"Persuasion is grounded in basic scientific practical and learnable principles." -- Harvard Business Review

Have you ever find it difficult to say no to your friends, colleagues and family members? Ever felt trapped into buying something you didn't really want or hoodwinked into saying yes? Time and again, people in every culture have developed certain predictable reactions to common situations in the persuasion process. It is because of these reactions to certain stimuli that make it possible to predict behavior and for that reason to persuade. Unfortunately it is also these same reactions that make it possible to manipulate or be manipulated by unscrupulous individuals.

Politicians, sales professionals, network marketers, insurance agents, colleagues, friends and family members all have an interest in you agreeing to their requests. So how do you know whether you have been manipulated unfairly or ethically persuaded?

Although this article looks at the Seven Principles of Persuasion that govern getting to "yes". And you would have already know your success largely depends upon your ability to persuade and influence others to accept and adopt your point of view. I assert to you that in addition to this, there is a direct correlation between your ability to persuade others and the level of income you receive.

Therefore, knowledge of these Seven Principles of Persuasion would certainly empower you.

Principle #1: PRINCIPLE OF RECIPROCATION

This principle states that when we give something of apparent value, people will respond with a desire to offer something in return.

According to Bob Stone, professor of Direct Marketing at the Northwestern University and founder of his own direct marketing advertising agency, Stone and Adler, Inc.: "It's not at all unusual for the right gift to increase the response by 25 percent or more."

It is no wonder that super salesmen like Zig Ziglar have made this the foundation of how they operate. Zig has always said this: "You can have whatever you want as long as you help enough people to first get what they want." We can see this powerful principle in practice all around us. Supermarkets offer free samples, car dealers offer test drives, health clubs free workouts, builders offer free surveys and so forth so that potential customers try out the product or service and at the same time become indebted at some psychological level.

It is also common practice, at Tupperware home parties, for the presenter to give away an inexpensive Tupperware item or product sample. And reciprocation is further reinforced by the generous offer of free refreshments and tidbits – This technique further obligates the partygoers to the host and the company.

You can build a sense of indebtedness in someone by delivering a number of uninvited "first favors" over time. They don't have to be tangible gifts. In today's world, useful information is one of the most valuable favors you can deliver.

Another form of reciprocity at work is "risk-reversal". In marketing, this is offering a guarantee on the products so that you can overcome a prospect's innate aversion to "taking a risk" and buying the product. With a guarantee, the risk is no longer on the buyer. By reversing the risk, much more sales are made and the customer and vendor are both satisfied. How can you apply "risk-reversal" in your life to get whatever you want? Let me demonstrate by the example of Napoleon Hill, best selling author of "Think and Grow Rich".

Napoleon Hill chose his future employer right out of college even though his future employer didn't know about it. Here's how he got the job. He went to the employer and essentially said, "Let me work for you for two weeks and I'll pay you for the opportunity. Let what I pay you be drawn against my future earnings. At the end of two weeks, if you don't like me, I'll leave. If you like me, you hire me at the rate I'm paying you for the opportunity to show myself."

Of course the employer immediately jumped at this idea. A fortnight later, Napoleon Hill had the job he had set out to get. Why did this work? It worked because he helped overcame the employer's reluctance to hire an unproven fresh graduate. View it from the employer's perspective, he either got an excellent employee after two weeks or he got someone to pay him two weeks of wages and two weeks of free labor. For Hill's employer, it was totally "Risk-Free".

Can you think of three ways you can apply "risk-reversal" in your life to get more of what you want right now?

Principle #2: PRINCIPLE OF CONTRAST

This principle states that when two different items or circumstances are placed close together, their differences will be made more apparent.

"We can do this the hard way... or we can do this the easy way." -- Gangster Movie Script

I'm not advocating any acts of criminal intimidation here, but there is something to learn from the above quote. The way the Principle of Contrast goes like this – You offer your prospect two choices. One choice will be so 'bad' that no one in his or her right mind would take it. The second choice, the one you want them to take, will seem in contrast to be the most attractive.

For example when two homes are in similar neighborhoods, real estate agents will usually say, "Before we look at the $500,000 home we should really take a look at the $350,000 home." The more expensive home will always have more features and it is the last home the prospective home buyer will see. Psychologically as the last home is a much more decorated than the first, the less expensive home will appear a lot less attractive to the prospective home buyer.

Here's another example: Retail store salespersons will always sell you the suit first, then offer you "add on" items like ties, belts, cardigans, etc. The additional $45 to $150 for the extras is considerably less compared to the $800 suit. These retail store salespersons would never sell you the $45 item first, then try to persuade you to "add on" the suit! By the way, do you remember the last time when you availed yourself to a product and what items you were asked to buy in addition to your original purchase?

Remember when using the Principle of Contrast, we must always start with the choice that no one in his or her right mind would take first. It's only then that the choice we want our prospects, loved ones or friends to take will be readily accepted.

Principle #3: PRINCIPLE OF CONSISTENCY

"It is easier to resist in the beginning than at the end." -- Leonardo da Vinci

Research shows that we humans have a nearly obsessive desire to be and appear consistent. Once we've made a decision or taken a stand, we feel pressure to act in ways consistent with that commitment. Usually once a decision is made, we usually don't have to think about it any more.

If you are in insurance or network marketing sales, have you ever had prospects cancel appointments with you at the last minute? In a similar situation back in 1998, a certain Chicago restaurant owner was all ruffled up with last minute cancelled reservations. He solved his problem by asking his receptionists to modify just two words of what they said to patrons requesting a reservation. These two words reduced the no-show rate from 30% to 10%. The magic within these words was that they tapped the human desire to be consistent. The receptionist modified her usual request from "Please call if you have to change your plans" to "Will you please call if you have to change your plans?" At this point, she would deliberately pause and just wait for a response. The pause was critical because it encouraged the customer to make a public commitment. This principle also worked well for my clients in the insurance industry.

Have you ever wondered why is it difficult for a person to leave a cult? That's because cult members are unconsciously trying to justify their earlier assurance to their families and friends that no one is ordering them around and that they had chosen to do what they did." With such public commitment or declaration, getting out can make these cult members feel really guilty.

In a coaching scenario, if a coach can create a situation in which his client or group makes an active verbal or written commitment, particularly if this is done in public, the chances of compliance shoot up dramatically. In reality, the magic of written goals derives its power from the client's desire to be consistent. A second way to use the Principle of Consistency to persuade is for the coach to frame his request as related to a commitment his client has made earlier on. For instance, "I know how committed you are to your family. The diligent application of the time management tools we are talking about will free you up for more quality family time, don't you agree?"

Principle #4: PRINCIPLE OF LIKING

This principle states that people prefer to say yes to individuals they know and like.

The Master Persuader will always emphasize certain factors and/or attributes to increase their overall attractiveness and subsequent effectiveness. He will always use the following factors:

A) Physical Attractiveness

Majority of the population form conclusions about people within the first four minutes they meet. Research has shown that 93% of the time we are judged based on first impression and the remaining 7% is based on our real abilities.

This means that sales professionals such as insurance, real estate agents with good dress sense are perceived as physically attractive and therefore more likely to influence more prospects to use their services.

Physical attractiveness also gives the impression of intelligence and kindness. As a result, attractive sales professionals and motivational speakers are more persuasive both in terms of changing others' attitudes towards the business and getting what they request.

B) Similarity

We like people who are like ourselves and are therefore more willing to say yes to their requests, often without much critical consideration.

C) Praise

Sincere and lavish compliments almost certainly enhances liking. Remember Dale Carnegie? He advised all who wants to win friends and influence people to be hearty in their approbation and lavish in their praise.

Research conducted at the University of North Carolina at Chapel Hill found that inaccurate praise also induces the same intensity of liking for the flatterer. In fact, men will sacrifice their lives for praise, honor and recognition. Intrinsically, we crave and yearn for a boost to our esteem. We all wear an imaginary badge that says, "Please make me feel important." And ironically most people would never think of physically harming someone or depriving them of food and water, yet often without reservation we will harm someone emotionally or deprive them of love and appreciation! To be a Master Persuader, we should make it a habit to give genuine sincere praise to someone every day. Don't wait for a reason or for something big to happen. Be generous with your praise. Praise simply makes others more open to persuasion.

D) Increased Familiarity & Frequency

Repeat contact between a prospect and direct sales professionals (like insurance agents and network marketers) always facilitates liking and influence the prospect's decision to join the business. This principle explains the necessity to follow-up with your prospects. According to the 'McGraw Hill Sales Statistical Studies', 96% of all sales happen after 5.6 exposures to information (and, most importantly, the persuasive presenter).

Principle #5: PRINCIPLE OF AUTHORITY & POWER

This principle states that most people have a very strong tendency to obey authority figures and they also prefer products, services and opportunities that are endorsed by people whom they believe to be credible.

From a very young age, we are trained to obey. First our parents (and by default all adults), then teachers, policemen, managers and so on. Eventually it defaults to anyone who seems to be our superior. We thus divide the world into those who are superior to us (and who are thus to be obeyed) and those who are inferior (and who should obey us). We also must be cautious not to equate superiority with authority.

