Created by the Medicare bill signed by President George W. Bush on 8 December 2003, a Health Savings Account (HSA) allows individuals to save for current and future qualified medical and retiree health expenses on a tax-free basis.
HSAs are only available to individuals who are enrolled in a High Deductible Health Plan (HDHP). Money in the HSA can be used to pay for expenses that are part of the deductible. Once the deductible is met, additional medical expenses are covered by the Health Plan.
Think of an HSA as an IRA that's earmarked exclusively for offsetting medical expenses. Money not spent stays in the HSA and accrues interest on a tax-free basis. Funds that are withdrawn from the account (at any time) and used for qualifying medical expenses are not taxed.
HSAs are usually set up through insurance companies or banks. Contributions can be made by individuals and/or their employers. All money in an HSA is portable, meaning it stays with the individual no matter where he or she works.
What It Isn't
An HSA is not the same thing as a Flexible Spending Account (FSA). An FSA is a "use it or lose it" account: any money not used in a given year is not available for use the next year. With an HSA, money stays in the account from year to year and accrues tax-free with interest. The bottom line: an HSA is a much better deal.
The HSA is an evolutionary step up from the Medical Savings Account (MSA), which first became available in 1997. In general, HSAs are less restrictive and are available to more people.
It is important to note that an HSA is a savings plan, not a health care plan per se. It must be used in conjunction with a qualifying health care plan.
Who Needs It
People who want to lower the cost of their health care insurance premiums, and who want more control over their health care options, will definitely want to check out whether they're eligible for an HSA.
To qualify, individuals must:
Be covered by an HDHP (with a deductible of at least $1,000 for a single person; $2000 for a family).
Not be covered by another health care plan (with certain exceptions, including vision, dental, and disability).
Not be enrolled in or eligible for Medicare.
Not be able to be claimed as a dependent on someone else's tax return.
There are no income limits or minimum income requirements to enroll in an HSA. People between 55 and 65 years of age are eligible for make-up contributions (up to a set maximum) to their HSAs.
Things To Think About
If you currently have health insurance—whether through your employer or on your own—you'll want to find out if it qualifies as a HDHP. Also, some Flexible Spending Accounts and Health Reimbursement Agreements may disqualify individuals from enrolling in an HSA.
If you qualify for an HSA, how much should you contribute? The U.S. government sets a maximum amount that you can contribute. For 2004, the maximum contributions are $2,600 for single coverage and $5,150 for family coverage. The maximum amount will be adjusted annually for inflation. The amount you actually contribute should be based on the size of your deductible, your disposable income, and your health needs.
Minggu, 24 Agustus 2008
Annuity Life Insurance Quotes
An Annuity is a retirement investment account set up with an insurance company. The investor pays premiums that the insurance company invests, accumulating interest on a tax-deferred basis. At some point (often after age 59.5), the investor can begin withdrawing money from the annuity.
There are many types of annuities. Some include a survivor benefit, paid out to beneficiaries after the investor’s death. Others expire on the investor’s death and don’t pay anything to survivors. Annuities without a survivor benefit tend to pay a higher rate of return.
Fixed annuities are lower risk investments that pay a "guaranteed" rate of return for a specified time period, and are adjusted for inflation down the road. Rates of return tend to be comparable to those of certificates of deposit and other low-risk assets.
Variable annuities are invested in higher yield, higher risk funds. They are similar to mutual funds, but are managed by the insurance company. They tend to pay a higher rate of return over the long run. The investor can usually select from a variety of different types of funds offered by the insurance company.
What It Isn't
An annuity isn’t really insurance, although many annuities do include some type of death benefit. Life insurance typically pays out only on the insured’s death. Annuities begin paying out while the investor is still living.
Annuities share some things in common with mutual funds, but the key difference is that accumulated interest in annuities isn’t taxed until it is withdrawn, whereas mutual funds are taxed year by year. Annuities without a survivor benefit tend to pay higher rates of return than comparable mutual funds, due to the possibility of the investor’s premature death.
Unlike an IRA, there is no maximum contribution to an annuity and no mandatory time frame for withdrawal.
Who Needs It
Annuities are common among people who don’t have a company-sponsored 401k or other type of pension plan. They are also popular with people who have maxed out their IRAs and 401ks, and want additional tax-deferred retirement benefits.
Those who are already retired, but who want additional retirement benefits, are also likely candidates for an annuity.
