The world of 1868, when the Metropolitan Life Insurance Company was born, was very different from the world we know today. There were no telephones in those days and no electric lights. The country had not yet been spanned by a transcontinental railroad. Records were kept in handwritten ledgers, and business letters were penned in longhand. The entire population of the United States was only about 37,000,000. The flag then carried 37 stars.
Canada at that time contained only 3,500,000 people. She had only one year earlier (1867) achieved Dominion status in the British Empire. The two countries, although their frontiers were expanding, were still largely rural. At the census of 1870, the American population living on farms and in country villages numbered about 30,000,000. Persons engaged in agriculture, forestry, and animal husbandry constituted half the total working population.
The War of the States, to be sure, was over, but the struggle had left in its wake a variety of national problems— not only political but also economic and social. The Nation was still feeling most of these with full force. For instance, greenbacks were still in circulation, and specie payment was not to be resumed until 11 years later. With the emancipation of the slaves, the labor problem reached a new phase. The Government of a now united Nation was anxious to offer its citizens fields for expansion, and through the Homestead Acts and subsequent land grants made thousands of farm acres available to pioneers.
To others more enterprising, new territories offered opportunity to exploit the resources of great plains and mountains. The primary need of the country was adequate transportation facilities, which were considered a key to further economic progress. However, all signs pointed to a great expansion ahead. The actual issues of the war itself had, for the most part, been settled. The country could now go forward to the fruitful destiny which its rich natural resources and its vigorous people promised.
Industry, commerce, and finance felt the new stimulus to surge forward. The business depression which immediately followed the close of the war proved short and was succeeded by a distinct upturn. By 1868 there was in progress a business revival which was to last five years. The Metropolitan was thus launched on a rising economic tide. Immigrants in large numbers were encouraged to come to add the work of their hands to the building of the country.
They made up a new working population, which took root, for the most part, in the cities. Crossroads were becoming towns almost overnight. Towns were swiftly growing into cities. A deeper sense of permanence colored the thoughts of the American people, who began to think in terms of a future, a home, family security. The United States was rapidly coming of age.
The class of wage earners was growing rapidly, a circumstance which, as we shall see, proved to be a determining factor in the development of the Metropolitan. As inventions multiplied and factories grew, women and children were employed in greater numbers. The acceleration of industry and of urban life accentuated the economic insecurity which many felt in their new environment.
City dwellers became conscious of the hazards of long working days, child labor, and industrial accidents. Mines and railroads and machines were being developed with consequent risk to human life. Health conditions in our cities were far from good. To provide a measure of security for this increasing urban population, life insurance and private health insurance companies came into being.
The war decade of the 1860s gave opportunity for the great expansion of the life insurance and individual health insurance business. As a result, more than 100 companies were functioning by 1868. The New England Mutual and The Mutual Life Insurance Company of New York had already been in operation for 25 years.
In fact, when the Metropolitan appeared on the scene, there were already in existence organizations with such familiar names as the New York Life, the Equitable Life of New York, the Mutual Benefit of New Jersey, the John Hancock, the Aetna, and the Connecticut Mutual. By present standards none of these companies was large, yet in their day they were important economic enterprises. At the end of 1868 the largest of these, The Mutual Life of New York, had gross assets of more than $30,000,000 and insurance in force amounting to nearly $200,000,000.
I Don't Need Life Insurance - I'm Going to Live Forever!
Have you ever watched that 70’s TV series "Greatest American Hero"? It’s about a guy who has a super hero suit delivered from aliens which allows him to fly and have other useful super hero powers. This had a great theme tune with the chorus line ringing out "I'm gonna live forever...I'm gonna learn how to fly -high!"
This song captures how many of us feel when we are younger but the truth is that as time goes by the we realize that our time on earth is limited. I think only realised I was mortal when I turned 25. It wasn’t like a light bulb went on it was more a dawning sense of reality. Some of my friends are still risking their necks bungee jumping and white water rafting but I stopped thrill seeking when the impending sense of doom joined me at 25. Now, you may believe that you will get another chance at life and return in some other corporeal form but as far as I’m concerned I can't remember that I had a past life so I like to work on the presumption that I only get one shot.
