Pros and cons of life insurance
By the way, how do you feel about the “investor” word? Do the investor himself, and if not, how you could more precisely be called himself and his own kind?
I want to ask you a rather intimate question (and – in confidence), which ask me to write a letter to one (at least) the code word “investor”.
Yesterday our investors Dnepropetrovsk club “Synergy” became friends with the Simferopol club of investors’ Neolayf “.
Now we start to use them, too, the system of distance education and the discount programs from a number of financial institutions. And I suggest you pay attention to our colleagues and, if desired, to connect to the common cause. Connection, of course, is not free, but it is voluntary. The site is called http://neolife.com.ua, and my login name – uainvestor.
Joint actions promise, in my view, a lot of benefits in the future, and you can even take part in their distribution.
And now, as usual – from last year’s article “Gorozhanina”.
ADVANTAGES AND DISADVANTAGES OF LIFE INSURANCE.
On the life insurance you already know. Do you know what it is – mutual investment and, as you read my article about it in the “city-dweller”. However, this article is not only to answer some questions, but also spawned a number of new ones. Well, let’s try to clear them as well.
Pros and cons of life insurance – a relative thing: what is good for one person, it may be of little benefit for another, but it is unlikely to be harmful to the third, because in general, this is a positive phenomenon. In real life it happens to a lot of situations where insurance is useful, but as long as insurance companies do not consider it necessary to spend money on a wide explanation and promotion of their programs. On the one hand, – “skim the cream” from the more affluent sections of society, and on the other – do not want to work for competitors, because they do not believe in his leadership. It turns out that your knowledge of the insurance depend on the skill of a particular insurance agent. Since each insurance agent insurance only praises and only your insurance company, then you may be involuntary excessive resistance to his perseverance and, as a consequence – and nedoinformirovannost nedovospriyatie this side of life. As a result, you do not use the available features and benefits you.
Some situations I’ll tell you, and then you think for yourself. One caveat: I do not really trust the advice of friends and family, if they are not experts in this field. Here there is a subtle psychological moment: to advise to do something – it means to take on some responsibility for possible negative results, and advised not to change anything – it means to stay away from making a decision. You can check out: most of the advice from znakomyh- layman for absolutely any occasion, will – to leave everything as it is.
SITUATION ONE. Do you have small children, elderly parents, unemployed spouse (spouse), which you keep or other material obligation. What fate awaits your beneficiaries if you something happens? A loving and responsible person thinks about it in advance. You can write a will (if there is to bequeath), and it is possible to insure their lives and whom and how much paint will get in testamentary records. Testamentary record can be changed repeatedly during the insurance contract. In the family of a wealthy man may be a problem with the usual testament. The first – it’s six months of the adoption of the inheritance, for which it is necessary for something to live. Second – this is the inheritance tax, which, for its adoption, it is necessary to pay in cash. Third – it is possible debts that the heir must pay before the acceptance of the inheritance. Fourth – it is the likelihood of challenging legacy in the courts, which may be delayed. Fifth – it is a problem inherited management business, especially if he is not personally created, and with partners. All of these problems can be exacerbated if the testator has not lost a life, only to a greater or lesser extent, the ability to work.
When the storage you are not interested, you can buy only risky part of the insurance, then it will be much cheaper and will increase the sum insured. If nothing happens to you – and, thank God, let your insurance money will go to that family, which was less fortunate; I regret it would be just silly.
SECOND SITUATION. Within 10-20 years or more spouse works and earns a pension, and the wife is a household and raising children. In case of divorce, the ex-wife remains without the state pension and is entirely dependent on the goodwill of the once caring spouse. I would suggest the young husband to buy an insurance policy for your second half is still at the stage of starting a family. That he, better than any fine words would show their love and seriousness of purpose. It will be all right in their relationship – the money will still be in the family, and happen to leave, – material no one gets hurt.
SITUATION THREE. Divorce. The child remains with his mother. Pope regrets money for child support because he believes that the ex-wife spends it not for the child, but for themselves. He buys children’s insurance policy, according to which a child in any situation gets money for education, and this ensures its future. Gifts and other financial assistance is not excluded, but the basic operating costs are borne by mom.
SITUATION FOUR. Grandmother would like to help her grandson, but I suspect that it is not the money to reach – a young family a lot of their personal needs. It may enter into a contract of life insurance, the purpose of which is to ensure the financial start in life to his grandson. Money grandson will receive 17, 18 or, say, 21 years and will be able to get a good education, start a business or buy a home. Feed the same and dress his son will be parents – it is their sacred duty. Grandson is also know to whom he owes his creation of start-up capital.