Stanley Milgram was a famous Yale psychologist who is most remembered for his work with obedience to authority. Deeply disturbed by what had happened in Germany during World War II, Milgram carried out an experiment to find out whether it was indeed true, as many Nazi collaborators claimed, that ordinary people could be made to commit unspeakably cruel acts under the influence of authority figures.

Posing as an education researcher, Milgram hired an actor to pose as a "student" in the experiment and told his subjects he was studying "learning." The actor was hooked up to wires that, Milgram explained to his subjects, would deliver a shock whenever they pulled a lever. In his role as experimenter and authority figure clad in a white lab coat, Milgram instructed his subjects to deliver greater and greater shocks to the actor whenever he got answers wrong on a series of learning tests. The actor would howl theatrically in pain and often feign a heart attack before passing out.

How many subjects do you think continued to administer shocks to the actor to the point that they reached the dangerously fatal level? Sixty-eight percent of them obeyed orders to punish the actor! By donning on a white lab coat, Milgram had undoubtedly created an atmosphere of authority.

"The disappearance of a sense of responsibility is the most far-reaching consequence of submission to authority." -- Stanley Milgram, Yale University Psychologist

During one of my training trips to China, I actually came across an advertisement billboard that promotes a certain hospital in a large city. The billboard actually features their team of top medical specialists all donned in surgeon's cap and white lab coats.

Robert Kiyosaki, the best selling author of 'Rich Dad, Poor Dad' and popular guru of wealth creation, has helped many decide to join Network Marketing when he strongly endorses this industry in his landmark book 'The Business School for People Who Like Helping People.' This principle also explains why so many network marketers are approaching medical professions in this business. Whenever doctors join network marketing opportunities and endorse any products, it is usually perceived as credible.

Anyone offering his or her experience, expertise or credentials are harnessing the power of authority. Of course there is nothing wrong with these claims providing they are real because we all want the opinions and ideas of true experts.

You can put this principle to use by citing authoritative sources to support your ideas. Look and act like an authority yourself. Be sure others know that your research, education and experience support your ideas. Complement the Principle of Authority & Power with the Principle of Liking, dress like the people who are already in the positions of authority that you seek.

Principle #6: PRINCIPLE OF CONFORMITY

This principle states that people prefer beliefs, products, services and opportunities that are popular or part of a trend.

This principle is also known as the "Bandwagon Effect" and is closely associated with the Principle of Authority and Power. One way we decide what is correct is to find out what others think is right. Or when everyone else is behaving in a certain manner, most would assume that is the right thing to do. For example, one of the important, and largely unconscious, ways we decide what is acceptable behavior on our current job is by watching the people around us, especially the higher-ups or old timers.

When attempting to persuade, you may wish to include accounts of others' positive reactions to the suggested action. This is especially effective if the people cited are those that the person perceives as similar to self in some ways. In team building, you can use the power of positive people on your team to help you influence others to choose helpful and constructive behavior.

At the corporate level, more and more companies are donating a percentage of their profits to charitable organizations. They are doing this because it has been proven in a study that 70 percent of consumers believe that cause-related marketing helps to solve social problems. And when the product's price and quality are the same, these consumers are more likely to switch to a brand that's associated with a good cause. Even more surprisingly, more than half of these consumers are willing to pay more for a product when it is associated with a cause they care about.

The Principle of Conformity kicks in even more strongly when the situation is uncertain or people aren't sure what to do. When you can show them what others like themselves believe or are doing, people are more likely to take the same action. The 1997 mass suicide among the Heaven's Gate cult followers in Southern California is an example of the negative power of this principle.

Principle #7: PRINCIPLE OF SCARCITY

"The way to love anything is to realize that it might be lost." -- G.K. Chesterton

This principle essentially says that people desire more of those things that seem to be scarce. Also when a person believes that something he might want is scarce, that something becomes even more valuable.

Nearly everyone is vulnerable to some form of the Principle of Scarcity. Opportunities seem more valuable when they are less available. Hard-to-get things are perceived as better than easy-to-get things. Why do you think the "limited time offer" is so common in advertising? Because it works! The retailer indicates that a decision must be made now or within a short period of time, or the price will go up or the opportunity will no longer be available. The desire to acquire the scarce item is increased further when we believe that someone else might get it and hence gain a higher social position that we might have possessed.

The Principle of Scarcity also works in calculating the value of an item. If it is rare or becoming rare, it is more valuable. According to the Principle of Scarcity, the more time a lawyer has available in his schedule, the less prospects and clients will value his services. But as the lawyer grow busier and has less time available, prospects and clients see his services as increasingly more valuable.

Likewise many novice insurance agents seemed to be begging for an appointment, "Pete, I hope you don't mine me asking, are you free on Tuesday at 7pm? I've got this interesting investment to show you." And the answer most often given is "no." The experienced insurance agent (EIA) however will leverage on the Principle of Scarcity by implying he has a tight schedule, with only certain days and time slot available.

EIA: I can't meet you on Wednesday, Thursday is also packed. How about Friday at 4pm? I have a 20 minutes slot free then.

Prospect: Wow! Business must be good for you! Okay, let's meet on Friday at 4pm.

By the way, the Principle of Scarcity also has applications in our personal lives. Do you recall the proverb, "Absence makes the heart grow fonder"? Well, on one occasion, I actually sat down with a sobbing course participant who declares his undying devotion and willingness to do "anything" for his wife who has just walked out on him because of years of neglect and being taken for granted.

IS THIS MANIPULATION?

Some of you may be wondering out loud, "Aren't the above tactics manipulative?" Perhaps, if that's the way you choose to use them. That's a matter of personal integrity and ethics. My assumption is that you will exercise integrity when applying these Principles of Persuasion. It is my sincere belief that using these principles to persuade people to think or act in ways that are in their own best interests as well as yours will certainly help everyone become even more successful. The Seven Principles of Persuasion are incredibly powerful and can be combined in numerous ways to your advantage.

ABOUT THE AUTHOR: James Leong is one of Asia's leading authorities on Direct Selling, Network Marketing, Development Of Human Potential and Personal Effectiveness. Certified Master NLP Practitioner and CEO of Excellerated Excellence (which offers training and consultancy in Network Marketing and Direct Selling), James has been actively involved in the MLM industry since 1995 and was formerly the Best Distributor of the Year 2001 in a prominent international MLM company. In 2005, he was inducted into his MLM opportunity's Wall of Fame. James Leong is also the Co-author of The World's First Book on Network Marketing with NLP, "MLM Persuasion Mastery: How Master Networkers Change Beliefs and Behavior". To contact James Leong, please visit his website or call +6590486062. This article comes with reprint and redistribution rights as long as it is done so in its entirety with no editing.

When buying insurance, most people ask for "full coverage" without knowing what they're asking for. What's the problem? There is no such thing as "full coverage". While understanding your coverage is important for everyone, it is vitally important if you're driving a Mercedes, BMW, Bentley, Rolls-Royce, Porsche, Viper, Ferrari, Lamborghini, Lotus, or Aston Martin.

If you're driving an expensive, exotic or high-performance car, you will want to make sure that after an accident you receive OEM parts, OEM paint, the ability to repair your vehicle at the auto body shop of your choice, and the amount of money needed for the repair.

Repairing an expensive car with non-OEM parts and/or improper workmanship will result in substantial diminished value. With expensive cars, even a proper repair will result in diminished value. What is diminished value? It is the lowered market value of a vehicle subsequent to repair. For instance, a Porsche or Ferrari will be worth less after an accident, even after it has been properly repaired. For research on diminished value, see

You do not want to get into an argument with your insurance company as to whether or not your vehicle can be repaired or should be totaled. Often, insurance companies will want to repair your car, when you think it should be totaled. If the insurance company agrees to total your car, most insurance policies only provide "actual cash value" insurance coverage which would only give you with a payment based on the current replacement cost of your vehicle, less depreciation (the decrease in the value of your car due to use, deterioration and the passage of time).

In the event that an exotic or high-priced car is totaled, the best replacement coverage is "agreed value" or "stated value". The only insurance companies I have found to offer agreed value insurance are Chubb and MetLife.

Chubb's web site states: "You and Chubb can agree on a value and lock it in for a full year. That's the exact amount you'll receive if your car is stolen or totaled in a covered loss. Never mind the "book" value. We even waive the deductible. No haggling, no depreciation, no deductible, no problem."

MetLife's web site states: Equivalent New Automobile Replacement for Total Loss is offered for vehicles within the first year of purchase or the first 15,000 miles, whichever comes first.

What's the difference between Chubb's "Agreed Value Option" and MetLife's "Equivalent New Automobile Replacement" coverage? For high-value cars, Chubb is definitely the better choice. Chubb offers its agreed value coverage every year and readjusts the agreed value upon policy renewal. From what I have seen, the adjusted agreed value even years and over 100,000 miles later is substantially higher than actual value. Additionally, on a different topic, Chubb also offers up to $1 million of underinsured coverage, which is also vitally important. Make sure you ask your Chubb agent for the maximum underinsured coverage.

