All About Creditor Insurance

Update Sept. 04 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-09-02T13:11:00.000-07:00

The main aim of buying a life insurance policy is to protect your dependents from financial strife in the event of your death. Your choice of an insurance policy should therefore be economical as well as effective. Choosing the right policy will enable you to make regular payments and ensure your dependents receive adequate coverage. Term life insurance would be worth considering if you're looking for basic life insurance coverage.

There are several kinds of life insurance policies, however, and a smart salesman or an aggressive sales campaign might tempt you into buying a policy you don't really need. One of them is credit life insurance. Let's learn about what it is, and why you are better off not buying such a policy.

What is credit life insurance?

This is a type of insurance policy that is customized for the purpose of paying off the unpaid amounts on your credit transactions in the event of your death; the most common of which are loans, mortgages and credit card bills. It works like a decreasing term life insurance policy. Credit life policies are usually offered when you make a huge financial purchase. The premiums on this policy are added to your loan amounts.

Why you shouldn't buy a credit life insurance policy

Credit life coverage is quite expensive compared to term insurance. Salesmen receive huge commissions for selling them to you.
It doesn't require a medical test to determine your premiums, but it also doesn't cover pre-existing medical conditions.
Your family doesn't receive the death benefit. Your creditor does.
If you are older you also have to be careful not to get conned into such a policy because the policy becomes null and void at the age of 70.

What you should know about credit life insurance policies

Most people are not aware that these policies are entirely optional. Pushy salespeople make it sound like they are indispensable policies that will put your family through financial mishap in the event of your death. Your family will manage fine as long as you take out a simple, no-fuss term life policy for an amount of death benefit that can cover all your dependents' needs.
Such policies are sold by telling people that if they pass away, their dependents will 'inherit' the loans and debts. The truth is, your dependents are not obligated to pay these off unless their names are on these accounts next to your name. Of course, most of us are honorable enough to leave money through life insurance death benefits so that our dependents can pay off any outstanding amounts.
If you have already been sold a credit life policy without your knowledge, you can cancel it and even receive a refund. It is illegal in most states for a salesperson to insist on such a policy when you make high-ticket purchases. Check with your state insurance commissioner, and if it is illegal in your state, you are within your rights to complain to the authorities.

Concentrate on the important stuff.

Have you insured your life? Have you reviewed your policy lately? Is the insured amount enough to take care of your family, and will it be enough to pay off your credits and loans? In that case you are okay. However, if you find that your life insurance coverage is not enough, simply take out a fresh term life policy to make up the difference. There is no need to buy a separate credit life policy.

When you are strapped for cash, a credit life policy is a waste of money. Such policies give you the same benefit as an economical term life insurance policy but at higher rates. Instead, buy a term life policy and effectively secure your family's overall insurance plan.

About AccuQuote:
AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

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Update Aug. 18 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-08-17T10:13:00.000-07:00

Creditor Insurance is defined as a type of Insurance that covers the financial responsibilities for a mortgage, loan, or line of credit, when the insured dies or becomes disabled.
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Credit-Related Life Insurance - Should You Buy It?
By Sidney L. Moore

Credit insurance is one of the most misunderstood and fraudulently marketed products in the field of personal finance. The types of insurance sold by creditors to debtors range from the old standard credit life and accident and sickness insurance to such worthless contracts as "life events" which will be explained below. Almost all of these policies are grossly overpriced and are a source of substantial profits for lenders and sales finance companies.
The use of insurance as a type of security for a loan or other extension of credit is not an inherently a bad choice. Both the creditor and the debtor can benefit from removing the risk of death or disability from the equation. If the reduced risk is a factor in providing a lower interest rate, or in basic credit approval, it can be a win-win situation. The problem arises, however, when the creditor intimidates or otherwise induces a customer to purchase an insurance product not for its effect on risk but as an additional and substantial source of revenue.
Normally insurance rates are set by the competitive market, which tends to hold rates down at least for the reasonably informed consumer who does some comparison shopping. Automobile insurance companies, for example, are highly competitive and the rates are seldom regulated. But in the context of an application for credit there may be no competition at the point of sale of the insurance. The creditor may be the only practicable source. The only "competition" is between insurance companies to see who can charge the highest premium and pay the highest commission to the creditor or its officers for selling the coverage. This tends to force rates up rather than down and has been dubbed "reverse competition".
During the 1950s as consumer credit was expanding rapidly and many states had strict usury laws (laws limiting maximum finance charge rates) both lenders and sellers began relying on commissions from credit insurance premiums to pad the bottom line profits. Many engaged in selling excessive coverage (not needed to pay the debt if something happened to the debtor) and nearly all charged outrageous premiums, with 50% or more being paid to the creditor or its employees, officers or directors as "commissions" for writing the coverage. As incentives for paying as few claims as possible there were also "experience refunds" awarded to creditors, which sometimes raised the total compensation to 70% or more of the premiums. In addition, the premium was added to the loan or unpaid balance of the sale price and finance charges were charged on the premium.
Finally the National Association of Insurance Commissioners (NAIC) declared it had had enough of the consumer abuse and model legislation was drawn up and passed in nearly every state authorizing insurance commissioners to limit the amount and cost of credit life and accident and sickness insurance...the two biggest sellers in the field. In some jurisdictions the legislation had very little effect because the commissioners would not seriously exercise their new regulatory powers, but in others the rates came down almost immediately. Over a number of years where there was pressure from consumer groups the rates on these two products reached a reasonable level...with some states requiring that the rates produce a 50 or 60 per cent "loss ratio"....ratio of incurred claims to earned premiums....and limiting commission payments to creditors.
While this progress helped the consumer buying credit life and accident and sickness insurance creditors soon realized that it was easy to develop new products which were not regulated under the NAIC model law...products such as "involuntary unemployment insurance" to protect the consumer against job loss and "unpaid family leave" insurance to make payments in the event of a family emergency that required the debtor to have to leave his job temporarily.
Now, back to the question of whether you should purchase credit related insurance in connection with your next transaction, that really depends on the type of transactions, your individual circumstances and the kind of coverage in question. The first question to answer before deciding who to buy credit life insurance from is whether you need life insurance at all. The first step in the answer is "Do I already have life insurance in sufficient amount to cover this obligation and other needs?" If so it is obvious you don't need any more, and the answer should be "No".
Life insurance is justified when (a) there are dependents to be cared for after you are gone; (b) you have a moral obligation to a co-signer or co-maker or guarantor...possibly a family member...that you will pay at least your portion of an obligation, living or dead; (c) you own property or other assets which you want to leave to someone upon your demise, and unless this debt is otherwise paid the property may have to be sold to pay it; (d) you are buying something important "on time", such as a home or an expensive vehicle, and don't want it to be foreclosed or repossessed if you are not there to make the payments; or (e) you and a partner have invested heavily in a business that depends on both of you working, and you don't want your partner to suffer a hardship if you are not there. There may be other reasons, but the point is that you must examine your individual circumstances.
You do NOT need life insurance if you have no dependents, own very little and are not leaving anything to anyone, and there is no co-maker to protect, because your debts essentially die with you. No one will have to pay them if you don't. And if there is no money to bury or cremate your remains don't worry. Something will be done with them because public health requires it. If you want an expensive send-off buy just enough to pay for the funeral and name a beneficiary with instructions to use it for that purpose so your creditors won't try to grab it.
If you want to make gifts to others when you die, perhaps to make up for the mistreatment of them while you were around, life insurance is a very expensive "estate substitute". It is better to put your money into savings than to pay it to some national insurance corporation on the hope that you will profit by dying. With life insurance you are essentially betting that you will die and the insurer is betting you won't.
Assuming you decide you need life insurance, the next question is whether to buy it from a creditor or on the open competitive market. Most of the time it is best to purchase a proper amount of term life insurance payable either to a beneficiary, or to a trust for the benefit of minor dependents, or to your estate to be used to pay your last rites and obligations. If you have it paid to a beneficiary, such as your spouse or children, your creditors cannot claim it for the payment of your bills....unless you designate a particular creditor as a beneficiary to the extent of your debt obligation. No creditor has an insurable interest in your life except to the extent of your debt.
If you owe a mortgage debt on your home it may be wise to scale your term life policy to approximate the amount of your mortgage so it will be paid off for the benefit of your spouse and children if you, a provider, cannot provide. If you have a car note you need to adjust your total life insurance amount to discharge that obligation as well, so that whoever gets the car gets it free and clear. If you don't care what happens to the vehicle don't worry about the additional coverage. The creditor will take it and sell it and eat the balance. It is theoretically possible for a sales finance creditor to sue an estate for a deficiency after repossession but it very seldom occurs. It's just too much trouble.
Aside from large obligations such as home mortgages and car notes there is usually very little justification for buying life insurance, and certainly not from a creditor. The premium rates on creditor-provided life insurance are much higher, as a general rule, than the rates for other life coverage.
Credit life insurance comes in three varieties...level, decreasing, and revolving. Level life insurance begins and ends with the same coverage over the term and is normally associated with single payment obligations. It is illegal in most states to sell level life insurance on installment transactions. Decreasing credit life comes in two sub-varieties...gross and net. Gross decreasing credit life begins with the "total of payments" (the principal plus all interest you will probably have to pay over the whole term of debt) and decreases by one monthly payment each month until it reaches zero at the end of the term. Net decreasing credit life starts at the "amount financed" and declines as the principal balance declines over the term. Usually net decreasing life is enough to pay the obligation because it tracks the remaining principal, unless you fail to keep up with the payment schedule and reduce the debt accordingly. Gross decreasing life will normally be excessive at the beginning and less so as the term continues. For example, if the principal is $10,000 and there will be $4000 in finance charges on a car note over a six-year term, the insurance will start at $14,000, but during the first month the debtor in fact only owes $10,000 plus a few days interest. This means that if the debtor dies during the term the excess coverage should be paid either to the debtor's estate or to a named beneficiary. In some states creditors are limited to net decreasing life plus three or four months of payments just in case the account is in arrears at the time of death.
Auto accident deaths create a unique insurance situation where credit life is involved because the casualty insurance on the vehicle will often pay off the car note leaving the credit life insurance to be paid directly to the debtor's estate as a cash benefit. Millions of dollars of insurance benefits have been lost because the surviving spouse was unaware of the double coverage on the note.
"Revolving account" credit life insurance usually involves a monthly premium computed on the basis of the outstanding balance being billed. The premium covers that amount for 30 days, discharging the obligation if death occurs before the next billing date.
Unfortunately, national banks that issue credit cards have developed a scam to get around the accusation of illegally high credit life premiums. Most of them if pressed would take the position that since they are a "national" bank the states cannot limit their insurance premiums, even if the state also limits premiums charged by state banks, but this legal position stands on shaky ground.
Many have issued their own policies in the form of "debt cancellation clauses" which are amendments to credit card agreements under which the account balance will be canceled if the debtor dies. But because of the risk that some state may clamp down on their rate-setting practices they "bundle" the credit life with up to a dozen other coverages, nearly all of which are not rate-regulated, so the charges produce a very large margin of profit. They won't sell credit life alone, but require an "all or none" purchase of the various components such as credit accident and sickness, involuntary unemployment coverage, unpaid family leave coverage and even such weird products as "college graduation", "having a baby", "retirement", "divorce" and other "life events", each of which results in a month or two of benefits at the minimum payment level on the account. These bundled products usually cost upward of $1.00 per $100 per month, or twelve per cent per annum on top of the existing finance charge rate. Truth in Lending does not require that additional 12% to be reflected in the annual percentage rate, however, because the coverage is deemed "voluntary" and not part of the "finance charge".
So the answer to the initial question is a resounding "maybe"...depending on your individual circumstances, the options available to you, and the cost of each alternative. Perhaps having read this you will know what questions to ask and make an informed choice.
Sidney L. Moore Jr. is a retired consumer credit attorney who has handled many thousands of consumer defenses and claims against creditors. He holds a Master of Laws degree and was in practice for more than 40 years. He now specializes in consumer class actions against credit-granting institutions. His cases have resulted in millions of dollars being paid to non-profit organizations by creditors, in addition to millions in refunds to customers. He is a member of the National Association of Consumer Advocates (NACA) and a frequent lecturer on consumer credit issues in lawyer-training events. He may be reached by e-mail at attnys@windstream.net.

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Update Aug. 01 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-07-31T07:32:00.000-07:00

A creditor debt management program provides relief to a concern for most professionals, small business owners and others potentially susceptible to personal liability during their lifetime or after death. A creditor debt management program can't guarantee that a particular savings or income producing account will or will not be protected from creditors. as every situation depends on a number of circumstances, a creditor debt management program will protect you in many instances but not in others.

It is important and a responsibility to do all you can to try and mitigate risk as best you can using a creditor debt management program.

A creditor debt management program covers some of the laws and legal cases that either support or deny creditor debt management programs for both insurance and non-insurance savings and income producing investment vehicles.

Bankruptcy and Insolvency Act re: creditor debt management programs

The foundation of a creditor debt management program proceedings is the Federal Bankruptcy and Insolvency Act. The Act states three main conditions under which a creditor debt management program doesn't apply.

1. If the bankrupt was solvent at the time of settlement and went into bankruptcy within one year thereafter, the creditor debt management program doesn't apply.

2. If the bankrupt was insolvent at the time of settlement and went into bankruptcy within five years thereafter the creditor debt management program doesn't apply.

