Spacesuit? Helmet? Life insurance? Space tourist loophole may end
Space tourism is the coming thing. Here's an article from Reuters News that explains what kind of insurance space travelers will need in the future:
(Reuters) - While private pilots and skydivers have to take out extra life insurance to cover the added risk of their pursuits, space tourists do not need special policies on their high flying rides.
That loophole is likely to disappear, slowly, after the fatal crash last week of a test flight of a Virgin Galactic space ship designed to take tourists into space.
The loophole exists because U.S. life insurance policies don't ask about space tourism or exclude it from coverage, meaning insurers most likely would have to pay if the holder died on a space trip, insurance industry veterans said.
Insurance companies, which say they are considering what to do about space tourists after the Virgin crash, are likely to start adding questions about space travel and may even explicitly exclude space coverage, the industry observers said.
The companies themselves are taking a cautious approach.
"If we had an applicant with such plans, we would postpone any underwriting decision until they returned," Prudential (PRU.N) spokeswoman Sheil Bridgeforth said.
Northwestern Mutual said that it is paying close attention to the issue after the crash, but that there is too little safety data to assess the risk of space tourism. U.S. life insurer MetLife (MET.N) said it doesn't have imminent plans to offer space tourism insurance.
Do I Need To Upgrade My Health Insurance During The Open Enrollment Period This Year?
And now from Forbes Magazine a question most of us are asking, especially with all the new changes in healthcare that are taking place -- do I need to upgrade my health insurance?
My employer is offering a buy-up plan for health insurance next year, and Iím wondering if itís worth the added cost. I typically see my primary doctor three to four times per year and also see a few different specialists. I take three prescription medications on a regular basis and am considering elective bariatric surgery. Is a buy-up option right for me? What should I take into consideration?
This is a good question for this time of year, during the open enrollment period that sees companies offering new health insurance options for employees. As with most decisions about your health care, you should make this one with careful consideration.
First, what is a buy-up plan? Many companies offer employees a base health insurance plan, with basic coverage and the company paying a portion (or even all) of the costs. But some companies also offer plans that allow employees to obtain greater coverage at an increased premiumóthat is, to buy up to a higher level of insurance. In exchange for higher monthly premiums, these plans may include lower out-of-pocket expenses when you access care, such as lower deductibles and copays, and greater freedom to choose providers out-of-network.
I recommend the following steps to determine the best policy for your needs:
Step 1. Take stock of your health needs and medical treatments over the last year to estimate the services youíll need in 2015. If you think youíll need less care in the coming year, you probably donít need to consider the more expensive buy-up plan and can extend your current coverage.
However, if you arenít sure, start by making a list of your 2014 health needs and itemize your out-of-pocket expenses. If you used a health savings account or flexible spending account, refer to your statement to build your list of health expenses. Donít forget to include the cost of elective procedures, as well as your prescriptions, specialist appointments and regular doctor visits.
Consider how your health needs will change over the coming year. If you do pursue an elective bariatric procedure, know that it requires medical care before and after surgery. You will visit a doctor many more than three or four times in the year of your surgery and will require additional prescription drugs. These costs can add up.
Best Life Insurance Tactic to Increase Your Childís Financial Aid
Want to know what the best way to increase your child's financial aid ... life insurance. Surprised? Read this article from the Nerd Wallet and find out why.
In 2014, college graduates entered the working world with an average debt of $33,000. This eye-popping figure highlights the importance of making the most out of financial aid, which requires a solid understanding of how it works in the first place.
If youíre a parent who is already thinking about financing your young childís education, hereís one factoid worth remembering: Financial aid formulas typically exclude all assets from retirement accounts and whole life insurance policies in their calculations. This can help maximize the amount of financial aid a student receives.
How life insurance asset-shielding works
When purchasing whole life insurance, youíre signing up for a lifetime of coverage as well as for a savings account of sorts. A certain amount of money is taken from the monthly or annual premiums that you pay and placed into the savings account. The money in this account grows tax-deferred. Most financial aid formulas, including the FAFSA, exclude money from that account when calculating how much aid a student should receive.
Itís important to weigh this strategyís pros and cons before committing to it.
Is this strategy right for me?
