car Insurance

Auto Insurance for Pimped Out Rides

2008-09-11T10:40:00.004-07:00

With the popularity of custom car TV shows such as "Pimp My Ride," personalized cars are hotter than ever. Accessories have come a long way from simple paint jobs and fuzzy dice. Today, drivers want their cars to stand out from the crowd, and to express their personality and style. As a result, car owners are adding chrome rims and grills, customized murals, spinners, pipes, LCD monitors, DVD players, expensive stereo systems, ground effects, and hydraulics.

But what is the cost to insure these hot new accessories? And do you know if your auto insurance company will cover these often-expensive enhancements?

If you're thinking of improving your car, these are some very important questions to ask! Modifying your car can be a huge investment, and you don't want to find out after the fact that your vehicle is not covered.

Ask first, change your car later
The best course of action is to consult your insurance company before you start modifying your car. This will help you find out what your auto insurance company does and doesn't cover, if they are willing to insure your new car, and the total cost of keeping your customized auto covered.

Most insurance companies will ask if your car has "substantial customization" that you would like to insure at an additional cost. If so, you can add an endorsement to your comprehensive and collision coverage for custom parts and equipment. An endorsement is a change to your auto insurance policy, and it can extend coverage to include your modifications.

Check the amount covered under your endorsement, because it can vary for different companies. If your new parts cost more than the covered cost, you may want to consider shopping around to explore your coverage options. Keep in mind that standard insurance companies insure the actual value of the parts, meaning that they will pay you what the parts are worth, not what it costs to replace them.

Safety is key
Always make sure that your parts are installed safely by a knowledgeable professional. Many drivers attempt to do the work themselves. As a result, parts could be installed improperly.

Your best bet is to have a professional do the work for you. It will save you a lot of money in the long run, in addition to keeping you safe.

Even if you don't have a custom car, you can still get free car insurance rate quotes from multiple companies by filling out a single application. If you do have a custom car, most companies will cover you. Just make sure to select "Yes" for the question about substantial customization in the vehicle information section of the application.

Save on Auto Insurance With a Hybrid

2008-09-11T10:40:00.003-07:00

Between gas prices and the economy, American drivers are having trouble deciding what autos to buy. Many people are exploring alternatives, from bikes, to buses, to biofuels. One auto alternative is hybrid cars. But what exactly is a hybrid and why would you want one?

Gas Mileage. The reason most people want a hybrid is because of the great gas mileage they can get. How is this possible? Technology for hybrid autos varies, but higher fuel efficiency is usually accomplished with an electric motor. Batteries store energy recovered during braking and supply that energy back to the electric motor, cutting down on the amount of gas used. A 2008 Toyota Prius, for example, gets an EPA estimated 46 MPG for combined use, while a 2008 Honda Civic Hybrid gets an EPA combined rating of 42 MPG.

Hybrid Types. However, make sure you understand what type of hybrid you’re buying. Some hybrids are designed not to save gas, but to increase performance. For example, there are sports autos that take the gas engine from another model and add an electric motor to increase power. This design uses less gas than an auto with a bigger gas engine, but could actually use more gas overall than the same auto without the electric motor. A 2008 Lexus GS 450h gets an EPA estimated 23 MPG combined, while the 2008 Ford Escape Hybrid gets an EPA rated 32 MPG. Buying a hybrid doesn’t automatically mean you’ll get better mileage than a big SUV does.

Discounts. You could be eligible for discounts if you buy a hybrid. Although their numbers are dropping quickly, some hybrid models may qualify for a federal tax incentive. In addition, many states offer tax incentives, parking incentives, and other toll or driving incentives. When you add these savings into the amount you can save in gas, suddenly a hybrid auto doesn’t seem as expensive.

Auto Insurance. Another great savings opportunity could be a discount on your auto insurance rate. Some companies have started to feature discounts of up to 10% for hybrid auto insurance rates, although it depends on the type of hybrid. You’ll need to shop around and compare auto insurance rates from different companies to see who has the best rate. If you need help finding your best cheap online auto insurance rate, you can use our online auto insurance quotes tool.

8 Things You Should Know About Auto Insurance

2008-09-11T10:40:00.001-07:00

Dealing with the ins and outs of auto insurance can be as tricky and confusing as trying to untie the Gordian knot. Although we can`t help you with the knotty Gordian problem, the following recommendations could help you figure out some of the more complicated points of auto insurance.