3. If the bankrupt was solvent at the time of settlement, went into bankruptcy within five years thereafter and the bankrupt's interest in the settled property did not pass at the time of settlement, the creditor debt management program doesn't apply.

However, subsection 67(1)(b) of the Act excludes assets of the bankrupt that are exempt under provincial law. So, even if one of the conditions above applies to the situation, assets may still be available for the creditor debt management program. This brings us to the provincial insurance acts.

Common Law Province Insurance Acts and a creditor debt management program

The insurance acts in Canada's common law provinces are generally similar. The sections of the various acts relating to a creditor debt management program, in general, that insurance money and contracts are exempt from seizure as long as a spouse, child, grandchild or parent of the annuitant is named beneficiary. The protection of a creditor debt management program also extends to the instances where an irrevocable beneficiary is named.

The beneficiary in a creditor debt management program can't be one of the policy owners where there are joint owners on a policy. The beneficiary will not be deemed an exempt beneficiary if the beneficiary is one of the owners.

A creditor debt management program may not apply if the transfer of assets to an insurance policy is deemed to be made with the intent to delay, hinder or defeat creditors. The transfer of assets may be considered to be a fraudulent conveyance in such a case. The concept of fraudulent conveyance is getting more and more attention these days as creditors are finding it a more successful approach to take in legal proceedings they undertake, another reason to consider a creditor debt management program.

John Stratos is a contributor to Equity Cash North Americas premiere program for protecting your hard-earned equity and creating Cash Flow with ZERO risk to your equity!

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Update July 15 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-07-14T16:45:00.000-07:00

How could that happen? You're not opening a nuclear reactor, just an ice cream shop.

Aha! What if the site you select for your ice cream shop ends up being in a district where the water is found to contain too many parts per million of some noxious substance or another and you have to close down or move? Or worse, be permitted to stay, but be required by local government to hang a sign at the order window telling customers they drink your sodas at their own risk? It has happened to a shop in the town of Finksburg, Maryland. Fortunately, the local population isn't too concerned about that stuff in the water, and the owner didn't have to close up shop, risking his investment and his livelihood. But he without a doubt lost business.

That was a mild case of the "environmental flu." Others can be much worse.

Fortunately, there is insurance for that sort of thing, and having it might even help you get financing for your new venture. Originally meant for big business, ones that might easily buy a 40-acre site that was a pharmaceutical waste dump in the 1950s and is now in need of expensive remediation, secured creditor environmental insurance now comes in sizes to fit most businesses, large and small.

These policies protect both the business owner and the business owner's lender in the event that contamination of the business site is found and must be cleaned up. The insurance takes care of the cost of remediation, or the loan if the owner must default because of the cost of remediation. And it also covers liability claims, including bodily injury. Note: These policies cover only claims based in environmental laws in effect at the time the policy was written, not claims based on later regulation and legislation. In effect, secured creditor environmental insurance acts much like title insurance.

Title insurance includes an investigation of the real estate to make certain all previous deed transfers, survey and so on were correct. If the investigation failed to find something that later becomes a problem, the title insurance takes care of it.

Secured creditor environmental insurance policies also require an investigation into the prior uses of the land. If a problem is discovered later, but the investigation was conducted with due diligence, then the insurance pays for the cleanup. In all cases, the policies won't pay off if information that results in claims has been withheld.

Unlike title insurance, secured creditor environmental insurance companies also want to know what the intended future use of the site will be. You want to open an ice cream store? You'd probably have no problem. The Finksburg case is actually unusual.

Dry cleaner? Sure, although your deductible will be fairly high, in the $1,750 range. Note, too, that managers of strip malls, where most dry cleaners are located, are beginning to require dry cleaning shop owners to have some sort of pollution liability insurance. Cleaning up a spill at a dry cleaning store costs about $50,000 on average; the deductible will be somewhere around $10,000.

Ted Taylor, Vice President of General Insurance Services, has over 30 years experience as an insurance agent. Ted holds the following professional designations: Chartered Property and Casualty Underwriter - CPCU Chartered Life Agent - CLU Certified Insurance Counselor - CIC. Call him today at 219-879-4581 to learn more about Michigan City Business Insurance.

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Update June 25 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-06-25T06:31:00.000-07:00

By Robert C Eldridge Jr

With present bankruptcy regulations making it trickier to meet the requirements of debt relief, a still accessible option can be the usage of annuity. In many states, income from annuity payments is secured from the creditors. Every State is different from another and several states have their own laws in this regard. So, it is always helpful to first look for professional tax and legal advice when planning to use any annuity as protected asset.

State Annuity Creditor Protection Laws

Many court decisions and state statutes safeguard all or some of reimbursements from the annuities, while other states designate a particular amount of annuity which can be excused. Several states including Massachusetts exempts any amount which is declared explicitly in the agreement. The federal laws do not exempt annuity values or payments specifically, and has allowed every state to introduce own rules with regards to exceptions. Some persons choose to buy insurance firm annuities as prospective retirement options to earnings, and the annuity exception is mainly introduced to cover up this kind annuity. Further, buying of annuities also serve as excellent 'asset protection tool' in the case of bankruptcy.

What Protection Do Fixed Annuities Offer?

Asset safety is an imperative point of consideration when settling on the retirement investment, and one investment type that interests the retirees most is fixed annuity. As a fixed-annuity is an 'insurance product', it has unique protection afforded coverage over the years. While you are living, fixed annuity may offer mainly three protections from the following:

· Ups and downs of market: As fixed-annuity proffers an assurance of interest and principal, you are safeguarded from loss in principal and profits that investments in stock markets are susceptible to.

· Lawsuits: Annuity is not often liable to garnishment or attachment in the favor of creditor of individual insured according to the agreement. That means annuity proffers creditor protection.

· Current dues of annuity-earnings: Since fixed-annuity earnings are tax deferred, they are not marked on your tax-forms. This ultimately keeps your fixed-annuity investment off the tax record until you extract money. This gives you the required privacy feature.

As the annuity is an agreement with a designated beneficiary, it offers 2 more protections after the death of primary candidate, including contestability and probate process. Contestability means no person can raise questions on your settlement as to who is going to get your fixed-annuity advantages after your death. The fixed-annuity investment moves immediately to the beneficially, which minimizes the overall cost related with probating the money and avoids the characteristic holdup. This also keeps the money transfer private, which is another privacy feature.

Now-a-days, various state annuity creditor protection plans are made available to safeguard capital from creditor and if one is planning to use them, it is imperative to know how he could be affected personally. Always get advice as per your circumstances before taking further steps to defend your assets. Also, never sign the contract until you understand each aspect of contract fully.

Visit http://www.annuitycampus.com for more Annuity and Life Insurance Tips and Tricks.

Call Robert Eldridge directly at 800-643-7544.

Robert Eldridge holds over a decade of experience as a multiline agent in multiple states and currently serves on the membership council of the National Association of Insurance and Financial Advisors

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Update June 05 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-06-05T08:24:00.000-07:00

By Kevin Schroeder

We have all been there...you have just bought your new home and are at your lenders desk signing the paper work when they ask "Would you like to purchase life insurance to cover your mortgage?" At first glance it looks like a great idea, we all want to ensure that our family is taken care of should something happen to us and its quick and easy to get. Just answer a couple easy questions and it's yours.

However, if you happened to watch an episode of CBC Market Watch titled "In Denial" you will know that this type of mortgage protection may not give you any coverage at all. In the Marketplace investigation, they interviewed two families who bought coverage and thought they were protected, only to have their claims denied when they became sick or died.

So why is it that Mortgage/Creditor Insurance may not provide coverage but typical Life coverage purchased through a licensed Advisor will? One big difference is that with most mortgage/creditor policies the your application is not reviewed and accepted until after you pass away. Whereas, most policies purchased through a licensed agent are approved or declined upon application. Therefore, unless you made a fraudulent statement about your health, coverage is guaranteed when you receive the policy.

There are a number of other differences between mortgage/creditor coverage and life insurance. Here are just four further examples:

1) Often the amount of coverage with creditor insurance decreases every year however the monthly payment stays the same. Whereas the amount of coverage with life insurance does not decrease.

2) Creditor policies terminate when the loan that it is attached to is paid off. In the case of a mortgage this could happen any time you re-finance or move. Life policies terminates when you want it to.

3) With a mortgage/creditor policy you have no say in what the insurance proceeds are used for. With a Life policy the beneficiary gets to decided what the proceeds would be best used for.

4) Coverage purchased through a licensed advisor is in a lot of cases is CHEAPER and provides better coverage then creditor policies.

Now here's the good news. In almost all cases if you have mortgage insurance you are able to cancel it at any time without penalty. To determine if your present coverage fits your needs and for a free no-obligation quote please contact me. Further, on a regular basis I see individuals that have proper coverage but are paying way too much. If you have not recently received competitive quotes on your policy please give me a call.

Kevin Schroeder is an Insurance and Investment Funds Advisor with Money Concepts (Chilliwack) IA Investia (Mutual Fund Dealer).

Kevin's objective is to provide Insurance and Investment Fund products in a manner clearly different and superior to what is currently available to consumers in the area.

He believes that each client is unique and therefore approaches investment and insurance planning according to your individual needs and comfort level. He prides himself around developing a solid long-term working relationship with his clients. He achieves this through scheduled face to face review meetings, excellent communication and service from his staff.

Kevin has studied many areas of Financial Planning, from cash flow management to estate planning. He has a special interest in wealth creation strategies, many of which have a tax reduction component. Most people pay far more tax than necessary. He also strongly believes that later in life preservation of capital is paramount, and manages assets according to these principles.

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Update May 16 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-05-16T06:48:00.000-07:00

By Kaushik Adhikary

The credit insurance(popularly known as payment protection insurance), originally developed in USA, has witnessed a spectacular growth throughout the world. This is because of enormous presence of credit culture in the western economies and subsequent protection for the lenders & consumers against the unforeseen events such as death, disability and unemployment of consumers loosing his ability to repay the loan.

The term is primarily associated with a specific loan or line of credit that's design to mitigate the risks of the lender. And in today's credit happy society, its very much relevant. Apart from the lender's point of view of safe-guarding their financial interests over the lending money, borrowers ought to confirm that their families are safe and won't be in a debt trap.

Just imagine, you are permanently disabled and have lost your job or steady flow of income and/or any extremity has happened to your life, what would be the miseries prevail in your family? And here comes the essence of credit (protection) insurance.

Although in today's credit happy world, this type of insurance is much common, you have to make sure that you have the proper credit plan that could adequately safe-guard you. In this case, its not only you who's an insurable interest, creditor or lender has a legal insurable insurance on your life (as a borrower or debtor).

Credit insurance may be of three kinds, depending on the type of credit.

**Decreasing Term Coverage for close-ended installment payment system. This is normally seen in case of mortgage, automobile, consumer, educational lending where the load balance decreases with repayment at regular intervals.

**Ordinary Term Coverage for single payment loan where the loan repayment practice is in a single lump sum amount (single premium credit insurance) and the outstanding amount won't decrease.

**Varying Amount Insurance Coverage in open-ended nature where the credit amount varies from month to month such as credit card loan. Normally the mortgage and loan-based credit insurance are more popular than varying amount credit insurance(open-ended). Make sure that at-least your loan amount must be covered by the credit insurer as a large portion of your borrowings may remain uncovered due to certain upper limit of coverages from the credit insurance company.

The important coverages are-

1. Death: In case of borrower's death, the claim amount is paid to the creditor or lender.

2. Disability: Claim, arising out of disability, is payable as per definition or contract of insurance which is again subject to a specific waiting or elimination period.

3. Unemployment: The benefit is payable if the borrower's lost his job, may be due to termination, lay-off, strikes, labor disputes. But the majority of credit insurance plans do not cover the conditions such as retirement, resignation or illness.

Kaushik Adhikary operates http://www.myinsuranceinsiderinfo.com a blog all about fresh and quality content on insurance and finance fields.He loves giving away Free Stuffs and now started giving away Free Membership to his Newsletters. On signing up, you'll get incredible instant Training Course, E-book and Special Reports and its all absolutely free.

Get more details here:http://myinsuranceinsiderinfo.com/2007/09/28/credit-insurance-solution/

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Update April 26 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-04-26T06:17:00.000-07:00

By Victor Fong

A frequent cause of personal financial difficulties is the failure of a business and the attendant business-related liabilities personally owed by the company owner. These individuals must often file for bankruptcy or make a proposal to their creditors as result of business-related debts.

Debtors completing their bankruptcy/ proposal often wish to start up another business sometime in the near future. The expected question then arises: how can they creditor-proof themselves in the event that their new business fails? Here are some ideas:

1. Consider incorporating the business. Incorporation will provide the owner with a level of creditor protection - most of a corporation's obligations are limited to its assets so this structure can provide protection for personal assets. This structure also has income tax benefits, which will not be discussed here, (this subject warrants its own article which will be published at a later date).

2. Always pay statutory debt on time, specifically:

Payroll source deductions;
Goods and Services Tax collected;
Provincial Sale Tax collected; and
Employee wages and vacation payable.

In Ontario (and in certain other provinces), corporate directors can be personally responsible for these debts, notwithstanding that the business is incorporated.