For average value new cars, MetLife is a good choice. MetLife does not offer its Equivalent New Automobile Replacement coverage after the first year or first 15,000 miles. For drivers of most new cars, this is still a good value because it is not uncommon for someone to total their new car soon after purchasing it. Usually, just driving a car out of the showroom can result in as much as $10,000 depreciation.

Philip L. Franckel, Esq. founded HURT911® Accident Lawyer Directory, publishes articles on Lawyer Advertising and does lawyer advertising for injury attorneys.

Well do you need Financial Planning? In this article, I will show you how you can answer this question.

Immediately after we complete our college education, we automatically participate in a race call rat race.

Everyone started the race with a cart. In this cart, we have personal bills, loans and our allowance. As we are single, everything is good and manageable. We can spend what we earn without worry.

Then we meet our partners and get married. Thus we begin our next chapter in life. Our cart becomes heavier and we now worry about our spouse's bills and loans and kids allowance. Some of us must support our parents too. We may even need to bring our family to vocation. As we grow older, our carts get heavier and heavier. Do you have enough savings to meet these expenses?

As we know, life is never a straight and smooth path. We will encounter obstacles. Some of these obstacles may set us back in terms of our financial standing .If we do encounter a big obstacle (e.g. critical illness, operation, surgery, business failure) and need a huge sum of money to recover, Do you have enough money to meet this expense? What if the big obstacle results in us being permanently bed-ridden or out of work for a long time, what is going to happen to our cart? Do you have enough money to support yourself and family if that happens?

Many may say, well we have friends and relatives to turn to for help. But our friends and family have their own carts to pull too. If they help push our cart, who is going to push theirs?

We will all retire from work eventually. From then on till we all rest in peace, we do not have regular income but our life must still go on. We still need to pay our bills and we still need to eat. Do you have enough money to support yourself during retirement?

At old age, our body is no longer working as well as they used to. Our health conditions deteriorate, as we get older. We will need to seek medical help frequently. We may even need to employ a person to take good care of us. Do you have enough money to spend on these medical expenses?

So do you need Financial Planning? If you answer 'Yes' to all the above questions, then you are safe and need not worry about Financial Planning. Otherwise, I suggest you start thinking about it.

Charles Wee runs an Article Directory at Authors and website owners are welcome to visit his site for free quality content and free article submission script.

What is a car insurance? What will an auto insurance cover?

Auto insurance companies cover you and your passengers in the event of an accident. But it is up to you to decide the level of cover you will get.

Will the damages to your property be covered by the company? Will all the passengers be covered or only your family? What if your daughter was driving your car?

What questions should you ask your auto insurance company when it comes to auto insurance? This article help you choose between the various insurance policies.

Types of auto insurance

Liability insurance, or third party insurance.

This is general the lowest form of insurance offered by an auto insurance company. This is the basic insurance, if you are involved in an accident, and it is proven to be your fault, the auto insurance company will pay damages to the other party.

The cover offered by the auto insurance company is usually set beforehand. These are the maximum amount the auto insurance company will pay in case of accident

For example the agent will agree on a $10000 coverage per person, (bodily injury) and/or $40000 coverage in bodily injury and/or $10000 in property damage per accident

You need to confirm with your auto insurance company what they will cover and what are the limits.

You might be offered a very low premium by some auto insurance company only to realize that your cover is minimal and unrealistic.

Collision and comprehensive coverage, comprehensive insurance and full comprehensive insurance

An auto insurance company will also offer you a comprehensive insurance, as the name indicates, you will be comprehensively covered.

In simple terms it means that if you are responsible for a collision the insurance company will pay for the repair of the vehicle.

But it is not so simple, an auto insurance company will almost always have the final say on what amount will be paid out, so if it is cheaper to give you market value for the car, then they will.

You might think that your car is worth $1000.00 but the real market value might be $500.00. This is not an uncommon scenario. So if the repair of your car are more than $500.00 then the auto insurance company will simply pay the book value of the car.

You must make sure that the insurance company is not in control of the market value of the car, normally organisations like the AA will give an impartial market value.

As with the third party insurance, the auto insurance company will almost certainly limit the amount that will be paid out, but in general terms, a comprehensive insurance will have higher limits.

Recreation Vehicle

A recreation vehicle needs its own insurance, a Recreation vehicle insurance, (http://www.insurance-owl.com/other/car_rec.php), is not the same as auto insurance.

You should not assume that because your car is comprehensively insured, so is your recreation vehicle.

Other Types of auto insurance

Medical (MedPay), Persona Injury protection (PIP) and no fault cover

This insurance will cover you and your passengers medical expenses in the event of a collision.

The no fault cover means that the auto insurance company will pay regardless of who is at fault. This give you the piece of mind that, at the very least, your family and friends are covered.

PIP is often a minimum requirement in some countries or states, ask your auto insurance company what the requirements are.

Uninsured/Underinsured motorists' coverage

This cover, (also sometimes a minimum requirement in some states), will cover you if the person at fault is not insured or is underinsured.

You must ask your auto insurance company what you will be charged in case of such a situation. Normally the auto insurance company should not charge you some extra premiums.

Rental reimbursement, towing and labour

Those 'extras' often given with a comprehensive insurance is often use by auto insurance companies as specials.

So in case your car is damaged the auto insurance company will pay for rental costs, (sometimes only for a few days).

The auto insurance company might also offer to pay for the towing of your vehicle, (not always included).

As always you should ask your auto insurance company what is included in the cover.

The legal requirements.

Most states, and most countries will require a certain level of cover, from full comprehensive car insurance to third party auto insurance.

In most cases it is up to you, the driver, to ensure that your auto insurance company offers you the minimum required. In most cases the insurance company, (the auto insurance company), is under no obligation to instruct you of the requirements.

But of course, a good auto insurance company will, (should?), try its outmost to advise you on the best deal for you.

Find out more about Auto Insurance company, (http://www.insurance-owl.com/other/car_co.php), on our website.

Insurance Owl gives simple, clear information about insurance.

Everything, ranging from health insurance to indemnity claims, including Auto, Travel and life insurance.

It can be very difficult to decide if you need life insurance. Life insurance can be an extremely onerous financial commitment and investment, and it will also last for a considerable period of time, so you should take careful consideration in deciding if it is the best way of achieving the financial and other goals you and your loved ones may have.

Life Insurance Policy

Basically, a life insurance policy will cause a sum to be paid to the named beneficiary upon the death of the insured. This sum will generally be paid to the beneficiary, free of income tax. So in which instances is life insurance generally used above its alternatives? Well its primary function is to provide death benefit protection in a tax efficient way. For example, if you would like to transfer wealth from your estate to your beneficiaries you can do it through life insurance.

You should now that it may still be liable to federal estate taxes. It can also be used to ensure the continuation or protection of a business and to provide financial benefits to your partners or employees who may otherwise be at risk financially. It may also be used to support your family or other dependents that rely on your income during life. It can replace this income and support them in your place for a period. It can also be used to supplement retirement income in various instances when other contributions are not possible.

Be Aware

You can access the money in your policy unless it is a Modified Endowment Contract. What's more, it will be federal income tax free so long as you make the withdrawal by borrowing against the policy and do not exceed what you have paid into the policy. Withdrawals from an MEC are subject to federal income tax on the gains they have made. There is an additional 10% tax in certain situations.

You should be aware that all withdrawals and loans against a permanent life insurance policy would reduce the policy's value and the amount of any pay out upon death of the insured. There may also be various fees and penalties associated with accessing the money early so you should be aware of these and if they are very onerous, you may wish to look for an alternative source of funds so that you don't have to fall prey to these. Also, if your policy is invested on your behalf, the amount available for withdrawal or loans may be less or more than what you have paid in, depending on how your investments perform.

Joseph Kenny is the webmaster of the insurance site where you will find information, news and links to the leading providers of insurance in the UK. If you found this article interesting you may find more articles of the same nature in the insurance guide located on site.

People spend a lot of money on complicated financial products and it is sometimes difficult to keep track of what products perform what tasks. Many people are not aware of all the financial products that are available or they only know of them vaguely. They may not know how much they cost or the potential benefits they offer. How can consumers make informed decisions on what products they would be willing to buy if they do not have this basic information? This problem can often lead to consumers buying unsuitable of overpriced products simply because they feel they should have some financial protections available but don't have the details to make an informed choice.

One of the common questions many consumers have is regarding the difference between insurance policies and assurance policies. Put simply, insurance policies cover the costs of an event that might happen while assurance policies will pay out on the occurrence of an event that is certain to happen. Insurance policies only last for a specific period of time. If the event occurs within that time, they pay out, otherwise they are finished. Therefore, if no claim can be made within the term of the policy, they have no remaining value.

