Discussion on the Insurance Laws (Amendment) Bill 2015: Shri Ramesh Pokhriyal Nishank: 04.03.2015

The Importance And Benefits Of Life Insurance

Have you ever wondered if the bill you pay every month for life insurance is really worth it?  Do you see the insurance bill in the stack of all the other bills you have to pay and think maybe you could save some money by getting rid of this one?  Well if you have, think again because life insurance is definitely a necessity.  This is especially true if you happen to be the main income earner for your household.

To begin with, if you should unexpectedly pass away, the money from your life insurance will enable your family to pay for your final expenses.  Although none of like to think about our death, do you want your family left in debt in order to pay for your burial services and casket?  These are expenses that will need to be paid.  If your life insurance policy exceeds the amount that is needed for your funeral costs, your family won’t have to stress over that while they are grieving their loss.

Also, should you happen to die due to an unforeseen accident, you don’t want your family to end up struggling financially.  You want to have a policy that will get your family through a year at least without needing to readjust their living expenses.  This will give your loved ones time to arrange their finances before needing to cope with a drop in income.  This is one of the greatest gifts you can provide your family with.

Look to see what different kinds of policies are available to you.  If you are in good health and a non smoker, you might be able to get a policy with a much better rate than your current one.  Speak with several different agents or visit Taik.org to ask how much insurance you can get from different companies and what it would cost.  You may discover it doesn’t need to be that expensive in order to have peace of mind.  After all, your family definitely deserves to have the reassurance that should the unthinkable happen, you have thought of them ahead of time and planned for their financial well being.

What Is Life Insurance?

There’s a popular belief that life insurance is something one can benefit of only after death. This is why many people regard it as an unnecessary expense, something that’s not useful during their lifetime.

These people ignore a fact: life insurance is also about the living. It can be about investing your money into stocks and bods, while covering yourself for the event of becoming ill of suffering an accident. Besides, if you do die, a life insurance policy will give your family a better chance to be able to cope with their expenses.

Additionally, the burden of your funeral will seriously affect your family. Funerals aren’t cheap and if your family isn’t wealthy, they may even be forced to declare bankruptcy or go through a foreclosure process. A simple life insurance policy would have saved them from all that, but it would be too late by then already. Being cautious is a virtue and a sign of respect for your beloved ones. Why throw your death on their shoulders, when you can have everything settled from before?

There are two types of life insurance: term and whole. If you want to know the difference between the two, you could contact an insurance agent and ask for more details. The agent will help you understand what kind of insurance works best for your specific situation and income level, so you can choose the best protection you can afford.  You can also go to a life insurance quotes site like Goldsmithinsurance.com to get quote based off of your profile that are VERY accurate.

As a rule of the thumb, the bigger the coverage, the more expensive the life insurance policy will be. The older you are when you buy it, the more you’ll have to pay for the same coverage. This is why it’s best to get your life policy while you are still young. This is how you’ll pay less and go on with your life without worrying your family will have to suffer from financial point of view in the event of your death.

Understanding Life Insurance for Diabetics

When an individual is diagnosed with diabetes, life insurance coverage sold inside the United States can get unaffordable. This is because life insurance insurance companies  “rate” or charge a premium based upon an your health conditions. Make sure you shop the entire life insurance marketplace and find a trusted advisor who can help you secure the lowest rates while factoring in your diabetes.

Affordable Life Insurance for Diabetics

Finding affordable life insurance for diabetics is possible. You simply need to know where to look. Certain life insurance companies look at your diabetes more favorably than other companies.  So all you have to do if find the company that looks most favorably at YOUR unique situation.

Which is why you need to speak with an agent who knows how to pitch your risk to life insurance underwriters.  It’s up to your agent to secure the most affordable rates so make sure you find an expert!

Understanding Life Insurance for Diabetics

Many consumers get upset when they find out how expensive life insurance can be if you have diabetes.  Life insurance doesn’t have to be expensive unless of course you don’t have your condition under control.  If you have any diabetic complications or high a1c levels, you’ll naturally have a hard time finding affordable rates.  Our suggestion would be to wait to apply for coverage until you have everything under control.

Life insurance companies are looking for control and compliance.  Compliance meaning that you’re following your doctors orders and taking your medications on time, every time.  Control meaning you have your glucose, blood sugar or a1c levels under control.

For those that do have their diabetes under control, affordable rates are attainable.  You can even qualify for life insurance without a medical exam although it would be more expensive.  However many diabetics like the convenience of not taking a medical exam.

