest rates, your taxes and other major expenses for most homeowners, such as healthcare. All of them will impact your ability to buy a home and your lifestyle. For many years American homeowners have been the true “silent majority”. With a Presidential election this November the 75 million American homeowners can no longer afford to remain silent. We must raise our voices to policymakers at all levels in 2008 to protect the value of our homes and the institution of home ownership.
Courtesy of the American Homeowners Foundation and the American Homeowners Grassroots Alliance, www.AmericanHomeowners.org.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Also, I would guess the one I really disagree with on this list would be resolution #8. There are some really good discount brokers out there. There are also some that aren't so good. Just remember, just like in anything else, you get what you pay for.
--------------
http://rismedia.com/wp/2008-01-02/top-ten-2008-new-years-resolutions-for-homeowners/
Top Ten 2008 New Years Resolutions for Homeowners
RISMEDIA, Jan. 3, 2008-One of the best New Years Resolutions homeowners can make is to eliminate expenses that are unnecessary and have no benefit. This is a tall order for many of us, with implications ranging from how you finance your mortgage to the energy efficiency of your home. Nevertheless it’s a very worthwhile exercise which will affect your current and future lifestyle. Many have already made some of the following ten 2008 New Years Resolutions for American Homeowners, but few probably addressed them all.
Resolution #1: I will get my home finances in order.
Despite all the disaster stories about the mortgage meltdown, mortgage interest rates are relatively low and widely available to creditworthy homeowners. This is therefore a good time to review how you are financing your home. You may be able to save money, reduce financial risks, improve your financial status and/or use the opportunity to incorporate home financing in your long term financial planning. This is especially true if you currently have a subprime and/or adjustable rate mortgage.
If you have an older mortgage, there’s a pretty good chance you can get a lower interest rate - and therefore lower monthly payments - if you refinance your mortgage today. Since most of your mortgage payments in the early years consist of interest, you will also end up with a larger mortgage interest tax deduction with a new mortgage. If you don’t take any cash out and your new rate is lower, your actual monthly payments will also be lower. Paying less money while getting a bigger tax deduction is a good proposition. Also, the cost of private mortgage insurance (PMI) is also tax deductible for mortgages originated after 2007.
If you have an adjustable rate or interest only mortgage that has not yet reset, you have done well in this period of low mortgage interest rates. But don’t assume that your good luck will continue. The increase in monthly payments could be frightening when mortgage rates increase in the future. Worse, the large number of adjustable rate loans is expected to trigger as many as one million foreclosures when their teaser rate runs out in 2008. This may be the best time to refinance to a safer fixed rate mortgage if your current income will qualify you for the monthly payments.
If you have substantial home equity when you refinance your mortgage you can take cash out for worthy uses such as remodeling. Since the remodeling is financed through a mortgage, the interest on the cash you took out for the remodeling project is tax deductible. This is a big plus compared to using your credit card to pay for remodeling costs, because credit card interest isn’t tax deductible. If you currently have substantial high interest credit card debt and/or a higher interest short term second trust on your home, it may make sense to use the proceeds to retire those as well. However, there are limits on the mortgage interest deductibility if you finance for more than the original cost of the home plus improvements. Check with IRS (www.IRS.gov or 800-829-1040) or your tax advisor for the limitations before you take cash out.
Resolution #2: I will stop lending the government money interest free.
More than 101.2 million taxpayers got more than $229 billion in income-tax refunds in 2006. The average refund was $2,264. Refunds from IRS may sound like good news, but the IRS didn’t pay those taxpayers any interest on that refund, which accumulates through the year. Taxpayers who received refunds would have been better off if they reduced the amount withheld from their income tax every paycheck by enough to break even with IRS at years end, and put the extra amount in their paychecks into investments that earn interest or dividends. If they are also paying interest on credit cards (which isn’t tax deductible), it would probably make even more sense to use the difference to reduce their credit card balances.
