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Life insurance is tax-free, which is why many rich people drop serious amounts of cash into it. To understand why the rich buy it, you first have to understand the two fundamental purposes of insurance. First, it was intended for the young and married who have children but little cash and want to protect their family. The second purpose is known as estate conservation. People build wealth through businesses and investments, but most do not realize they are in partnership with the government through what is known as the Capital Gains Tax, where the government owns a piece of their estate.
Depending on how their affairs have been set up, the Capital Gains Tax will take effect when the person dies or after their spouse dies. The tax-free law on life insurance gives everyone but especially the rich, an easy method of creating more wealth free of taxes. Life insurance becomes a key estate planning tool. If you look at examples of extraordinarily rich people such as James Gandolfini, he will end up giving half of his 70 million dollar estate to taxes because of poor planning. In essence, it uses the death benefit to offset the tax bill because the estate tax will be due when you die. Nevertheless, life insurance pays out after you die, and this allows the insurance companies to pay the bill rather than the heirs. However, some contracts will not build cash-value like the others. People have to exercise understanding of a policy when purchasing because some life insurance agents are more interested in a commission than giving the right product. People who have a net worth exceeding five million dollars risk half their estate if they do not plan it properly. Creating a trust and buying policies help to mitigate the tax consequences. Call Pachuta Insurance Today @ 706-769-2262 Sources: Naples News
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Coins, jewelry, fine china and art evoke warm memories of travels and adventures, or they reflect a deep passion of interests. However, these cherished possessions may not have adequate insurance. What if they are lost, damaged or stolen? The typical homeowner's insurance policy will only cover personal liability, general contents of your home and protect your place of residence. Coverage for valued items usually ranges between $1,000 to $5,000.
Appraise Your Valuables Work with a qualified appraiser who belongs to a nationally recognized organization to receive an up-to-date value assessment. Home insurance providers typically demand appraisals to guarantee the item's existence, to confirm its value and to serve as a description. Appraisers need a minimum of five years experience to receive membership status at an appraisal organization. Choose Adequate Coverage When picking coverage, choose a broad insurance policy to cover disasters such as storm damage, smoke damage, breakage and mysterious disappearance. Additional insurance coverage can be found in two main forms: The first option is to insure with floaters, which covers a specific item. The second option is known as blanket coverage, and it covers an extensive category of valuables including:
Blanket coverage has been recommended only for less expensive items while floaters are a better choice for valuable items. In a typical homeowner's insurance policy, coverage for personal property has been limited to 50 percent coverage on the home. A home that has been covered for $150,000 will only cover $75,000 in personal property, but to ensure the best coverage, talk to your local home insurance agent. They can help you to modify your policy with a blanket coverage or a floater. If your home insurance policy prove insufficient for your higher valuables, some insurance providers offer stand-alone policies. Call Pachuta Insurance Today @ 706-769-2262 Sources: Money Crashers NY Times The car insurance industry could soon be revolutionized because of Apple and Google's smartphone apps. Both companies are developing Android and iPhone apps that cut the upfront costs. These applications will track driver habits including braking and mileage in exchange for savings on insurance. Because of this, smartphones could become the central nervous system in usage-based auto insurance.
Developing these apps could disrupt the casualty and property industry, which has a history for gathering their own loss data and keeping the information in-house. In addition, Apple and Google will have other advantages, such as already being ubiquitous in the lives of most consumers and accepted as a big data collector. Sandeep Puri, the co-founder of D-rive, said that Apple and Google are in a great position to gather large quantities of data, which could be more insightful than traditional methods. Puri continued in saying that car insurance companies could be disenfranchised from activities that they used to control. Nevertheless, Apple and Google did not respond to requests for comment. According to a Towers Watson survey of more than 1,000 US consumers, only eight percent of consumers have or have had usage-based auto insurance policies. However, during a 17-month period, the percentage of drivers who were uneasy about insurers monitoring their driving locations fell from 42 percent to 35 percent. Google has the opportunity to revolutionize the insurance industry's ability to offer faster and less expensive usage-based car insurance. The Los Angeles Times reported that several lead auto manufacturers, including Subaru, Jeep, Dodge, Chrysler, Nissan, Honda and Audi, have said that they will support the CarPlay and Android Auto apps. In addition to these apps, Google and Apple have been competing against each other with a driverless-car program. Even more than the developing apps, this could change the way the auto insurance industry works. Call Pachuta Insurance Today @ 706-769-2262 Sources: Chicago Tribune Express News Some home insurance policies buy peace of mind but little else. One individual bought an $89-per-year policy for their sewer pipe but his wife told him it was a waste of money. Did he waste his money? Well, if his sewer pipe cracks within the next 12 months, it will have been money well spent. Some people pay thousands of dollars in repairs, cleanup and excavation for sewer pipe problems, and they will receive recompense for every expense that the policy covers. These policies do not always cover everything.
Also, it is true that your sewer pipe is not likely to break this year, and if it does not, you will not collect anything other than peace of mind. For some people, $89 is not a big payment if it helps you sleep easier, but those extended warranties, which can be bought for almost every appliance, adds up to hundreds of additional dollars on policies, and they provide questionable value because of the coverage restrictions in fine print. Linda Sherry, director at Consumer Action, says that she usually advises against buying extended warranties and policies. The majority of products come with a one-year warranty anyhow. However, some people may still find themselves tempted to buy extended warranty coverage for free tech help or annual maintenance visits. If you decide to buy, make sure the cost of the annual policy is no greater than 10 percent of the price. Sherry says that all things higher are overpriced. Always make sure your jewelry, antiques, art and electronics are covered under your policy. You can take inventory using free software on the Android/iPhone app KnowYourStuff.org, which is provided by the Insurance Information Institute. Determining the types of extra coverage needed will provide peace of mind. If you are likely to sustain damages, then it is good to have it covered. However, you could be paying extra dollars for your home insurance if it is highly unlikely. Call Pachuta Insurance Today @ 706-769-2262 Sources: Time Forbes |
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PACHUTA INSURANCE
1031 Village Drive, Suite A
Watkinsville, Georgia 30677
johnny@pachutainsurance.com
(706) 769-2262 (Office)
(888) 769-2262 (Toll Free)
(706) 769-2282 (Fax)
(706) 201-1901 (Mobile)
1031 Village Drive, Suite A
Watkinsville, Georgia 30677
johnny@pachutainsurance.com
(706) 769-2262 (Office)
(888) 769-2262 (Toll Free)
(706) 769-2282 (Fax)
(706) 201-1901 (Mobile)