Tax On Life Insurance – Who Will Owe Money

There are many kinds of life insurance to choose from. These are offered from different insurance companies worldwide or in your area. It is one of the bases with regards to protecting your financial stability after your death.

With regards to the cost of life insurance, it varies depending on many factors. Such as the insured’s age, health as well as occupation. There are many types of life coverage such as whole life, universal life, variable life, term life, etc.

Life insurance is confusing sometimes. It is so important that you understand the entire process such as knowing how much the premiums are and if there are taxes on death benefits. It is written in the Internal Revenue Code Sec. 101 that manners in which insurance payouts can be taxed and taxes on insurance do not apply.

Actually life insurance proceeds are not taxable on their own, but most of the other forms of inheritance are taxable. These include dividend, interest and capital gains income. What is taxable is that if your life insurance death benefits is $100,000 for example, then you receive more than that let say $110,000. The taxable part is only the exceeding part or what we called extra, which is $10,000. Since benefits are generally tax free wherein you don’t need to report it on your income tax. If ever you receive the exact amount of $100,000 then its tax free.

The proceeds of life insurance are tax free but there are also several factors where in it could make the proceeds taxable income especially to beneficiaries. So, always be careful in choosing insurance and always read the insurance policy and understand what covers and benefits it gives you. It is important that before purchasing any policy, you need to educate yourself. Once you have knowledge on where your money goes, what is taxable in your insurance policy the better off you’ll be. Do your research online for easy, fast and convenient way where in you own your time and day to log in.

Remember that most policies are subject to premium limits, in short a certain set of amount that can be contributed each year and take note also that you need to avoid policies from building up too quickly and become tax sheltered investments.

If you have what is known as incidents of ownership in the policy then proceeds of your policy may be subject to federal estate taxes so be careful. Always be sure you understand the policy you have and ask if ever you don’t understand. As customer, you have the right to ask question regarding on your life insurance.

Choose the insurance company that have good service and willing to explain what you don’t understand in your life insurance policy especially when regards to being taxable.

Is Your Life Insurance Company One of The Biggest?

Life insurance companies are the most profitable businesses these days. Moreover, companies selling policies are among the most influential corporations in the world.

These well-known and biggest companies provide affordable policies that benefit consumers. Economical stability of the insurance industry helps these companies to make the most of the consumers’ money with an attractive cash return.

Metropolitan Life Insurance Company (MetLife), Transamerica Occidental Insurance Company and American General Insurance Company (AIG) are some of the recognizable brands in the United States. These companies deal mostly with life insurance. They handle both term and whole life insurance policies in an easy and comfortable manner.

Details on These Giants:

All the biggest companies work with similar principles. They provide life coverage policies to fulfill the needs of the customers. However, they differ in their coverage plans and terms.

Metropolitan Life Insurance Company offers definite service factors, simple policy administration and reliable operations. They offer the best solution and service, in case of financial planning. MetLife handles $2 trillion worth of policies and therefore, is considered as one of the biggest insurer in the United States. MetLife provides financial holding with a countrywide-chartered bank.

MetLife also offers services in Asia and Europe, and serves customers as a part of Reinsurance Group of America. In 2005, MetLife received the certification of biggest life insurer in the United States, with the implementation of traveler’s life and allowance group. MetLife offers both term and whole life policies at a cheap rate and avoids rider.

According to the press releases, American General insurance Company is another of the biggest insurance company in the United States. The company is a worldwide leader in financial service that deals with insurance, retirement planning and investment. This company is spread internationally all over Asia, North America, Europe, Latin America and the Middle East, as AIG (American International Group).

AIG provides savings on life policies at affordable rates. Online quotes offer an effortless and hassle free shopping option to their customers. AIG plans include term life, whole life and universal life insurance coverage. However, their term life policy is the most widely used as compared to others.

The Transamerica Corporation is the parent firm of various life insurance and investment companies. Among these firms, Transamerica Occidental Life Insurance Company is the biggest insurer. They also handle affordable policies, including term, whole and universal.

Conclusion:

All the above listed companies sell these policies at affordable rates and assure security to their customers. These qualities make them the giant figures in the industry. These companies earn huge profits from the premiums paid by their customers.

These premiums are termed as float and the status of float, leads to the life insurance company’s success. Certain financial rating companies such as A.M Best, Fitch, Diamond Bond, and Standard and Poor evaluate the status of these companies annually. Their findings show that, MetLife, AIG, TOIC and Prudential are the four biggest companies.

People often choose one of these big companies for security it offers compared to lesser know brands. To see how much such things could cost you please consult one of the links below.

The Necessity of International Travel Insurance

Everyone has an innate desire to travel abroad and go to places they’ve never been before. It certainly would be an exhilarating experience worth remembering for life.

Indeed, traveling abroad is exciting but there are things you need to brace yourself up with before you fly. These include international travel insurance. It isn’t a scam. Actually, it can be considered as a life saver in some ways. You’ll fully understand its importance once you get to your destination.

Basically, if you have international travel insurance at hand, you will never be anxious instead, you’ll have peace of mind. This is not a sales pitch. Take note, you are traveling to another country. You don’t know what to expect, right? Driving your way to a different state that has unfamiliar symbols and signs around with different names and places can be very disorienting. Good for you, if they speak the same language as yours or at least know how to speak the language you speak of.

Being in a foreign land can be discomforting as well as alarming at times. But with international travel insurance it will make it less so. Therefore, never hesitate to apply for international travel insurance before you leave the country.