Some taxpayers save their income tax refunds, but others blow it on things they could live without. The latter is a big mistake, especially with the growing number of economists who see a growing likelihood of a recession in 2008. It may be wise to hold off until next year on a purchase of a new car, boat or other major expense that can be deferred another year.
Resolution #3: I won’t let fears of dropping home values, the mortgage market meltdown, and the growing risk of a recession stop me from purchasing a home in 2008.
Many homeowners have decided to put off the consideration of a home purchase because of these concerns, but in many cases those fears are unwarranted. If you want to move in 2008 you should take a closer look, because this year could be an excellent time to buy a home.
As previously stated, the risk of a recession is certainly increasing, and this is certainly no time to push the limits of your financing ability. However, many homeowners are in a strong financial position, thanks to good savings habits and accumulated home equity. While they need to make sure they keep plenty of liquid assets against the risk of a recession, in fact many homeowners have more than sufficient liquid assets for that purpose and are in a position to buy a home if they wish to.
The direction of home values is of little consequence if you plan to stay in the same area. According to the National Association of Realtors, the median moving distance in 2006 was 13 miles. This means that if the value of your current home has declined, so did the value of the home you’ll be buying if you stay in the same area. The price difference will probably remain about the same in most cases (and this relationship holds true if homes are appreciating in your area). The future outlook for home values will also be about the same, so the direction of home values will have relatively little consequence for most home buyers.
The mortgage meltdown/subprime crisis will make home financing difficult for many who could only qualify for subprime mortgages previously, and more expensive for home buyers with impaired credit when they can get financing.
Despite this bad news for some homeowners, mortgages are still widely available at attractive rates for the majority of home buyers, who have excellent credit histories, and a good financial profile. In addition the government has begun to step in to help those at the margins - FHA loans have been made more accessible, Fannie Mae and Freddie Mac programs have been allowed to expand, and more proposals to help home buyers are in the works.
On top of all this, the inventory of homes for sale is at an all time high in many areas. Yes, that means you’ll have to work harder to sell your home, but it also means you will never be as likely to find a replacement that fits your needs exactly as you are today. Because homes are moving slowly in today’s market, it makes far more sense to first sell your home before you commit yourself to buying your next home. Even so, some sellers in this current soft market will accept a home sale contingency in a purchase offer, but usually only if they are first convinced that the prospective buyers will be pricing their home extremely competitively. That’s not unreasonable - pricing competitively is something you must do in this market anyway if you expect to sell your home. The bottom line is that for many, if not most homeowners, 2008 is a great time to buy a home, and the gloom and doom on the housing and economic front should not stop you from looking into it.
Resolution #4: I will increase my saving and reduce or eliminate high interest loans.
Refinancing your mortgage is often the first step in this process (see resolution #1), and curtailing your interest free loans to IRS the second (see resolution #2). Next, make sure you are taking advantage of all matching employer contributions to a company IRA if you have one and if at all possible make the full tax deductible annual contribution to your 401k, 403(b), regular or Roth IRA, or other tax-deferred retirement accounts.
In order to pay their mortgage off sooner, many homeowners make additional payments above the required monthly amount to their mortgage lender. They would have been better advised to get mortgage with a shorter term (15 years, for example), because they would have received a slightly lower interest rate as well. While debt reduction is a worthy goal, many homeowners would be much better off from a financial and tax standpoint to instead put extra money into tax-deferred retirement accounts. Not only would they get employer contribution matches in some cases, but the accumulated interest or dividends will either be deferred or tax free until you withdraw them at retirement. A 2005 study found that more than 38% of households would have earned 11 - 17 cents more on the dollar by investing in tax-deferred retirement accounts instead of prepaying the mortgage. Those extra earnings would have resulted in additional annual savings of almost $400 per household.
