The Similarity Between the 1031 and 1035 Exchange

The 1035 exchange is one of those rare times in which officials with the Internal Revenue Service actually put in place a plan to help individual investors.  The 1035 comes from the 1030 group of exchanges because it belongs to a section of the tax code on tax-free situations.

Investors who often deal in real estate may be familiar with the 1031 and the 1031 exchange rules.   The IRS naturally wants a cut of any proceeds an investor makes when they buy a property and sell it at a profit.  However, investors can sometimes avoid taxation through a 1031 exchange.  Under this scenario, the investor would simply rollover the profit from the sold property into a new property of equal or greater value, thereby avoiding taxation on gains from the old property.

In a similar way the 1035 also follows an exchange rolled over rule.  But instead of pieces of property, the investors hold assets such as annuities, life insurance, or endowments, which are then rolled over into new plans with different holding companies, without facing taxes on any gains.

The reasons the holders of such policies might want to switch and take advantage of the 1035 exchange, will vary from person to person.  In general assets such as life insurance policies start small and grow over the years.  This build up of assets is often called the reserve.  The provider of the policy keeps the reserve in stocks, bonds and other areas where the funds can build up and earn a profit.  When the policies are left intact, these earnings are not taxable.  But the moment a holder tries to touch them, i.e. taking them out of the policy, such as a loan or withdrawal, the IRS will tax it.  Of course not all the money withdrawn is taxable, just the profit faces these regulations.  This is calculated by subtracting the base investment from the gross.

However, if an investor’s policy is not performing as well as they would like, perhaps it was purchased years ago and is no longer competitive with newer policies, they can have the option to rollover their plan to a new company without facing any taxation.  In other words, the IRS will treat the funds as if they haven’t been withdrawn, when they are transferred to the new policy, thereby avoiding unwanted taxes for the investor. However, the investor should understand that a few other taxes could apply with a 1035 exchange, so it’s important to check with the IRS before committing to any exchange.

Rental Property Insurance

If you are renting a property then you really should consider getting rental property insurance.  When the owner of the place you are renting gets insurance, it is usually only to cover the actual house and structure, not anything inside that house.  That means if something happens and you don’t have rental properties insurance, then none of your stuff inside the house will be covered.

Usually a landlord requires insurance for rental properties that they rent to other people as a condition of the lease.  This gives double coverage for the house, and also protects any of your belongings inside of the house.  Another thing that rental insurance can do is to provide coverage for any injuries of your guests, since the landlord’s insurance won’t cover that either.

There are many different types and kinds and coverage that you can get.  Read below to learn more about these so that you can make the best decision for you and your family.  Also, it’s always best to pay a little more each month, then to lose out because you wanted to save a few bucks, if anything happens.

There are a few different types of coverage that you can get on your rental property insurance policy:

• Loss of Use – If something happens to your house that is covered under the insurance policy, and you can’t live in your house during the time it is getting fixed, loss of use coverage will pay for your living and food expenses for the time it takes for your house to get repaired.  That way, if you have to pay for a hotel and eat out for a few days while your house is recovering from a flood or something, those expenses will be reimbursed.
• Personal liability – If someone gets injured on the property, this will help to pay for your legal obligations for that injury or for any damage in the house.
• Personal Property – This is the most important, and it covers stuff such as belongings, clothes and furniture.   This also helps to protect your stuff if you are on a trip and something happens in your home or any of your stuff in stolen.

I hope that knowing the importance of rental property insurance as well as knowing the different things that should be covered, that you can make the best decision on the type of rental property insurance coverage that you need for your specific situation.

Low Cost Term Life Insurance

There are many people and companies in the insurance industry that are pretty shady, and it is easy to be scammed by these companies if you aren’t on the lookout. When it comes to the low cost term life insurance, your chances of being scammed can often increase. Here are some details about term life insurance that can hopefully help you in finding some good and affordable term life insurance.

