Article Content:
The global economic crisis is causing all of us to review our outgoings and to reconsider whether we really need to spend on items we used to take for granted such as life insurance. However, whilst many of us are eager to reject the idea of life insurance as a necessity at all, we all know that the best way to really save and benefit from the security it offers is to be a healthier person. So how healthy are you? And could you be benefiting from kicking some of those indulgent vices into touch?SmokingWhether you are a smoker or not can make a huge difference to the amount you spend on life insurance premiums. UK No Smoking Day occurs on the 11th May and highlights the many benefits of quitting, and aside from the obvious health implications, the financial ones via savings on your life insurance are also very great. According to The Guardian, stopping smoking for a year when you reach the age of 40 can result in premiums 50 percent lower than they would be for a continuing smoker. Taking actual costs into account, an individual could save over £100 a month.AlcoholSimilarly, alcohol consumption can affect life insurance prices also. This information increases in significance when we consider how much is adequate to drink in health terms. The Telegraph reported last December that insurers were being forced to push up prices after increases in cases of liver cirrhosis, heart problems and cancers which may be linked to alcohol consumption – whilst statistically 20 percent of UK men and 30 percent of women are said to drink ‘hazardous’ amounts. 50 units, i.e. an amount that is considered harmful can result in £300 extra on premiums over a year. Yet, an article at bytestart.co.uk highlights the importance of re-taking a liver-function test should you cut down, as this will likely be taken into account during a life insurance review.ObesityBeing obese to the point that it affects your health, and with levels of clinical obesity increasing faster in the UK than anywhere else, insurance companies are beginning to take note. Statistics form whatprice.co.uk look at the average 40 year old (at 12 stone) compared to an obese person of the same age and who will weigh 18 stone. Cover that is worth £100,000 would cost 50 percent more for the latter individual, but they may even be at risk at not being granted cover at all.Whilst the recession is causing many of us to cut back on spend, and to re-assess the financial aspects of our lives, by acknowledging the savings made by those with a healthier lifestyle it seems that 2009 might be the best year to focus on our health habits as well as our money habits. And if you are healthier now than you have been since buying life insurance, review your policy and compare prices – and keep them informed even if you have just joined the gym. It might be worth more than you had realized.