What happens if I die? I don’t really like to dwell on is as I think that that I am pretty lucky in life. I’ve never had broken a bone or a cavity and I for the most part have had good health. National statistics tell me that I have a good chance of turning 80 years old. Some internet site like the "Death Clock" tell me that I may live to be 103. Trouble is I now have a home and mortgage, children who need me and I now know that I can’t live forever. In some cultures the concept of life insurance is quite foreign. In Polynesian culture past and present children will be looked after by extended family with no questions asked. Our Western family structure isn’t so flexible and while I like to think that my children would not go uncared for if I was to die without life insurance they could be put at a disadvantage. So life insurance is the solution I have opted for.
In shopping for life insurance you need to decide on the right amount of cover. It is about as important as deciding to get insurance in the first place. If you don’t provide enough cover then the beneficiaries may not have enough to live comfortably. On the flip side providing too much cover can end up being expensive for you month to month.
HOW MUCH COVER? The Quick Answer.
If you are looking for quick answers, don’t have a lot of time and are not worried about details. Some like to use the rule that the sum of cover should be 10 times your annual income. This is supposed to leave enough for your family to be comfortable. However this doesn’t account for debts that you might have, inheritance taxes and other costs.
So, if you are serious about providing the right amount of cover then you will need to sit down and look at some figures.
The Serious Answer.
To work out a figure for cover it shouldn't take too long. You will need to consider the points below.
1. How much will your funeral cost?
You don’t have to make full arrangements but you should consider providing a sum to cover the costs of your funeral. A guide to funeral costs can be found online at WhatPrice.co.uk.
2. Debts
Do you have a loan, mortgage or big bills? You also can consider inheritance tax which will impact the final sum which your beneficiaries receive. If you are unmarried and have an estate more than £275,000 inheritance tax is very steep.
3. Living
How much per month will your beneficiaries need to get by? You can consider how much income a working partner could contribute and put this against the monthly costs of running the house hold. If you have savings you may want keep these to cover unexpected bills or repairs to the estate.
Have a think about how long your beneficiaries will need support for? The term/length of your life insurance policy will affect what your premium will be. If you have small children you might want to support them until they have completed school or higher education. or if you have a non working partner then providing support for them for as long as they might need it.
4. Assets
If you have assets in your name will you sell them to raise cash for the your surviving family or is it better to hang on to them?
If you consider the points above you will go a long way to providing the right amount of cover and hopefully not be landed with a very expensive premium.
This song captures how many of us feel when we are younger but the truth is that as time goes by the we realize that our time on earth is limited. I think only realised I was mortal when I turned 25. It wasn’t like a light bulb went on it was more a dawning sense of reality. Some of my friends are still risking their necks bungee jumping and white water rafting but I stopped thrill seeking when the impending sense of doom joined me at 25. Now, you may believe that you will get another chance at life and return in some other corporeal form but as far as I’m concerned I can't remember that I had a past life so I like to work on the presumption that I only get one shot.
What happens if I die? I don’t really like to dwell on is as I think that that I am pretty lucky in life. I’ve never had broken a bone or a cavity and I for the most part have had good health. National statistics tell me that I have a good chance of turning 80 years old. Some internet site like the "Death Clock" tell me that I may live to be 103. Trouble is I now have a home and mortgage, children who need me and I now know that I can’t live forever. In some cultures the concept of life insurance is quite foreign. In Polynesian culture past and present children will be looked after by extended family with no questions asked. Our Western family structure isn’t so flexible and while I like to think that my children would not go uncared for if I was to die without life insurance they could be put at a disadvantage. So life insurance is the solution I have opted for.
In shopping for life insurance you need to decide on the right amount of cover. It is about as important as deciding to get insurance in the first place. If you don’t provide enough cover then the beneficiaries may not have enough to live comfortably. On the flip side providing too much cover can end up being expensive for you month to month.