Guaranteed Payout

An assurance policy is different. Assurance policies always pay out. For example, a life assurance policy will generally pay out upon death or upon reaching the age of 65. How does this policy work? Well, they combine two elements; an insurance element, which will pay out if, the person dies early. This will then be used to pay for the funeral or support his family. But then there is another payment made every year and this is the investment portion. The insurance company invests this part of the premium on behalf of the policyholder and when they reach the age of 65, they pay this out. Life assurance policies are therefore often used both as a method of life insurance and as a method of saving for retirement.

Do You Need Money Now?

If you wish to cash in the investment portion of a life assurance policy early this is generally possible. However, there will usually be hefty penalties added to this so it is unadvisable to cash in early if you don't have to. The distinction between insurance and assurance is also becoming more blurred as more companies offer both types of policy or add features of one type of policy to their other type to make them more attractive. The distinction is still important so that you know what to ask for and know what kinds of facilities are available for insuring your life and providing for your future.

Joseph Kenny is the webmaster of the insurance site where you will find information, news and links to the leading providers of insurance in the UK. If you found this article interesting you may find more articles of the same nature in the insurance guide located on site.

Disability can occur at any time. While many people take their body and health for granted, serious accident or injury can happen to anyone and if you find yourself disable, for a short period or long term, how will you cope?

Disability insurance is a sub set of health insurance that will provide the holder with income should they become disabled and thus unable to continue earning a living. If this were to happen to you, do you know what you or your family would do for income?

If you are aged 40, there is a higher chance that you will be disabled, and thus unable to work for a period of 90 days or more, than of you dying before the age of 65. There are three common ways of insuring against this risk.

Employer's Insurance

The first is to receive insurance from your employer. This is required by law in many states. It comes as a form of short or long term paid sick leave. Larger employers can have even more generous terms. For example, a common policy might offer you 60% of your salary for five years, or maybe even all the way up to retirement. While not everyone is lucky enough to work for such a company, it is worth checking with your employer to find out what your protection is and whether or not its something you wish to provide for yourself.

Long Term Disability

The second common protection against this type of risk is social security and disability benefits. This usually only covers employees whose disability lasts for a period of 12 months or more. It also must be shown to be so severe that you cannot find gainful employment. Therefore there are some gaps here that you may be more comfortable providing for with private insurance.

Individual Policies

The third method of dealing with this risk is with an individual disability insurance policy. This means taking out a private insurance policy yourself. You should shop around to make sure you get the best deal available, but at least you will have the peace of mind of knowing in what circumstances you are covered and what the terms of the policy cover.

There are some other sources of protection. Workman's compensation policies will sometimes step in to cover you if the injury occurred at work. Auto insurance may provide coverage if the injury occurred in a car accident and the Department of Veteran's affairs can advise you if you think the disability is related to service in the armed forces.

Joseph Kenny is the webmaster of the insurance site where you will find information, news and links to the leading providers of insurance in the UK. If you found this article interesting you may find more articles of the same nature in the insurance guide located on site.

A great deal is at stake when choosing an auto insurance carrier. In

addition to the financial considerations, there are issues such as

reliability, quality of service, and integrity. Luckily, there are

certain steps you can follow to ensure that you select an auto insurance

company that will meet your needs.

When choosing an insurance carrier, reputation carries a great deal of

weight. For instance, Allstate, Nationwide, and State Farm are well-known

companies that have managed to hold onto some clients for years. For

additional guidance, you can consult your state's department of insurance

website. The website might offer consumer complaint ratios which indicate

exactly how many complaints an auto insurance company has received for

every 1,000 claims filed. This information can help you to better

evaluate companies so that you have some idea how their customer service

rates. You can then compare the list of companies with low complaint

ratios with the list of companies with low premiums and see if you can

come up with any matches. Those companies that combine stellar customer

service with low rates offer you the best deal for your money.

If for some reason you cannot locate complaint ratios for your state, try

looking at the complaint ratios for other states. While an insurance

company's operations may vary from state to state, if a company posts a

high complaint ratio in a number of states, you should consider that to be

a warning sign. It is best to simply cross off your list any insurance

company with consistently high complaint ratios.

Another technique you can use when evaluating insurance carriers is to

determine which insurers body shops in your area recommend. Because body

shop managers must deal with a number of insurance adjusters, they can

provide you with an inside look at insurance companies. The managers will

know, for instance, which companies offer the most convenient claims

procedures. They'll also know which companies are particularly slow in

processing claims.

Another important source of information is J.D. Power and Associates,

which rates insurance companies in terms of variety of coverage, rates,

claims processes, and customer service. In recent years, Amica and Erie

have posted the best rankings with J.D. Power. These two companies have

earned raves for finding ways to cover claims, when at all possible. You

might also want to consider an insurer's financial strength by checking

out ratings from A.M. Best and Standard and Poor's. These ratings

determine an insurance company's ability to pay claims. Still, you

should be aware of the fact that most well-known carriers are considered

to be financially sound.

Finally, you might select your insurance company based upon the

professionalism of an individual agent. Since you will have to work

closely with your agent, it is important to find one that you can trust.

You might consider consulting a relative or friend to find out the names

of some particularly efficient agents.

In the end, you may not find out just how responsive your insurance

company is¡ªuntil you are faced with an accident. However, if you conduct

extensive research before selecting an insurance company and agent¡­if you

pay close attention to complaint ratios¡­and you ask plenty of questions,

chances are good you will find insurance coverage you will be happy with.

A great deal is at stake when choosing an auto insurance carrier. In

addition to the financial considerations, there are issues such as

reliability, quality of service, and integrity. Luckily, there are

certain steps you can follow to ensure that you select an auto insurance

company that will meet your needs.

When choosing an insurance carrier, reputation carries a great deal of

weight. For instance, Allstate, Nationwide, and State Farm are well-known

companies that have managed to hold onto some clients for years. For

additional guidance, you can consult your state's department of insurance

website. The website might offer consumer complaint ratios which indicate

exactly how many complaints an auto insurance company has received for

every 1,000 claims filed. This information can help you to better

evaluate companies so that you have some idea how their customer service

rates. You can then compare the list of companies with low complaint

ratios with the list of companies with low premiums and see if you can

come up with any matches. Those companies that combine stellar customer

service with low rates offer you the best deal for your money.

If for some reason you cannot locate complaint ratios for your state, try

looking at the complaint ratios for other states. While an insurance

company's operations may vary from state to state, if a company posts a

high complaint ratio in a number of states, you should consider that to be

a warning sign. It is best to simply cross off your list any insurance

company with consistently high complaint ratios.

Another technique you can use when evaluating insurance carriers is to

determine which insurers body shops in your area recommend. Because body

shop managers must deal with a number of insurance adjusters, they can

provide you with an inside look at insurance companies. The managers will

know, for instance, which companies offer the most convenient claims

procedures. They'll also know which companies are particularly slow in

processing claims.

Another important source of information is J.D. Power and Associates,

which rates insurance companies in terms of variety of coverage, rates,

claims processes, and customer service. In recent years, Amica and Erie

have posted the best rankings with J.D. Power. These two companies have

earned raves for finding ways to cover claims, when at all possible. You

might also want to consider an insurer's financial strength by checking

out ratings from A.M. Best and Standard and Poor's. These ratings

determine an insurance company's ability to pay claims. Still, you

should be aware of the fact that most well-known carriers are considered

to be financially sound.

Finally, you might select your insurance company based upon the

professionalism of an individual agent. Since you will have to work

closely with your agent, it is important to find one that you can trust.

You might consider consulting a relative or friend to find out the names

of some particularly efficient agents.

In the end, you may not find out just how responsive your insurance

company is—until you are faced with an accident. However, if you conduct

extensive research before selecting an insurance company and agent…if you

pay close attention to complaint ratios…and you ask plenty of questions,

chances are good you will find insurance coverage you will be happy with.

A great deal is at stake when choosing an auto insurance carrier. In

addition to the financial considerations, there are issues such as

reliability, quality of service, and integrity. Luckily, there are

certain steps you can follow to ensure that you select an auto insurance

company that will meet your needs.

When choosing an insurance carrier, reputation carries a great deal of

weight. For instance, Allstate, Nationwide, and State Farm are well-known

companies that have managed to hold onto some clients for years. For

additional guidance, you can consult your state's department of insurance

website. The website might offer consumer complaint ratios which indicate

exactly how many complaints an auto insurance company has received for

every 1,000 claims filed. This information can help you to better

evaluate companies so that you have some idea how their customer service

rates. You can then compare the list of companies with low complaint

ratios with the list of companies with low premiums and see if you can

come up with any matches. Those companies that combine stellar customer

service with low rates offer you the best deal for your money.

If for some reason you cannot locate complaint ratios for your state, try

looking at the complaint ratios for other states. While an insurance

company's operations may vary from state to state, if a company posts a

high complaint ratio in a number of states, you should consider that to be

a warning sign. It is best to simply cross off your list any insurance

company with consistently high complaint ratios.

Another technique you can use when evaluating insurance carriers is to

determine which insurers body shops in your area recommend. Because body

shop managers must deal with a number of insurance adjusters, they can

provide you with an inside look at insurance companies. The managers will

know, for instance, which companies offer the most convenient claims

procedures. They'll also know which companies are particularly slow in

processing claims.