Aside from having peace of mind, international travel insurance can also grant you safety. You can be spared from many paradoxes you may encounter along the way. For example, you are looking for a doctor and since let’s say, you are in Portugal, it would be easy if you speak Portuguese. Now, what if you can speak Portuguese, would you still need an English speaking doctor?

Another example, let’s put it in this case, if you happen to lose your passport, the easiest solution would be to go to your Embassy. Now, how are you going to do that when you can’t get inside the Embassy without showing your passport?

This is where International travel insurance serves its purpose. It provides solutions to these paradoxes and helps you get away from these difficult situations. Aside from that, it helps youin recovering nonrefundable costs in delays and cancellation as well as it aids you with emergency medical care.

Indeed, going to places you’ve never been can be an exciting experience. Seeing the world’s best tourist destinations such as France and Italy will certainly be a memorable experience. You may bump into some unexpected and unwanted events, like what was above mentioned; having international travel insurance will be your guarantee for a safe and worry-free trip.

Bank Owned Life Insurance – Everything to Know

Bank owned life insurance or BOLI is a life insurance policy which is purchased by a bank against the lives of its executives. State insurance law has made it advisable for the bank to have an insurable insurance as the bank suffers loss if the employee deceases. The executive’s consent is required but his/her involvement ceases after the initial signing of the contract. The insurance cash values accumulate at a tax-free basis at the net crediting rate.

Types of Bank Owned Life Insurance

There are mainly three types of bank owned life insurance based on the investment point of view-

  1. General account: These investments are usually not required to be bank eligible. These are the general investments, real estate loans and all other assets that come within the general fund offered by life insurance companies.
  2. Separate account: The underlying investments in this case are typically bank eligible bond funds which are generally designed by well-known fund managers and also managed by them.
  3. Hybrid account: The underlying investments in this type are bank eligible investment pools that are designed by the insurance companies and also managed by them.

The percentage of transparency in the disclosure of the policy’s yield and costs is a chief distinction between the three types of BOLI. The general account yield of the insurance company is indirectly proportionate to the net yield that the bank receives. The insurance carriers reserve the right to pay up any appropriate rate according to their perspective. A desire to be competitively priced could influence the market rate paid on the general account BOLI. This is similar to the concept of interest rates offered by the banks where the banks can adjust rates if they choose. While in the case of separate account and hybrid BOLI, all costs incurred in the underlying investments are entered in the documents and contracts. This ensures greater transparency of costs and interests.

Characteristics of BOLI

It is a typical characteristic of all insurance policies where the older the individual is, the higher the insurance cost. However, this is not necessarily so in case of bank owned life insurance. Calculating the long-term internal rate of return the high insurance costs may be offset with the receipts of the insurance when the employee dies. As many banks and organizations have objected to benefiting from the death of an employee, insurance companies have come up with specialized solutions including a smoothened mortality feature.

Band Owned Life Insurance Basics

Bank owned life insurance explained in a basic level involves the buying of life insurance in a group involving the employees of a particular bank. The group eligible for BOLI is usually at the higher level which may be assistant Vice President and above or based on the salary criteria. The premium of the policy is paid by the bank and the bank owns the cash value and is the sole beneficiary of the insurance amount. This is a non-taxable benefit and is quite basic in form.

International Travel Insurance Protects Life and Pocketbook

Man stabbed in Ecuador
In a recent blog about an unprovoked attack on an American couple in Ecuador, Lisa – one of the victims — writes, “We recently received some good news that I would like to share–Britt does have some insurance coverage that should help cover medical expenses here in the US.”

Yet Lisa goes on to admit, “We cannot be sure what our ultimate financial burden will be right now, but have no doubt that the donations people have made in his name will be needed for his recovery.”

Lisa’s blog documents the medical progress of her fiancĂ©e, Britt Leis, who was violently attacked on a beach in Ecuador. In preparation for their year-long tour of South America, Britt and Lisa sold their American belongings, packed their bags and done their research. The day of the assault they had dressed down, so as not to attract unnecessary attention. Lisa was beat by the assailants and Britt was stabbed 18 times. Authorities have not discovered the motivation behind the attack nor its abrupt end. However, they have asserted that the attackers were intending to kill and not simply to rob Lisa and Britt. Even after undergoing three surgeries in Quito, Britt’s infections were so severe that death became an eminent possibility. Finally, he was medically evacuated to the States only two months after he and Lisa had departed.

The huge cost of medical evacuation
According to msnbc.com, the evacuation alone cost over $55,000. As Lisa mentions, they are currently heavily dependent on the will and generosity of others. However, even this generosity cannot completely erase the stress and difficulty that comes with unpaid medical bills. Thankfully, Britt does have some health insurance in the States. Nevertheless, the bills he accrued while in Ecuador still had to be paid out of pocket.

The inexpensive cost of international travel insurance
Do you want to avoid paying out $55,000 for medical evacuation? I do. And all I have to do to avoid that is to pay out $29 for a month of travel. Yes, that’s right … only $29! If you are older, say about 50, your worldwide travel insurance would only cost about $35.

A good global travel insurance plan can assist you in several ways:
1. Supplement your domestic health insurance policy. Many policies are limited in what they cover when you travel abroad.
2. Inform you about which hospitals and physicians meet your standards and aid you in getting access to them.
3. Provide trip protection against trip cancellation, trip interruption, baggage protection, medical evacuation and other critical services.

Talk to a reliable insurance broker before you travel.