HOW MUCH COVER? The Quick Answer.
If you are looking for quick answers, don’t have a lot of time and are not worried about details. Some like to use the rule that the sum of cover should be 10 times your annual income. This is supposed to leave enough for your family to be comfortable. However this doesn’t account for debts that you might have, inheritance taxes and other costs.
So, if you are serious about providing the right amount of cover then you will need to sit down and look at some figures.
The Serious Answer.
To work out a figure for cover it shouldn't take too long. You will need to consider the points below.
1. How much will your funeral cost?
You don’t have to make full arrangements but you should consider providing a sum to cover the costs of your funeral. A guide to funeral costs can be found online at WhatPrice.co.uk.
2. Debts
Do you have a loan, mortgage or big bills? You also can consider inheritance tax which will impact the final sum which your beneficiaries receive. If you are unmarried and have an estate more than £275,000 inheritance tax is very steep.
3. Living
How much per month will your beneficiaries need to get by? You can consider how much income a working partner could contribute and put this against the monthly costs of running the house hold. If you have savings you may want keep these to cover unexpected bills or repairs to the estate.
Have a think about how long your beneficiaries will need support for? The term/length of your life insurance policy will affect what your premium will be. If you have small children you might want to support them until they have completed school or higher education. or if you have a non working partner then providing support for them for as long as they might need it.
4. Assets
If you have assets in your name will you sell them to raise cash for the your surviving family or is it better to hang on to them?
If you consider the points above you will go a long way to providing the right amount of cover and hopefully not be landed with a very expensive premium.
How to Determine Human Life Value?
Human Life Value is calculated to determine the optimum quantity of life insurance that is needed to an earning person. This HLV is determined by three factors i.e. your age, current and future expenses and current and future income. Simply put, this is the present value of an individual’s future earnings.
An individual should calculate his Human Life Value so that he can invest accordingly in the insurance plans. These plans may give his family adequate finances and security in the event of his death.
The main purpose of life insurance policy is to compensate a financial loss on the occurrence of unanticipated death. So HLV is calculated at the time of purchasing an insurance plan for an earning person. Because if a person dies at the beginning of the policy, claim amount i.e. equal to Human Life Value should be able to give financial support to dependent members during his remaining future earning period. For calculating HLV some factors are required:-
The expected net monthly financial loss to the dependents on the death of the insured person.
The expected future earning period of the insured person when he takes the Insurance policy.
The expected Interest rate at which the HLV amount can be invested.
For calculating the net value expected monthly financial loss to the dependent member, the gross monthly income of an insured person is deducted from his earning expenses such as income tax, professional tax or other job expenses, his personal share given to the family and many more.
The expected future earning period can be ascertained easily in case of employee group. The expected Interest rate can be calculated through prevailing investment or bank agencies. It is preferable to calculate HLV through HLV chart.
To sum up, Human Life Value is essential before purchasing any insurance policy. Because it may help you to get right compensation and right insurance cover for your loved ones.
An individual should calculate his Human Life Value so that he can invest accordingly in the insurance plans. These plans may give his family adequate finances and security in the event of his death.
The main purpose of life insurance policy is to compensate a financial loss on the occurrence of unanticipated death. So HLV is calculated at the time of purchasing an insurance plan for an earning person. Because if a person dies at the beginning of the policy, claim amount i.e. equal to Human Life Value should be able to give financial support to dependent members during his remaining future earning period. For calculating HLV some factors are required:-
The expected net monthly financial loss to the dependents on the death of the insured person.
The expected future earning period of the insured person when he takes the Insurance policy.
The expected Interest rate at which the HLV amount can be invested.
For calculating the net value expected monthly financial loss to the dependent member, the gross monthly income of an insured person is deducted from his earning expenses such as income tax, professional tax or other job expenses, his personal share given to the family and many more.
The expected future earning period can be ascertained easily in case of employee group. The expected Interest rate can be calculated through prevailing investment or bank agencies. It is preferable to calculate HLV through HLV chart.