Another important source of information is J.D. Power and Associates,

which rates insurance companies in terms of variety of coverage, rates,

claims processes, and customer service. In recent years, Amica and Erie

have posted the best rankings with J.D. Power. These two companies have

earned raves for finding ways to cover claims, when at all possible. You

might also want to consider an insurer's financial strength by checking

out ratings from A.M. Best and Standard and Poor's. These ratings

determine an insurance company's ability to pay claims. Still, you

should be aware of the fact that most well-known carriers are considered

to be financially sound.

Finally, you might select your insurance company based upon the

professionalism of an individual agent. Since you will have to work

closely with your agent, it is important to find one that you can trust.

You might consider consulting a relative or friend to find out the names

of some particularly efficient agents.

In the end, you may not find out just how responsive your insurance

company is—until you are faced with an accident. However, if you conduct

extensive research before selecting an insurance company and agent…if you

pay close attention to complaint ratios…and you ask plenty of questions,

chances are good you will find insurance coverage you will be happy with.

A great deal is at stake when choosing an auto insurance carrier. In

addition to the financial considerations, there are issues such as

reliability, quality of service, and integrity. Luckily, there are

certain steps you can follow to ensure that you select an auto insurance

company that will meet your needs.

When choosing an insurance carrier, reputation carries a great deal of

weight. For instance, Allstate, Nationwide, and State Farm are well-known

companies that have managed to hold onto some clients for years. For

additional guidance, you can consult your state's department of insurance

website. The website might offer consumer complaint ratios which indicate

exactly how many complaints an auto insurance company has received for

every 1,000 claims filed. This information can help you to better

evaluate companies so that you have some idea how their customer service

rates. You can then compare the list of companies with low complaint

ratios with the list of companies with low premiums and see if you can

come up with any matches. Those companies that combine stellar customer

service with low rates offer you the best deal for your money.

If for some reason you cannot locate complaint ratios for your state, try

looking at the complaint ratios for other states. While an insurance

company's operations may vary from state to state, if a company posts a

high complaint ratio in a number of states, you should consider that to be

a warning sign. It is best to simply cross off your list any insurance

company with consistently high complaint ratios.

Another technique you can use when evaluating insurance carriers is to

determine which insurers body shops in your area recommend. Because body

shop managers must deal with a number of insurance adjusters, they can

provide you with an inside look at insurance companies. The managers will

know, for instance, which companies offer the most convenient claims

procedures. They'll also know which companies are particularly slow in

processing claims.

Another important source of information is J.D. Power and Associates,

which rates insurance companies in terms of variety of coverage, rates,

claims processes, and customer service. In recent years, Amica and Erie

have posted the best rankings with J.D. Power. These two companies have

earned raves for finding ways to cover claims, when at all possible. You

might also want to consider an insurer's financial strength by checking

out ratings from A.M. Best and Standard and Poor's. These ratings

determine an insurance company's ability to pay claims. Still, you

should be aware of the fact that most well-known carriers are considered

to be financially sound.

Finally, you might select your insurance company based upon the

professionalism of an individual agent. Since you will have to work

closely with your agent, it is important to find one that you can trust.

You might consider consulting a relative or friend to find out the names

of some particularly efficient agents.

In the end, you may not find out just how responsive your insurance

company is¡ªuntil you are faced with an accident. However, if you conduct

extensive research before selecting an insurance company and agent¡­if you

pay close attention to complaint ratios¡­and you ask plenty of questions,

chances are good you will find insurance coverage you will be happy with.

A great deal is at stake when choosing an auto insurance carrier. In

addition to the financial considerations, there are issues such as

reliability, quality of service, and integrity. Luckily, there are

certain steps you can follow to ensure that you select an auto insurance

company that will meet your needs.

When choosing an insurance carrier, reputation carries a great deal of

weight. For instance, Allstate, Nationwide, and State Farm are well-known

companies that have managed to hold onto some clients for years. For

additional guidance, you can consult your state's department of insurance

website. The website might offer consumer complaint ratios which indicate

exactly how many complaints an auto insurance company has received for

every 1,000 claims filed. This information can help you to better

evaluate companies so that you have some idea how their customer service

rates. You can then compare the list of companies with low complaint

ratios with the list of companies with low premiums and see if you can

come up with any matches. Those companies that combine stellar customer

service with low rates offer you the best deal for your money.

If for some reason you cannot locate complaint ratios for your state, try

looking at the complaint ratios for other states. While an insurance

company's operations may vary from state to state, if a company posts a

high complaint ratio in a number of states, you should consider that to be

a warning sign. It is best to simply cross off your list any insurance

company with consistently high complaint ratios.

Another technique you can use when evaluating insurance carriers is to

determine which insurers body shops in your area recommend. Because body

shop managers must deal with a number of insurance adjusters, they can

provide you with an inside look at insurance companies. The managers will

know, for instance, which companies offer the most convenient claims

procedures. They'll also know which companies are particularly slow in

processing claims.

Another important source of information is J.D. Power and Associates,

which rates insurance companies in terms of variety of coverage, rates,

claims processes, and customer service. In recent years, Amica and Erie

have posted the best rankings with J.D. Power. These two companies have

earned raves for finding ways to cover claims, when at all possible. You

might also want to consider an insurer's financial strength by checking

out ratings from A.M. Best and Standard and Poor's. These ratings

determine an insurance company's ability to pay claims. Still, you

should be aware of the fact that most well-known carriers are considered

to be financially sound.

Finally, you might select your insurance company based upon the

professionalism of an individual agent. Since you will have to work

closely with your agent, it is important to find one that you can trust.

You might consider consulting a relative or friend to find out the names

of some particularly efficient agents.

In the end, you may not find out just how responsive your insurance

company is—until you are faced with an accident. However, if you conduct

extensive research before selecting an insurance company and agent…if you

pay close attention to complaint ratios…and you ask plenty of questions,

chances are good you will find insurance coverage you will be happy with.

A great deal is at stake when choosing an auto insurance carrier. In

addition to the financial considerations, there are issues such as

reliability, quality of service, and integrity. Luckily, there are

certain steps you can follow to ensure that you select an auto insurance

company that will meet your needs.

When choosing an insurance carrier, reputation carries a great deal of

weight. For instance, Allstate, Nationwide, and State Farm are well-known

companies that have managed to hold onto some clients for years. For

additional guidance, you can consult your state's department of insurance

website. The website might offer consumer complaint ratios which indicate

exactly how many complaints an auto insurance company has received for

every 1,000 claims filed. This information can help you to better

evaluate companies so that you have some idea how their customer service

rates. You can then compare the list of companies with low complaint

ratios with the list of companies with low premiums and see if you can

come up with any matches. Those companies that combine stellar customer

service with low rates offer you the best deal for your money.

If for some reason you cannot locate complaint ratios for your state, try

looking at the complaint ratios for other states. While an insurance

company's operations may vary from state to state, if a company posts a

high complaint ratio in a number of states, you should consider that to be

a warning sign. It is best to simply cross off your list any insurance

company with consistently high complaint ratios.

Another technique you can use when evaluating insurance carriers is to

determine which insurers body shops in your area recommend. Because body

shop managers must deal with a number of insurance adjusters, they can

provide you with an inside look at insurance companies. The managers will

know, for instance, which companies offer the most convenient claims

procedures. They'll also know which companies are particularly slow in

processing claims.

Another important source of information is J.D. Power and Associates,

which rates insurance companies in terms of variety of coverage, rates,

claims processes, and customer service. In recent years, Amica and Erie

have posted the best rankings with J.D. Power. These two companies have

earned raves for finding ways to cover claims, when at all possible. You

might also want to consider an insurer's financial strength by checking

out ratings from A.M. Best and Standard and Poor's. These ratings

determine an insurance company's ability to pay claims. Still, you

should be aware of the fact that most well-known carriers are considered

to be financially sound.

Finally, you might select your insurance company based upon the

professionalism of an individual agent. Since you will have to work

closely with your agent, it is important to find one that you can trust.

You might consider consulting a relative or friend to find out the names

of some particularly efficient agents.

In the end, you may not find out just how responsive your insurance

company is¡ªuntil you are faced with an accident. However, if you conduct

extensive research before selecting an insurance company and agent¡­if you

pay close attention to complaint ratios¡­and you ask plenty of questions,

chances are good you will find insurance coverage you will be happy with.

.

Auto-Insurance-S is a directory of auto insurance companies across the United States.

The law requires liability insurance for all drivers and vehicles. This means that if you are involved in a serious accident, and it turns out that it was your fault, your insurance company will pay out any claims that are made against you. Extra coverage on your own vehicle, called comprehensive insurance, is optional.

Insurance companies based on a number of risk factors will calculate the price you pay for this insurance. Basically how it works is the more they feel you are at risk of crashing, and the more they think the resulting crash will cost them, the higher the premium you'll pay.