3. If the owner is using his or her own funds to invest in the company, it's advisable to do so in the form of a loan to the company secured by a charge over the assets. A lawyer should ensure that the proper documents are prepared and that the security interest is properly registered. In the event the company fails, the security interest will have a priority over all unsecured creditors with respect to realizing on the company assets.

If the loan is not properly documented and registered, the owner may become an unsecured creditor waiting in line to be paid with all the other creditors in the event of business failure.

4. Consider acquiring personal assets in a spouse's name or a family trust. Such assets do not form part of the transferor's bankruptcy estate and are therefore not subject to claims of estate creditors.

5. If the company owner is putting away money for retirement, consideration should be given to investing in RRSPs that are exempt from claims; for example, segregated funds. The distinction between segregated funds and mutual funds is that segregated funds are insurance contracts. The Ontario Insurance Act provides that:

"where the beneficiary of the

insurance contract is a spouse, child, grandchild or parent of a person whose life is insured... the rights and interests of the insured in the insurance money and in the contract are exempt from execution or seizure..."

Therefore, insurance products held in RRSPs will be exempt from seizure by creditors.

6. If one can avoid doing so, personal guarantees of a company obligation should not be given to suppliers or a landlord unless it is absolutely necessary.

Conclusion

With some foresight (what's the worst that can happen, and how do I avoid it?) and careful planning using the applicable initiatives outlined above, one can create an effective creditor-proofing strategy that will enable the company owner to ready him or herself if things don't go as well as expected.

Creditor proofing is best undertaken at the start of a business venture - when there are few assets and no claims outstanding. By the time a claim occurs, it may be too late to move assets beyond the reach of creditors.

Disclaimer

This article is an overview rather than a complete analysis. Before applying any of these suggestions, consult your professional advisor. If you are a resident of Toronto, Ontario, Canada and have questions related to this article and have previously filed bankruptcy Toronto, please contact Victor directly.

Victor Fong is a licensed trustee in bankruptcy with the firm of Fong and Partners Inc., a trustee in bankruptcy. Fong and Partners Inc. offers personal bankruptcy and debt consolidation services in Toronto, Canada. Since 1975, we've helped hundreds people from all walks of life get a fresh start in "Starting Over".

Victor can be reached at victor@fongpartners.com

Update Mar. 25 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-03-25T05:50:00.000-07:00

By Jeff Lakie

Segregated funds are the insurance company's answer to mutual funds. There are many differences and similarities but if you are putting together a financial plan that includes insurance and investments, you'll probably want to consider a segregated fund.

Segregated funds are also called individual variable insurance contracts (IVIC's) and they'll be offered by a many insurance companies. Like mutual funds, they are investment vehicles, but like insurance, they have guarantees and tax advantages.

How are they like mutual funds?

Like mutual funds, you can choose to put your segregated fund money into any number of different types of segregated fund. For example you can choose growth oriented funds or bond funds or some combination of both, which provide you with an investment vehicle that matches your goals.

How are they like insurance products?

But there are four insurance-related aspects of segregated funds that make them an attractive product for many people.

1. First, is the maturity guarantee. A segregated fund offers a guarantee of at least 75% after 10 years (although some segregated funds offer maturity guarantees of 100%!).

2. As well, segregated funds offer attractive death benefits, which work in a similar way to the maturity guarantee: your survivors will receive the difference between the guaranteed amount and the market value of the fund at your death.

3. Because segregated funds are insurance products, they also offer creditor protection, so that if creditors seize your assets, they cannot touch your segregated fund.

4. Lastly, segregated funds bypass probate so that you can easily transfer the money to a beneficiary upon your death without the costly fees associated with probate.

Like all insurance and investment vehicles, segregated funds are not for everyone. For example, the guarantees do bring a higher cost in order to enjoy the segregated fund. However, segregated funds are growing in popularity, so many people feel that the guarantees are worth the cost.

These are just highlights of segregated funds. There are many more aspects you should be aware of. But, if you're interested in a segregated fund and what one can do for your financial portfolio, contact your insurance company and see if they sell them. If they do not, you can probably find another insurance company that will be able to help you if you look around.

Jeff Lakie is the founder of Insurance Information [http://www.my-boat-insurance.info] a website providing information on Insurance [http://www.my-renters-insurance.info]

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Update Mar. 06 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-03-06T09:07:00.000-08:00

By Amy Cooper-Arnold

We all know the key to good health begins with a dose of prevention--eat right, exercise regularly, and get a good night's sleep. Your financial health is no different. By taking a few steps of prevention today, tomorrow your finances will have a clean bill of health freeing you to live a life of opportunity rather than of difficulty.

Keep the Right Perspective

Much of the problem with credit card debt problems comes from changes in credit card availability, advertising, and values over the past 75 years. According to Linda Tucker, Director of Education for Consumer Credit Counseling Service in North Little Rock, Arkansas, it wasn't until the 1960s that credit cards started becoming available to the average consumer. Now today, nearly everyone has access to a credit card.

Advertising plays a role too. Howard Dvorkin, author of Credit Hell: How to Dig out of Debt and founder of Consolidated Credit Counseling Services, an organization that provides education on debt and a debt management program, says that according to one survey consumers are exposed to 300-400 advertisements every day. Combine this with a shift from saving for the future and we have a society trying to keep up with the Jones' satisfying the desire of the moment. Add the purchasing power that comes with a credit card and you have the perfect formula for disaster.

But it doesn't have to be this way. If there's one thing Dvorkin wants consumers to know, it's that you don't have to be a slave to the credit card company or even to the seduction of advertising. You can have control over your financial health without depending on a credit card!

Manage your finances

Starting with a strategy will help keep you on track before you ever even pull out the credit card. According to Tucker the first step is determining your monthly income and needed expenses. As part of these monthly expenses, figure in 5-10% of your income to set aside for emergencies, long range savings such as a retirement account, and short term savings. If you have some savings then you avoid having to put large amounts of debt on a credit card in times of a crisis.

Setting up a budget is not always easy, so if you want some help Consolidated Credit Counseling Services offers free budget counseling. You can also consult your phone book to see if your community has a local office of Consumer Credit Counseling Service.

Setting up a budget is just the first step; sticking to it is the next, and often more difficult task. To help keep you on track set goals and put motivators in place. Tucker suggests setting a savings goal with a deadline. Savings goals can include emergencies, vacations, cars, and of course don't forget long range goals such as retirement. Tucker also says a reward program can be a great motivator as well. Just keep in mind that whatever you choose as a reward, it shouldn't compromise the hard work you've done in managing your finances.

Finally, you need to monitor how much you charge on your card in relation to your credit limit. You should never charge more than 30-50% of your available limit otherwise your credit score could go down. For more information on credit scores read our article On the Path to a High Credit Score.

Shop for the Right Card

Dvorkin says it's important to really shop around and get a credit card personalized for your particular situation. Ideally he suggests getting one with no or very low fees and low interest. It will take a little time to compare various offers, but with the high saturation of the market you'll find the perfect fit for your wallet. Browse the Card Reports section of CardRatings.com to shop for every kind of credit card including reward, low-rate, business, and cards for those with poor or no credit.

Read the Fine Print

An afternoon reading the fine print probably doesn't sound very appealing, but that one hour spent reading can save you hours of headaches and hundreds of dollars in the long run. You'll understand everything from your interest rate and fees to how to earn rewards and how long of a grace period you have.

Know Your Interest Rate

If you're going to use a credit card, regardless if you pay the balance in full each month, you need to know the interest rate. This means not only knowing what interest rate you were offered, but also the interest rate the issuer actually gives you on approval. In addition, check the rate on your monthly statements because credit card issuers can raise your rates for little or no apparent reason and with little warning.

Even those who don't carry a balance need to know their interest rate because emergencies do happen. Unfortunately, cars break down, jobs are lost, deaths happen, and marriages end. While it's always a good idea to have an emergency fund, sometimes the job search takes longer than expected or the second car breaks down too leaving you with no other choice but to put some expenses on the card. If you're not up to date on your interest rate, you might end up paying more in interest than you have to.

Pay the Balance in Full

This is important in keeping control of your credit cards. Before using a credit card for a purchase, ask yourself, "Do I have the funds to pay for this?" In cases of emergencies where your emergency fund won't cover the whole amount you need to charge, experts say at least pay more than the required minimum payment.

Pay on Time

Michael Killian, credit and debt management guide for About.com, says never make a late payment to anyone including car and house payments. Because of the universal default clause in credit cards' terms and conditions, credit card companies can raise your interest rate if you are late paying any creditor or even your utility company. Read our Universal Default article for more information.

In fact, Killian recommends being very early if at all possible to account for mail time and processing by the credit card company. If you're payment arrives before the actual due date you will end up saving money on interest because any interest you pay is calculated based on the average daily balance; so if your payment can bring down that average you will pay less interest.

Some people have turned to online bill paying to avoid potential problems with the mail. While Killian doesn't recommend this form of payment because of the increased risk for fraud by hackers--especially if the company is not reputable or doesn't offer encryption--it is definitely a better option to a late payment.

Use it Like Cash, Not a Credit Card

In one sense, you need to use your credit card like cash by paying your balance in full each month. But remember it's really not cash. Imagine the feel of that sleek, plastic card in your hand. It's so sleek that it slides right out of your wallet with little effort at the check out counter. Each time you pull it out it looks and feels the same. You cannot physically feel your charges climbing higher and higher.

Now imagine a wad of twenties. The first time you pull it out its thickness fills your hand...you feel rich (well, at least you feel like you can afford the purchase your making). :0) But with each purchase the wad gets a little smaller until eventually it's gone...and now you know you can't afford any more purchases. Dvorkin calls this the green factor--with cash you can physically feel how much or how little you have.

The point is that you need to be in control of your credit card and spending habits. It's much easier to be swept away if you use a credit card for all your purchases.

Limit the Plastic in Your Wallet

Every credit card comes with its own set of terms and conditions including varying interest rates, penalties, fees, grace periods and due dates. It is much easier to make payments on time, remember which card has the lowest rate, and save you from making a mistake that will affect your credit history if you only have to keep track of one or two cards.

Avoid Extra Expenses

Sometimes it's the little extra expenses that sneak up on you before you even know it.

Cash Advances

Typically cash advances come with a much higher interest rate, fees, and no grace period. The moment you take a cash advance you start paying interest on that balance, which means even if you pay the entire balance in full each month you still pay interest.

In addition, credit card companies apply payments to the balances with the lowest interest rate first. So your $200 cash advance will continue earning 20% interest until your $2000 purchase balance is completely paid off.

Extra Products

Credit card companies will try to get you to purchase additional products such as fraud protection and insurance. The truth of the matter is you usually don't need it. By law you are liable for a maximum of $50 if the victim of fraud, and in most instances you are not liable for any amount. If you are thinking about adding on insurance, first read our article Credit Card Protection Insurance--Should You Get It?

Early Education

The best method for prevention is teaching our youngest generation all about money before they even qualify for a credit card. Statistics show that students are entering college without ever having a personal finance class or knowing how to balance a checkbook. Yet once students arrive on campus credit card issuers are eager to sign them up. College students are racking up the bills. Some even drop out of college to find a job so they can pay their credit card bills. And those who do graduate typically enter adulthood with thousands of dollars in credit card debt and student loans.

In addition, advertisers market more to younger and younger children, so it's imperative to teach them very early about the lure of money and how to manage finances. The earlier children learn how to manage finances the less likely they will be to fall into credit card and debt problems as an adult.

Fortunately many wonderful resources exist for parents and educators. If you have elementary aged children check out The "It's a Habit!" Company and introduce your children to Sammy the Rabbit who will teach them all about the importance of saving and developing good money habits. The Jump$tart Coalition for Personal Financial Literacy is another organization dedicated to providing resources for teaching children from Kindergarten on up through college valuable lessons in personal finance.

So there you have it. Some simple steps you can start taking today to avoid the trap of credit card debt and to help others do the same!

Amy L. Cooper-Arnold has been a staff writer for CardRatings.com since 2004. Amy's articles have been republished by respected publications throughout the country, including Young Money Magazine, E/The Environmental Magazine and About.com, a top 15 Web property which is owned by the New York Times Co. Amy recently graduated with honors from Austin Peay State University with a degree in English and is currently taking graduate-level classes at Dallas Theological Seminary.

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Update Feb. 12 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-02-12T04:25:00.000-08:00

By Sidney L. Moore

Credit insurance is one of the most misunderstood and fraudulently marketed products in the field of personal finance. The types of insurance sold by creditors to debtors range from the old standard credit life and accident and sickness insurance to such worthless contracts as "life events" which will be explained below. Almost all of these policies are grossly overpriced and are a source of substantial profits for lenders and sales finance companies.

The use of insurance as a type of security for a loan or other extension of credit is not an inherently a bad choice. Both the creditor and the debtor can benefit from removing the risk of death or disability from the equation. If the reduced risk is a factor in providing a lower interest rate, or in basic credit approval, it can be a win-win situation. The problem arises, however, when the creditor intimidates or otherwise induces a customer to purchase an insurance product not for its effect on risk but as an additional and substantial source of revenue.

Normally insurance rates are set by the competitive market, which tends to hold rates down at least for the reasonably informed consumer who does some comparison shopping. Automobile insurance companies, for example, are highly competitive and the rates are seldom regulated. But in the context of an application for credit there may be no competition at the point of sale of the insurance. The creditor may be the only practicable source. The only "competition" is between insurance companies to see who can charge the highest premium and pay the highest commission to the creditor or its officers for selling the coverage. This tends to force rates up rather than down and has been dubbed "reverse competition".