1) Determine appropriate coverage.
Help control the price you pay, just ask American Insurance Association executive Dave Snyder. For example, Snyder notes that half of your auto insurance bill covers liability and "that has to do with how you are going to use the vehicle, such as for commuting to work and your driving record. If you`ve got a clean driving record, you figure to pay less for insurance than you would if you had a speeding ticket on your record. You can control the other half of your premium which covers damage or loss to your vehicle, comprehensive and collision coverage."

2) Shop around for insurance.
"In most states," Snyder reports, "there are hundreds of insurers competing for business, so it`s possible to save hundreds of dollars by obtaining quotes from different auto insurance providers." Picking up on Snyder`s theme is his AIA colleague, Nicole Mahrt. Mahrt urges you to work with your insurance provider to get more than one quote. "It pays you to shop around, especially if you feel you`ve been paying too much."

3) Look for insurance discounts.
"Many insurers will give you a discount if you buy two or more types of insurance from them, for example auto and home insurance," confirms John Marchioni, senior vice president of Personal Lines for Selective Insurance, in Branchville, N.J. More cost-saving suggestions from Marchioni: "Ask about discounts for air bags, anti-lock brakes, daytime running lights and anti-theft devices."

4) Consider taking a higher deductible.
"You could lower your insurance bill by increasing your deductible," Mahrt says. "But just make sure you can pay the higher deductible if you file a claim."

5) Look into "stacking" coverages if you file an insurance claim.
Insurance trade group officer Daniel Kummer explains that stacking uninsured/underinsured motorist coverages means "you can collect from more than one of your auto insurance policies. Most states prohibit this practice, but there are about 19 states that either allow stacking or don't address the issue either through legislation or litigation," according to Kummer, director of personal insurance for the Property Casualty Insurers Association of America. "Be sure to check your auto insurance contract to see if it's allowed. "Be advised that you`ll likely pay a higher insurance premium if you have stacked coverage. "It could be 10% to 30% more depending on the litigious nature of the state in which you reside," says Kummer.

6) Check with your insurance provider BEFORE buying a car.
"Your premium is based in part on the car`s sticker price, the cost to repair it, its safety record and the likelihood of theft," answers Selective`s John Marchioni. Remember to avoid shopping by price alone. "You want an agent and a company that answer your questions and handle claims fairly and efficiently," emphasizes Marchioni, senior vice president of Personal Lines for Selective Insurance.

7) Notify your auto insurance company as soon as you change companies.
"Be sure to cancel your old policy," suggests PCI`s Dan Kummer. "Do it the same day, but don`t cancel your old policy until you`ve lined up a new contract. That`s important because some states like New York will fine you for the number of days you go without insurance." One last thought from Kummer on the subject: "Most auto insurers specify in your contract that you can terminate your policy any time you want by informing your company in writing about the date you wish that coverage be terminated or you can do that over the phone.

8) Pick the insurance payment option that best fits your budget.
"Generally, most companies will give you the ability to pay over time, but that comes at a price," says Kummer. "Your payment could increase a few dollars each time you pay by installment. Insurers can accept payments monthly, quarterly, or every six months, what ever is most convenient for you. Remember, though, that the more you break down your payments, the more the cost adds up."

Safety Dance - Motorcycle Insurance

2008-09-11T10:38:00.000-07:00

Playing Hypothetical

Buying insurance is like ordering from a Chinese menu without translations. You can take a stab at it, but you often don't quite know what you're going to get.

With online quoting, however, it's possible to know just what you're getting into, and how much each of your decisions is going to cost. (And for that matter, how much each of those tickets or accidents will take out of your play money for the next year.)

What follows is a what-if based on taking a single owner and changing a few key parameters. We arrived at these numbers by using up quite a lot of Progressive's server time (www.progressive.com). It was an interesting experiment you can try, too.

Before we get into the numbers, let's begin with the caveats. First, this is just one insurance company. In any of these instances, Progressive may be high, low or right in the middle. Without an exhaustive survey of many insurance companies, it's hard to know exactly where Progressive fits in. This is a competitive market, and Progressive clearly wants business, but we're told it does not intend to undercharge in high-risk cases just to have the head count. Second, these online quotes were good only for the day they were made; insurance rates are always in flux. In fact, we went back to check another variable and found two totally unrelated outcomes had changed within the space of two days. Third, surely there are better deals and worse deals for similar coverage on the baseline bike. So be it; the purpose here is to illustrate the effect of some variables on the quoted rates.

