What is a return of premium life insurance policy?

Life insurance is a critical part of a financial plan.  Usually, an insured person has other persons who are financially dependent on him or her.  Without life insurance, there would be no way to protect these dependents from the financial hardships associated with the death of the insured.  Life insurance is not just used by families, but it is also used by businesses.  Sometimes, a business owner will insure the life of a key employee.

Life insurance comes in two broad forms: temporary life insurance and permanent life insurance.  Return of premium life insurance is a type of temporary life insurance.  Temporary insurance is otherwise known as “term insurance.”  A return of premium life insurance policy is characterized by the fact that premiums are paid either over the course of the insurance coverage or at the beginning of the coverage in a lump sum form, but they are then returned to the policy owner after the return of premium term life insurance expires.  Many people feel that this is “free insurance,” and in a sense it is, but people who think this way are ignoring the time value of money.

Inflation will diminish the value of that amount of money in the future.  Therefore, the present value of that money is more valuable than the same amount in the future.

Insurance companies make their money by using this time value principle of money.  They take your money, invest it, keep the profits, and give you back your premium.  They’re the ones who really made money for free.

When looking through return of premium life insurance quotes, you will see they are, on average, less expensive than the average non return of premium life insurance quote would be.  This is because the insurance company only makes money on the investment profits, not the premiums you are paying.  They have to make up the difference in the amount they charge you.  So, don’t be surprised when they are more expensive than non return of premium life insurance.

These policies are really suited for people who really need the money back, and who cannot afford to not get it back.  Otherwise, these persons would be better suited to get a regular term insurance policy or a permanent policy.

One last thing must be noted as some life insurance advice.  Occasionally, policies of any type are surrendered for their cash value, and the policy owner gets back the cash value in the policy.  This is often confused for “return of premium” life insurance, but they are not the same.  The cash value will not equal the entire value of the total premiums, as the premiums also included administrative costs and covered the amount at risk, as well.

Why Are Whole Life Insurance Rates So Much Higher Than Term Life Insurance Rates?

To understand rates for whole life insurance, or permanent life insurance, you must first understand how it works, so here is some life insurance advice.  To do this, we can best look at term insurance first.

The premium is what is payed each month to the insurance company.  The premium is determined by one thing in term life insurance – the amount at risk.  The insurance company calculates the amount at risk by looking at the probability somebody is going to die and how much they would have to pay if that person died.  In term insurance, the only thing is the amount at risk.  Since the probability of dying becomes so great in the later years of life, life insurance companies usually have an age maximum on which they will offer term insurance; this is usually age sixty-five, especially among low cost term life insurance companies.

To solve this problem, whole life insurance was made.  Whole life insurance premiums are comprised of two parts – the amount at risk and a savings element.  The amount at risk is about the same as for term insurance, but the insured pays extra to build up some savings.  These savings will grow through investment earnings over the person’s lifetime, and these savings, together with the amount at risk, comprise the face value of the policy.  Near the end of the person’s life, the savings element is so large that the amount at risk is very small, so the insurance can be extended until the end of the person’s life.

Therefore, in whole life insurance vs term life insurance calculations, whole life insurance rates will always be higher than term life insurance, because they are also building a savings element.  In order to find the best whole life insurance rates, you should speak with a broker or an agent; he or she is an expert at finding you the best insurance available.  After you compare whole life insurance rates, be sure to review the each plan’s features – the cheapest plan isn’t always best.

Whole life insurance ratings are the same as term insurance; the ratings are the values assigned to each applicant that show his or her probability of death.  These are the same with both kinds of insurance – there is no natural tendency for persons who are more likely to die to select one type or the other.  Therefore, they are the same as term insurance.

So, when you are shopping around for life insurance, don’t be surprised to see that whole life insurance rates are much higher than term insurance, because they will be.  Whole life insurance, though, is part of any sound financial plan, and it should not be avoided because of its seemingly high cost.