During the 1950s as consumer credit was expanding rapidly and many states had strict usury laws (laws limiting maximum finance charge rates) both lenders and sellers began relying on commissions from credit insurance premiums to pad the bottom line profits. Many engaged in selling excessive coverage (not needed to pay the debt if something happened to the debtor) and nearly all charged outrageous premiums, with 50% or more being paid to the creditor or its employees, officers or directors as "commissions" for writing the coverage. As incentives for paying as few claims as possible there were also "experience refunds" awarded to creditors, which sometimes raised the total compensation to 70% or more of the premiums. In addition, the premium was added to the loan or unpaid balance of the sale price and finance charges were charged on the premium.

Finally the National Association of Insurance Commissioners (NAIC) declared it had had enough of the consumer abuse and model legislation was drawn up and passed in nearly every state authorizing insurance commissioners to limit the amount and cost of credit life and accident and sickness insurance...the two biggest sellers in the field. In some jurisdictions the legislation had very little effect because the commissioners would not seriously exercise their new regulatory powers, but in others the rates came down almost immediately. Over a number of years where there was pressure from consumer groups the rates on these two products reached a reasonable level...with some states requiring that the rates produce a 50 or 60 per cent "loss ratio"....ratio of incurred claims to earned premiums....and limiting commission payments to creditors.

While this progress helped the consumer buying credit life and accident and sickness insurance creditors soon realized that it was easy to develop new products which were not regulated under the NAIC model law...products such as "involuntary unemployment insurance" to protect the consumer against job loss and "unpaid family leave" insurance to make payments in the event of a family emergency that required the debtor to have to leave his job temporarily.

Now, back to the question of whether you should purchase credit related insurance in connection with your next transaction, that really depends on the type of transactions, your individual circumstances and the kind of coverage in question. The first question to answer before deciding who to buy credit life insurance from is whether you need life insurance at all. The first step in the answer is "Do I already have life insurance in sufficient amount to cover this obligation and other needs?" If so it is obvious you don't need any more, and the answer should be "No".

Life insurance is justified when (a) there are dependents to be cared for after you are gone; (b) you have a moral obligation to a co-signer or co-maker or guarantor...possibly a family member...that you will pay at least your portion of an obligation, living or dead; (c) you own property or other assets which you want to leave to someone upon your demise, and unless this debt is otherwise paid the property may have to be sold to pay it; (d) you are buying something important "on time", such as a home or an expensive vehicle, and don't want it to be foreclosed or repossessed if you are not there to make the payments; or (e) you and a partner have invested heavily in a business that depends on both of you working, and you don't want your partner to suffer a hardship if you are not there. There may be other reasons, but the point is that you must examine your individual circumstances.

You do NOT need life insurance if you have no dependents, own very little and are not leaving anything to anyone, and there is no co-maker to protect, because your debts essentially die with you. No one will have to pay them if you don't. And if there is no money to bury or cremate your remains don't worry. Something will be done with them because public health requires it. If you want an expensive send-off buy just enough to pay for the funeral and name a beneficiary with instructions to use it for that purpose so your creditors won't try to grab it.

If you want to make gifts to others when you die, perhaps to make up for the mistreatment of them while you were around, life insurance is a very expensive "estate substitute". It is better to put your money into savings than to pay it to some national insurance corporation on the hope that you will profit by dying. With life insurance you are essentially betting that you will die and the insurer is betting you won't.

Assuming you decide you need life insurance, the next question is whether to buy it from a creditor or on the open competitive market. Most of the time it is best to purchase a proper amount of term life insurance payable either to a beneficiary, or to a trust for the benefit of minor dependents, or to your estate to be used to pay your last rites and obligations. If you have it paid to a beneficiary, such as your spouse or children, your creditors cannot claim it for the payment of your bills....unless you designate a particular creditor as a beneficiary to the extent of your debt obligation. No creditor has an insurable interest in your life except to the extent of your debt.

If you owe a mortgage debt on your home it may be wise to scale your term life policy to approximate the amount of your mortgage so it will be paid off for the benefit of your spouse and children if you, a provider, cannot provide. If you have a car note you need to adjust your total life insurance amount to discharge that obligation as well, so that whoever gets the car gets it free and clear. If you don't care what happens to the vehicle don't worry about the additional coverage. The creditor will take it and sell it and eat the balance. It is theoretically possible for a sales finance creditor to sue an estate for a deficiency after repossession but it very seldom occurs. It's just too much trouble.

Aside from large obligations such as home mortgages and car notes there is usually very little justification for buying life insurance, and certainly not from a creditor. The premium rates on creditor-provided life insurance are much higher, as a general rule, than the rates for other life coverage.

Credit life insurance comes in three varieties...level, decreasing, and revolving. Level life insurance begins and ends with the same coverage over the term and is normally associated with single payment obligations. It is illegal in most states to sell level life insurance on installment transactions. Decreasing credit life comes in two sub-varieties...gross and net. Gross decreasing credit life begins with the "total of payments" (the principal plus all interest you will probably have to pay over the whole term of debt) and decreases by one monthly payment each month until it reaches zero at the end of the term. Net decreasing credit life starts at the "amount financed" and declines as the principal balance declines over the term. Usually net decreasing life is enough to pay the obligation because it tracks the remaining principal, unless you fail to keep up with the payment schedule and reduce the debt accordingly. Gross decreasing life will normally be excessive at the beginning and less so as the term continues. For example, if the principal is $10,000 and there will be $4000 in finance charges on a car note over a six-year term, the insurance will start at $14,000, but during the first month the debtor in fact only owes $10,000 plus a few days interest. This means that if the debtor dies during the term the excess coverage should be paid either to the debtor's estate or to a named beneficiary. In some states creditors are limited to net decreasing life plus three or four months of payments just in case the account is in arrears at the time of death.

Auto accident deaths create a unique insurance situation where credit life is involved because the casualty insurance on the vehicle will often pay off the car note leaving the credit life insurance to be paid directly to the debtor's estate as a cash benefit. Millions of dollars of insurance benefits have been lost because the surviving spouse was unaware of the double coverage on the note.

"Revolving account" credit life insurance usually involves a monthly premium computed on the basis of the outstanding balance being billed. The premium covers that amount for 30 days, discharging the obligation if death occurs before the next billing date.

Unfortunately, national banks that issue credit cards have developed a scam to get around the accusation of illegally high credit life premiums. Most of them if pressed would take the position that since they are a "national" bank the states cannot limit their insurance premiums, even if the state also limits premiums charged by state banks, but this legal position stands on shaky ground.

Many have issued their own policies in the form of "debt cancellation clauses" which are amendments to credit card agreements under which the account balance will be canceled if the debtor dies. But because of the risk that some state may clamp down on their rate-setting practices they "bundle" the credit life with up to a dozen other coverages, nearly all of which are not rate-regulated, so the charges produce a very large margin of profit. They won't sell credit life alone, but require an "all or none" purchase of the various components such as credit accident and sickness, involuntary unemployment coverage, unpaid family leave coverage and even such weird products as "college graduation", "having a baby", "retirement", "divorce" and other "life events", each of which results in a month or two of benefits at the minimum payment level on the account. These bundled products usually cost upward of $1.00 per $100 per month, or twelve per cent per annum on top of the existing finance charge rate. Truth in Lending does not require that additional 12% to be reflected in the annual percentage rate, however, because the coverage is deemed "voluntary" and not part of the "finance charge".

So the answer to the initial question is a resounding "maybe"...depending on your individual circumstances, the options available to you, and the cost of each alternative. Perhaps having read this you will know what questions to ask and make an informed choice.

Sidney L. Moore Jr. is a retired consumer credit attorney who has handled many thousands of consumer defenses and claims against creditors. He holds a Master of Laws degree and was in practice for more than 40 years. He now specializes in consumer class actions against credit-granting institutions. His cases have resulted in millions of dollars being paid to non-profit organizations by creditors, in addition to millions in refunds to customers. He is a member of the National Association of Consumer Advocates (NACA) and a frequent lecturer on consumer credit issues in lawyer-training events. He may be reached by e-mail at attnys@windstream.net
Recommended Reading
An Insurance Insider Exposes
The Shady Practices And Underhanded Tactics
Used To Devalue Claims For Insurance Company Profit

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Update Jan. 21 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-01-21T04:13:00.000-08:00

By Chris Blanchet

Insurance plays an important role when it comes to financial planning. It allows people to plan for unplanned events, just as they would with insurance on their vehicle and the personal contents in their home. But as an important financial planning tool, does insurance have a place when it comes to credit products? In other words, is it worth it to insure your credit cards and unsecured personal loans (even some secured personal loans)?

Surely, this question cannot be answered generically. However, you will want to consider the following facts when deciding whether or not you should insure your credit borrowings.

Remember, your unsecured credit will not have an asset assigned as collateral. This means that in the event of your death or default, your creditors cannot come repossess any other asset. So, in the event of your death, what benefit could insurance offer?

Simply the peace of mind that your loved ones will not be burdened with the debt you have left behind. Sounds like a simple, no-brainer statement. However you need to remember that in the event of your debt, all of your assets will essentially be liquidated anyway. If some of those assets have insurance associated with them (such as a mortgage), the asset will be free to be sold. And if those assets that have a credit product attached to them do not have any corresponding insurance, then the asset will likely be sold anyway.

In most cases, there will be equity in those assets that need to be sold to repay any uninsured debt. If those assets leave a surplus in equity, then the unsecured credit can easily be repaid. Of course, in such a situation, none of the equity would be left for your survivors to enjoy. So if your intention was to leave your survivors with some sort of "gift," then relying on your assets and the equity you have built up may not be sufficient.

In cases where you want to leave more than just enough to repay your debt, you should consider taking the insurance policy on your unsecured credit. While marginally more expensive than other insurance products, unsecured credit will allow you to enjoy the peace of mind that your debt will be repaid in the event of your unplanned death (i.e. most credit-related insurance products have a suicide clause that will not pay out if the insured commits suicide).

So does accepting the insurance on your credit products make sense? Well, that is a question only you can answer. Use the pointers above to guide yourself through the decision making process. Ultimately, in most cases you want to make sure that your assets provide adequate coverage to repay your debt. And in the event that they do not, or if you do not want to burden your loved ones with the hassle of selling assets, then it is quite likely that insurance makes sense for you.

--> Looking for a Memory Card 1GB? Yes, it makes great sense.

Chris has more than 16 years of experience in the financial services industry. He maintains a debt-related that aims to help people provide find Debt Help on their own or with the help of a professional.

Article Source: http://EzineArticles.com/?expert=Chris_Blanchet

Never Pay Back Your Unsecured Debt - Tricks to Never Pay Back Your Unsecured Debt Now Or Ever

By Diane Sheridan

Credit card debt is troubling most consumers in the US. The sequence of events since the recession has forced most Credit card users into this debt trap. Traditionally most people have thrived on plastic money. Credit cards have been the symbol of the American free market economy. They have helped to usher in the spirit of enterprise. They benefited the economy since more and more purchases were made by the consumers.

However the recession has changed it all. The majority of card users lost their regular source of income. This lead to mass defaults on payments and piling up of unsecured debt in hitherto unprecedented scale. The common man has been desperately looking for debt relief since then.

There are many options for debt relief.

• The easiest form of debt relief is debt counseling. Professional counselors help out card users to plan their finances so that they can regularly pay back their debt and reduce their expenditure. This is done by non-profit organizations. However if your debt is more than $10,000 this kind of counseling is not going to be of much help. Your malady will require stronger treatment.

• Take a look at debt settlements. It is one of the most talked of form of debt relief in recent times. It involves an out of court negotiation with the credit card company. Most credit card users do not know that their creditors are also under great pressure to make two ends meet. If all Credit card users file for bankruptcy the Credit card companies will be broke. This will lead to a collapse of these Credit card companies. Therefore the card companies are trying to recover as much money from the users as it is possible. This has lead to the concept of debt settlements. In this type of debt relief the debtors pays 40 to 50 percent of the net outstanding amount in one lump sum. Balance of the amount is waived by the creditors. This benefits the creditors since they are able to recover about 50 percent of money from an account that otherwise would have gone delinquent. The user also gets to legally eliminate 60 percent of the debt.

Bankruptcy is certainly not your best way to deal with debts. Debt relief and debt settlement can certainly make a difference, and eliminate a strong percentage of your debt and in the meantime you will avoid the consequences of having to file for bankruptcy. Make sure you are always informed in regards to the best solution for you, and eliminate as much debt as you can. If you want to find more about this, check out the following link:

Free Debt Advice

Article Source: http://EzineArticles.com/?expert=Diane_Sheridan

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Update Jan. 03 - 2010 All About "Creditor Insurance" Information By Insurance Experts

2010-01-03T04:11:00.000-08:00

By Chris Blanchet

Surely, this question cannot be answered generically. However, you will want to consider the following facts when deciding whether or not you should insure your credit borrowings.

--> Looking for a Memory Card 1GB? Yes, it makes great sense.

Article Source: http://EzineArticles.com/?expert=Chris_Blanchet

An Investing / Insurance Alternative

By Jeff Lakie

How are they like mutual funds?

How are they like insurance products?

But there are four insurance-related aspects of segregated funds that make them an attractive product for many people.