Assessment

Common factors that will be to assess the premium are the value of the car you're driving, the safety of that vehicle, the coverage you want, will there be deductibles or limits etc.? How much you'll drive the car, how your driving record stands, how long you've held your license, your age, and if you are young, also your sex.

The premium is then calculated. Usually there is a flat per car, per year rate that everyone pays, regardless of other factors. The other factors will then alter this rate, generally upwards. So if your car is especially fast or dangerous your rate will be increased by a set amount. If it is very old, your rate goes up. If you've had one or more accidents in the past, your rate will go up. If you're young and male, your rate will go up. The more of these factors you satisfy, the more your rate will be going up.

Discounts

As a sales enhancement, many car insurers offer a "low estimated future mileage" discount to customers who predict that the car's mileage will be below some stated limit during the next premium period. There is no verification involved and no additional charge if the car is subsequently driven more than the stated amount. This arbitrary discount tends to foster customer belief in the mistaken idea that "miles" are just one of many classification factors used to raise or lower prices from the territorial base rate. In fact, odometer miles (which insurers do not use) are not a factor but a metric - the only valid basis for measuring each car's consumption of insurance protection in on-the-road use.

The best way to save on car insurance is to shop around, keep a good clean driving record, drive safely, and choose reliable cars that are not known for their power and speed.

Joseph Kenny is the webmaster of the insurance site where you will find information, news and links to the leading providers of car insurance in the UK.

It's not only people nearing retirement who are being pitched the concept of insurance to cover long-term nursing or other assisted care. Even people in their early 50s, or younger, may find they are the target of insurers who view the aging of America as an opportunity to sell more of their stock in trade–peace of mind. While long-term-care insurance can salvage family finances and ease worries about having a nursing home bed if you need one, its provisions are often misunderstood. And people frequently develop unrealistic expectations of the amount of help such insurance can provide. Buying too soon–or too much–can be a waste of money. Waiting too long can make you ineligible because of health problems. And, because it's so expensive, you may decide it's a safety net that you can't afford or don't need at all. Here's some help to make sense of all this:

Once someone hits 65 and qualifies for Medicare, won't that pay for a nursing home stay?

Sometimes. Medicare pays for 20 days at a nursing home for recuperation and rehabilitation after a hospital stay, and it picks up part of the cost for an additional 80 days. A supplemental Medigap policy could pick up the share that Medicare won't. But neither covers custodial care that elderly people may need when they can't bathe, eat, dress, or get around without help–or when they need supervision because of Alzheimer's disease or other forms of dementia.

What about Medicaid?

This welfare program is often confused with Medicare, the federal insurance program that helps older people pay doctor and hospital bills regardless of income. Medicaid, run jointly by the federal government and the states, is a haven for people with few assets and a low income. It may pay for long-term custodial care and, in some cases, for at-home care or assisted living in communities for the elderly. But it won't kick in until those bills eat up most of a person's assets and income. Provisions vary by state, but protections apply when one spouse is institutionalized and the other stays at home. The at-home spouse can typically retain about half the family's assets but no more than about $84,000, plus the family home–and keep as much as $2,100 a month of income, and perhaps more.

Despite those safeguards, many people worry about a reduced living standard for the at-home spouse or an erosion of the assets they can leave to their children. As a result, many people transfer the title to their assets–at least in part–and make other financial moves to appear poor on paper and thus prematurely qualify for Medicaid. That's part of the reason there are so many more elder-law attorneys, who specialize in helping people with the complexities of aging.

How does insurance help?

It can reduce the incentive to manipulate finances and provide peace of mind about getting care. Insurance can also increase a family's leverage to choose the care it wants. Not all facilities accept Medicaid patients, and those that do may limit the number of such occupants because Medicaid pays a discounted rate. Residents who pay full price from their own assets or insurance may get preference even in cases where regulations bar discrimination against Medicaid patients. "It's like flashing $20 to the maitre d'," says Barbara Kate Repa, an attorney in San Francisco. It can help if you use insurance or private funds to start off before turning to Medicaid. A nursing home that accepts Medicaid patients can't force out paying occupants when they go on Medicaid, but lawyers tell of patients being moved to a less desirable room or a different facility. Complaints by family members may help.

Middle-income people are the prime target for this insurance. Their income may not cover long-term care, but they can have sizable assets that could be sliced away. Couples with modest assets and income may need little or no insurance, as Medicaid may protect all or most of that for the at-home spouse. The rich can probably afford to take care of themselves.

What does a policy cover?

This is where you must read the fine print; terms vary widely. Generally, insurance may pay $100 to $200 a day for custodial care in a nursing home for two to four years–but sometimes for life. A similar or reduced amount may be paid for assisted living or care at home. A policy with such options can be useful because alternatives to nursing homes are becoming more popular and available.

Keep anticipated costs in mind. Nursing homes currently charge about $100 to $300 a day, so insurance may not cover everything unless you pay an outsize premium for very extensive coverage. For many people, the insurance may have to serve as a supplement to other savings and retirement planning. A policy that raises its daily compensation each year helps protect against inflation even before the first claim is made. It's a costly added feature that in some cases may almost double the premium, but it's worthwhile, particularly for younger buyers who may not claim benefits for many years. The most generous adjustment compounds the rise in benefits–similar to interest compounding in a savings account.

Buying minimal protection is unwise, as it will hardly dent the bills. A better way to economize is to accept a wait of up to 90 days after entering a nursing home before benefits begin–not unreasonable if you view the policy as a last-ditch backstop against the financial drain of long-term care.

To trigger benefits, a person must generally be unable to handle two or three "activities of daily living" from a list of five or six. Make sure bathing is on the list; that is typically one of the first chores that can't be done. Good policies also provide coverage for dementia. Check for restrictions that might, for example, rule out a preferred smaller facility. If you're considering assisted living, check the policy's definition of what qualifies.

What if the benefits run out?

In that case, the resident would pay all expenses until he or she eventually qualified for Medicaid. The following projections aren't fun, but the average nursing stay is about two years, and the chances of surviving long enough to need care for more than four or five years is low. Alzheimer's patients, though, tend to have longer-than-average stays.

Some states are trying to reward those who buy long-term insurance. Pilot programs in California, Connecticut, Indiana, and New York allow residents who have bought insurance to retain a larger-than-normal amount of assets when they go on Medicaid. But the individual's income may be tapped to reimburse Medicaid costs.

What does it cost?

A 55-year-old might pay as little as $500 a year for minimal long-term coverage, or $2,500 for comprehensive benefits, estimates the United Seniors Health Cooperative in Washington. An individual who first purchases insurance at 75 might pay $2,000 to $8,000. Changing the level or length of benefits has a big effect on the cost, but also check for specials, such as a discount of perhaps 10 percent to 20 percent for couples who sign up.

Consider whether you can afford the cost–buying a policy and later letting it lapse is generally a bad strategy, and it is something that many buyers of the first generation of unattractive long-term-care policies did. One rule of thumb is that retirees should not spend more than 5 percent of their income on such insurance. Some insurers allow policyholders who get stretched too thin to downgrade the coverage to a level they can afford–a half-loaf-is-better-than-none approach. In some cases, the premium will be waived once benefits begin, a good feature. It's not unreasonable for children who will inherit the protected wealth to help out. But for many, coverage won't be affordable.

Can the premium rise later?

Once you pass an insurer's health requirements–the older you are, the harder that might be–the initial premium can't be increased as you age or as your health falters. But the rate can legally rise if the insurer generally raises it for everybody–not just for you or those your age. That could happen if claims are heavier than forecast or if a firm initially set prices low to drum up business. Some experts believe that sizable boosts may come in a few years; you may want to consider that when budgeting. Ask an agent about a firm's record of recent price increases and be wary of a premium that's way out of line.

Who sells the insurance?

Sellers are life and health insurance companies, including big names such as Sellers are life and health insurance companies, including big names such as General Electric Capital, MetLife, and John Hancock. A buyer who wants to be conservative should choose a company that receives at least three of the following ratings, advises Joseph Belth, professor emeritus of insurance at Indiana University and editor of the Insurance Forum. They are: AA- or better by Standard & Poor's, A1 or better by Moody's, AA or better by Duff & Phelps, B- or better by Weiss Ratings, and A+ or better by A. M. Best.

M. Sanders is a long term care insurance marketing specialist. She is appointed throughout the United States as a long term care insurance representative with several major insurance carriers. Her website, About Long Term Care and LTC Insurance, contains information and articles pertaining to long term care, insurance and other related senior topics. It is her goal to inform the public about these increasingly important topics.

This type of private insurance policy can help pay for many types of long-term care, including both skilled and non-skilled care.

Long-term care insurance coverage can vary widely. Some policies may cover only nursing home care. Others may include coverage for a whole range of services like care in an adult day care center, assisted living, medical equipment, and formal and informal home care.

Long-term care insurance premiums vary, depending on your age and health status when you buy the long-term care insurance policy and how much coverage you want. Additionally, you must be in generally good health to pass underwriting when purchasing a policy. For this reason, it may be better to buy long-term care insurance at a younger age when premiums are lower. If this is done, a periodic review is advised to make sure your policy covers your current and future long-term care needs. But you can buy long-term care insurance at any age. Talk about this with a family member, insurance agent, or financial advisor to learn what is best for you.