Also important to understand is Type 1 diabetics will be more expensive than a Type 2 diabetic.  That’s just the way it is.  Type 1 diabetics can ballpark their rates at double the cost of Standard rates if they show control and compliance to medications.

Bottom line is make sure you speak with an independent life insurance agent whose experienced in working with diabetes.

Benefits of Life Insurance

There are a few things in life that should concern you, but one of the more important issues would be, what would happen if you ever passed away? When children are involved, this event becomes that much higher of a concern. It is for this reason that parents and guardians consult an insurance representative to decide what sort of policy they need to enroll in, if only to make certain that their loved ones are covered.Because we are given choices, the difference can sometimes end up being, which policy will be more affordable, or how many extra dollars am I able to budget for this cause. Unfortunately, there are times that we put off the responsibility until a later date, simply because we happen to be healthy at the time. Rather than invest in the possibility that things can turn on a dime, we keep hoping that we will be around for a much more permanent period of time.As important as Life Insurance is for us to have, there are benefits that we should be thinking about, especially the one where we are given peace of mind. We should also be aware that there are two basic kinds of insurance policies to choose from and here are some of the differences.

1-As far as affordability is concerned, term life insurance is probably easier to work into any budget and if you have some minor health problems you can even get a no medical exam life insurance policy.

2-There is no end of the policy date to consider with whole life insurance, in fact, so long as it is paid up, you are covered.

3-On the other hand, term life can be selected for a specific period of time, a choice that will likely affect the amount of your premium.

4-Although your premiums may be higher, a term life policy can be purchased by someone who still smokes cigarettes.

5-If you like the thought of saving money for your golden years, whole life insurance is something to consider. This is just like a savings account that covers your life too.

6-Some investors look at whole life as another opportunity to put money aside, reduce tax liabilities, at least until they are ready to cash in.

7-If your health status changes through the life of your term life policy, your rates will not go up, although if you are still alive when the term is up, you will likely have problems renewing it.

8-Both policies will be there for your loved ones when you pass away and both can be adjusted to fit your particular needs.

There is something to be said for an insurance policy that covers all of your acquired bills when you leave this earth, some may think of it as smart, but one thing is for sure, your dependents will thank you for it.

Who is Whole Life Insurance Best For?

Trying to choose the right type of life insurance policy for you can be a bit of a challenge with all of the options out there to pick from. If you are in the market for a policy, one of the main types of coverage that you might be looking at is whole life insurance. Whole life insurance have some attractive features, but it’s not for everyone. How do you know if whole life insurance is right for you?

Want Permanent Coverage

If you want some kind of permanent life insurance coverage, then whole life insurance may be the best option for you. When you purchase a term life insurance policy, the policy will eventually expire. After that, your policy is worth nothing and you don’t have any death benefit for your loved ones. If you want to make sure that your loved ones will always have a death benefit come into them at some point in the future, getting whole life insurance makes sense. You won’t have to worry about paying into something for so long and never getting anything back out of it with whole life insurance.

Hands Off Investing

Another reason that you may want to get whole life insurance is so that you can take advantage of “hands off” investing. When you pay your premiums every month or year, part of the money you pay goes to an investment component. Part goes toward the death benefit, but the other part goes to a cash value. This is automatic and requires no effort on your part. Many people say that they’re going to buy term life insurance and then invest the amount of money that they save from not buying whole coverage. The problem with this scenario is that they never actually get around to doing it. That option requires you to have the financial discipline to actually do it.

When you put money into a whole life insurance policy, you also do not have to take any time to research investments or choose which investments to put your money into. The insurance company employs fund manager is to do all that for you. You simply make your payments every month and that cash value just automatically goes up. This makes your life a lot easier and you don’t have to worry about choosing the investments that are going to perform.


Whole life insurance isn’t always the best choice for every person, but it is attractive for many. If you shop around for whole life insurance quotes, you will quickly see that these added features do come with a price. Obtain some traditional life insurance quotes too and do cost-benefits comparison.

If you want to make sure that your loved ones will be taken care of no matter what happens to you, the permanent coverage of whole life insurance is definitely a good option.

Getting The Full Picture On Annuities And Life Insurance

From The New York Times. Read the original article here.
Published: May 10, 2013

LIFE insurance and annuities are supposed to accomplish straightforward goals: life insurance provides for your family if you die unexpectedly and annuities guarantee a steady stream of income in retirement. But right now, both are being promoted for their tax benefits.