If you already own a whole life insurance policy with existing assets, thatís fantastic. Ideally, you purchased this policy as soon as your child was born, meaning the policyís cash value has had nearly two decades to grow. Financial aid formulas would have to overlook this sum of money, regardless of how substantial it is.
Itís worth remembering, though, that this cash accumulation takes time. If your child is about to head to college and you just bought whole life insurance a few years ago, not enough time will have passed for a lot of cash to accumulate. Although shielding some assets is better than not shielding any, it may not make a huge impact on the amount of financial aid your child receives.
Buying whole life insurance under your childís name isnít a solution either, since some financial experts argue that young people without families donít need whole life insurance because they donít have to provide a financial safety net for anyone. Plus, whole life insurance premiums can be quite expensive. After all, as well as paying for insurance, youíre also contributing money toward that planís cash value. Investing in life insurance now simply to shield your assets wouldnít make much sense, because it takes time for these assets to accumulate.
Things to consider
Itís worth remembering that family income is the biggest factor in determining financial aid. You and your spouse may earn so much money that it doesnít matter whether youíre storing additional assets in your life insurance policy.
If you are still interested in whole life insurance, keep in mind that insurance agents receive commission every time they sell an insurance policy. Although these agents arenít necessarily trying to set you up with a bad deal, their desire to earn a commission may override any desire to look out for your financial well-being.
If you have a young child but still havenít bought whole life insurance, the asset-shielding that this type of policy provides should certainly serve as an extra incentive to invest in coverage. Students headed to college in a few years, however, should think twice about buying whole life insurance, both because it takes years for assets to accumulate and because the premiums theyíll pay in the meantime will be very costly.
Does China Have the Best Life Insurance Marketing?
Not only is China's economy booming, but there's one sector of their economy that's really takin off -- life insurance. Want to know why? Read this article from the Nerd Wallet.
One of the many sectors that are running red hot in China, the life insurance industry is growing by leaps and bounds. Some of that growth is due to a burgeoning middle class and falling taboos about discussing death.
But some of the increase in the number of life insurance policies can be attributed to how companies are marketing the product. Chinaís best life insurance marketing may hold some lessons for American companies, which are fighting declines as its pool of potential clients changes.
Marketing life insurance
Chinese life insurance policies were once mainly small endowment products sold through banks. Life insurance marketing has changed dramatically in recent years with a sharp increase in the number of agents and a more diverse distribution strategy. These days direct sales on insurance websites, large shopping sites (similar to Amazon) and online content based on consumer interests are being used to drive sales.
Products are also beginning to be presented differently. Rather than just being about money, purpose has also entered the picture. Researchers at the Society of Actuaries (SOA) identified three distinct markets, each requiring a different marketing approach:
Life investors: Representing 41% of the market, these individuals view life insurance as a temporary investment. Marketing to this group should involve making life insurance a permanent part of the financial portfolio.
The uninterested: 33% of the market falls into this category. The SOA found nearly half of this group would seek information about life insurance online, and the primary marketing strategy here should be education.
Life protectors: 26% of the market is considered life protectors who regard life insurance as something needed permanently. Marketing to these individuals would involve introducing new products for them to consider.
Life insurance trends in China vs. the U.S.
Chinaís marketing push is occurring on a backdrop of double-digit growth. Life insurance sales in China grew an incredible 28.1% between 2006 and 2010, with strongest growth in the 25-to-34 age group, according to the SOA.
Here in the U.S., the picture is quite different. The 2013 Ernst & Young Life-Annuity Market Outlook showed a 50% decline in the amount of money American households spend on life insurance over the past decade.
Younger people are largely disinterested in life insurance, and although premium rates have kept pace with inflation, sales show a zero growth rate for this period. Changing regulations and low interest rates are contributing factors, making life insurance a less attractive investment than it used to be.
In addition, the average age for agents is 54, meaning they are less likely to reach younger prospective clients. Life insurance agents generally are less likely to reach out to younger people because it may mean lower commission.
The bottom line
Even with its new approach, Chinaís life insurance industry is in an adjustment period and has undergone some changes and corrections. Still, the American life insurance industry has much to learn from Chinaís strategies. Identifying market segments and individualizing marketing approaches may be just whatís needed to give the life insurance sales in this country a much needed shot in the arm.