Make sure that both your tax deferred accounts and investments are diversified and you aren’t overly exposed in any one investment, including holdings in your employer’s stock. Even sound, well managed companies can take a beating in the stock market. Make sure you invest in mutual funds or stocks with consistently good performance records. For example the Lipper Reports tracks mutual fund performance by category (i.e. large caps, energy, etc.) over 1, 3, 5, and sometimes even 10 years. If there are 100 funds in that category invest only in those that are consistently in the top quartile (which would be the top 25 if there are 100 funds in the category) over each of those periods, and you should do pretty well. Review your investments annually (or even better quarterly) against that standard to make sure they are maintaining their track record.
Review your annual Social Security Benefits statement to make sure that your earnings have been accurately reported and that no one else is using your Social Security number. If they have, they may also use your social security card to get a drivers license and credit cards in your name as well. You can order your statement online at www.ssa.gov.
Resolution #5: I will review my homeowners and other insurance to make sure I’m adequately protected.
Review your coverage with your agent to make sure you have enough insurance. The insured value of your home should reflect its current replacement value, including any additions or improvements, as well as the value of its contents.
Make sure you are covering all important circumstances. Insurance against flooding may not cover internal pipe backups or wind damage during a hurricane for example, and many insurers won’t provide flood insurance (in such cases you may be able to get flood insurance through the National Flood Insurance Program). Many policies also have standard fixed limits on certain types of contents (jewelry and furs, antiques, cameras, electronics, etc.) so you may need an additional “floater” policy to fully insure your home’s contents.
Life insurance needs change throughout your life. They are highest for young couples with children, far less for empty nesters with enough savings for their retirement. Depending on your situation you may be able to cut back on insurance costs.
Resolution #6: I will reduce my home’s energy consumption.
There are many ways to reduce your home energy costs. The American Homeowners Foundation has a free home energy audit. All it takes is a ten minute tour of your home with the audit questionnaire and a few simple tools you probably already have, and you will likely find numerous ways to reduce both your energy costs and global warming. For a free copy, e-mail AHF@AmericanHomeowners.org , and put “Free Energy Audit” in the subject line. We will e-mail you back the free home energy audit.
Among some of the “no-brainers” are replacing old manual thermostats with programmable thermostats, which typically will pay back their costs in several months, and replace standard light bulbs with compact fluorescent bulbs, which have dropped in cost recently. Also make sure your exposed hot-water pipes are insulated, furnace filters are changed regularly, leaky faucets are repaired, and run only full loads in the dishwasher and clothes.
Resolution #7: Whenever appropriate I will take advantage of new options to reduce real estate services costs when I buy or sell a home.
Internet-based real estate service companies will provide rebates of as much as 2% of the selling price of the home you buy if you use them to assist you in your home purchase (state real estate associations have managed to make real estate commission rebates illegal in several states, but the U.S. Department of Justice, the Federal Trade Commission and consumer groups like the Consumer Federation of America and the American Homeowners Grassroots Alliance are working to repeal those laws). Try to get an exclusive buyers agent (EBA) to represent you when you buy a home. EBAs represent only buyers, never sellers.
Many of the state real estate associations have also managed to convince their legislatures to allow traditional real estate brokers to simultaneously represent both the buyer and the seller of the same home, creating a potential conflict of interest you want to avoid if possible. This practice is called “dual agency” and in those states a real estate agent may refer to himself as a “buyer’s agent”, even though the brokerage is actually representing the seller of the property you’re considering.
With the market as soft as it is, buyers should consider selling their present home before buying its successor. There’s a large inventory of unsold homes in most areas, so finding your next home shouldn’t be a problem. Selling your current home will probably take much longer, especially if you don’t want to be forced to accept an unusually low price. For that reason most sellers aren’t willing to accept purchase offers contingent on the sale of your current home, unless you are pricing your home very competitively and/or only asking for a month or two to sell it. While it is inconvenient, moving into a short term rental if necessary after you sell will allow you to take full advantage of your negotiating leverage when you buy the next home.
Another tool that can simplify some of the chores related to buying are service aggregator Web sites that let you compare rates from different local providers of electricity, local, long distance and cellular telephones, oil and gas, TV and Internet services, and newspapers by zip code. Some aggregator Web sites charge a fee for their services and all of services providers in each area may not be available on each Web site.