Thomas Pauloski, national managing director at Bernstein Global Wealth Management, says it can be difficult to know what fees will apply to a policy.

Money put into these products grows on a tax-deferred basis just as it does in retirement accounts. In the case of annuities, the money is eventually taxed as ordinary income when it is taken out. With permanent life insurance, the death benefit goes to the beneficiaries free of income tax, but if it is a permanent policy, as opposed to a term policy, the owner of the policy could also borrow against its cash value and never pay income tax on it. (The insurance company charges interest on the borrowed money, though, and that loan reduces the value of the death benefit if it is not paid back.)

And while insurance companies are using the tax issue as a selling point, that is by no means the full picture. I have written recent columns on how this year’s tax increases have influenced behavior around estate planning and investments. As in those two cases, the decision to buy various life insurance policies or annuities can be unduly influenced by the tax advantages inherent in insurance. Many policies carry high upfront and management fees, have limited investment options and penalize people for withdrawing their money within a few years of buying the policy or annuity.

With these downsides, insurance companies are regularly looking for reasons to sell their products beyond the death benefits of insurance and the steady income stream of annuities.

“Oftentimes these products are sold based on the moment in time,” said Richard Coppa, managing director of Wealth Health, a financial advisory firm. “A couple of years ago, they were sold on guaranteed returns of 6 or 7 percent because people were so fearful. Today, it’s uncertainty about taxes because many of the favorable tax treatments out there are subject to negotiation.”

He said there were certainly people who were afraid of running out of money in retirement who could benefit from an annuity. He pointed to people with $250,000 to $500,000 in assets who could calculate how much money on top of Social Security they would need and buy an annuity that would cover that.

“I think you really need to run the numbers and understand the charges and compare those to an investment portfolio where you’ll get an expected rate of return,” he said.

Given the lure of tax-deferred savings, how should people weigh that against the risks and downsides of insurance and annuities?

Thomas Pauloski, national managing director at Bernstein Global Wealth Management and a former insurance company executive, said people could go wrong when they did not fully consider how long they wanted to keep their money in an insurance policy and how much the company was charging them in fees.

If they are going to pull out the money out in a few years, insurance makes little sense since fees will cancel out any gains. What’s trickier is knowing what those fees are going to be, even over the long haul.

Mr. Pauloski said among permanent insurance options — as opposed to term insurance, which has no cash value — only so-called private placement life insurance policies were clear about their fees, but that was because these policies were custom-made for someone paying a premium often in excess of $1 million. With more common forms of permanent insurance, like universal and whole life, finding the fees becomes more difficult, he said, because of how they get embedded in the policies.

More confusing still is how the returns on the cash value of the policy are presented, since they can mask the high fees. “Any insurance illustration is going to have a lot of assumptions built into it,” he said. “It assumes, for one, that today’s pretax dividend is going to continue forever. That is simply not going to happen.”

When presented with a proposal for a client, he said he often went back to the insurance company and asked it to redo the calculations with lower, more realistic assumptions. Even that, he said, is not perfect because it assumes a consistency that is unlikely.

With annuities, the fees start to pile up when people elect additional features, like a guaranteed, minimum payout. Those fees reduce the return and the value of the tax deferral.

Since the annuity company paid a commission to the broker who sold the annuity, there are also so-called surrender fees for taking your money out in the first five to 10 years of the annuity.

“My premise is annuities are second only to hedge funds in their ability to separate people from their money,” said Richard Del Monte, president of Del Monte Group, an investment adviser. “Generally speaking, they’re awful but there are specific situations.”

Among Mr. Del Monte’s exceptions are older annuities that have high guarantees and favorable terms for adding more money; another is the offerings of stripped-down, low-cost deferred annuities from newer annuity companies. These aim to preserve the benefit of the tax deferral through low management costs and no extras.

Mitchell Caplan, chief executive of Jefferson National, one of those low-cost annuity providers, conducted a study on the value of tax deferral to make the case for his company’s offerings. It analyzed what assets were best held in tax-deferred accounts and at what point fees reached a level that negated the benefit of that deferral.

Mr. Caplan said the study found that annuity management fees over 1 percent began to reduce the value of owning assets in a tax-deferred account. (Jefferson National charges a flat annual fee of $240, which, based on its average account size, is about 0.10 percent. It also does not pay commissions to advisers who sell them.)