1. First, is the maturity guarantee. A segregated fund offers a guarantee of at least 75% after 10 years (although some segregated funds offer maturity guarantees of 100%!).

3. Because segregated funds are insurance products, they also offer creditor protection, so that if creditors seize your assets, they cannot touch your segregated fund.

4. Lastly, segregated funds bypass probate so that you can easily transfer the money to a beneficiary upon your death without the costly fees associated with probate.

Jeff Lakie is the founder of Insurance Information [http://www.my-boat-insurance.info] a website providing information on Insurance [http://www.my-renters-insurance.info]

Article Source: http://EzineArticles.com/?expert=Jeff_Lakie

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Update Dec. 14 - 2009 All About "Creditor Insurance" Information By Insurance Experts

2009-12-14T04:30:00.000-08:00

By Chris Blanchet

Surely, this question cannot be answered generically. However, you will want to consider the following facts when deciding whether or not you should insure your credit borrowings.

--> Looking for a Memory Card 1GB? Yes, it makes great sense.

Article Source: http://EzineArticles.com/?expert=Chris_Blanchet

Life Insurance For Senior Citizens

By Lorne S. Marr

Life insurance for the mature generation has changed significantly in Canada. Despite insurance companies look more intently at applications the actual costs, in most cases, are a lot lower.

When acquiring this type of insurance as a senior citizen there are six predominant factors to think about.

1. Life insurance up to the age of 85 is at the present time quite normal. There is a multitude of different rate available as well as noticeable differences in prices when you are 65, 75 or even 85. What a lot of individuals fail to consider is the best time to buy life insurance is now, that's because you are looking at today's rate.

2. The premiums due can be anywhere from $20 per month with a face value of $5,000.

3. Many creditor insurance schemes end at age 69. The public who are coming up to retirement or are currently retired and in good health should consider individual life insurance options instead of creditor insurance.

4. An excellent family health history as well as tip top personal health gives you the chance to qualify for the preferred rates.

5. A last-to-die policy often has a smaller rate than the normal life insurance policies, this is on offer at most insurance companies [out]. Insurance like this pays the policy out when the final surviving spouse passes away and it pays out a tax-free death benefit to the estate. It's because the the insurance proceeds are paid out further in the future that the premiums are substantially lower.

6. If you do have a lot of health issues then look at Simplified Issue policies. These schemes do not have medical tests, but they do have health questions. Look through the health questions and see how many you can say no to; go through a number of organizations until you discover the one that you can answer the most number of no's. If you are wanting a plan that requires no medical questions then you will be paying out a lot of money; they also state that the death benefit can't be paid out for two years.

Lorne S. Marr has been a very accomplished financial planner since 1993 and runs his own Toronto life insurance company LSM Insurance Services Ltd. He's recognized as an industry leader thanks to the commitment to providing clients with value-added services.

Article Source: http://EzineArticles.com/?expert=Lorne_S._Marr

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Update Nov. 25 - 2009 All About "Creditor Insurance" Information By Insurance Experts

2009-11-25T05:03:00.000-08:00

By Richard Lepinsky

If you are in the market for life insurance, then you need information to make an informed decision. And like most things in life, the more information the better.

Through our online quotes window, you can now view the entire Canadian life insurance landscape, with rates from the major Canadian Life companies.

In addition to searching for rates, you can compare various term insurance plans, including, renewable term, level term, and others - based on your age and amounts of coverage you need.

Life Insurance by the nature of the product, is a long term purchase. You want to have the best policy, not only based on premium, but also based on Features. Features like Guaranteed Premiums for as long as you own the policy. The Premium Guarantee Feature you can't purchase with Creditor insurance, which is the type many people purchased at the bank to cover their mortgage or loan.

When should you shop for term insurance ? If you have term insurance policy, it is probably a good idea to check the premium, every few years, and particularly
- at the renewal of your current policy term, when the premium will increase.

- when you renew your mortgage. You may have purchased the creditor life insurance that was offered at the bank, because it was convenient at the time.

The difference in life insurance rates from the lowest to the highest can be substantial. Take an example of a male age 40 non-smoker looking at a 20 Year Term policy for $500,000. Our quotes show the lowest rate to be $48. per month and the highest rate is $169 per month. That is a saving of $121. per month !

See what you have been missing -

You owe it to yourself to check your current term insurance premiums, as the savings could mean thousands of dollars per year.

Take a few minutes and see the most competitive rates in Canada.

http://www.insuranceanalytics.ca/quotes/lifequotes.htm

Then call me to discuss it further.

Richard Lepinsky - EPC - 250-889-3784

Insurance & Investment - Advisor & Broker

Victoria, BC Canada

Your Guy to call, to protect your lifestyle and nestegg from a fall.

[http://www.InsuranceAnalytics.ca]

[http://www.NesteggAnalytics.ca]

Article Source: http://EzineArticles.com/?expert=Richard_Lepinsky

Auto Insurance and Your Credit Report - How Does it Affect You Or Me?

By Tony Banks

One of the things which we use loans derived from financial institutions is to make our lives better. A good roof over our heads, a nice car to move around town and maybe paying for college tuition - these are just a few of the many uses to which we can put financial aid to. But how do you fare when you're in need of a loan badly but there's no lender willing to part with their money to give to you. Or maybe they even require you to pay an exorbitant interest rate. How bad can it get?

You see, the problem here which could have been used to a better advantage is your report. This is the document which tells a creditor: "lend this one" or "don't lend that one". Once a creditor looks into your file and sees your score among other accounts listed therein, he can quickly make a decision whether you're the kind of person his company would find it safe to do business with.

But not only that. The file is now used for other things apart from making a decision whether you can get a loan or not. We know that employers use your file and property insurers also use it in determining how much you pay for homeowners insurance. In addition to this, you should stop being surprised that your file is also used to set insurance rates for your car. A study confirms that 92% of auto-insurers actually use clients' files to determine the amount they should charge as interest. Some insurers even user your file to determine whether they should help insure your car at all.

Why they do this is not specifically stated, but some of them have hinted that there's the possibility that clients with poor credit ratings are more likely to make false insurance claims.

In your own interest, you should begin a restoration of your file by using either a self-help or the services of a professional repair agency.

Visit self-credit repair or credit repair services to learn more on raising your credit score 200+ points to get approved for car, home and credit card loans.

Article Source: http://EzineArticles.com/?expert=Tony_Banks

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Update Nov. 05 - 2009 All About "Creditor Insurance" Information By Insurance Experts

2009-11-05T02:37:00.000-08:00

By Robert Griffin

Homeowners have a few choices when they are applying for a reverse mortgage but the line of credit is very advantageous. For one reason with a line of credit the homeowner can withdraw the funds only when necessary thus saving interest costs since interest will be applied only to those funds that he is actually using. In addition the unused funds are subject to a growth factor that is equivalent to the interest on the loan plus a half of a percent. That means a borrower will have more money in principal the longer his money remains untouched. This growth is not available for heirs but only for the original borrower-only principal funds that are on deposit at the time of a borrower's death are available to his or her heirs.

Since reverse mortgage lines or credit have variable interest rates, the growth rate will also fluctuate. There is a lifetime cap of ten percent on variable rate reverse mortgages, so this controls how much of a difference in the interest is possible. Of course, the more interest that accrues on the loan means the higher the growth factor that is applied to the unused funds. For a homeowner who lives for a substantial amount of time after the commencement of a reverse mortgage line of credit there can be a substantial amount of extra cash. Since there is no limit on how he can spend the money those borrowers can hope to achieve a comfortable retirement and do things they were unable to do while they were working.

Because of the mortgage insurance a borrower pays he does not have to worry about losing access to his money if the lender goes out of business or tends to freeze funds on those account holders who do not withdraw all of their funds within a specific period. No matter what the circumstances of a lender, the borrowers who pay mortgage insurance premiums will never lose any of their money. For those who rely on the cash proceeds from their reverse mortgages this is a very important aspect of the program. The two percent you pay at settlement and the half of one percent annual premium are well worth your peace of mind.

While lump sum payments may be good for those who need to make a large purchase such as paying off their existing mortgage, those who only need funds occasionally might be better served by a reverse mortgage line of credit. Whether you need extra cash on a monthly basis or only occasionally you will still find the convenience of a line of credit better suits your needs. Being able to save on interest and watch the unused funds in your account grow over time is an even more important reason to choose the line of credit option. Speak to a reverse mortgage specialist to find out how much you can hope to save with a line of credit and how you can arrange your payments in order to make the most of your loan's growth factor.

A thirteen-year veteran of the mortgage industry, Robert Griffin specializes in reverse mortgages and has helped over 3000 Americans find financial security with a reverse mortgage. The owner of Griffin Financial Mortgage LLC, based in Fort Worth, Texas, his memberships include the National Association of Mortgage Brokers (NAMB), the Mortgage Bankers Association (MBA), the National Reverse Mortgage Lenders Association (NMRLA) and the Better Business Bureau (BBB). Robert Griffin is also co-author of "62 Senior Moments." If you would like more information, please call (866) 683-3690 or visit our Reverse Mortgage website.

Article Source: http://EzineArticles.com/?expert=Robert_Griffin

Borrowers With Bad Credit Can Avail Bad Credit Loans

By Peter Taylor

Borrowers with bad credit can boost now! Lenders have designed a special loan named bad credit loan for the borrower who are marked with bad credit history, so that they can live with their dream. Bad credit loan fulfills varied purposes at feasible and flexible terms.
Borrower who are under financial stress and tagged with bad credit like CCJ’s, IVA, bankrupts, defaulter or arrear holder etc. can avail the bad credit loans.

The situation for the bad credit history arises when the borrower fails to accomplish with previous repayments terms. Borrower generously use credit card or avail new loan without fulfilling the previous loan term like home equity lines of credit, store cards, overdrafts, payday cash advances etc. to meet his financial requirements. Furthermore late or missed payments results in bad credit history or score.

Borrower’s credit score is determined by the FICO score. FICO score is a three digit number that ranges from 300-850; it helps to evaluate the credit history of the borrower. So if borrower’s credit score is above 720 he will be possess good credit, but if borrower’s FICO score is below 600 he will possess bad credit score.

With bad credit loans, borrower can fulfill his various purposes like renovating a home, holiday trip, meeting with wedding expenses, car buying, debt consolidation, etc.

Bad credit loans can be categorized as secured and unsecured. For secured bad credit loans, borrower possesses his collateral against the loaned amount. With that borrower can raise the loan amount up to £ 75000 for the repayment period of 3-25 years.
In unsecured bad credit loans, borrower willingly or unwillingly doesn’t possess the collateral as a security against the loaned amount of £ 25000. Therefore borrower enjoys fast and quick cash approval as no property evaluation is required. Borrower with bad credit also enjoys feasible interest rate and flexible repayment period compared to other borrowers.

The most popular sources of searching the bad credit loan are through internet. As today almost every lender has the access to the internet and with that borrower also finds easy to search a best quotes by comparing the quote of different lenders. Other then this, borrower can also acquire bad Credit loans from the banks, or the financial institution.

Peter Taylor is a senior financial analyst at Loans Bad Credit with an acumen for finance and insurance. In recent years he has taken up to provide independant financial advice through his informative articles. His articles are widely read because of the lucid manner of wriiting and thoroughly researched datas. To find bad credit loans UK,bad credit personal loans,bad credit debt consolidation loans visit Peter Taylor is a senior financial analyst at Loans Bad Credit with an acumen for finance and insurance. His articles are widely read because of the lucid manner of wriiting and thoroughly researched datas. To find bad credit loans, bad credit personal loans visit http://www.loans-bad-credit.net

Article Source: http://EzineArticles.com/?expert=Peter_Taylor

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Update Oct. 18 2009 All About "Creditor Insurance" Information By Insurance Experts

2009-10-18T07:01:00.000-07:00

A topic I have never covered is the life insurance option you can receive from credit cards. Most usually cover the balance on the credit card and some offer life insurance amounts. However, most of the higher amounts of life insurance is actually accident death insurance. Meaning you have to die in some type of accident: i.e. fall off roof and die or more common die in a car accident. Generally, the cost is very little due to the odds someone actually dies due to an accident.

If you are looking at protecting your family a good term policy is better than an accidentally death policy. I'll give you an example. I had an aunt who was in her early 40s and died due to a brain aneurysm. She had a life insurance policy for $500,000, but when we called to look at filing a claim we discovered the policy was an accidental death policy. Since a brain aneurysm is not an accident the insurance company did not pay the claim. Just so you know the monthly premium was on $8 a month, but offered little death protection.

If you are called by one of credit card companies about a life insurance policy you better think twice about the insurance. If you feel the cost is not that much then go ahead and buy a policy. The only advice is to make sure you have other :true life insurance" that will protect your family and spouse. What I mean by "true" life insurance is that if you die it pays regardless of cause of death.

Life insurance is an important part of any financial plan especially if you have a lot of credit card bills. Remember if the accounts are joint accounts then your spouse is still responsible for that bill. If you are single make sure you have designated someone as a beneficiary on all your life insurance, retirement plans, and bank accounts. If not the money will be payable to your estate and then the credit card companies can file a claim to receive the balance left on the account. Yes this is technical, but should be done regardless.