Professionals who are in occupations likely to be sued for malpractice (like doctors, attorneys, and CPAs) sometimes favor annuities if they live in states that protect annuities from creditors.
Things To Think About
The most important consideration is the financial health of the insurance company. Annuities are only as good as the insurance company that offers them. Even though the company says the payouts are guaranteed, they really aren’t if the company should fail. Annuity investments are not protected by the FDIC.
There are often a lot of fees associated with annuities: commissions, management/administration fees, surrender benefit fees, etc. Many annuities charge little up front, but have substantial backloading fees when the annuity begins paying out or when it terminates. It’s important to read the prospectus very carefully to understand any costs and penalties associated with early withdrawal. The IRS code specifies a 10% penalty for withdrawing from annuities before age 59.5. In total, annuity commissions and fees tend to be in the range of 1.5-2% of the value of the annuity.
Talk to your agent to discuss which type of annuity is best for you: one with or without survivor benefits, a group or individual annuity, fixed or variable, temporary or until death, etc.
There are many types of annuities. Some include a survivor benefit, paid out to beneficiaries after the investor’s death. Others expire on the investor’s death and don’t pay anything to survivors. Annuities without a survivor benefit tend to pay a higher rate of return.
Fixed annuities are lower risk investments that pay a "guaranteed" rate of return for a specified time period, and are adjusted for inflation down the road. Rates of return tend to be comparable to those of certificates of deposit and other low-risk assets.
Variable annuities are invested in higher yield, higher risk funds. They are similar to mutual funds, but are managed by the insurance company. They tend to pay a higher rate of return over the long run. The investor can usually select from a variety of different types of funds offered by the insurance company.
What It Isn't
An annuity isn’t really insurance, although many annuities do include some type of death benefit. Life insurance typically pays out only on the insured’s death. Annuities begin paying out while the investor is still living.
Annuities share some things in common with mutual funds, but the key difference is that accumulated interest in annuities isn’t taxed until it is withdrawn, whereas mutual funds are taxed year by year. Annuities without a survivor benefit tend to pay higher rates of return than comparable mutual funds, due to the possibility of the investor’s premature death.
Unlike an IRA, there is no maximum contribution to an annuity and no mandatory time frame for withdrawal.
Who Needs It
Annuities are common among people who don’t have a company-sponsored 401k or other type of pension plan. They are also popular with people who have maxed out their IRAs and 401ks, and want additional tax-deferred retirement benefits.
Those who are already retired, but who want additional retirement benefits, are also likely candidates for an annuity.
Professionals who are in occupations likely to be sued for malpractice (like doctors, attorneys, and CPAs) sometimes favor annuities if they live in states that protect annuities from creditors.
Things To Think About
The most important consideration is the financial health of the insurance company. Annuities are only as good as the insurance company that offers them. Even though the company says the payouts are guaranteed, they really aren’t if the company should fail. Annuity investments are not protected by the FDIC.
There are often a lot of fees associated with annuities: commissions, management/administration fees, surrender benefit fees, etc. Many annuities charge little up front, but have substantial backloading fees when the annuity begins paying out or when it terminates. It’s important to read the prospectus very carefully to understand any costs and penalties associated with early withdrawal. The IRS code specifies a 10% penalty for withdrawing from annuities before age 59.5. In total, annuity commissions and fees tend to be in the range of 1.5-2% of the value of the annuity.
Talk to your agent to discuss which type of annuity is best for you: one with or without survivor benefits, a group or individual annuity, fixed or variable, temporary or until death, etc.
Weatherford Moves to Association for Insured Retirement Solutions
Catherine J. Weatherford has been appointed president and CEO of NAVA Inc., the Association for Insured Retirement Solutions, effective Sept. 3.
Weatherford previously served as executive vice president and CEO of the National Association of Insurance Commissioners (NAIC), a position she held for 12 years. She has more than 31 years of experience in insurance regulation, government and public policy. eatherford replaces Mark Mackey, who announced his resignation as NAVA's president and CEO in January of this year.
Prior to joining the NAIC in 1996, Weatherford served as regional manager for public affairs for Liberty Mutual Insurance Group. Weatherford joined the Oklahoma Department of Insurance in 1977 and was appointed state insurance commissioner in 1991. She served a four-year term, during which she oversaw the department's accreditation process and established a regulation system for long-term care insurance in the state.