Joseph W. Spada, senior principal at Summit Financial Resources and a longtime skeptic of annuities, said lower-cost annuities allowed his wealthy clients to own high-tax investments like hedge funds without worrying about their tax consequences. He recommended them, he said, when clients had fully funded all of their other tax-deferred vehicles, like retirement accounts.

For people in high-tax states like New York, this strategy could make particular sense, Mr. Pauloski said. If the return on a hedge fund were 10 percent, an investor in a high-tax state might give up half of that to taxes. If an annuity owned the same fund, though, the return could be closer to 9 percent if the annuity fees were low enough.

Mr. Spada said he put $1.5 million of his own money into a Jefferson National annuity because he could not put any more into his pension plan and wanted to maintain his allocation to high-tax tactical investments in a tax-deferred way.

But he said he also had a client with a net worth of $100 million who put $7 million into one of his annuities. “It’s not so he can get more retirement income that he’s never going to need,” Mr. Spada said. “I told him to let it grow tax-free and leave it to charity or put it into a stretch account and leave it to his kids.”

Mr. Spada said that fears over access to the money because of penalties and taxes were overblown when it came to low-fee annuities. If people were able to leave the money in an annuity for 10 years, they would have about the same amount after paying penalties and taxes as they would if the money been in taxable accounts.

Most people do not have millions of dollars to put into these products. They have to consider annuities and insurance in a more basic way.

“What I’m trying to do is to get people to stop thinking about life insurance as a plug-in for something else and start thinking about it as a risk-adjusted investment,” Mr. Pauloski said “The one risk we really can’t do anything about with our portfolios is an early death and, in the case of annuities, it’s outliving our assets. Use those insurance products to provide a better risk-adjusted return over the lifetime of their portfolio.”

Information Regarding Supplemental Insurance for Medicare

There are a lot of people who are confused about the details of their health insurance. Many times, they anticipate becoming a beneficiary of Medicare due to the fact that Medicare is not sufficient to completely pay the costs of their medical bills. They believe that this will eliminate their concerns. However, this is far from the truth.

The coverage provided by Medicare merely pays a small part of total medical costs. It is up to the patient to pay the rest of the bill. These medical bills can vary significantly in amount, which makes them hard to predict. This is bad news for people living on fixed incomes.

One solution to this problem is to get an Advantage insurance plan for Medicare. These budget-friendly plans help patients receive complete coverage in addition to peace of mind. They are often referred to as MA plans and they cover the remaining doctor fees and prescription costs left behind by Medicare.  For example, you can get a Medicare HMO California plan that covers both health insurance costs and prescription drugs.

It is best to shop around before deciding on a supplemental insurance plan. You should get lots of information from insurance agency regarding the Medigap plans they have available. There are a lot of plans to choose from, so take your time to find the right one that covers all of your medical care requirements and fits your budget.

The majority of insurance providers will gladly listen to your concerns and address your questions. You are not obligated to buy a certain plan just because you ask for information. Obtain information about several different plans and review them on your own time before you make a commitment to buy.

Anyone who is over the age of 65 should seriously think about obtaining a supplemental insurance plan for Medicare. Such plans make it possible to afford the medical care you need without worrying how you will pay for the portion that Medicare does not cover.

A Guide to Medicare Supplement Insurance

If you don’t like paying for medical costs that are not covered by your original Medicare Insurance policy, and you can afford it, it is a good idea to buy a Supplement Insurance Plan, also known as Medigap Insurance.  These insurance plans were designed to help pay for some of those medical claims that are not paid by Medicare Plan A or Medicare Plan B.  I am talking about those annoying extra bills for deductibles, co-payments an co-insurance amounts.

Some of these Supplement Insurance Plans, like medicare supplement plan G and plan F, even have options to pay for medical treatment when you are travelling overseas.  It will also cover emergency medical treatment so that you do not have to take out medical insurance when you buy your air tickets. When you are on holiday, you don’t want to be worried about what you would do if you suddenly became ill or had an accident and landed up in hospital.  A Supplement Insurance Plan will give you peace of mind so that you can enjoy a stress free holiday.

Paying your medical bills is easy with a Medigap insurance policy.  Your original Medicare Insurance will pay for the normal approved claims under Plan B, and then Medigap will pick up the balance.  The same service will apply when you are hospitalized, or for any other medical services covered under Plan A.

It is important to understand that a Medigap Insurance Plan does not give you extra benefits, but only supplements the benefits you already have with your Original Medicare Insurance policy.  Depending on your requirements, there are quite a few options that you can choose from.  The best thing to do is to discuss your needs and preferences with your insurance agent.  Make sure that you understand exactly which expenses, currently not covered by your Medicare Plan A or B, will be paid for by the Supplement Insurance plan you decide to buy.