Now, let's begin. Our prototypical rider is in fact quite average. Let's call him Baseline Bob. (OK, at 41 he's a little older than average, which is 38.) He is married, owns a house in Southern California and wants to insure the 2003 Yamaha YZF-R1 he intends to buy. He's the cautious type, so he buys a lot of liability insurance, with a basic liability of $500,000 combined single limit and an uninsured/underinsured motorist limit of $250,000/$500,000. He's financed the bike and chosen a $100 deductible for both comprehensive and collision. The total premium, so says the computer, is $3645 a year. It breaks down at $247 for the liability, $327 for the uninsured motorist, $1014 for the comprehensive and $2057 for the collision.

Just out of curiosity, Baseline Bob tries a higher deductible, punching in $250 for comprehensive and collision. That drops the rates to $940 and $1523, respectively, for a savings of $608 a year. Liking that direction, Bob tries a $500 deductible, resulting in a quote of $912 for comprehensive and $1477 for collision; this nets a $682 savings over the highest bill. In this case, he'd be better off spending the $74 over the year to save the extra $250 in the deductible. Next he tries a $1000 deductible, resulting in a quote of $770 for comprehensive and $1158 for collision, for a savings of $1143. Now we're getting somewhere. Assuming he has one accident in the year, he's $43 ahead on comp and collision alone. The question really should be: Can Bob afford to put $1000 out of pocket at any time to cover a crash?

Feeling the sting of a literbike's insurance, Bob thinks about getting an R6 instead. All else being equal, the R6 will in fact save him money. The basic liability is $208 (a savings of $39), uninsured motorist is $188 ($139 less), comprehensive at the $1000 deductible is $440 ($330 less) and collision falls to $605 ($553 less). Across the board, Bob is better off on the R6, particularly with regard to comprehensive and collision. Clearly the statistics favor the 600.

But most companies consider the R6 a pure sportbike. What if Bob found himself a nice YZF600R instead? You might be surprised to learn that his quote is exactly the same. But isn't the YZF a slowpoke compared to the R6? Yes, but as far as the statistical exposure goes, it ranks about the same, and so Progressive's rates are the same as for the R6.

Bob had heard naked bikes were cheaper to insure, so he checks the deal on an FZ1, just for fun. Turns out "they" were right: The total bill for the year is $918, with savings in every category, but particularly in collision. The FZ1 is a reasonable $424 for collision on a $1000 deductible.

But Bob has his heart set on the R1, so that's what he'll get. Nevertheless, he's worried that the superbike would get him into trouble with the law, and checks to see what impact three speeding tickets (in the last three years) would have. Predictably, the rates are up across the board. Liability is now $532 (almost double), uninsured motorist is $690, comprehensive is a whopping $2101 and collision is $2710. That's a total annual premium of $6033. Why would comprehensive and collision go up even if he hasn't had accidents? According to Progressive's data, someone with three tickets is more likely to have an accident than someone without any tickets, and the company charges more to offset the potential losses.

Let's say Bob turned back the clock and was half his 41 years of age. He wouldn't like the insurance bills. Keeping the $1000 deductible on comprehensive and collision but losing the tickets still earns him a breathtaking $12,070 insurance bill. The worst parts are the dramatically upped liability, now $2419 alone, and the collision, $5531, that would drive any 21-year-old to tears. Even running "bare" on comprehensive and collision, Young Bob would be in for a $3464 annual premium. And what if Young Bob just happened to have those three tickets in three years? How about a total premium of $22,981, with a collision amount itself of $10,349. Of course, Young Bob could drop down to the minimum liability level and skirt by on a $3099-a-year bill.

One more major variable to consider is location. Bob is old again and decides to move to central Maryland. (He hears the cows are nice.) There, with a clean record, he could even afford a $250 deductible for comprehensive and collision and pay only $1016 a year. Hearing that, he's out the door. Shame he'll learn about the summer humidity the hard way.

So, it's just as the insurance people told us. Age, experience and driving record are the prime movers of your insurance rate, though location also has a large impact. (In fact, different insurance laws by state make that issue extremely variable, not just for the rates but for the kinds of insurance offered, coverage limits and consumer rights.) Better shop around, Bob.

How To Get the Best and Cheapest Motorcycle Insurance

2008-09-11T10:36:00.000-07:00

Now that you have found the bike for you, it's time to get it insured. But, before you call just any insurance agent you will want to learn how the insurance company decides your rate.