About Teddy Danfield. I have worked in the finance field for over 15 years. I want to help people get out of debt or at least pay less in interest charges. Visit my site http://debtstrength.com. My new book "How to Beat Banks and Credit Cards At the Money Game" can help you keep more money in your pocket. Stop paying interest to banks and start earning interest.

Article Source: http://EzineArticles.com/?expert=Teddy_Danfield

Are Credit Card Insurance Plans a Good Deal?
By Martin Lukac

If you have a credit card, chances are that you've been offered a type of credit card insurance.

You've probably received the phone call that says that if you lose your job, your payments will be made for you by the plan, protecting your credit. And you can get a free shredder or gift card, and you can cancel in thirty days with your money back. Even if you don't want the plan, you should sign up and get the free gift.

And they are betting you will forget to cancel.

Payment protection plans are pitched that they will make your payments for you if you are hospitalized, lose your job or suffer a financial hardship. This sounds like a good thing to have in place. But it isn't.

There are many different types of credit card insurance. Including:

Credit disability -- pays your minimum monthly if you become disabled.
Credit unemployment -- pays your minimum monthly if you are fired or laid off.
Credit property -- pays for items purchased with the card in the event that they are broken, lost or stolen. (Some cards offer this for no additional charge.)
Credit life -- pays if you pass away.

Most people don't need a credit card insurance plan. The main reason is that it costs you money. For example, the plan might cost you 75 cents per $100 balance you have. If your balance is $3,000, you will be charged $22 each month for your protection plan. Your yearly premium is $264, which equals an APR increase of 9% on the card. It is better to invest the money into your savings account each month and earn a little interest on it.

You have to read the fine print in the protection plan. Most companies will not let you use the credit card when the insurance is making the minimum payment for you. If you are in a financial emergency, you might need to use your credit card.

In most cases, you will really have to work to prove your claim. If you are fired, you must document that your unemployment is involuntary. And if you had a contract with your employer that simply wasn't renewed, you are out of luck. If you become hospitalized, you must show that your illness is not a pre-existing condition.

When you pass away, your estate will need to pay your credit card bills. If the estate can't cover the bills, your bills will be charged off by the company. Unless you have a joint account, that is the end of it. The company cannot go after your family for your debts. There is no need for credit life insurance. You may argue that you carry a large amount on a joint account. However, remember that the amount you pay each month is set by how much you owe. Use the money towards a small insurance policy that can be used for all needs after your passing.

Before you agree to any purchases to your credit card, make sure you know exactly what you are purchasing. Yes, it may sound great now, but if you never collect, you just wasted your money. Take the time to read the fine print first.

Martin Lukac represents RateTake Mortgage marketplace. RateTake matches consumers with multiple lenders offering low Refinance Rates from our network of accredited lenders.

Article Source: http://EzineArticles.com/?expert=Martin_Lukac

Credit Insurance - Find a Low Cost Quote Online
By Bryan Burbank

Credit insurance is something that you may need to get because you need to be protected in case something happens and you can not pay your credit card bills. There are many types of insurance and most of them are designed to help keep you protected in case you have something bad happen and you need the insurance to give you coverage.

You should take a look at your credit card bills and decide that if you have a large amount of debt you should consider getting credit insurance to protect in case that you lose your job or you can not make the monthly payments. There are many places that you can get insurance that can help to protect you in case something happens.

You can first check with your credit card company and see if they offer a protection plan that can help you to protect your credit rating if you can not pay your debt. You usually will pay a certain amount for every one hundred dollars of debt. There are also places online that will give you a credit insurance option but make sure that you do not overpay for this protection.

If you have a small amount of debt it may not make since to pay a lot of extra money to protect you. You may end up paying more than it is worth so always weight out your options before making a final decision on whether to get insurance protection for your debt.

Remember that if you are concerned that you have a lot of debt then you may need to consider getting credit insurance. There are several ways you can go about this and you can start with the credit card company. In many cases they will offer a plan that will give you protection in case you are out of work and can not pay your debt.

Find: Discount Credit Insurance.

Buy Cheap: Credit Insurance.

Bryan Burbank is an expert in the field of Discount Insurance.

Article Source: http://EzineArticles.com/?expert=Bryan_Burbank

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Update Sept. 29, 2009 All About Creditor Insurance Information By Insurance Experts

2009-09-29T09:37:00.000-07:00

Life Insurance - The Drawbacks of Certain Beneficiaries
By Julian Floyd

You've decided to get a life insurance policy. That's great! You have taken a positive step toward protecting a person or entity from the financial strains of death. However, you must pick your beneficiaries carefully. Paying attention to the details will not only help you decide who should receive the death benefit, but also how they should receive it.

Your spouse as the beneficiary. Clarity is important here. If you simply name your beneficiary as "spouse", your ex wife or husband can claim the benefit. Furthermore, if your spouse remarries, your insurance payout could be subject to the rights of the new partner. If the proceeds are paid directly to your spouse, they may have a right to be claimed by your spouse's current or future creditors.

Your child. This seems to be the most obvious choice, but it has its drawbacks. Death benefits pay out a substantial amount of money. If your child does not know how to manage money, it could lead to bigger financial ruin than that which could have been caused by your death. In the event your child can't be found to claim the death benefit, your grandchildren may be left out of the loop. You must be sure to clarify who is to receive the death benefit if your primary beneficiary cannot make the claim.

Your estate. While there are many benefits of naming your estate as the beneficiary, there are major drawbacks as well. The proceeds of the death benefit actually increase the size of your estate, which results in higher executor and attorney fees since the fees are partly based on the size of the estate. Naming the estate as the beneficiary may also disqualify the proceeds from the inheritance tax exemption in some states. The benefit may also increase your state, federal, and death taxes as well.

Naming a trust as the beneficiary. Trusts are designed to properly manage and allocate the proceeds of a death benefit payout. Naming a testamentary trust may be the right way to go, but you should do your research. You have to find out the state laws regarding the proceeds of your estate when naming a testamentary trust. When the insurance proceeds are larger than the norm, a revocable trust may be the way to go. The trust has to be active before the designation, and should specify that the payout is not to be used for particular estate obligations, like debt claims.

Creditors. There are times when insurance is needed for a business related debt, or substantial mortgage. In cases like these, the creditor is usually named as the primary beneficiary. You must, however, specify that the creditor is the beneficiary only to the full extent of your debt obligation, and that the remaining proceeds will go to any additional beneficiary.

Picking a beneficiary is an important part of this process. Consult with professionals to assess a suitable solution for your situation. Don't just accept a suggested format. Learn about the options available to you, and make an informed decision.

This article was written by Julian Floyd. For risk-free no-obligation insurance quotes, visit http://www.thebestonlineinsurance.com

Or visit my blog at http://www.2jonline.blogspot.com

Article Source: http://EzineArticles.com/?expert=Julian_Floyd

Credit Inquiries and Your Credit Score
By Krista Scruggs

In some cases you have to sign a similar document when applying for work or even when attempting to rent an apartment. Employers and landlords do have the legal right to check out your credit before offering you work or even habitation. In many cases a disclosure of such an entity wanting to check a consumer's credit is placed on the front page of any business contract, rental request, or even application for employment.

When a credit inquiry is noted on your account, it essentially notates a would-be creditor's request to take a look at your use of credit. This kind request needs to be permitted by you, and when you apply for credit, you usually sign a document that gives the credit grantor permission to access your credit profile for the sole purpose of evaluating you for creditworthiness. In some cases you have to sign a similar document when applying for work or even when attempting to rent an apartment. Employers and landlords do have the legal right to check out your credit before offering you work or even habitation. In many cases a disclosure of such an entity wanting to check a consumer's credit is placed on the front page of any business contract, rental request, or even application for employment.

Even insurance companies decide to check on the credit profiles of those they are thinking of offering vehicular insurance to. Consumers with a poor credit rating may have to pay more for the insurance coverage, and in some cases they might no even qualify for coverage at all. In the same vein, consumers whose credit rating is too low will likely have to pay too much for loans and other fiscal products, or they may be denied credit altogether. Yet did you know that each and every time someone checks your credit a notation that marks this check is placed into your credit profile? As such, they eventually accumulate and may end up counting against your credit score, potentially even dragging it down.

There are some credit inquiries that have no effect on the credit rating. Most notably, these are inquiries initiated by the consumer who is checking up on their credit profiles. Another credit inquiry that is not considered detrimental is the request received by a creditor with whom you are currently doing business or an employer who is checking on a potential employee's credit profile. It is the inquiry of a new would-be creditor that is taken into consideration when determining the effect it will have on the overall credit rating. This credit rating culminates in the calculation of the credit score, and this score is the first piece of information any prospective creditors consider when they receive an application for credit from any consumer.

Credit reporting agencies reveal that credit inquiries have a small impact on the overall credit rating, but nevertheless, their share of weight - when it comes to being included in the calculation of the overall credit score - is estimated to be right around 10%. Consumers with good or very good credit will hardly notice any difference in their credit rating, even after applying for one or more credit products. Consumers with borderline good credit, however, may notice that their score is far more affected by the request for credit and as such may actually suffer a slip in their rating that might take them into the less desirable categories. The good news is that the credit inquiries only stay on the credit profile for a short few years before dropping off.

In order to find out more about debt settlement, you can visit our site Debt-Settlement411.com.

Krista Scruggs is an article contributor to debt-settlement411.com. Debt-settlement411.com connects you with service providers that can help you avoid bankruptcy. We have several Debt Settlement companies within our network, each with their own strengths and specialties. Depending on your specific situation (the amount of debt owed, nature of your debt, your credit, your hardship, and any other unique situation you might be in), we will match you up with the right company.

Article Source: http://EzineArticles.com/?expert=Krista_Scruggs

Personal Loan Insurance - Should You Consider?
By Kaushik Adhikary

I have had an experienced cash crisis recently. I was thinking to borrow some money then from a friend or relative of mine, but I dropped that idea. I seldom request anybody to lend me money or any thing like this. Cash withdrawal from credit card could have been a better option instead. However, I instantly dropped that idea too as borrowing charges from credit cards were high enough because of high rate of interest (normally up to 3% a month) after expiration of a fixed period, say 50 days. Finally I've decided to go for a personal loan because it was fast in approval and hassle free.

A personal loan is a great option to have your funds for consolidating your debt and you can take personal loan to further your higher education, repairing your car, or even taking up a vacation.

You may know that personal loans, just like credit cards, can be secured or unsecured. Secured loans are often much riskier because you may have to ensure the repayment of the loan by providing the lender with collateral security. If anyhow you fail to meet that repayment, the lender will legally repossess your property, vehicle, or what ever asset you used to secure the loan.

But don't be worried thinking about the failure. Personal loan is still a better option and offer plenty of opportunity for individuals to improve their overall financial condition. But you should develop a habit of good money management skills. However, certain inevitable incidents in life can changed everything and you may not have control over those things such as unexpected death of the lender, loss of employment, or becoming a disable person.

Skipping the first issue of unexpected death of creditor, rest of the things can affect our ability to repay the personal loan. If that loan is of a secured type, you may lose your asset as well, being a collateral security.

Now to protect yourself against all those probabilities, you should consider purchasing a personal loan insurance. Being an insurance guy,I would suggest you to actively consider the insurance option.

I personally feel that personal loan insurance is the best protection you ever have for repayment of the loan and ensures you to have a peace of mind during the repayment term if opting for a secured one. The cost of such insurance, however varies and is generally determined by the outstanding balance of your loan amount. The type of personal loan insurance coverage will also affect the premium too.

There are three types of personal loan insurance coverage to choose. For Americans, the specific dollar amount of coverage will depend on the laws in your State and the dollar amount of your loan. But I always suggest you to discuss the matter regarding your personal loan insurance with your lender.

Personal loan death insurance will pay up to a certain dollar amount in the event of death of one of the individuals on the loan. In that case, the nominated person on the policy will be paid in full up to the maximum dollar amount or assured amount. Personal loans generally have a maximum loan amount of $15,000 in the USA.However it is not uncommon for individuals to take out more than that.

Disability Plus personal loan coverage is such type of coverage that most often be purchased for personal loan protection. It will pay you the monthly personal loan repayments(EMI) up to a certain dollar amount. Additionally you will receive a cash payment for a percentage of your loan amount each month to help you with the cost of living expenses.

Involuntary Unemployment Coverage Insurance for personal loans is very popular. This type of insurance will pay you up to a certain dollar amount per month in case your are being laid off.

You may be aware of the fact that personal loan is a great financial tool when you use it properly. Personal loan insurance is a very reliable option to help you ensure to continue your repayments regardless of medical issues, unemployment, or death. And this type of insurance is especially important for individuals with a secured personal loan. Not having a personal loan insurance will create a kind of situation where, not only your credit score will be negatively impacted, you would be end up loosing your valuable collateral assets that are tied to your personal loan.

You'll be happy to know that personal loan insurance is very affordable and can often be purchased through the lender. It is important that you educate yourself properly and inquire about it while you're looking for such personal loans. Most lenders are readily available and more than happy to discuss about this option with you as it further assures them that they will receive the refund.

Kaushik Adhikary operates http://www.myinsuranceinsiderinfo.com a blog all about fresh and quality content on personal line of insurance and finance field. He loves giving away Free Stuffs and now giving away Free Memberships to his Newsletter,Special Reports,E-Course,E-Books et. all absolutely free.