Understanding Medicare Supplemental Insurance

Medicare supplemental insurance, also known as Medigap, helps cover some of the costs not covered by Medicare Parts A and B, including co-payments, co-insurance, and deductibles. The money can be used to pay for food and medication, cover lost wages, and handle unexpected expenses. This type of policy is not a replacement for regular health insurance. People who are 65 or older and have enrolled in the Medicare Plan can apply for Medigap.

How Does Medigap Work?

This type of health insurance covers the “gap” between the medical expenses reimbursed by Medicare and the total amount charged. Those who apply for this policy are still in the Medicare program and can keep the same doctors. When you enroll in Medigap, you don’t replace or cancel your Medicare membership. This optional backup plan can help pay expenses that your regular health insurance plan doesn’t cover. 

Medicare supplemental insurance is sold by private companies like AARP and Mutual of Omaha. There are 11 standard plans that vary in price. Each plan fills different “gaps” in Medicare coverage and offers different benefits. Customers can choose only one of these plans. Medigap plan F is the one most often chosen because it fills nearly all of the coverage gaps. If your spouse wants Medigap insurance, he or she will need to purchase a separate policy. Depending on what plan you choose, Medicare supplemental insurance may cover the cost of:

• Medicare Part A co-insurance and hospital benefits
• Medicare Part B co-insurance or co-payment
• Hospice care
• First three pints of blood
• Emergency care abroad
• Skilled nursing care
• Doctor’s services

This type of health insurance does not cover private-duty nursing, vision or dental care, long-term care in a nursing home, eyeglasses, and hearing aids. The policy will not pay for prescriptions or prescription co-payments. All companies that offer Medigap insurance must provide the same basic benefits. Not all plans may be available in your state. Medigap doesn’t offer prescription drug coverage anymore. If you take medications, you can join a Medicare (Part D) Prescription Drug Plan.

Who Is Eligible for Medicare Supplemental Insurance?

You can apply for a Medigap policy if you are:

• Age 65 or older
• Enrolled in Medicare Parts A and B
• A resident of a state where the policy is offered

If you want to purchase Medigap insurance, you must apply for a policy within six months of turning 65. Medical screening is not required during the open enrollment period. People with end-stage renal disease (ESRD), as well as those who receive Social Security Disability Insurance (SSDI) benefits are entitled to Medigap insurance regardless of age. This rule is not available in all states. The policy is renewed automatically each year. If you cancel it, you may not be able to get it back or buy a new one.

Saving Money On Auto Insurance

Save money on auto insuranceIn the present tough economic times you may be looking for ways to save money. Taking a closer look at your household bills can pay huge dividends. One area that most people overlook is their auto insurance because they assume it is a set rate. Here are some areas of your insurance bill to examine.

You might want to do some comparison shopping to make sure your company is giving you the best deal possible. Comparing insurance companies has never been easier, and you probably will not even have to leave home. There are several web sites available that will let you compare insurance companies to get your best deal. Look for sites that specifically cater to the area you live in like this site about Florida auto insurance. Taking some time to research what is out there could equal significant savings.

Your deductible is a good place to look. The insurance company will reward you with lower premiums if you assume more of the financial responsibility of claims. If you are a safe driver, and have minimal claims, a higher deductible might make sense.

Insurance companies also look at the amount of miles you drive each year. Your premium is, in part, calculated from this mileage estimate. Check with your local agent to see if your provider offers discounted rates for lower mileage.

If you drive an older vehicle you might be paying for coverage you don’t need. For instance, collision insurance on an older vehicle is often unnecessary. Research the replacement costs of your vehicle, and then compare what you are paying annually for collision coverage. If you are paying more in coverage than what the vehicle is worth, collision coverage doesn’t make sense.

Combining all of your insurance needs with one provider can lead to lower premiums. Providers want all of your business, and they are willing to reward you by lowering premiums to get that business. There is also the convenience factor of only having to deal with one company for all of your insurance needs.

Probably the easiest way to save money is to ask about your eligibility for any other discounts. Your company may not disclose all of the discounts they have. Asking is the only way you will ever know if you are missing savings.

These are just a few ways that you can save on your insurance bill. Taking time to research can save a lot of money. Get creative and see if there are other ways that you can save on your auto insurance.