———————

Article Content:
Here are 10 things you can do to protect your families wealth from the simple creating a will to the less obvious like discounted gift schemes.1.Make a willWithout a will, the State decides who receives money and assets in your estate. When this happens in England and Wales, your spouse takes the first £125,000 as well as your personal possessions and an interest for life in half the balance. The rest goes in equal shares to your children.By making a will you could, for example, transfer some of your assets to children, grandchildren or others after your death within the £300,000 nil-rate band which would mean these bequests were IHT-free. All transfers between spouses are IHT-free but simply passing all assets to the surviving spouse means the IHT allowance of the first spouse to die is wasted and an extra £120,000 extra tax may be paid when the second spouse dies.You could also use your will to set up a family trust but recent legal changes may mean your will needs updating. It is important to revise your will whenever your circumstances change – for example, when there is an addition to the family.2.Change ownership of your homeCouples usually own their home jointly, meaning you both own the entire property. You should change ownership to become tenants in common so that you each own half of it.David Rothenberg of accountants Blick Rothenberg explained: ‘If you own it jointly, the house automatically belongs to the other person when you die. “By severing the joint tenancy you can give your share away to someone else when you die.”It is simple and cheap to do. A lawyer should charge around £100 to do it. But it is very important to consider the risk such a bequest might present to the security of tenure of the surviving spouse.3.Equalise other assetsEqualise your estates. By having most of your cash, savings and assets held jointly or in one name only, the other person will not be able to use up their IHT allowance in their will.Accountant Charlotte Black of Brewin Dolphin said: “If everything is held jointly it causes a problem as there is nothing to pass on when the first person dies.”Where husbands and wives or other members of civil partnerships trust each other sufficiently to equalise assets, they may even achieve immediate tax savings through making more use of the personal allowance for income tax – currently £5,225 per person aged under 65 – and capital gains tax – £9,200 per person during the tax year which ends on April 5, 2008.4.Give with warm handsYou can give money and assets away before you die but there are strict limits under the IHT regime. Each person can give away £250 a year to any number of people as well as £3,000 in total annually to different people.If the £3,000 allowance wasn’t used last year you can give away another £3,000 this year. So, for example, couples who have made no use of this gift allowance can give away £12,000 in total this year.There are no limits on the amount you can give away regularly out of your income, but it must not reduce your lifestyle.Mr Rothenberg explained: “The Revenue is getting quite tough on this – so it’s important to keep records of your expenditure as your income has to remain sufficient to cover your expenses. And record what you’ve given away.”5.Put your life cover in trustWhen you die your life insurance will automatically pay out to the beneficiaries without having to go through the IHT regime if it is held in trust. The death benefit passes directly to them without being counted towards your estate. The life company – or, for example, the insurer which issued a with-profits endowment – will give you a form to complete to do this and it is usually free.6.Check your pension arrangementsEmployers’ pensions are normally written in trust meaning any death-in-service lump-sum payment passes directly to whoever you nominate. Pension benefits for a widow or widower do not affect IHT though they will be subject to income tax.Personal pensions should be written in trust, too, so that the pension pot can pass tax-free to whoever you wish. This must be done before you have to buy an annuity at 75 and cannot be done if you are in poor health – so it makes sense to consider action sooner rather than later. For example, as Mr Rothenberg said: “You can’t change it if you are at death’s door.”7.Consider tax-efficient investmentsSeveral investments are free of IHT after they have been held for two years. These are shares quoted on the Alternative Investment Market (AIM), forestry land, farming land – provided you farm it, rather than rent it out – and partnerships or shares in a private business.However, the favourable tax treatment should not blind you to the risks in these investments, particularly AIM shares. Small or recently formed companies are often more vulnerable to setbacks in a particular sector and may have smaller reserves to help them survive difficult conditions. There is no point losing capital to avoid tax.8.Think of a PETPotentially exempt transfers (PETs) are gifts of assets, cash or property you make before you die but you have to survive for seven years before they become IHT-free.After three years, the beneficiary may get some tax relief which can increase each year until the seven years is up. However, if the gift is less than the nil-rate band the whole amount is added back into your estate when calculating how much you owe in death duties.Mike Warburton of accountants Grant Thornton explained: “The tax relief is a discount on the tax, not the transfer itself. A single gift of £300,000 six years before the death of the donor will save nothing because the gift would all be within the nil rate band. This is frequently misunderstood.”You can’t give your house away and continue to live there to diminish IHT liabilities, as the Revenue will regard it as remaining in your estate. But you can give it to a child who lives with you, said John Liddington of lawyers Speechly Bircham. He explained: “The child must live in the property until you die or go in to a home and you must both contribute to the running costs in order not to fall foul of tax rules.”9.Discounted gift schemesThese are single premium life policies which pay you an income for life and you give the policy itself away. Because it is paying a fixed income, the value of the policy is reduced. The actual discount is based on your age – the older you are the more valuable it is – so you have to be under 90 years old to use this type of scheme. However, it is important to understand that HM Revenue & Customs has pursued a strategy of challenging tax avoidance schemes in the courts which may continue in future.10.Set up a trust in your willHomeowners usually have the majority of their wealth tied up in their property. Without a trust, you cannot give away your share of the family home safely.In this instance, the trust only comes into existence when you die. You will your assets and share of your house (held as tenants in common) to the trust up to the value of the nil-rate band, currently £300,000 and due to rise to £350,000 by 2010.Then the trustees sell the share of the house back to the surviving spouse in return for an IOU. When the second person dies, the loan is repaid, thus using up the first person’s nil-rate band.It may sound simple but trusts are complicated and need a specialist to handle them. For example, earlier this year, the family of an Oxford don and his wife had to pay £60,000 in IHT when their trusts were considered to fall foul of IHT rules.The problem was that Dr Patrick Phizackerley gave half his house to his wife, who then willed it to a trust on her death, and the trust lent him the share back until his death. However, the Special Commissioners, who settle disputes between taxpayers and the HM Revenue, ruled the scheme did not apply as Mary Phizackerley had no income and had not contributed to the house.Mr Liddington said: “Since he’d given her half the house and then loaned it back to him via the trust after her death, he was considered to have lent his gift back to himself so the loan was not deductible for IHT.”Checklist – 10 things to doWrite a will and/or check that your existing will is up to dateConsider changing the legal form of ownership of your homeEqualise your assets so that both partners make use of tax allowancesMake gifts sooner rather than laterPut life assurance policies in trust and outside IHTCheck pension death benefitsConsider investing in tax sheltersThink of a PET – or Potentially Exempt TransferDiscounted Gift Schemes may help – but beware pitfallsSet up a trust in your will