Resolution #8: I will look for economical ways to increase the value and livability of my home.
If you are like most, you probably have a list of things that need to be fixed or upgraded in your home, and a remodeling project may be on the list as well. Many of the things on the list may have been on the list for many weeks, if not months. You may have noticed that those jobs seldom get done by themselves, and some conditions get worse over time.
Start by putting your home “to do” list in priority order. Put on top the kinds of repairs that can cost more if neglected (a leaky roof for example), or which will continue to cost you money until they are fixed (a broken refrigerator seal, leaky faucet or toilet, etc.). Usually the parts are the least expensive part of a repair. If you are at all handy force yourself to take the time to fix things yourself.
If you’re not handy or won’t have the time to fix everything in the next few months call a handyman or specialist for the things you can’t handle. A good independent handyman should be able to do most things you need at a far lower rate than a plumber would charge to fix your toilet or an electrician would charge to fix a broken appliance. Ask your neighbors for recommendations of good handymen, and find out their hourly rates. The handyman franchises, which advertise heavily in local media, can cost as much as a specialist, however. If you can get a specialist (i.e. electrician or a plumber) for about the same price, that’s a smarter choice. Reporting services like Angies List, which carry consumer ratings on local contractors, can be very helpful in identifying which contractors are the most reliable and least expensive.
More extensive remodeling projects will probably require a remodeling contractor. Many projects can return 100% of the investment when you eventually sell your home, and improve your lifestyle in the meantime. Another plus of remodeling is that if it will make the home better suit your needs in the future, it can be a lot less expensive than selling your home and buying another which has features. By the time you finish selling your home and buying another, you can easily spend 10% of your home’s selling price on real estate commissions and various settlement costs for both homes. You can do a lot of remodeling for that amount.
The best candidates for a good return on your remodeling investment are things like updating badly dated kitchens or baths, or adding a second bathroom in a one bath home. The National Association of the Remodeling Industry periodically publishes return-on-investment data on most types of remodeling projects. Don’t over improve to where your home’s value substantially exceeds that of the neighbors or you’ll have trouble recouping your investment when you eventually sell. You can also help keep costs down if you are willing to do some of the easier finish work yourself, like painting or trim work.
Check the references of remodeling contractors thoroughly. Consumer complaints regarding remodeling contractors consistently at the top of the Better Business Bureau’s and the American Homeowners Foundation’s complaint list. To avoid disputes always use a comprehensive contract when you hire a remodeling contractor.
Resolution #9: In the face of growing signs of recession, I will be cautious in 2008.
Because of the growing threat of a recession, 2008 is not a good year to become over extended. Whatever else you do, make sure that you have enough cash or liquid reserves to weather unforeseen events, such as company layoffs or family illnesses. If that means waiting until next year to buy a new car or new home, so be it. Prices and interest rates may be a little higher next year, but so will your savings. A little wait to avoid a significant financial risk is well worth it.
Resolution #10: I will engage in the political process to influence issues of economic impact to me and my home.
Home ownership is a nonpartisan condition, yet the votes of legislators and rules of regulators will have a lot to do with your economic future. Home equity is the single largest form of savings for most homeowners and many of those votes will impact the value of your home. Those votes will also impact your mortgage interest rates, your taxes and other major expenses for most homeowners, such as healthcare. All of them will impact your ability to buy a home and your lifestyle. For many years American homeowners have been the true “silent majority”. With a Presidential election this November the 75 million American homeowners can no longer afford to remain silent. We must raise our voices to policymakers at all levels in 2008 to protect the value of our homes and the institution of home ownership.
Courtesy of the American Homeowners Foundation and the American Homeowners Grassroots Alliance, www.AmericanHomeowners.org.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.