The Advantages Of Check Cashing Software

These days people want their money fast and don’t want to have to stand in line at the bank or be confined to banking hours in order to cash their checks.  The advent of readily available check cashing software has made it possible for other business such as convenience stores, kiosks and other retail establishments to compete with banks for people’s cash checking business.

Check cash software gives these establishments the ability to cash checks for their customers while at the same time cutting down on fraudulent activity.  The best check cashing software comes with features such as fingerprint ID imagers and database trackers.  Identifying customers using fingerprint software eliminates the problem of fake IDs being used at a check cashing service.

Check cashing software also gives businesses the ability to store and access information online or through media storage.  Checks can be scanned into databases and stored for future reference.  Some check cashing and payroll check cashing software also allows information to be shared utilizing a database to help prevent fraud and protect check cashing services.  Other tools available with the software include voice prints, iris recognition, hand imaging and facial recognition.  Having the option to take a picture of the customer, the customer’s check, id, or fingerprints through the check cashing software can help to increase repeat business and customer loyalty by having customers register through the check cashing system so that they don’t have bring any id with them on future visits.

With the added security features that check cashing software provides, cashing checks can be a very profitable business.  The anti-fraud measures helps to eliminate the number of bad checks which can also help to keep fees down for customers who will have more options available for cashing payroll checks, government checks, and other types of checks and money orders.  Another service that can be provided is printing checks so that individuals do not have to use temporary checks while waiting for the regular checks to arrive from the bank.  These software systems can issue bank drafts, cashier checks and money orders.

Check cashing software provides more opportunities for business to provide check cashing services while at the same time protecting them from fraudulent activity and attempts at cashing bad checks.  This gives consumers more options for cashing their checks as well.  If you are interested in purchasing cash checking software you can review different systems online or even try out free check cashing software or a free trial before making your final decision.

What’s a Good Credit Score?

If you are in the market for a new car or maybe looking at buying a house, you may be interested in what your credit score is.  Maybe you recently found out your credit score and you are wondering how it competes with other credit scores.  Before actually going into what is a good credit score, I am going to give a brief rundown of what exactly a credit score is.

It is a scientific and mathematical calculation that puts together many factors and outputs a score that is supposed to help determine if someone is good to loan money to or not.  It combines two main factors, the situation your credit is currently in, and your past credit history.  There are other factors, but those are the main ones.

Each of the 3 different credit bureaus, Equifax, Trans Union, and Experian all determine your credit score in different ways, but they all use the same system, the FICO (from the Fair Issacs Company who developed the scoring model).    The score range from around 400 to a perfect 850.  The average credit score is around 670, and anything above a 700 is considered a “good credit score range”.

You may be wondering how to get a good credit score.  Well, you can do a few things.  The first thing is to not make any late payments at all.  Do what you need to do to ensure that all of your loans and debts are paid on time, every single month.  That will help to establish a good credit history, and allow future lenders to know that they can expect to be paid on time if they loan to you.

Another key is to reduce your  total debt.  If you take your available debt (the max amount you can have on your credits), and if your current debt is more than 50% of that number, then your credit score will be lower.  Work on reducing your debt so that it is below 50% of your available debt.  This will help to contribute to a good credit score and a good credit report.

How To Choose The Best Mortgage Provider

Whether you are looking to buy your first home or refinance your current one, it is very important that you make a good decision when selecting your mortgage provider.  Because mortgages are such a large investment, even small differences in interest rates or other costs included with the loan can save or cost you hundreds or even thousands of dollars over the life of the loan.

The good news is the internet makes it easy to research mortgage loan providers, for one of the best investment types of all, real estate.  You can find many websites online which will compare different mortgages providers in terms of the interest rate, closing costs and other information regarding the loan.  To find the best mortgage providers you need to know what their interest rates are and how long the initial interest rate lasts, what their loan-to-value or LTV is, and what other charges are included with the mortgage such as closing costs, legal and valuation fees.  Also check to see if the mortgage includes an early repayment charge.  Some companies specialize in a bad credit mortgage loan, if your credit isn’t that good.