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Update August 21, 2009 All About Creditor Insurance Information By Insurance Experts

2009-08-20T23:30:00.000-07:00

Credit protection insurance is a good example of a consumer rip-off that affects millions of people, yet gets little attention in the financial media. Simply stated, you should NEVER buy "credit protection insurance," or a "payment protection plan" or any other similar type of credit-related insurance. Let's take a look at how these programs work and why they are a bad deal for the average consumer.

First, let's dispense with the scam version of this insurance. With identity theft in the news so much lately, con artists have set up telemarketing boiler rooms to call people and try to scare them into buying worthless credit insurance products. Representatives will try to convince you that you're at risk if someone gets hold of your card and starts making fraudulent purchases in your name. When they call, they may even pretend to be from the "security department" of your bank. In fact, they may actually be part of an identify theft ring, with the goal of getting you to disclose personal information over the phone. Or they may simply be trying to make a fast buck by selling you an insurance policy that you absolutely don't need.

Under Federal law, you are limited to a maximum of $50 liability for unauthorized use of your credit card. If you didn't authorize a charge, don't pay it! Follow your credit card bank's procedure for disputing bogus charges. You simply don't need insurance to protect yourself from a situation that is already covered by Federal law!

Now, what about those "payment protection plans" offered directly by the big credit card banks? These are plans that promise to cover your minimum monthly payments for an extended period of time (usually 12-24 months) if you get laid off from your job, become hospitalized due to accident or illness, or become disabled. On the surface, a plan like this sounds like a pretty good idea. After all, how could you keep up with your payments if you suddenly lost your job or became too ill to work?

Of course, you should not be carrying balances on your credit cards anyway. If everyone paid their balances every month in full, then credit protection insurance would not even exist in its current form. You are charged for the insurance based on the amount of debt you're carrying on the card, so if the balance is zero, then there is no fee. In fact, some bank representatives use this as part of the sales pitch when trying to entice people to sign up for that "free 3-month trial" on their payment protection plan! They attempt to talk you into adding the insurance now, while you don't need it and when there is no cost, in the hope that one day you will start carrying a balance. By then, you'll probably have forgotten you signed up, and you'll wonder what those mysterious charges are on your statement every month.

If you do carry balances on your cards, credit protection insurance is still a very bad deal. To see why, let's look at the math here. A typical loss protection plan costs $0.85 for every $100 of balance carried on the card. So if you're carrying a debt of $5,000 on the credit card, it will cost you $42.50 per month to buy the insurance. Over the course of 12 months, you will spend $510 under this scenario. That's equivalent to paying an extra 10% in annual interest!

A light bulb should be shining over your head right about now. Why not take that same $42.50 per month and use it to pay down the balance faster? Good question. When you consider that most consumers who have credit protection carry it year after year, without ever becoming eligible for a claim against the insurance policy, the amount of wasted money can add up to a truly staggering sum.

Continuing with our $5,000 example, with a typical minimum payment of $125/month, it will take more than 26 years to pay off the balance in full, at a cost of $7,115.42 in interest. By applying that extra $42.50 per month that would otherwise go toward the insurance, for a total monthly payment of $167.50, you'll have the debt paid off in only 40 months! And you'll have saved $5,435.22 in interest charges. It simply makes no sense to waste this money , especially when you consider that the credit protection plan is normally only good for 12-24 months anyway.

There's another important factor involved here. Credit protection is also a bad deal because the eligibility requirements are so very restrictive. When you read the fine print, you'll realize that there are all kinds of situations that aren't covered. Let's say, for example, that you've been fighting a medical condition for some time. So you buy the insurance thinking it's a good idea. Eventually, you end up in the hospital for treatment and recovery. Can you breathe a little easier knowing your credit card payments are covered? Nope. Most of these policies have exclusions for pre-existing conditions. And there are numerous other loopholes that allow the bank to deny your claim under the policy. In view of the lousy math and the restrictive nature of this type of insurance, these programs should really be named "bank profit protection" instead of "credit protection insurance." Instead of spending good money on an insurance plan that you will probably never use, you're far better off applying that same amount toward paying off the debt early.

Charles J. Phelan has been helping consumers become debt-free without bankruptcy since 1997. A former senior executive with one of the nation's largest debt settlement firms, he is the author of the Debt Elimination Success Seminar™, a five-hour audio-CD course that teaches consumers how to choose between debt program options based on their financial situation. The course focuses on comprehensive instruction in do-it-yourself debt negotiation & settlement designed to save $1,000s. Personal coaching and follow-up support is included. Achieves the same results as professional firms for a tiny fraction of the cost.

http://www.zipdebt.com

Article Source: http://EzineArticles.com/?expert=Charles_Phelan

Insurance and Adequate Cover - Making Sure You Are Sheltered From Financial Hardship
By Mike Nathan J. Marvin

Insurance traditionally falls into the category of a necessary evil. It is that unseen expense that you just cannot get out of paying; the unseen product; the invisible protector of everything you value. In today's economic climate, it is tempting to cut corners on monthly outgoings and to trim the edges of financial commitments to make more cash available for the things in life that are more enjoyable.

Paying the extra cover on the jewelery or the fully comprehensive package for the car instead of the minimum required will not break the bank but perhaps it will make enough difference in payments to be able to take the kids out for a treat or pay for a restaurant meal. In the long run, however, is it worth the risk?

Risk is one of the keywords in insurance matters. The other is assessment, not only that of the insurance company but your own; your own assessment of what your belongings are worth to you personally. If you feel you can live without something in the event of it being stolen, then why bother insuring it? The trick is to know which items you really value and which you could say goodbye to quite happily.

The reality is, though, that most people surround themselves with the things they love in profusion. It is what makes them happy: their books, their paintings, their rugs and china and crystal. All these things are material yet they represent happiness to everyday, ordinary people who dread fire, theft, flood and all the other unpleasant disasters that can occur unexpectedly.

The insurance payments that guarantee replacement of your valuables and assets are part of your own peace of mind. Those pesky payments might not seem much bang for your buck when you cannot afford a new pair of shoes but they are certainly worth every cent should the water tank rupture and send a flood through your vintage record collection.

A sensible insurance plan will cover all your most precious belongings and take a little over for unforeseen accidents. Make sure that your spectacles, your camera and your sunglasses are covered, for instance. They are high risk items but the cover for loss is negligible compared to the cost of replacing them yourself.

Check what items are covered in your policy and read every word of your insurance proposal. You may find items that are not included may be inserted for no extra charge. Insurance companies on the whole aim to please their clients and do not like unexpected disasters any more than you do!

Debt Settlement
We can help you get relief from credit card debt much faster than you may believe possible with debt settlement and debt negotiation tactics, providing both debt relief and debt consolidation alternatives, while avoiding bankruptcy, and helping you to minimize creditor phone calls and harassment. Get Rid of Debt today and Prevent Bankruptcy

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All About Creditor Insurance Information By Insurance Experts

2009-08-05T12:11:00.000-07:00

Forced Place Insurance
By Alexander Gordon

Forced place insurance refers to insurance taken out by a bank or creditor on uninsured debtor’s behalf on a property placed as collateral. In case the property is damaged, funding is available to repair it. This type of insurance is most common with flood insurance; the flood insurance regulations of each agency provide notification procedures that should be followed. Forced place insurance can also be purchased for other hazards also.

Guidelines:

• Forced place hazard/flood insurance is general liability insurance for residential and commercial properties and foreclosed properties. It can also cover vacant properties, mobile homes, town houses and condominiums.

• Forced place insurance is a proven hazard insurance program. It has been designed specifically for mortgage lenders and services.

• It provides insurance cover to protect the mortgage collateral against fire and such like property hazards. However, it is most common with flood insurance.

Avoiding Lawsuits:

• The power to force place should be included in the contract note when taking out the mortgage. This will save you a lot of trouble later and prevent lawsuits against lenders placing insurance. The powers and obligations should be spelt out clearly in the loan contract note at the outset.

• If the lender has force placed insurance, do not pass on the charge to the customer that is greater than the actual cost of the insurance. It amounts to retaining a commission, which is liable for litigation.

• If a lender force places hazard insurance, the policy and disclosure letter should be made known to state.

• Insurance procured by the lender for whatever reason and that is not reflected in lender’s record, is also a strong case for later litigation.

• There are laws regulating force placed insurance in Connecticut, New Mexico, Florida, New York, Hawaii, Tennessee, Maryland, Texas and Mississippi.

Insurance cover for fire handling for vacant and foreclosed properties is very expensive and can create servicing burden. Loans made on properties located in federally designated flood zones too prove to be expensive and cause difficulty to bank’s loan servicing department. The federal flood tracking regulations for these types of loans are now imposed on the lender, thus increasing the mortgage premium considerably.

Solution Offered by FSIA, Inc.
The firm offers a Forced Placed Property/Liability/Flood program that claims to provide maximum protection with the least hassles. The program has some outstanding features that include:

• Instant binding authority for occupied and vacant properties, residential or commercial

• Competitive rates and no minimum premium or deposits

• Flexible monthly billing

• Flood zone determinations.

• Flood insurance quoting and placement programs.

• Flood insurance tracking.

Forced place insurance is essential for a bank or lender on an uninsured debtor’s behalf, to ensure that funding is available in the event of damage to the property. Ensure that the legal requirements are complied with to avoid litigation later.

Alexander Gordon is a writer for http://www.smallbusinessconsulting.com - The Small Business Consulting Community. Sign-up for the free success steps newsletter and get our booklet valued at $24.95 for free as a special bonus. The newsletter provides daily strategies on starting and significantly growing a business.

Business Owners all across the country are joining "The Community of Small Business Owners” to receive and provide strategies, insight, tips, support and more on starting, managing, growing, and selling their businesses. As a member, you will have access to true Millionaire Business Owners who will provide strategies and tips from their real-life experiences.

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Settlement Letters To Creditors - Advice on Writing to Your Creditors to Settle Debts
By K D Garrow

When you are in debt, knowing how to deal with your creditors properly can make the difference between being able to find your way out of debt and sinking deeper into it. It really is a vital skill and something that is far too frequently overlooked. Many people with money problems turn to consolidation loans or debt management plans, but these are rarely a better solution than negotiating with your creditors. Unlike the other two, negotiating with creditors costs you nothing.

There is a well established system for dealing with all types of debt problems, no matter how serious. Go to any unbiased debt counsellor who has nothing to gain personally from advising you, and they will in most cases guide you through a process of negotiation with your creditors to reach an agreement for settling your debts on terms you can afford. Any other solution will almost certainly involve borrowing more money (consolidation loans) or spending money on fees for someone else's help (debt management plans, IVAs, etc).

The tried and tested system for dealing with your debts properly is to communicate honestly with your creditors to explain your situation, put your debts in priority order, work out your exact financial situation and then make offers to your creditors to agree repayment terms. So the first step is to write to all your creditors to tell them why you are in the predicament you are in and why you are not in a position to pay them back on the terms you originally agreed. Being upfront like this is crucial. Whatever your relationship with creditors has been up to this point, now is the time for you to take the lead in being honest and professional in all your dealings with your them.

In your letter, tell each of your creditors that you are seeking help to address your situation and that you will be writing to them again with offers of payment and a personal financial statement. Ask each creditor to confirm exactly how much you owe and get them to list any penalties or arrears that have also been applied. It is sensible to also ask them whether any insurance policy is in place with regard to the debt.

When you get your replies back from creditors, make sure you have an organised system for keeping track of all correspondence. The paperwork could become quite substantial over a period of time, and you need to keep absolutely everything and know where to find it quickly and easily. Check the letters to receive back and see if there are any penalty charges or extra interest listed. If there are, it is worth contacting the creditor to see if they will at least waive these extra charges and stop accruing any further ones while you try to reach a settlement. You may be surprised how often this works, and there is nothing to be lost by trying.

The next stages in negotiating your settlement involves separating your debts into priority creditors and secondary creditors, creating a financial statement, then writing to your creditors again with offers of settlement. It is a process that is proven to work, and all that is required is some guidance on the process.

Read the full step by step negotiation process and find template letters to creditors on the author's website covering debt cures. The site provides free unbiased advice on dealing with debt, and covers loans for debt, credit cards, bankruptcy, IVAs debt management plans and more. KD Garrow has worked as a senior manager with significant financial responsibility for the last twenty years.

Article Source: http://EzineArticles.com/?expert=K_D_Garrow

Worried About Getting Sued Over Credit Card Debt?
By John Stevenson

Credit card debt can sneak up on you. You miss a payment or make a couple of late payments, and before you know it, your minimum monthly payments add up to several hundred dollars a month and your creditors are threatening to sue you over credit card debt.

Credit card holders who are afraid they are going to get sued over their credit card debt have at least three alternatives available to them: they can declare bankruptcy, they can use a credit counseling service, or they can reduce their credit card debt by cutting back on expenses and applying the savings to their balances.

Is Bankruptcy For You?

If your debt is overwhelming and your circumstances make it virtually impossible for you to repay it, bankruptcy may be an option for you. Consult with an attorney specializing in bankruptcy to find out if filing bankruptcy would reduce or eliminate you credit card debt. At a minimum, filing for bankruptcy may fend off a creditor who is threatening to sue you over credit card debt. Filing for bankruptcy may also buy you some additional time to pay off your credit card debt by allowing you to restructure all your debts and reestablishing the minimum amount you pay to each creditor.