Source: NAVAwww.RetireOnYourTerms.com
Weatherford previously served as executive vice president and CEO of the National Association of Insurance Commissioners (NAIC), a position she held for 12 years. She has more than 31 years of experience in insurance regulation, government and public policy. eatherford replaces Mark Mackey, who announced his resignation as NAVA's president and CEO in January of this year.
Prior to joining the NAIC in 1996, Weatherford served as regional manager for public affairs for Liberty Mutual Insurance Group. Weatherford joined the Oklahoma Department of Insurance in 1977 and was appointed state insurance commissioner in 1991. She served a four-year term, during which she oversaw the department's accreditation process and established a regulation system for long-term care insurance in the state.
Source: NAVAwww.RetireOnYourTerms.com
Aon to Acquire Broker Benfield for $1.75 Billion
Chicago-based Aon Corporation and UK-based broker Benfield Group Limited announced that their respective boards of directors have reached agreement for Aon to acquire Benfield for £3.50 ($6.55) per share in cash and assume £91 million ($170 million) of Benfield net debt, representing an enterprise value of approximately £935 million ($1.75 billion) on a fully diluted basis.
"The consideration represents a 29 percent premium to Benfield's closing stock price on August 21, 2008, the last trading day prior to the announcement of the agreement," said Aon's bulletin.
Benfield is a leading independent reinsurance intermediary. The company took its present form in 2001, when UK-broker Benfield Greig acquired Dallas-based E.W. Blanch Holdings [See IJ web site - http://www.insurancejournal.com/magazines/southcentral/2001/05/14/features/18667.htm]. Renamed "Benfield," it is generally ranked as the third largest reinsurance broker. Aon said it "intends to integrate the Benfield business with its existing reinsurance operations (Aon Re Global) and operate the division globally under the newly created Aon Benfield Re brand."
"This agreement reflects our ongoing efforts to ensure that Aon's colleagues, capabilities and technology remain at the forefront of our industry and that we provide the best value for our clients," stated Aon's President and CEO Greg Case.
He added that, "Aon and Benfield share a common focus on excellence in client service, and both recognize the importance of being the destination of choice for the best talent in our industry. The strong cultural fit between our firms will enable us to quickly realize the benefits of this transaction, and the value added for our clients and shareholders, in a seamless fashion following the close of our transaction."
Grahame Chilton, Benfield's CEO will become vice chairman of Aon Group, reporting to Case. Chilton stated: "We are excited by this unique opportunity to create a powerful global franchise capable of expanding and redefining innovative reinsurance and capital market solutions. At the same time, the Benfield board believes that the offer provides Benfield's shareholders with fair and certain value. We look forward to joining the Aon team and working with them as Aon Benfield Re to expand our joint expertise and local reach to customers around the world."
In further notes to the bulletin announcing the transaction, Aon said the two companies "reinsurance operations are highly complementary," and that both firms have been targeting "developing markets around the world,…including Asia, Central and Eastern Europe, Africa and Latin America."
In terms of cost savings, Aon said "the transaction is expected to generate approximately £65 million ($122 million) in annual cost savings fully phased-in in 2011, primarily from shared administrative and support services across both Aon Re Global and Benfield."
The transaction is expected to close by the end of 2008, subject to customary closing conditions and regulatory approvals as well as approval by Benfield shareholders.
Aon said it has "received commitments from Benfield shareholders representing approximately 25.4 percent of Benfield's outstanding shares to vote their shares in favor of the transaction. Aon intends to fund the transaction through cash on hand. The transaction is not subject to a financing contingency.
For those who missed the "Newswire Conference Call" at 8:00 a.m. in London and 3:00 a.m. in New York, Aon and Benfield will host a conference call today, Friday, August 22, 2008, at 8:30 a.m. (New York), 7:30 a.m. (Chicago), 1:30 p.m. (London). Interested parties can listen to the conference call by dialing +1- (888) 423-3275 (within the U.S.) or +1- (612) 332-0820 (outside of the U.S), or via a live audio web cast at: www.aon.com and www.benfieldgroup.com.
A replay of the conference call will be available through September 5, 2008, and can be accessed by dialing +1- (800) 475-6701 (within the U.S.) or (320) 365-3844 (outside of the U.S.), access code: 958397. The replay will also be available on both companies web sites.