To sum up, Human Life Value is essential before purchasing any insurance policy. Because it may help you to get right compensation and right insurance cover for your loved ones.
The Fundamentals of Life Insurance – A Caring and Smart Financial Decision
Life insurance is unique among financial instruments. It is one of, if not the only financial instrument that is based on caring and love. Even though there can be personal advantages to having life insurance, the real impetus is love for those one cares most about – to make sure they are taken care of. So, applaud yourself for taking the time to learn about this subject (and please follow up with action whether through us or the organization of your choice.)
Interestingly, while one is taking care of the financial needs and wants of a spouse or the next generations, life insurance can also develop and build one’s personal financial goals while living. For example, because you have sufficient life insurance, you might be able to use more of your assets to enjoy life in retirement. Why is that? Because if you know you have sufficient life insurance you won’t feel that you are lowering the inheritance by spending some of your principal. You may actually “pay down principal” to some degree to yourself, especially if you have lifetime permanent life insurance as a backup.
There are various types of life insurance but they all have some common attributes. You pay an insurance company what are called premiums. At your death, the life insurance company pays an amount to the people you named in your policy, called beneficiaries. Also it’s interesting that if you named a beneficiary(ies) they’d receive the insurance amount free of income tax.
Some types of life insurance have cash benefits available while you’re living. In these types, a portion of your premium goes into a cash reserve and builds on a tax deferred basis. You can access this money, called cash value. Some people use it to help education costs, enhance retirement cash flow or for any reason. Two of the most common types of “permanent life insurance” are called whole life insurance and universal life insurance.
Survivorship Life Insurance
An Estate Planning Solution and Estate Planning Tool
Survivorship Life Insurance, also known as Joint and Survivor Insurance or second to die life insurance, are insurance policies that insure the lives of two people, typically a husband and a wife.
The death benefit is not paid to the beneficiary until the death of the second insured. These survivorship life insurance policies are generally available as either whole or universal life policies, and second to die life insurance often provides more affordable life insurance than two separate policies.
The reason a survivorship life insurance policy doesn't pay until the second person dies is that it is designed to pay or assist paying for estate taxes. Estate taxes can be delayed until both spouses die thus the design of these special insurance policies.
The Strategy
Survivorship insurance can be a "discounted dollars" strategy. What that means is that one can use this policy to pay pennies on the dollar now in order to have 100 cent dollars when they�re needed to help pay estate taxes. This is a good analogy for any permanent life policy. For example, if you deposited $10,000 per year in a survivorship life insurance policy for $1,000,000 of insurance you are in effect paying 1% a year for 100% later. If the premium is guaranteed and you and your spouse live for 30 years, you would have paid in 30 cents for every dollar. What makes this even more interesting as a strategy is that if you set it up with third party ownership in an insurance trust (or with children as owners) the $1,000,000 could be set up to be both income tax free and not subject to estate taxes. Your attorney can assist you with the trust and ownership part of the strategy. Our job (and expertise) is to find you the most cost-effective policy.
Joint Survivorship life insurance policies are effective tools often used by wealthy individuals in estate planning. By removing the proceeds of a life insurance policy through the use of gifting and placing policies in third party ownership such as a trust or in the name of children, a joint and survivor policy can be used to pay for estate taxes. Careful planning by your tax and legal counsel, coupled with a properly structured second to die life insurance policy, can help you preserve your net worth for your heirs.
Insurance for Special Needs Children
We have had a fair number of couples requesting survivorship life insurance to make sure funds are available for a child with special needs for their care and financial security after the death of both parents. It is also important if you use this planning methodology to get individual life insurance to insure each parent’s income as well. The parents should also look into individual disability insurance (see www.protectyourincome.com ). We have worked with other parents to help in this planning. Feel free to contact us to discuss options.
Insurance Quotes on Second to Die Policies
If you want the most competitive insurance quotes on second to die policies, Life Insure.com has access to the leading and most competitive joint and survivorship life policies available.
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