The cost of care, especially in nursing homes and assisted living facilities, varies from state to state. Make sure that the long-term care insurance policy you buy will cover the costs of care where you plan to use it.

Most long-term care insurance policies offer certain tax benefits. These policies are called Tax-Qualified, or TQ, policies. Depending on your age, you can include some or all of the premium for a TQ policy as a medical deduction on your Federal income tax form if you itemize your deductions. Also, when you receive payments from a Tax-Qualified policy, you generally don't have to pay Federal tax on them.

Private insurance companies sell long-term care insurance policies. You can buy them from an insurance agent or through the mail. Or, you may be able to buy a group policy through an employer or through membership in an association. Insurance companies may let you keep coverage after your employment ends or your employer cancels the group plan. You may be able to continue your coverage or convert it to another long-term care insurance policy.

The Federal Long-Term Care Insurance Program (FLTCIP) offers Federal and U.S. Postal Service employees, and annuitants, members and retired members of the Uniformed Services, their spouses and other qualified relatives the opportunity to buy long-term care insurance at a group rate. Under this program, insurers that are selected and approved by the Government will make long-term care insurance policies available to those individuals who qualify.

The Partnership for Long-Term Care, a partnership between Medicaid and long-term care insurers, is currently available in four states (listed below) to provide an alternative to spending down or transferring assets. The four Partnership States have focused on creating affordable products that encourage people to self-insure, enable purchasers to provide better protection against impoverishment, and reduce long-term care costs for the Medicaid program. For more information on the Partnership program, call or look at the websites listed below.

New York - 1-888-NYS-PLTC (1-888-697-7582) (Note: This telephone number is toll-free in-state only.) or 1-518-473-8083 from anywhere (Note: This telephone number isn't a toll-free number.)

California - 1-800-Care445 (1-800-227-3445).

Indiana – 1-317- 233-1470 (Note: This telephone number isn't a toll-free number.)

Connecticut – 1-860-418-6318 (Note: This telephone number isn't a toll-free number.)

Buying a long-term care insurance policy is an important decision. Make sure that you buy from a reliable company. Insurance companies must be licensed by your State to sell long-term care insurance.

Be certain that you are dealing with a company that you know. If you decide to buy long-term care insurance, be sure that the company and the agent, if one is involved, is licensed in your State. If you aren't sure, call your State Insurance Department.

If you are considering buying long-term care insurance policy, call the insurance company and ask for a sample policy or Outline of Coverage that shows benefits and costs. Go over the information carefully. Compare the costs and benefits of policies from different insurance companies. Find out if any of the policies are Tax-Qualified if this is important to you. Be sure to talk with the insurance agent about anything you don't understand.

For more information on long-term care insurance, contact the National Association of Insurance Commissioners (NAIC). NAIC represents state health insurance regulators and has a publication called "A Shopper's Guide to Long-Term Care Insurance." You can also get a copy of this publication from your State Insurance Department or the National Association of Insurance Commissioners, 2301 McGee Street, Suite 800, Kansas City, MO 64108-3600.

If you have questions about where to buy long-term care insurance in your area, call your State Insurance Department.

State Health Insurance Assistance Programs (SHIPs) are state programs that get money from the Federal Government to give free health insurance counseling and assistance to people with Medicare. SHIPs have counselors who might be able to answer your questions about how to pay for long-term care, the coverage you may already have, or whether there are any government programs that may help with your health care expenses.

Some online resources for Long-Term Care Insurance include:

Allianz LTC Insurance

GE Long-Term Care Insurance

John Hancock LTC Insurance

Long-Term Care Insurance from MetLife

M. Sanders is a long term care insurance marketing specialist. She is appointed throughout the United States as a long term care insurance representative with several major insurance carriers. Her website, About Long Term Care and LTC Insurance, contains information and articles pertaining to long term care, insurance and other related senior topics. It is her goal to inform the public about these increasingly important topics.

Long term care is a major concern of American senior citizens and their families. Studies have shown that Americans rank long term care second, behind saving for retirement, when prioritizing financial needs. Unfortunately, many Americans do not want to think about needing long term care and, therefore, fail to plan for it. Others wrongly assume that Medicare or standard health insurance policies will cover the costs of long term care services. As a result of this failure to plan, tens of thousands of Americans are impoverished each year by the costs of long term care.

The best time to plan for long term care is before it is needed. Start thinking about long term care when you plan for retirement. If you are already retired, it is not too late to begin planning for potential long term care needs.

Private long term care insurance is an excellent way to finance long term care. This brochure will guide you through the important process of selecting the right long term care insurance policy. This booklet provides information on long term care services, what to look for in a long term care insurance policy, and a glossary of terms.

Finding a good policy will take some effort, but the effort will be worthwhile. Here are some steps to take when considering the decision to purchase a long term care insurance policy:

1. Talk to your financial planner or insurance agent about whether long term care insurance makes sense for you.

2. Ask your financial advisor to recommend a company and a policy.

3. Check with insurance rating services to make sure the insurance company you are considering is financially secure.

4. Call your state insurance department and ask about the company and its record in your state.

5. Make sure your insurance agent is licensed to sell long term care insurance in your state.

6. Review all the details and options of the policy. Do not rely just on the marketing materials or outline of coverage.

7. Make sure you understand all the provisions before you purchase any policy.

8. Ask your insurance agent questions. Seek guidance from the state insurance commission office, the Area Agency on Aging, or local senior centers. Discuss policies with friends, family, and others whose opinions you respect. Take time when choosing a policy, and don't allow yourself to be pressured into making quick decisions. And remember: Never pay cash.

The decision to purchase long term care insurance is not a simple one, but thorough investigation and thoughtful planning now can offer you and your family financial protection for the future, and, most importantly, peace of mind.

Defining Long Term Care

Long term care includes a range of nursing, social, and rehabilitative services for people who need ongoing assistance. Most people in long term care facilities are older, but many young people need long term care during an extended illness or after an accident.

Assistance with routine personal needs such as bathing, dressing, eating, toileting, and taking medicine is the most common long term care service. Long term care facilities also provide skilled nursing and rehabilitative care, which is ordered by a physician and supervised by skilled medical personnel such as a nurse or licensed therapist.

Long Term Care Is Offered In A Variety Of Settings

Nursing facilities are the primary settings for people who require medical care daily or intermittently. You must have a physician specify needed services in a written treatment plan for admission to a nursing facility. Many nursing facility stays are short periods of recuperation from an acute medical episode such as a hip fracture or surgery.

Assisted living facilities or residential care facilities provide general supervision, housekeeping services, medical monitoring, and planned social, recreational, and spiritual activities for people who are still independent and ambulatory. Assisted living facilities do not provide medical care.

Facility care services include skilled nursing care, speech, physical, or occupational therapy, facility health aides, or help from facilitymakers. Sometimes, family members, or caregivers, provide most of the care with the help of facility aides and skilled professionals.

Adult day care services are available in many communities, providing personal care, skilled care, and recreational services.

Financial Issues And Long Term Care

The cost of long term care varies by the level of care needed, the setting where the care is provided, and geographic location. Nursing facilities, assisted living facilities, and facility care services provide different levels of care to different resident populations; therefore, costs are not comparable.

On average, round-the-clock long term care services in a nursing facility cost $40,000 per year, or $112 per day.

Assisted living costs vary dramatically—anywhere from $900 to $3000 per month depending on room size, amenities provided, and services required.

Facility care, if needed daily, also can be quite expensive. In 1996, an average facility care visit from a registered nurse (RN) cost $99. RN visits for facility care typically do not exceed 2-4 hours per day, so care is not round-the-clock.

Eight hours of adult day care can cost an average of $45 per day.

Nursing Facility Care: About one third of the costs of nursing facility care are paid directly by individuals and their families. Two government programs may pay for some of your care.

Medicare, a health insurance program for people age 65 or older, only covers skilled facility care and up to 100 days of skilled care in a nursing facility if you are admitted after a three-day hospitalization (not required if you are an HMO member) and your physician prescribes skilled care in your treatment plan. Many people think that Medicare is the primary payor of nursing facility stays, but Medicare accounts for only 9 percent of nursing facility expenditures.

Medicaid, a program for the poor, pays for approximately 52 percent of the nation's nursing facility care, but only for people who have spent almost all their assets and become impoverished. Due to lack of planning for long term care, Medicaid is the source of payment for nearly 70 percent of people in nursing facilities!

Unless you have long term care insurance, qualify under limited conditions for Medicare coverage, or become poor, you will pay out of your savings for nursing facility services.

Assisted Living: About 90 percent of the nation's assisted living services are paid for with private funds. The Supplemental Security Income, Older Americans Act, and Social Services Block Grant programs pay for some assisted living services, while about one-fifth of the states allow the federal Medicaid program to pay for some service components.