"The consideration represents a 29 percent premium to Benfield's closing stock price on August 21, 2008, the last trading day prior to the announcement of the agreement," said Aon's bulletin.
Benfield is a leading independent reinsurance intermediary. The company took its present form in 2001, when UK-broker Benfield Greig acquired Dallas-based E.W. Blanch Holdings [See IJ web site - http://www.insurancejournal.com/magazines/southcentral/2001/05/14/features/18667.htm]. Renamed "Benfield," it is generally ranked as the third largest reinsurance broker. Aon said it "intends to integrate the Benfield business with its existing reinsurance operations (Aon Re Global) and operate the division globally under the newly created Aon Benfield Re brand."
"This agreement reflects our ongoing efforts to ensure that Aon's colleagues, capabilities and technology remain at the forefront of our industry and that we provide the best value for our clients," stated Aon's President and CEO Greg Case.
He added that, "Aon and Benfield share a common focus on excellence in client service, and both recognize the importance of being the destination of choice for the best talent in our industry. The strong cultural fit between our firms will enable us to quickly realize the benefits of this transaction, and the value added for our clients and shareholders, in a seamless fashion following the close of our transaction."
Grahame Chilton, Benfield's CEO will become vice chairman of Aon Group, reporting to Case. Chilton stated: "We are excited by this unique opportunity to create a powerful global franchise capable of expanding and redefining innovative reinsurance and capital market solutions. At the same time, the Benfield board believes that the offer provides Benfield's shareholders with fair and certain value. We look forward to joining the Aon team and working with them as Aon Benfield Re to expand our joint expertise and local reach to customers around the world."
In further notes to the bulletin announcing the transaction, Aon said the two companies "reinsurance operations are highly complementary," and that both firms have been targeting "developing markets around the world,…including Asia, Central and Eastern Europe, Africa and Latin America."
In terms of cost savings, Aon said "the transaction is expected to generate approximately £65 million ($122 million) in annual cost savings fully phased-in in 2011, primarily from shared administrative and support services across both Aon Re Global and Benfield."
The transaction is expected to close by the end of 2008, subject to customary closing conditions and regulatory approvals as well as approval by Benfield shareholders.
Aon said it has "received commitments from Benfield shareholders representing approximately 25.4 percent of Benfield's outstanding shares to vote their shares in favor of the transaction. Aon intends to fund the transaction through cash on hand. The transaction is not subject to a financing contingency.
For those who missed the "Newswire Conference Call" at 8:00 a.m. in London and 3:00 a.m. in New York, Aon and Benfield will host a conference call today, Friday, August 22, 2008, at 8:30 a.m. (New York), 7:30 a.m. (Chicago), 1:30 p.m. (London). Interested parties can listen to the conference call by dialing +1- (888) 423-3275 (within the U.S.) or +1- (612) 332-0820 (outside of the U.S), or via a live audio web cast at: www.aon.com and www.benfieldgroup.com.
A replay of the conference call will be available through September 5, 2008, and can be accessed by dialing +1- (800) 475-6701 (within the U.S.) or (320) 365-3844 (outside of the U.S.), access code: 958397. The replay will also be available on both companies web sites.
Get Smart About Insurance!
Finding an insurance company can be a challenge. The NAIC’s Consumer Information Source (CIS) provides information about insurance companies you can use BEFORE purchasing insurance. Using the input fields in the right-hand column of this page, you can access key information about insurance companies, including closed insurance complaints, licensing information and key financial data.
Get More InformationThe NAIC and state insurance regulators are committed to helping every American be a smarter insurance consumer. Our award-winning Insure U education program provides tips and special considerations on a variety of insurance issues. Available in English and Spanish, Insure U also provides insurance information specifically for small business owners. Visit www.insureUonline.org to learn more.
File an Insurance Complaint Do you have a specific problem with an insurance company, broker, agent or adjuster? Click here to file a complaint with your state insurance department.
Get More InformationThe NAIC and state insurance regulators are committed to helping every American be a smarter insurance consumer. Our award-winning Insure U education program provides tips and special considerations on a variety of insurance issues. Available in English and Spanish, Insure U also provides insurance information specifically for small business owners. Visit www.insureUonline.org to learn more.
File an Insurance Complaint Do you have a specific problem with an insurance company, broker, agent or adjuster? Click here to file a complaint with your state insurance department.
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