Bankruptcy is a drastic step that can have a negative impact on your credit rating for many years to come. You should not consider declaring bankruptcy until you have consulted a bankruptcy attorney and carefully weighed all your other options. Explore all your options!

Is Credit Counseling For You?

If you are concerned that you may be sued over your debt, one alternative to bankruptcy is to consult a credit counseling service. A counseling service will assess your income and your debts and approach your creditors on your behalf to make alternative payment arrangements. You make one monthly payment to the credit counselor, and the credit counseling service pays your creditors for you, per the agreement they made for you.

Making payments through a counseling agency may mean that your credit report reflects late or delinquent payments; however, these ratings are not as detrimental to your credit and do not last as long as filing for bankruptcy.

Cutting Back On Expenses

Before you consult a bankruptcy attorney or a credit counseling service, make an honest assessment of your monthly expenses and see what you can cut back on. If you are making a car payment, consider whether you could do without a car for a year or so. By applying you monthly car payment and auto insurance premiums to your credit card bills, you can substantially reduce your debt in a relatively short period of time.

Communicate with your creditors. If they know you are serious about not getting sued over your debt, and that you are willing to sacrifice your personal convenience by giving up your car for a year to pay your credit cards off, they are more likely to work with you than to sue.

John Stevenson holds an MBA in Finance from the Simon School of Business. He specializes in helping families reduce their credit card debt and regaining their financial freedom. For information about reducing your credit card debt please visit: Crush Your Debt Today

Article Source: http://EzineArticles.com/?expert=John_Stevenson

Loans for Those with Bad Credit
By Joseph Kenny

If you have bad credit, you may be finding it increasingly difficult to get vital loans. While this is generally a sign that you should try to avoid further borrowing, there are certain circumstances in which it is just vital that you get credit. This may include paying rent, especially if you have young children, paying school fees or paying for medical treatment. A bad credit rating can also hinder your attempts to get insurance, rent a home and sometimes get a job.

Repair Your Credit

If you are facing problems such as these, you should consider trying to repair your credit rating. Credit repair is a general term often applied to the controversial practice of improving or rehabilitating one's financial reputation (creditworthiness) among creditors. To improve a credit rating damaged by poor credit habits, in the long run only one thing will work: changing those habits.

Making arrangements with the creditors to repay them is often one of the steps in improving one's credit habits. Creditors may accept slow payment schedules, as an alternative to writing off the debt. In some cases, creditors may accept a less-than-full repayment (pennies on the dollar). The key here is contact with the creditor and taking action to retire the debt.

At the same time, reviving an old debt that is no longer collectible can actually do additional damage to one's credit reputation. It is best to be aware of the circumstances regarding the debts collect-ability, statute of limitations, and legal and illegal collection practices, before contacting a creditor on a very old debt.

FACT

In December 2003, Congress passed the Fair and Accurate Credit Transactions Act (FACT Act), which included the right to a free annual credit report on request and a number of provisions designed to improve the accuracy of credit reports.

On June 4, the Federal Trade Commission finalized its rule for implementing the new consumer right to a free credit report, rolling it out over a nine-month period, beginning on the west coast in December 2004 and finishing on the east coast in September 2005.

From 1994 to 2004, the state PIRGs and other consumer organizations have issued numerous reports showing that sloppy credit reporting agency practices are at fault for errors in consumer credit reports.
Inaccurate credit reports could damage 1 in 4 consumer's ability to buy a home, rent an apartment, obtain credit, open a bank account, or even get a job.

Joseph Kenny is the webmaster of the loan information sites http://www.selectloans.co.uk/ and also http://www.ukpersonalloanstore.co.uk. At the Personal Loan Store you can find all the different loan types explained.

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All About Creditor Insurance Information By Insurance Experts

2009-08-05T12:05:00.000-07:00

Payment Protection Insurance - Worth the Extra Cash?
By Rachael A Miller

Payment Protection Insurance (PPI) is designed to allow the borrower to keep up their payments on loans and credit if they aren't able to pay the repayments themselves, usually due to illness or losing their job. PPI can create peace of mind for the borrower, however that comes at a price. PPI can cost up to twice as much of the interest of the loan. It has also been revealed that 25% of people who claim on this insurance are unsuccessful. Is PPI worth it?

PPI is making the financial sector £5.4 billion per year, which proves many borrowers opt in for insurance. Even so, it has been said that creditors are quite negligent when explaining their small print. PPI is designed to pay your credit payments if you are unable to pay them through no fault of your own, for example if you fall ill or are made redundant. However, some customers do not realise that if these illnesses are concerned with pre-existing medical conditions then they are not entitled to a claim. Also, illnesses such as stress and back pain, which don't seem as serious, may be declined. Your situation concerning employment is also an issue. If you are self-employed this automatically exempts you from qualifying for cover, as does if you work as a contractor whose income may fluctuate from month to month.

Even though there seems to be many downsides to taking out a PPI, such as the cost, and the likelihood of being unsuccessful when making a claim, it offers the customer a peace of mind which can be priceless. If you read the small print of your policy and your circumstances match those stated, a PPI could be a worthy investment. Most people aren't aware that if you are unhappy with your policy you can cancel it by giving your provider thirty days notice. People aren't always aware of the option to shop around for PPI. Just because you are taking out credit with a company doesn't mean you can only take out their insurance. You can shop around and go to independent insurers who may give you a better deal.

When shopping around for personal loans make sure you also shop around for PPI. With economic uncertainty, interest of loans are increasing, and so will your insurance. Compare loans and PPI online before applying.

Article Source: http://EzineArticles.com/?expert=Rachael_A_Miller

Loan Insurance - Worth The Extra Cost?
By Joseph Kenny

There are many factors, out of your control that can make you unable to repay your loans. You might become sick or get involved in an accident that takes you out of work for an extended period of time. Maybe your employer has to cut back and make wage decreases or lay-offs. If you are working for your self then maybe business is not going well and you are not earning as much as you had hoped. It could even be that your expenses have risen or interest rates have risen and this has made it difficult to make repayments.

Many of us worry about these possible outcomes. Some of us, especially if we have borrowed a lot and are already close to our repayment capacity may be losing sleep over it. People who are elderly and close to retirement, or those with young children also may worry a lot about such issues.

Loan Insurance

It is for this reason that insurers offer loan insurance. Loan insurance is a policy that protects against the possibility that you will not be able to make your repayments. You will usually be offered it every time you take on credit. You should know that you are not obliged to take loan insurance and you cannot be denied credit for not taking it. If you do wish to take it out, you should shop around and not take it from the first insurer you come across. Rates vary widely and it certainly pays to shop around.

If you have loan insurance you can rest a little easier knowing that if certain events outside of your control occur you loans will be repaid by the insurance company. Events included would be illness, accident or job loss not of your fault, among others. You should also be aware of the conditions and exclusions however before you agree to such insurance. It is a fact that many people pay for loan insurance without much prospect of ever benefiting from it; often without even knowing they have it. This is because lenders are anxious to add it to your account as a way of increasing revenues.

Be Aware

Some policies will require for example that you accept the first job you are offered after losing your job. This can be very impractical for a person who may have had a very good job and now is offered a much lower paying one. They know that if they continue their search they will find a better job but their insurance wants them to take up the first one.

Always be aware of what you are paying for with insurance. Be aware of the exclusions and if you don’t want the insurance, don’t buy it. If it has been added to your account without your permission, call your creditor and have it cancelled immediately.

Article Source: http://EzineArticles.com/?expert=Joseph_Kenny

Don't Get Burned by the Top Three Debt Consolidation Loan Scams
By Bernard Johnson

If you are applying for a debt consolidation loan, you probably have a lot of debt, and need a way to combine all of your debts into one manageable monthly payment. Unfortunately the constant worry about money makes people desperate, and desperate people sometimes fall for some common debt consolidation loan scams. Here are the top three scams, and what you need to do to avoid them.

The most common debt consolidation loan scam is the money up front ploy. In this scam, you are promised a debt consolidation loan, even if you have bad credit or a previous bankruptcy. The catch is that before you get the loan there is an upfront processing or administration fee, which in many cases is excessive.

You pay the up front fee, and then either you either never hear from the debt consolidation loan company again, or they tell you that there was a problem with your loan application. They keep your money, but they don't give you the loan.

Avoiding this scam is simple: never pay an upfront fee to apply for a loan. Paying a fee is fine if you are getting a service, but only agree to pay the fee as part of the loan.

The next big scam is the bait and switch scam where you are promised one thing, and then at the last moment you get something else. For example, you are told that you can have the loan at an 8% interest rate, but when you come in to sign the loan agreement the lender tells you that due to unforeseen circumstances the interest rate is 15%. Since you are counting on the money, you sign the agreement.

This is also a simple scam to avoid. Don't agree to any last minute changes, and don't count on receiving the money until you actually receive the loan.

The final big scam is hidden charges. We all know that we will have to pay interest on the loan. In some cases the interest rate may be artificially low to make the loan appear more attractive, but there are a number of hidden charges that dramatically increase the cost of the loan.

These charges may be for life or disability insurance on the loan, or even unemployment insurance or creditor insurance. If you want insurance, talk to an insurance agent. Make sure that all charges an fees are explained to you in advance so that you can calculate exactly what you are paying.

Debt consolidation loans can reduce the interest you pay and combine all of your debts into one monthly payment, but do your own research and be aware of these debt consolidation loan scams so that you are the one who benefis from your debt consolidation loan.

Bernard Johnson has many years experience advising people on debt consolidation loans. Visit http://www.debt-consolidation-loans-information.com for information about debt consolidation loans and how to avoid debt consolidation loan scams.

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Four Investments Carry 'Government' Asset Protection - But With Limitations
By Shane Flait

Protecting your assets from unfair or unjust complaints is an important part of financial and estate planning. But before constructing a comprehensive asset protection plan, you should know what protection the government offers for 4 investment categories. Below, I overview from whom you are - and are not- protected and some limitations for these 4 investments categories: qualified plans, life insurance, annuities, and your homestead.

Qualified plans carry protection under bankruptcy Qualified plans are the tax-advantaged plans whose rules are regulated by the federal government. These plans are geared to induce people to save a portion of their working income for use during retirement. They include all the defined-benefit and defined-contribution employer retirement plans. I include your IRAs - traditional or Roth versions - with them, too.

These plans carry federal protection against creditors under bankruptcy. They don't carry protection against government tax claims or domestic relation claims associated with divorce or child support.

All the employer retirement plans have unlimited creditor protection in bankruptcy. Your personal IRA or Roth IRA is protected but only up to $1 million dollars - unless it was fully funded by a rollover from a company plan.

The remaining investment protections of these are regulated by the state. But the amount and nature of the protection varies with each state. So you need to check your own state's rules. Nevertheless you should be aware of what the issues are for each investment.

Qualified plans - short of bankruptcy claims For any legal action short of bankruptcy, your state law determines how much protection your qualified plan assets have. State laws vary on protection offered for:

* plan withdrawals,

* inherited plans to beneficiary

Most states will exempt qualified plan assets but only while they're in the retirement account. Some states, though, limit the exempt from creditor actions. The limit may be $200,000 or what is 'reasonably necessary' to support the owner and his or her dependents while satisfying some of the creditors' claims. Of course, the phrase 'reasonably necessary' promotes litigation by claimants.

Your IRAs can be vulnerable. Depending on how must protection your state gives to individual IRAs, your assets may be better off in your company plan than rolled over into your IRA.

Life insurance and Annuity Protection Again, these are regulated by your state's laws. Some will protect the cash surrender value of life insurance as well as annuity payments from creditor claims. Other states will restrict protection only for a beneficiary's interest necessary for his support.

As an example, those states with good asset protection protect the owner's cash value against creditors of the owner. Bad states will either not protect the life insurance at all, or just protect proceeds that are paid to beneficiaries when the insured dies. In the latter case, the beneficiary really has little protection since the creditor can gut the cash value of the contract leaving little or nothing for the beneficiary.

Likewise, exemptions for annuities don't always protect the owner's cash value in the annuity. So, to benefit by the exemption, the owner has to annuitize the annuity and start taking payments. Also if there's a state exemption allowing annuity payments for your "support", beware that this may leave you with a very small amount.

Homestead exemptions The extent to which your homestead - i.e. your main living residence- is protected is determined by your state's Homestead Act; and this varies greatly among the states. So you'll need to check out your state's limit.

Realize that your vacation or second home isn't protected by a state homestead exemption. And a homestead exemption doesn't protect you from a federal tax lien.

An estate planning conflict with state exemptions Generally, for state exemptions to protect you, the protected asset must be held in your own name. But then, those assets are trapped in your estate for purposes of federal estate taxes. And for large estates, the federal estate taxes can take up to 55% of the value of those assets.

So the wealthy should forget about state exemptions in favour of transferring their assets to trusts or other entities for the benefit of their heirs. These devices may be better for protecting them from future creditors as well as the ravages of federal estate tax.

Remember, you'll find very little or no protection under government exemptions for claims against you for taxes and domestic relations orders - such as child support. Such claims affect the majority of people. Nevertheless these 4 investment categories above can be helpful in your asset protection program for some of your assets.

Shane Flait is a writer and consultant on financial, legal, tax, and retirement issues. He explains the issues and gives you workable strategies to accomplish your goals. Find out more and get a free report on Managing Your Retirement => http://www.easyretirementknowhow.com/FreeReportandSignUp.htm

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