Ken Himmler.com

Whether they’re snatching your purse, diving into your dumpster, stealing your mail, or hacking into your computer, they’re out to get you.  Who are they? Identity thieves. Identity thieves can empty your bank account, max out your credit cards, open new accounts in your name, and purchase furniture, cars, and even homes on the basis of your credit history. If they give your personal information to the police during an arrest and then don’t show up for a court date, you may be subsequently arrested and jailed.

1. Equifax: www.equifax.com
   (800) 685-1111
2. Experian: www.experian.com
   (888) 397-3742
3. TransUnion: www.transunion.com
   (800) 916-8800

• To stop telephone calls from national telemarketers, list your telephone number with the Federal Trade Commission’s National Do Not Call Registry by calling (888) 382-1222 or registering online at www.donotcall.gov
• To remove your name from most national mailing and e-mailing lists, as well as most telemarketing lists, write the Direct Marketing Association at 1120 Avenue of the Americas, New York, NY 10036-6700, or register online at www.dmachoice.org
• To remove your name from marketing lists prepared by the three national consumer reporting agencies, call (888) 567-8688 or register online at www.optoutprescreen.com
• When given the opportunity to do so by your bank, investment firm, insurance company, and credit card companies, opt out of allowing them to share your financial information with other organizations
• You may even want to consider having your name and address removed from the telephone book and reverse directories

The government’s bailout money is not up for grabs. Large insurance companies that qualify for the government’s bailout money have made applications. So far Hartford life, Prudential and Metropolitan are some of the ones that have made the application. They may be eligible for billions that may help bolster their corporate bond positions. Most insurance companies make money on the spreads that they get from buying corporate bonds and government bonds. Just like a bank makes a spread on the money they payout on Cds and savings accounts versus the amount they charge on loans. Insurance companies make money the same way – on their portfolios.

The problem was when the recession – depression hit many companies either stopped their interest payments on their bonds or outright defaulted. This has put a crunch on some insurance companies that may have been leveraged to highly. This new seed of investment help from the government should help these companies buy up more corporate and government bonds. While it still makes sense to have insurance companies as a part of an overall investment plan it also makes sense to diversify between different companies and different insurance products. You also want to check your state to find out what the actual coverage is in case an insurance company does go into receivership. As an example in Florida the amount each person is covered for is $100,000 for an annuity contract. 

What is cash value?

Term insurance charges an increasing premium (annually or in bands) to reflect the fact that the insured is aging and, each year, more likely to die. Cash value life insurance has a level premium that is larger than necessary in the early years of the policy to offset the increased costs of insuring the individual in the later years. This excess premium is invested and kept in an account known as the cash value account. In the event that you surrender the policy before death, this excess premium and its earnings are returned to you.
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A revocable living trust (also known as an inter vivos trust) is a separate legal entity created to own property, such as a home or investments.

The trust is called a living trust because it’s meant to function while the grantor is alive. The trust can continue after the grantor’s death, but the trust becomes irrevocable the moment the grantor dies.

Revocable living trusts are used to accomplish various purposes:

1. To ensure that property continues to be properly managed in the event the grantor becomes incapacitated
2. To reduce costs and time delays by avoiding probate
3. To lessen potential challenges to or elections against a will
4. To maintain privacy
5. To avoid ancillary administration of out-of-state assets

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A QTIP trust (also called a marital deduction trust) is an irrevocable marital trust used to ensure that a decedent’s property will provide lifetime income to his or her surviving spouse and then pass to other beneficiaries. A QTIP trust qualifies for the unlimited marital deduction, allowing the surviving spouse to use his or her federal gift and estate tax exemption (also called the applicable exclusion amount–$2 million in 2008) and/or federal generation-skipping tax exemption (same amount as the applicable exclusion amount).

A QTIP trust is designed to transfer property free of transfer taxes under the marital deduction just as an outright transfer would. The result, as in an outright transfer, is that the property will then be subject to taxes in the surviving spouse’s estate, but can be offset to the extent of the surviving spouse’s available exemption(s). Another advantage of a QTIP trust is that the property does not pass outright to the surviving spouse–it passes to an independent trustee who controls and manages the property on behalf of the surviving spouse for his or her life, and then passes to beneficiaries (typically children and grandchildren) named by the first spouse to die. Read more…

What is life insurance?

A contract

Technically, life insurance is a contract between the policy owner (which can be you, “the insured,” or a separate party) and an insurer. The policy owner agrees to make premium payments, and the insurer agrees to provide a specified sum to a designated third party (the beneficiary) upon your death.

Tip:           Contracts, including life insurance contracts, are governed by state law.

And a will substitute

Because proceeds are paid directly to the beneficiary, life insurance can bypass the probate process, saving both expense and delay.

Purchased for four primary reasons

Life insurance is one of the biggest players in the estate planning game. For some, it is the only way to ensure that family members will be able to support themselves after the death of the primary wage earner. For those with larger estates, life insurance can provide the funds needed to pay estate taxes (and other costs) without liquidating estate assets. For those with a business interest, life insurance can be used as a vehicle for business succession. Finally, for those with a generous spirit, life insurance can permit you to make charitable gifts.

Advance planning needed to avoid taxes

Although life insurance proceeds are generally received by the beneficiaries income-tax free, they may be subject to estate taxes if you do not plan in advance.

For more information on estate planning or life insurance to pay estate taxes you can go to http://kenhimmler.com.

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What is life insurance?

Life insurance is a legal contract between an insurance company and a policyowner and is governed by state law. Under the terms of the policy contract, the policyowner pays premiums in exchange for the promise of payment of a specified amount of money to a named beneficiary when the insured dies. The policy itself contains provisions specifying the rights and obligations of the parties under the contract.

The specific purpose of life insurance is to replace the economic loss resulting from a person’s death using money from a pool of funds to which many people contributed a relatively small amount.

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Here we are in another day of la-la land with the U.S. and their drug policies. As I was doing research on the portfolios today I noticed some rather odd gyrations within the pharmaceuticals. When I looked further I noticed that just overnight six very popular drugs have doubled in price. As an example Ambien went up 160% in price. Do I have an answer for this, no. I will say that it is primarily a problem with the U.S. Last June (2007) I traveled to Germany to get back surgery done because the cost of this in the U.S. would have been five times as high as it was in Germany. The greatest part of it was it was a single price of 34k. This included everything from the surgery, the post-op and the drugs. If you have ever had any medical work done in the U.S. be prepared to pay $40.00 for a roll of surgical tape. That is another story where a local hospital did in fact try to charge my insurance company $40.00 for surgical tape – until I complained that I could get a roll of hockey tape for $2.00.

Here is the problem:

1) When you are retired or you are going to retire plan on needed a nest egg of about $225,000 per person for medical expenses. (Assuming you retire at age 60 – if you retire earlier it will be more)

2) Plan on an average annual increase of 15% on all medical expenses.  (This sounded good until the 100% increase overnight on drugs)

3) Plan on a 7 out of 10 chance that you will in fact need long term care before you die.

I dont know about you but getting older is really expensive. If you have had an experience with medical expenses ruining someone retirement leave a comment.

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Also check out the other post/article I wrote on Medical Expenses in retirement at

http://www.kenhimmler.com/2008/08/06/healthcare-in-retirement