Another important factor to look at is customer service.  You can often find reviews from borrowers and former borrowers on their experiences dealing with their mortgage service provider.  Again, because a mortgage is such a big investment receiving good customer service from your lender is another important aspect that should not be overlooked.

After you have done your initial research, you can apply for free mortgage quotes online.  You will want to get several quotes from different mortgage providers by providing the same information on the quotes in order to be able to compare them against each other.

Once you do find a mortgage provider you would like to work with, it’s a good idea to get pre-approved for a mortgage before shopping for a new home.  If you have less than a twenty percent down payment, you will most likely need to get private mortgage insurance.  If this is the case you will also need a mortgage insurance provider.  Usually your mortgage service provider or realtor will be able to provide you with a recommendation.  If you could not afford a 30 year mortgage, you may want to talk to your mortgage provider about a 40 year mortgage.

If you are looking to potentially refinance your mortgage you will need to check the terms on your existing loan first to see  if there is an early repayment charge for repaying your mortgage early.  If there is it may not be worth it to switch to a different mortgage provider.

Finding the best mortgage provider will require you to do some research, but it is time well spent.  Choosing the right mortgage provider can end up saving you hundreds if not thousands of dollars which will help you be able to afford the house of your dreams.

What is a Silver ETF?

It’s an ETF that’s silver! Right? No? What the heck is an ETF, anyway? An ETF is an exchange-traded fund. Basically, an ETF tracks something; it represents something. This can be an index, a commodity, or something else. Sometimes, they can be represent a group of things, like a mutual fund, only they have lower costs than mutual funds do. In the case of a silver ETF, it tracks silver. What do you mean, “tracks?” Imagine that you are interested in precious metals, and you have a particular interest in silver. You have read a lot about silver, and you think that its value will go up over time. You decide to take a speculative position and buy some silver. You actually have two options at this point. You can literally buy some silver, hold it in your hand, and keep it yourself. Keeping it yourself could mean keeping it in your home or depositing it in a safe deposit box at your bank. Either way, you have possession of the silver. Your second option is to buy silver ETFs (gold and silver ETFs are available, along with the other precious metals). With a silver ETF, you do not actually have possession of the silver; a company does. However, your ETF represents a set amount of silver. So, if the silver’s price goes up, then so does your ETF. If it goes down, so does your ETF. There are different types of silver that can be bought; your ETF doesn’t just have to represent bullion silver. It can be made of silver coins, like the Canadian silver ETF. Other silver ETF’s are also available, such as the Barclays silver ETF, leveraged silver ETF, silver miners ETF, zkb silver ETF, and the double silver ETF. They all have their differences, but they all do primarily the same thing: represent silver. You can look up a silver etf symbol using Yahoo Finance or MSN Money, and you can read more about the company who issues it. Since ETFs are traded like stock, many people confuse them with stock. They assume that ETFs are shares of a company. This is not the case. ETFs represent silver, not a company. Therefore, if the company does poorly, but silver goes up in value, a silver ETF will go up in value. If the company does exceptionally well, but the price of silver drops, the value of the silver ETF will go down.

How to Get a Bad Credit Mortgage Loan

Bad credit mortgage loans are notoriously hard to get; there is no mortgage category that is “mortgage loans for bad credit.”  Bad credit is simply frowned upon in the mortgage lending industry.  To get one in today’s day and age, you’ll need to improve your credit.

You can, however, visit a bad credit mortgage loan lender who specializes in bad credit home mortgage loans or bankruptcy mortgage loans, and your chances of getting mortgage loans with bad credit will improve.  However, by “bad credit,” they still mean credit that is relatively good.  Bad credit, when used in the phrase “bad credit mortgage loan,” does not mean awful credit.  If you have truly bad credit, you will find yourself unable to get a mortgage loan.