Facility Care: Private funds pay for about 46 percent of facility care costs; Medicare covers 32 percent; Medicaid, 22 percent.

Adult Day Care: There are some out-of-pocket expenses for adult day care; however, the majority of funding comes from public sources either the state exclusively, or, in some states, Medicare and Medicaid. Private donations from corporations and charitable groups such as the United Way also supplement the costs of adult day care.

When To Buy Long Term Care Insurance

Because long term care insurance premiums are based on age at the time of purchase, the younger you are when you purchase a policy, the less expensive the annual premium. These premiums for most policies stay level each year as you age. If you buy at age 55 a policy that cost $800 per year, you will continue to pay the same premium. However, if you wait until you are 65, the same policy will cost you $1,700 per year.

What To Look For In A Policy

The best policy for you depends on several factors, including your family arrangement, your financial situation, your preferences regarding long term care choices, and the level of risk you are willing to accept. There is no one best company or one best policy for everyone. You should select a policy that meets your needs.

Before you buy a policy, make sure you know the product you are buying and from whom you are buying it. Be sure your agent is licensed to sell insurance in your state and has received specific training on long term care insurance. Consult friends, consumer guides, and information from your state's insurance counseling program or local agency on aging.

M. Sanders is a long term care insurance marketing specialist. She is appointed throughout the United States as a long term care insurance representative with several major insurance carriers. Her website, About Long Term Care and LTC Insurance, contains information and articles pertaining to long term care, insurance and other related senior topics. It is her goal to inform the public about these increasingly important topics.

While placing a loved one in a nursing home is a difficult decision, there may come a time when it is the right one. It will help if you do your homework and trust your instincts.

According to the Department of Health and Human Services, the nation's nursing homes provide care to over 1.5 million people. Over 90% of these residents are over age 65. Most of the residents are frail and require round-the-clock supervision due to dementia.

Things You Need to Know

A nursing home is a residence that provides room, meals, nursing and rehabilitative care, medical services and protective supervision to its residents. While someone coming from the hospital may require the services of many long-term care professionals such as nurses, therapists and social workers, a nursing home is not a hospital (acute care) setting. The goal at a nursing home is to help people maintain as much of their independent functioning as possible in a supportive environment.

Choosing a Facility

One of the first things to consider when making a nursing home choice is the needs of the individual for whom you're providing care, suggest experts at the MetLife Mature Market Institute®. Make a list of the special care they need, such as dementia care or various types of therapy.

If the person is hospitalized, the discharge planner and/or social workers can assist you in assessing the needs of the individual and locating the appropriate facility.

If you are choosing a nursing facility for someone who is presently at home, ask for referrals from your physician, Area Agency on Aging, friends, and family.

Other factors such as location, cost, the quality of care, services, size, religious and cultural preferences, and accommodations for special care need to be considered.

When you've located a few facilities that you'd like to consider more thoroughly, plan on visiting each one, both with scheduled and unscheduled visits, and at different times and on different days of the week.

As you are walking around, take note of what you hear and don't hear. Is it silent? Is there activity? How clean does it look? Are the residents dressed appropriately for the season? Most importantly, find out the ratio of nurses to residents is and what is the staff turnover rate?

Helpful Hints

When you've finally decided on a facility, you should know your rights and those of your family member. Before you or the resident sign the admissions agreement, understand what you're signing, and do not sign any paperwork unless everything has been fully explained.

The admissions contract should, at a minimum, contain the daily room rate, reasons for discharge and transfer from the nursing home, and the policy regarding payment of the daily room rate if the resident goes to the hospital or the family brings the resident home for a short period of time.

You may question if you're really making the right decision to place your loved one in a facility at all. Remember, you can do no more than your best, and if you've done that, neither you nor your family member can ask any more of you.

M. Sanders is a long term care insurance marketing specialist. She is appointed throughout the United States as a long term care insurance representative with several major insurance carriers. Her website, About Long Term Care and LTC Insurance, contains information and articles pertaining to long term care, insurance and other related senior topics. It is her goal to inform the public about these increasingly important topics.

Risk. Every American must plan for the consequences of risk becoming reality. Some risks decrease as we age, while others increase. And we insure against these risks to protect our families and our assets.

As Americans' life expectancies continue to rise due to the benefits of modern medicine, the likelihood that we will need long term care increases as well.

Despite the fact that long term care is a growing reality for a number of Americans, particularly baby boomers, most are still reluctant to ponder becoming old and infirm, let alone paying for such care.

Now, more than ever, Americans should consider looking to financial planners for advice regarding long term care and the financial pitfalls they could face.

Asset Protection

In this context, the financial well being of baby boomers is cause for particular concern. In addition to their sheer volume (the number of elderly is expected to double to 77 million by 2030), the aging boomers face longer life expectancies and dwindling social support programs to sustain their long term care demands.1 Although studies indicate that baby boomers may have saved enough for their retirement, it is evident that they have not sufficiently prepared financially for their future long term care needs.2

For those concerned about protecting their assets should they ever need to enter a nursing home or assisted living facility, purchasing long term care insurance is the best deal one can make. Consider this: No matter what age you are now, if you were to buy a mid-priced long term care policy, chances are you would pay out less in premiums for your lifetime than you would for just one year in a nursing home.3

The Financial Planning Market Today

The majority of long term care insurers continue to market policies primarily to individuals. The number of providers in this market remains limited, however, and therefore highly concentrated. This could have a deleterious effect on premium costs and accessibility to potential consumers. The HIAA estimates that, at the end of 1996, only eleven sellers represented approximately 80 percent of the individual policies sold.4

Employers are beginning to offer long term care insurance as part of their employee benefits packages, just as they offer disability and retirement benefits. Yet there is still much to be done. Despite the billions of dollars lost annually on both sides—in missed days and decreased productivity—employers have enjoyed very little success encouraging their employees to participate. Of the firms offering long term care insurance in their benefits packages in 1996, the HIAA estimates that less than six percent of employees participated in the program.5

Public-Private Partnership

Government does play a role in the financing of long term care, but only to a limited extent and only after strict conditions are met. Contrary to popular belief, Medicare coverage for nursing home care is limited. Medicaid covers more long term care services, but in order to qualify, individuals must "spend down" their assets to the poverty level.

The private sector alone cannot realistically meet society's entire long term care needs. There will always be a significant need for government participation to ensure that a safety net exists for society's most destitute. The American Health Care Association is committed to working with Congress and other policymakers to craft a viable public-private partnership that will expand the availability of long term care insurance for those who can afford it, while at the same time leaving the social safety net intact and financially secure to meet the needs of those who cannot afford long term care by themselves.

Some online resources for Long-Term Care Insurance include:

Allianz LTC Insurance

GE Long-Term Care Insurance

John Hancock LTC Insurance

Long-Term Care Insurance from MetLife

M. Sanders is a long term care insurance marketing specialist. She is appointed throughout the United States as a long term care insurance representative with several major insurance carriers. Her website, About Long Term Care and LTC Insurance, contains information and articles pertaining to long term care, insurance and other related senior topics. It is her goal to inform the public about these increasingly important topics.

Nov. 8, 2005- The Internal Revenue Service has announced the 2006 limitations on the deductibility of long-term care insurance premiums from taxes.

Premiums for "qualified" (see explanation below) long-term care policies are treated as an unreimbursed medical expense. These premiums what the policyholder pays the insurance company to keep the policy in force -- are deductible to the extent that they, along with other unreimbursed medical expenses (including "Medigap" insurance premiums), exceed 7.5 percent of the insured's adjusted gross income.

Long-term care insurance premiums are deductible for the taxpayer, his or her spouse and other dependents.

However, there is a limit on how large a premium can be deducted, depending on the age of the taxpayer at the end of the year. Following are the deductibility limits for 2006. Any premium amounts above these limits are not considered to be a medical expense.

Attained age before the close Maximum deduction

of the taxable year

40 or less $280

More than 40 but not more than 50 $530

More than 50 but not more than 60 $1,060

More than 60 but not more than 70 $2,830

More than 70 $3,530

What Is a "Qualified" Policy?

To be "qualified," policies issued on or after January 1, 1997, must adhere to regulations established by the National Association of Insurance Commissioners. Among the requirements are that the policy must offer the consumer the options of "inflation" and "nonforfeiture" protection, although the consumer can choose not to purchase these features. Policies purchased before January 1, 1997, will be grandfathered and treated as "qualified" as long as they have been approved by the insurance commissioner of the state in which they are sold.

The Taxation of Benefits

Benefits from reimbursement policies, which pay for the actual services a beneficiary receives, are not included in income. Benefits from per diem or indemnity policies, which pay a predetermined amount each day, are not included in income except amounts that exceed the beneficiary's total qualified long-term care expenses or $250 per day (for 2006), whichever is greater.

M. Sanders is a long term care insurance marketing specialist. She is appointed throughout the United States as a long term care insurance representative with several major insurance carriers. Her website, About Long Term Care and LTC Insurance, contains information and articles pertaining to long term care, insurance and other related senior topics. It is her goal to inform the public about these increasingly important topics.