For term life insurance, it lasts for only a certain period of time, somewhere between 10 and 30 years, depending on what kind of coverage you get. The amount that you pay for your insurance will rise as you get older. So, make sure that you when are getting term life insurance quotes, that they tell you exactly how much you will be paying, and how much will be paid out through the term life insurance policy.

Also, you need to realize that cheap term life insurance isn’t always the best term life insurance. When you get your term life insurance quote, be sure to understand exactly how your family will be paid out in the event of your death. Different policies are paid out in different ways, so it is very important to understand. If you have dependants, you may want to look into whole life insurance, rather than term life insurance. Since your dependents will need some money to cover burial costs, etc, you don’t want your life insurance policy to end and forget to renew it.

You can search for term life insurance online nowadays, and you can find many different types of policies from different companies. Be sure to compare term life insurance rates as well as how much your family will be paid out. be sure to compare all parts of the package put together, not just the individual aspects such as the rate, the term, and the total coverage amount (which are also important).

Here are some different reasons for getting term life insurance:

Keep Your Family From Going into Debt – If your family depends on your income, and you pass away, they may not be able to meet financial obligations such as the mortgage, car payments, and other bills and debts that you may have to pay off monthly. With a significant drop in income, your family can spiral into bad debt, and lower their credit if they are unable to pay bills. Having life insurance there will help to alleviate those problems.

Pay for the Funeral – Funerals can be expensive these days, and so having life insurance ensures that your last wishes can be met without making it a financial burden on your family, when they are already dealing with the emotional burden.

Return of Premium Term Life Insurance

Life insurance is a necessary part of any financial plan.  It protects against the pure risks (risks which associate only with loss and no chance of gain) associated with the life of an insured.  Usually, this insured has those who are financially dependent upon him or her.  Sometimes, these dependents can be people; other times, it can be a business insuring a key employee.

The two categories of life insurance: term life insurance vs whole life insurance.   Among the types of term life insurance, there is one we should discuss in particular called “return of premium term life insurance.”

Return of premium term life insurance is a unique one in that the insurer completely refunds the money paid after the term of coverage is over.  So, if you paid $10,000 for a 10 year policy with a coverage amount to your liking, you would receive this $10,000 back after the then years expired, provided the insured is was still living.

Many think this is too good to be true, but in reality it does exist.  Not only does it exist, but it is very common.  Insurance companies are still able to make plenty profit on this setup.  Any finance course will quickly show you that the time value of money makes the money in the future worth less that the same amount of money in the present.

Since many are not aware of the time value of money, they believe that they are getting “free” insurance.  What they fail to realize is that their funds would be greater in the future than today even from the paltry earnings of a savings account, and they also fail to realize that inflation will be eating up a lot of this money; therefore, the dollars they receive later will not be worth quite as much as they are today.

The insurance company pays for its operating expenses, pays it payouts to beneficiaries, and invests the rest.  The investment earnings bring back enough to have the insurance company still able to profit while still giving you back your initial premium.

Return of premium term life insurance policies are good for people who really need that money back, and who just cannot afford it otherwise.  Sometimes, too, when the policy is surrendered only part way through, a portion of the premium will be given back to the policy owner.

Term Life Insurance vs Whole Life Insurance

Term Life Insurance vs Whole Life Insurance

Life insurance is an important part of any financial plan.  It protects those who are financially dependent from the financial consequences resulting from their provider’s death, and thus loss of financial support.  Life insurance is available in many different varieties now, but they can both be grouped into two categories: term and whole life insurance.

Term Life Insurance

Traditionally, all life insurance was term life insurance.   This protected the beneficiaries from the death of the insured for a certain period of time, ten years being the most common.  After the period of coverage passed, there was no longer any benefit left for the beneficiaries.  Thus, if the insured dies after the ten year period, the beneficiaries receive nothing.  If the insured dies during the period, however, the beneficiaries will receive the face value of the policy, or the entire amount of the policy.  Term life insurance is the simplest kind of life insurance, especially from a low cost term life insurance group.  Usually the premiums, or monthly payments, go up at each period of ten years, because the insured has an increased chance of death at each new year period.  This continues up to a maxmimum age, usually at 65, after which the insured is no longer insurable, because the likelihood of death is too high to warrant life insurance.  Because it is the simplest type, and because it only covers up to a certain age, term life insurance is the cheapest kind of life insurance available.