Insurance Fraud Never Pays
Please read. It's things like this that continue to keep insurance rates on the rise.
http://calibre.mworld.com/m/m.w?lp=GetStory&id=287293621
Chad Hemenway
Released : Wednesday, January 02, 2008 12:07 PM
Authorities continue to search for two individuals they say took part in an automobile insurance fraud scheme that put about $3.4 million in their pockets, according to court documents.
A federal grand jury in U.S. District Court, Northern District in Pensacola, Fla. handed up a 21-count indictment against Waylon Bryant Gregory and Chrystal Giluso, both of Florida. Arrest warrants were signed late last month.
The indictment charges the couple with fraud, identity theft and illegal use of Social Security numbers.
Gregory is accused of obtaining the personal information of others, using fictitious names and taking out fraudulent driver's licenses, bank accounts and credit card accounts, the indictment says. Using these identities, Gregory also took out auto insurance policies with Progressive, Permanent General Assurance Corp. and Geico companies in the maximum amount allowed.
Gregory allegedly wrecked the insured vehicles, then filed claims for medical expenses, property damage, personal injury protection and uninsured motorist coverage, according to the indictment. When the companies required more information about the claims, Gregory and Giluso gave them more false information.
It is unclear within the indictment how Gregory obtained others' personal information or how many vehicles he wrecked to collect fraudulent insurance payments.
The Insurance Information Institute estimates that fraud accounts for 10% of the property/casualty insurance industry's incurred losses and loss adjustment expenses, or about $30 billion a year. Miami leads a list of cities with the most staged auto accidents, according to the National Insurance Crime Bureau. Orlando, Fla. ranks eighth.
The top five writers of private passenger auto insurance in Florida in 2006, according to A.M. Best state/line data, were: State Farm Group, with a 21.5% market share; Allstate Insurance Group, with 14.3%; Berkshire Hathaway Insurance Group, with 12.7%; Progressive Insurance Group, with 11.2%; and USAA Group, with a 4.4% market share.
(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway@ambest.com)
Copyright 2008 A.M. Best Company, Inc.
http://calibre.mworld.com/m/m.w?lp=GetStory&id=287293621
Chad Hemenway
Released : Wednesday, January 02, 2008 12:07 PM
Authorities continue to search for two individuals they say took part in an automobile insurance fraud scheme that put about $3.4 million in their pockets, according to court documents.
A federal grand jury in U.S. District Court, Northern District in Pensacola, Fla. handed up a 21-count indictment against Waylon Bryant Gregory and Chrystal Giluso, both of Florida. Arrest warrants were signed late last month.
The indictment charges the couple with fraud, identity theft and illegal use of Social Security numbers.
Gregory is accused of obtaining the personal information of others, using fictitious names and taking out fraudulent driver's licenses, bank accounts and credit card accounts, the indictment says. Using these identities, Gregory also took out auto insurance policies with Progressive, Permanent General Assurance Corp. and Geico companies in the maximum amount allowed.
Gregory allegedly wrecked the insured vehicles, then filed claims for medical expenses, property damage, personal injury protection and uninsured motorist coverage, according to the indictment. When the companies required more information about the claims, Gregory and Giluso gave them more false information.
It is unclear within the indictment how Gregory obtained others' personal information or how many vehicles he wrecked to collect fraudulent insurance payments.
The Insurance Information Institute estimates that fraud accounts for 10% of the property/casualty insurance industry's incurred losses and loss adjustment expenses, or about $30 billion a year. Miami leads a list of cities with the most staged auto accidents, according to the National Insurance Crime Bureau. Orlando, Fla. ranks eighth.
The top five writers of private passenger auto insurance in Florida in 2006, according to A.M. Best state/line data, were: State Farm Group, with a 21.5% market share; Allstate Insurance Group, with 14.3%; Berkshire Hathaway Insurance Group, with 12.7%; Progressive Insurance Group, with 11.2%; and USAA Group, with a 4.4% market share.
(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway@ambest.com)
Copyright 2008 A.M. Best Company, Inc.
Subscribe to:
Posts (Atom)