By educating yourself on how the insurance company will view you, you can find the best insurance coverage for you and your bike while at the same time saving money. First, to find the best and cheapest motorcycle insurance you must understand how the insurance company will rate you:

1. Your Bike: If you have the latest and flashiest bike, that will cost you more than an older, basic motorcycle.

2. Your Age: As with auto insurance, usually the older you are the cheaper your rates will be. But, if you are new to operating motorcycles you will probably be in a higher rate category until you gain some riding experience.

3. Your Address: Sometimes the high insurance rates you receive can be greatly influenced by where you live. If you live and/or regularly drive in a high crime or high accident area, your rates will likely be higher than someone in a zip code with less crime and accidents.

4. Your Driving History: All accidents count. Even if you are new to a motorcycle, the accidents you had in your automobile will count against you. Therefore, the cleaner your driving record, the cheaper your insurance will be.

5. Your Job: Where you are driving to and parking your bike will influence your rate. If you have to keep your bike parked on a construction site, you insurance may be increased due to the increased risk of injury to your bike.

Now that you know how the insurance company will view and rate you, here are some tips on how to get a good deal:

1. Shop, Shop, and Shop More: Insurance can vary widely in the same region. Take a whole day to call as many companies as you can to get a rate quote. Shopping around for insurance can sometimes be the single best way to cut your insurance costs.

2. Securing Your Bike: What can you do to keep your bike more secure? If you can garage your bike, alarm it, or secure it somehow while it is parked, you may be able to secure yourself some discounts on your insurance.

3. Don't Over insure: Remember, if something happens to your motorcycle, you will only receive the market value so over insuring will not help you get a higher price for your bike.

4. Mileage: If you only ride your bike once in a while during the summer for pleasure, you should be able to get a better rate if you can keep your mileage low.

5. Special Motorcycle Training: Taking special DMV or other motorcycle classes can help decrease you rate. Just make sure you keep your certification documents handy for the insurance company to view.

There is no reason to overpay one insurance company when another one is willing to give you a better deal. If an accident would occur you will get the same value for your bike regardless of what company you choose. By taking the time to find out how the insurance company will view you, your bike, and your riding habits, you can learn how to save while still getting a great policy.

Factors That Affect Your Car Insurance Premium

2008-09-11T10:35:00.000-07:00

Many factors affect the premium you will pay for auto insurance. Each is a statistically based risk for a specific population. The higher the risk associated with a person, the more he or she is likely to pay for coverage. We have elaborated on some of the risk factors below, but there are numerous others, including driver's gender, miles driven per year, purpose for using the vehicle (commuting to work, using for work, leisure only), etc.

Age
Statistically, drivers under the age of 25 are at greater risk of being in an accident than those over age 25. Drivers between the ages of 50 and 65 generally have the safest records.
Gender
Women are statistically safer drivers, but that trend is changing as more female drivers get on the road.
Marital Status
A married person will pay less than a single person with an identical driving record.

You can think about these factors and determine what you can do to change them in your situation. You may be able to save on insurance based upon these decisions:

Geography
Where you live makes a difference. Folks living in areas with little or no traffic are likely to spend less on insurance than those living in congested cities or suburbs because areas with a lot of traffic tend to see more accidents. Some neighborhoods also have a higher rate of vehicle thefts, which can result in a higher premium.
Driving Violations
Having an accident or moving violations on your record (speeding tickets, DWI, reckless driving, etc.) put you at a higher risk for accidents and will likely mean a higher premium. Some insurance companies will penalize you for your record for as many as five years from when the incident occurred. However, keep in mind, as your record improves, your premium will get lower.
Vehicle Type
A cheap car will cost less to insure than that status symbol SUV sitting on 24" rims.
Accident Claims
A driving record that is clean and free of accidents will hold far better for you than lots of tickets and/or accidents.
Credit Rating
Many insurance companies view having a poor, or even no credit history as suggestive of higher risk and thus, charge you a higher premium. Monitor your credit rating free to see if you can get a better score. A better credit score will save on insurance premiums.
Occupation
Insurers have statistically found a correlation between your occupation and risk. For instance, a newspaper delivery person is most likely a higher risk than the personal banker sitting at their desk all day.
Education
A higher education can save on your premiums.
Driving distance to work
Miles driven each year
Years of driving experience
Business use of the vehicle
Whether or not you currently have auto insurance and how high are your limits
Theft protection devices (often results in discounts)
Multiple cars and drivers (another opportunity for discounts)

What can I do right now to make sure I have the lowest premium?