Whole Life Insurance

Whole life insurance solves the age problem.  Whole life insurance is insuring the insured for his or her “whole life,” which is where the name comes from.   The whole life insurance policy starts with premiums above the cost of insurance at a young age, and continues through to a certain age, usually one hundred.  Here’s some life insurance advice: by overpaying in the beginning stages of one’s life, one will be able to accumulate enough “extra” so that one can continue paying the same amount in the end of life, when insurance is too high to normally afford.  The death of the insured in whole life insurance always results in payout to the beneficiaries, unless of course the policy lapsed due to nonpayment of premium.  Whole life insurance comes in many varieties; the policies vary from rigid payments and set earnings to variable payments and variable earnings.

Both types of life insurance are useful for different things; one is not inherently superior to the other.  Any good financial plan will contain both types of life insurance, as well as others such as disability insurance and long term care insurance.

Life Insurance Advice

When shopping for life insurance you can often be overwhelmed, so I am here to give you some good life insurance advice so that you know what you’re looking at when trying to figure out which type and how much insurance if right for you and your family.

It is important to have life insurance policies set in case anything happens to you, your family can be covered for at minimum, the funeral expenses, but you can get insurance that pays out way more than that. Depending on the life insurance rates you are willing to pay, you can get into millions of dollars for a payout, but those usually cost more.

Often times some people don’t see the need for life insurance, especially younger people. Here’s some term life insurance advice. If you are about to have kids, it is a good idea to get a term life insurance quote to see if it can fit within your budget. Term life insurance allows you to pay for life insurance during a set term. While your kids are in the house is a great time to get term life insurance because your kids can be taken care of financially if anything happens to you. The term life insurance rates vary depending on the length of term, the amount of the policy, and how much you pay each month. Don’t just go for cheap term life insurance, because it may not be the best. often times with insurance, the old adage “You get what you pay for” is true.

When researching life insurance, be sure to nail down the differences between term life insurance vs whole life insurance, and don’t just go with the first place that you find that offers it. it is definitely wise to compare life insurance between companies. Nowadays, there are many online life insurance companies offering affordable life insurance, so it is best to compare the different terms, conditions, and payout amounts so that you can get the best life insurance for your family.

Shop around is the best advice I can give you. If having life insurance for a set period of time suits you best, then definitely look into term life insurance. If you’re interested in an insurance policy that you can borrow and loan money against, then definitely check out whole life insurance.

Structured Settlement Annuity

What are structured settlement annuities?  Let us first look at what an annuity is.  An annuity is the opposite of life insurance.  Life insurance is accumulating a principle sum, which is due upon the death of the insured.  An annuity is the exact opposite – it is the liquidating of a principle sum, regardless of how it was accumulated.  Life insurance is usually accumulated by periodic payments, and at the end, it is given to the beneficiary.  Annuities are usually accumulated this way, too, because not enough people have enough money or are willing to put up enough money to pay it in a single premium.  Annuities can, however, be bought from anywhere from single premiums to periodic payments, where they resemble life insurance.  However, unlike life insurance, at the end of the accumulation period, an annuity is liquidated over the course of the beneficiary or beneficiaries’ life or lives.

When someone does wrong to another and is sued in court, sometimes the court will award a structured settlement.    A structured settlement is a stream of periodic payments which either replace or add to a lump sum; this is designed to compensate the person for the wrong done against them, such as their injuries.  Sometimes there is no way to measure how much income a person will need for the rest of his or her life, so a lump some may be inadequate.  So, a life annuity is often used to cover the person until the day he or she dies.