Here are some simple things to do which will improve your credit:

Pay your bills on time – You’ll need to pay all of your bills on time, and you’ll need to keep this up forever.  This is the single most important part of your credit score.  You can have a good (but not excellent) score with just this facet.  If you have all the other facets in order, but you pay your bills late (or not at all) sometimes, your credit will be bad.

Keep your revolving balances below seven percent – Do not charge more on your personal lines of credit or credit cards than seven percent of your credit limit.  The more you charge, the riskier you appear to lenders.  They consider you to, in that case, have bad credit management skills.  Some will argue and say that you should keep your balances below thirty percent, but the truth is that there is no set number.  However, FICO scoring will tell you on your report that high achievers keep their balances below seven percent.  So, for all practical purposes, seven is the magic percentage number.

Keep your total installment and automobile loans below one thousand dollars – You don’t want to owe too much, and FICO scores are highest when you do not owe more than a thousand dollars on non-revolving non-mortgage accounts.

Keep a variety of credit open – It is better to have an installment loan and a credit card than two credit cards.  Variety is key.

If you do these things for a year or two, your credit score will dramatically improve.  Then, you won’t be looking for a bad credit home loan mortgage, but a regular mortgage along with those of us with good credit.  Simply put, mortgage loans for people with bad credit are just not possible to attain.  So, rather than continuing to seek an easy way out (there is none), face the fact that you are just going to put some time in and improve your credit score.  Once you do that, life will be a lot less stressful.

Understanding Reverse Mortgage Interest Rates

Reverse mortgages are becoming more and more popular as seniors are looking for ways to finance their retirement as well as pay for medical and other expenses.  One of the key factors affecting a reverse mortgage are reverse mortgage interest rates.  Up until recently, reverse mortgages were all based on adjustable interest rates.  However, fixed interest rates for a reverse mortgage loan are now available.

What Is A Reverse Mortgage?

You may be asking yourself, “How does a reverse mortgage work anyhow?” Well, reverse mortgages for seniors are loans provided by reverse mortgage lenders to homeowners who are at least 62 years old.  In order to receive a reverse morgage certain criteria that is set forth by the Department of Housing and Urban Development (HUD) must be met.  The amount that a homeowner can receive for a reverse mortgage is determined using a reverse mortgage calculator based on the homeowners age, value of the home, interest rate and other factors.  A reverse mortgage lender must be approved by the HUD and follow their guidelines, although they are able to set their own fees and interest rates as long as they meet the HUD criteria.

How Does A Reverse Mortgage Work?

With a reverse mortgage, the homeowner can tap into the equity that has accumulated in their home without having to sell or move out of the house.  Unlike a home equity loan, the homeowner does not have a monthly loan amount to pay back each month.  Instead the reverse mortgage doesn’t have to be repaid until the owner moves, sell the house or dies.  This provides senior citizens with cash that they need for their living expense as well as paying for medical bills and other expenses without having to sell or move from their home.  Reverse mortgage proceeds can be in the form of a lump sum, as a line of credit, or received in monthly installments.

Reverse Mortgage Pros and Cons

The main advantage to a reverse mortgage is that is allows seniors to tap into their homes’ equity without having to move or have any monthly loan payment.

The biggest disadvantage is that the costs associated with a reverse mortgage can be quite high.  Along with the closing costs, there are also origination and loan servicing fees, interest over the life of the reverse loan, and an insurance premium which is equal to 2.5% of the home’s value.

As discussed earlier, reverse mortgage interest rates can be either adjustable or fixed.  The rate of interest will partially determine how much a borrower is eligible for, so rates will need to be compared at the time of applying for a reverse mortgage.  The other thing that interest rate impacts is how much will need to be paid back on the reverse mortgage.  A fixed interest rate has more certainty, whereas an adjustable interest rate could increase or decrease the amount of equity left in the home over time.  One disadvantage to a fixed interest rate on a reverse mortgage is that you must receive the proceeds as a lump sump, whereas with an adjustable rate your reverse mortgage can be in the form of a line of credit or monthly installments as well as a lump sum.