———————

Article Content:
Thinking of cashing in your life insurance? Cashing a life insurance policy can be costly business! In recent years cashing a life insurance policy has become a very common practise. It used to be that most life insurance policies were left in force in order that the intended beneficiaries could receive the face value of the insurance policy upon the death of the insured.Ever since the inception of the aids virus, people with the disease have searched for ways to get their hands on cash to pay medical bills and in some cases just to live. Thus, if these people have life insurance policy with large cash values they end up cashing a life insurance policy or selling their life insurance policies.Even the people who are receiving structured settlements from life insurance or an annuity are cashing their settlements in return for an immediate lump sum. These companies that buy these settlements or policies are enjoying a real bonanza…but the person with the terminal illness and their families are really losing in the end.These investment companies buy life insurance policies from terminally ill people for a percentage of the face amount of the policy. The investment company pays all premiums for as long as the insured stays alive and collects the death benefit upon his or her death. The investment company is called a viatical company. Selling the policies can be referred to as “viatication”.In some situations people who are not terminally ill also sell their policies. In their situation their health has declined and they are in need of cash. These are referred to as life insurance settlements.Instead of cashing a life insurance policy or selling your life insurance policy it may be prudent to take a loan from your policy if the “loan value” is sufficient to meet your financial needs. Bear in mind that there may also be tax implications involved with cashing a life insurance policy or selling it.

———————

Article Content:
Why should you get life insurance? Well, insurance is designed to protect a person and the family from disasters and financial burdens. There are many kinds of insurance of which, the basic and most important is considered to be life insurance. It provides for the dependants after your death.Since there are certain financial commitments you need to meet throughout life and do contribute in some way to the family income, you need to provide something even in death—to secure the home, help the family meet expenses for a while, protect dependant parents, or secure the children or spouse.Financial obligations could include funeral expenses, unsettled medical bills, mortgages, business commitments, meeting the college expenses of the children, and so on.How much insurance a person needs would vary, depending on lifestyle, financial needs and sources of income, debts, and the number of dependants? An insurance adviser or agent would recommend that you take insurance that amounts to five to ten times your annual income. It is best to sit down with an expert and go through the reasons why you should consider insurance and what kind of insurance planning would benefit you.As an important part of your financial plan insurance provides peace of mind for any uncertainties in life.So here are 10 reasons why you should consider getting life insurance: Life insurance correctly planned will on premature death provide funds to deal with monies due, mortgages, and living expenses. It offers protection to the family you leave behind and serves as a cash resource.It secures your hard earned estate on death by providing tax free cash which can be utilized to pay estate and death duties and to tide over business and personal expenses.Life insurance can have a savings or pension component that provides for you during retirement.Some policies have riders like coverage of critical illness or term insurance for the children or spouse. There are certain rules regarding eligibility for riders which you will need to determine clearly.Having a valid insurance policy is considered as financial assets which improves your credit rating when you need health insurance or a home loan or business loan.In case of bankruptcy, the cash value as well as death benefits of an insurance policy is exempt from creditors.Life insurance can be planned such that it will cover even your funeral expenses.Term life insurance has double benefits, it protects and you can get your money back during strategic points in your life.Insurance protects your business from financial loss or any liabilities in case a business partner dies.It can contribute towards maintaining a family’s life style when one contributing partner suddenly dies.Insurance is vital to good financial planning and security but you would need to assess your personal risk and long term commitments. Insurance stands a person in good stead throughout life and can be used in case of emergencies during a life time by requesting a withdrawal or loan.Visit Post Office® for life insurance quotes and to buy a simple, cost effective life insurance policy, offering you a way to pay off your mortgage or leave your family a cash sum when you die.

———————

Article Content:
It’s inevitable that when you enter that bracket of the over 50s, your financial future starts to loom large. Pensions in particular are just over the horizon, and it’s usually at around this time that you start to truly assess the provisions that you’ve put in place for such a time as when you retire (either that or you curse your lack of forethought!).But alongside this imminent financial upheaval, there is the question that’s beyond that, thankfully still out of palpable reach – life insurance.Inevitably, ones own mortality starts to be felt in more and more of your life, and consequently, thoughts turn to providing for your nearest and dearest in the event of your death. Although it’s easy to shrug off the notion of dying, it pays to consider taking out a policy, or reassessing your existing one, at this stage – potentially before any personal circumstances change. Age, sex and health are the major contributing factors to how expensive the premium on your policy will be, so of course, when you start in to your fifties, insurers will change their offers to fit that watershed, half-century moment.Many companies will offer a specific over 50s life insurance, with particular rates and guarantees entailed. Often there will a guarantee of acceptance without any medical check – mainly because your age has become the largest factor in deciding how much your premium will be – though it pays to be entirely honest with your insurer.Closet smokers who are in denial will find it’s too late, post-death, to convince your insurer that you only smoke occasionally – by which time the pay out may have been denied. However, due to your being over 50, the policy will be particularly easy to arrange, although it is still worth shopping around for the best offer for you.Most insurers will incentivise their product, and it may have repercussions on the way that your bank or building society – if you decide to take out a policy with them – will treat you as customers.

———————