Shop around and compare quotes from different insurers. CarInsurance.com puts many insurance companies on one site so you can compare them in one place. Carriers base their premiums on their claims experiences, which naturally differ. One company may see your area as a higher risk than others may. Another may charge more because of your occupation. Shopping at http://www.carinsurance.com makes it easier because you can quickly see multiple companies and their rates for your particular situation. Where do I go for quotes?

One stop can take care of it all. Go to www.carinsurance.com where you can receive multiple quotes, pick the best price, and then purchase. Get covered immediately on-line or over the phone. It REALLY is the easiest way to purchase car insurance. Enter your zip code above.

Simple Steps to Filing Your Car Insurance Claim

2008-09-11T10:31:00.000-07:00

Having even a teeny-tiny car accident can be one of life's least enjoyable moments. However, accidents happen, and sooner or later, we all have the experience of meeting one of our fellow road travelers up close and personal. Using the following seven steps to filing your claim will help you get over this speed bump as smoothly as possibleCar Insurance .
They aren’t really accidents. They are more of an incident. Usually they are an incident that you would like to forget.

* Understand your policy before a loss, sit down and carefully read your insurance policy. Call your agent or company if you have any questions about what is or is not covered.
* Make sure everyone is okay and check to see if anyone needs medical attentionCar Insurance . Even if your injuries are minor, you may still want to have them checked out at a hospital or with your family doctor. Minor injuries can become major, long-lasting injuries.
* Exchange information when you are involved in an accident, get the other driver's name, address, phone number, insurance carrier, and insurer's phone number. Be prepared to give the same information about yourself to the other driver. You can find insurers’ telephone numbers on the proof-of-insurance cards that should be carried on your person when operating a motor vehicle.
* Identify witnesses and ask witnesses to the accident for their names and phone numbers in case their account of the accident is needed.
* File an accident report and contact local law enforcement officers to have an accident report prepared. If law enforcement is not reachable, accident reports and detailed instructions are available at all police departments, sheriff's offices, your local Department of Motor Vehicles office, and on your local Department of Motor Vehicles' web site
* Notify your insurer by contacting your insurance company about the accident as soon as possible. An insurance adjuster will review the accident report to determine who caused the accident. If the accident was not your fault, you can have either your insurance company or the at-fault driver's insurance company handle the repair or replacement of your vehicle. If you use the other driver's company, you will not have a claim on your automobile policy and Car Insurance you will not have to pay a deductible.
* Do not release insurers too early. Do not relieve your insurance company of its responsibility until the damages are settled to your satisfaction. For example, have your insurance company handle the claim if the other party's insurance company questions its policyholder’s negligence or offers an unacceptable settlement.
* Consider these settlement factors.
o Bodily injuries: You may be entitled to a monetary settlement for injuries caused by another at fault (liable) party. It can take several days for some injuries to become apparent.
o Damages: The insurance company is responsible to pay for the reasonable cost of repairs to your vehicle. An insurance adjuster will assess the damage. Usually, insurance companies and auto body shops negotiate disagreements about what should be repaired. If you disagree with their conclusions, you have the right to obtain another appraisal at any auto body shop.
o Appraisal clause: Most auto insurance policies include an appraisal clause, which can be used to help settle disputes about physical damage claims between you and your insurance company. (The appraisal clause does not apply for claims you file with the other party's insurance company.) If you cannot reach an agreement with your company, you or your insurer can initiate the appraisal clause. Your appraiser and your insurer's appraiser then select an independent umpire to try to resolve the dispute. Car InsuranceCheck your policy or ask your agent or insurance company for more information about the appraisal clause.

And that is it. While filing a claim is certainly no fun, following these seven steps will make the process almost as easy as getting free quotes and purchasing your car insurance at CarInsurance.com.

Health Savings Account Insurance Quotes

2008-08-24T14:12:00.001-07:00

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.

Annuity Life Insurance Quotes

2008-08-24T14:11:00.001-07:00

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.

Weatherford Moves to Association for Insured Retirement Solutions

2008-08-24T14:09:00.000-07:00

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

Aon to Acquire Broker Benfield for $1.75 Billion

2008-08-24T14:06:00.000-07:00

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.

Get Smart About Insurance!

2008-08-24T14:05:00.001-07:00

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.