This started in the 1950’s, but it became commonplace in the 1970’s.  Workers compensation, general liability, defective products, automobile accidents, and medical malpractice were the common reasons for these structured settlements.

An annuity is usually bought to make this stream of payments.  This is where the name “structured settlement annuity” comes from.

Structured settlement adjusters work with defense attorneys or liability claims adjusters to find the appropriate settlement amount and settlement annuity.   This will cover the amount of cash needed for immediate needs, to include medical expenses, legal fees, custodial services, rehabilitation costs, etc., as well as replacement income from not being able to work.

Structured settlement annuities are great ways to settle claims, because once the annuity is bought, the liable party no longer needs to play an active hand in watching over the injured party; without structured settlement annuities, periodic payments every month would be difficult to manage.

Finding a Car Insurance Broker

If you own and drive a vehicle in any state in the U.S., then you need to have some form of car insurance. With many television ads, radio ads, and even billboards, it is often hard to figure out exact the best place to get your car insurance from. You could call a car insurance agent or a car insurance broker and they can help you to get your car insured.

You may be wondering what the difference is between car insurance agents and car insurance brokers is. An agent is someone who works for a specific car insurance company, and they set up your insurance policy through that specific company. A broker is someone who doesn’t work for a specific insurance company, but they interact with many different companies, allowing you to be able to find the best rates for your car insurance.

Back in the day, you would literally have to call through all of the agents and brokers listed in the phone book in order to get the best rates. But, with many insurance companies and insurance brokers online now, you can often find the best rates by yourself online, without having to use an agent or a broker.

You can also find car insurance brokers online who will take the information specific to the type of policy that you need, and they will compare it against other companies offering a comparable policy, and then give you the best deal. That is the easiest way, by going through cheap car insurance brokers. But, just make sure the online car insurance broker is licensed in your state.

Always investigate a cheap car insurance broker before deciding on one. Make sure that they are properly licensed through your state’s insurance board, and that they have a valid license to be an insurance broker. You can demand to see a license number, and you can call to verify it. This is standard practice so if they don’t want to provide the information, then stay away from such a broker.

Often times a discount car insurance broker is able to keep his prices down because he isn’t paying for the proper licensing fees that are mandated through the state. While it may seem like it’s a cheaper route, you can be setup in a bad situation, and you will have no legal recourse because the person isn’t being licensed by the state.

Find a Good Home Insurance Broker

For people in the market for homeowners insurance, they may be confused about what the difference is between a home insurance broker and a home insurance agent. Although they both deal with the same thing, home owners insurance, they are definitely not the same job, and they often operate in different ways.

A home insurance agent usually will only work for one company. They will try to sell you just the home owner insurance from their company, since that is who they work for. They are often recruited because of their sales experience, and the company hopes that they will be able to get more sales for their company.

Home insurance brokers, like car insurance brokers, are different though, because they can represent multiple companies, and they often try to find the best deal from you by offering various home insurance quotes from different companies, allowing you to compare home insurance. They will help you to find cheap home insurance that works for you. Since they aren’t tied to one company, they are basically working for you trying to get you the best coverage that you need for the best price for your homeowner insurance policy.

Tips For Finding a Good Home Insurance Broker

1. Have People Recommend One – A great way to find home insurance brokers is the ask your family and friends, and even people you work with, to recommend who they use. If you trust someone’s opinion, then you can often find some of the best results.

2. Make Sure They Are Properly Licensed – Be sure to get proof of their license, and check with your state to insurance that they are properly licensed. You do not want to work with someone who isn’t licensed, because if something goes wrong, you don’t have much recourse.

3. Interview Them – Interview them, and see if they are a good match, even before you dive into a home insurance comparison. If they seem shady to you, or other red flags come up, it’s best to just walk away. There are plenty of home insurance brokers out there who can give you a home insurance quote, who won’t have red flags.

Now you know the difference between a home insurance agent and a home insurance broker. Hopefully these tips will help you to find just the right home owners insurance policy you need.