SITUATION FIVE. Do you think that you live for the sake of children, that children – the meaning of your life. What do you do for them? Feed, poite, dresses and shoes? So you do not for him, but for themselves. The baby – it’s your pride and your image; them you brag to your friends and pick up their status in their eyes. But the one important thing you can do for him personally – to guarantee the start of an independent life. It will help to make it an insurance policy, because it is the money that you will not be able to spend ahead of time for their needs. Otherwise, you’ll never save up money for it, say, a serious education; and he would have to learn not in the university that deserves their knowledge and talent, but the fact that you are at that time able to afford.
SIXTH SITUATION. Their employees wages you pay in an envelope, thus saving on taxes.
Today it suits them. And tomorrow, when in retirement turns out that the pension and will not be, because the employer has little or nothing to deduct the pension fund, it is possible scandal. Now you could be charged with tax evasion, with all the unpleasant consequences. But if you will pay for your insurance even if not everyone, but only the best workers, then not only will avoid potential problems, but also gain a number of advantages. For example, reduce staff turnover in your company and attract the best talent to it; create an atmosphere of confidence, stability and social partnership; get tax breaks and new controls.
SITUATION SEVEN. Death of one of the founders of the company. His widow can not and does not want to continue to manage the family business, its desire – to take the share of her husband’s money. It is unlikely that this process will be painless – someone will suffer: the enterprise itself, the other founders are very likely – the widow of the deceased, and maybe all together. The occurrence of problems can be avoided by insuring each of the founders in the amount of its share in the company at the expense of the enterprise. In case of death of any of them, his family get insurance in the amount of capital owned by him without paying taxes without a six-month delay and without scandal with other founders. The remaining shareholders will share the share of the deceased and get rid of the need to withdraw money from circulation, and the company will continue its work on normal schedule. In my opinion – this is a very beautiful circuit, which, however, requires a detailed legal study.
EIGHTH SITUATION. Your business is going well. Earnings you receive exceeds the possible income from deposits and other such investments and, therefore, you do not see the need to invest in insurance. However, the business – it is always a risk, do not take into account that – the height of carelessness and recklessness. This insurance, in this case may create a reserve fund for emergencies. Moreover, this fund can not be confiscated for the debts, tax evasion, and in other similar cases.
SITUATION Nine, the most common, or rather not the situation, and the simple life. You understand that it is impossible to live and decide to create your own personal pension fund for state pension. You can do it via bank deposit, but this method has several disadvantages. Firstly, money in the bank you assign only after the payment of income tax, and secondly, you do not have enough discipline and endurance do not pick them up and do not spend on something that you think is very important. None of these deficiencies have no life insurance.
Situations may be other, all you name it. Each case is different and must be considered separately together with a specialist.
The main purpose of life insurance – to protect the family from the loss of a breadwinner. However, it is easier to do together you can create a common fund from which compensation would be paid to the victim, and (or) his relatives. The point – difficult, requiring coordination and accurate calculations. This function takes on the insurance company. Not for free, of course, but for the money; because the insurance company – a commercial organization, whose main objective – profit. Earnings will, if properly calculate the tariffs, ie to take into account mortality statistics according to age, sex, and various diseases. Growth rates constrained by the level of life, competition, and the percentage of coverage of the service. Today, all these options do not contribute to reduction of tariffs and so they are quite high. This is the case when the first customers find themselves in a worse situation than the next. So those who can wait, should not hurry. The problem is that the time to wait is often not: props and the age and health status. At present and potential customers of insurance companies is one way out – to increase their ranks. The more insured, the better will become tariffs and other terms of insurance.
Another problem is that life insurance is more suitable for young families with minor children, but they still do not reflect either for their protection, nor of their pension, and when they finally will think, – even the age wrong, and health not the level to count on loyal rates.
Where to invest money to the insurance companies? Basically, in bank deposits. They need to get accreditation in the banks, and hence access to their clients in the first place – to the borrowers. Because it is possible to force borrowers to buy insurance – these are the usual conditions for obtaining loans. To date, the banks – the main source of clients of insurance companies, because the other source – agency network, is developed very poorly.
In addition, insurance companies no longer invest in anything and do not know how, they do not have the relevant experts, not yet, anyway.
In the coming years demonstrate high returns they can not, yes, probably, and do not want: after all, the stability and reliability is more important. Therefore, you should not feed on this score no illusions: high yield, high-risk, achieved entirely elsewhere.