It seems so simple, you would think it would be perfectly obvious. Online “information processing” is, practically speaking, what the Internet was invented for. The Web is tailor-made for shopping for the best insurance policy. Where else can you plug-in a few details and, within a few seconds, have your request rocketing across the Web on its way to a variety of insurance underwriters, each competing for your business? Then, with no pressure and with complete privacy, you get to make a sensible financial decision from the comfort of your desk chair or couch.

Here’s why the online insurance quote is the better idea whose time has come.

1. One application. Multiple bidders. Online makes you a kind of savvy broadcaster. You broadcast the fact that you are in the market for, say, life insurance. The insurance companies who are listening for your broadcast are tuned in to your frequency and respond with a matching quote in return. Now that’s good reception. No static at all.

2. The lowest price. Who doesn’t want to get to the bottom line, and fast?  Talk is not cheap when it takes hours to get a straight answer. Online is simply the least expensive and the premium you will be quoted will be the lowest, plain and simple. Since online is the most efficient channel for user direct, point-to-point communication, the savings are baked right in. Insurance companies know you are looking for a low price, not a visit from a salesman. Online cuts costs to the quick.

3. Your needs, not theirs. Ever hear the term “longtail” search in relation to Internet product inventory? It means you can find the exact merchandise in the precise size, color, texture and features you are most interested in. In a word, it’s called “Better Selection.” Online you can find just what you’re looking for.

4. Answers to your questions. There is also no shortage of information online. So you can find the frequently asked questions and the instant answers you want to almost any topic you have in mind. There are even online insurance calculators to help you pinpoint how much coverage you will need.

5. Full-service. Instead of just one line of insurance, from one company, at one price, the best online insurance company offers you choices when it comes to your other insurance needs. Auto, health, homeowners, renters, business, you’ll get the referrals you need. If they can’t help you with every form of insurance, they will tell you who can.

What’s been your experience with online insurance shopping?

It’s a deadly statistic. The top two causes of death in the United States are responsible for more than 50 percent of America’s annual death toll. If that doesn’t “hit us where we live,” this just might — where we reside in the U.S. has a strong correlation with how we will die.

The Center for Disease Control and the National Institutes of Health break out the 15 most common causes of death as follows:

1. Diseases of the heart   28.5

2. Malignant tumors   22.8

3. Cerebrovascular diseases   6.7

4. Chronic lower respiratory diseases  5.1

5. Accidents (unintentional injuries)   4.4

6. Diabetes mellitus  3.0

7. Influenza and pneumonia   2.7

8. Alzheimer’s disease   2.4

9. Nephritis, nephrotic syndrome, and nephrosis   1.7

10. Septicemia (blood poisoning)   1.4

11. Suicide   1.3

12. Chronic liver disease and cirrhosis   1.1

13. Primary hypertension and hypertensive renal disease   0.8

14. Parkinson’s disease (tied)   0.7

15. Homicide (tied)   0.7

Looking at the leading causes of death listed above, just five account for over 70% or 7 out of every 10 deaths. The  two major killers, heart disease and cancer, account for over half of all deaths in the country.

Not surprisingly, researchers found that states with the highest rates of cigarette smoking — Kentucky and Tennessee — also had the highest rates of heart disease deaths. The researchers say that if cigarette smoking declined in those states the number of early deaths from heart disease would also decline.

The researchers also found that male residents of some states have five times the risk of dying young from heart disease compared to other states. To see where your state ranks for heart disease and stroke, visit this Interactive Map.

While affordable life insurance can’t prevent any of these causes of death, it can make sure that financial protection will survive the catastrophe!

I’m sure you’ve read this quote before: “The unexamined life is not worth living.” Socrates said it when choosing whether to testify about his own life, even in the face of a verdict that could mean certain death.

One of the wisest examinations we can make as financial providers in today’s world concerns both life and death. It’s a Life Insurance Audit.  Times change, children get older, the financial status of our homes, cars, and investments change. Insurance is not one of those things that is a one-time, “set it and forget it” proposition.

As unpleasant as the prospect of leaving your loved ones may be, it is also an inevitability. A Life Insurance Audit is one way to make sure you are still getting the value you want and the financial benefit that others will depend on in your absence.

Ask yourself these worthwhile questions about your current policy.  Can I get the same coverage for less than I am now paying and put more money back in my pocket? Can I increase the benefit my family will receive for the same premiums I am now paying?  Can I extend my coverage to last longer without it costing a fortune?

As advocates for consumer education and consumer purchase options, Efinancial has put in place the tools and materials to put you “in the know.” but even more importantly, Efinancial makes it possible to audit your life insurance about as quickly as humanly possible. Just use our easy, insurance quote request form and you can compare your life insurance coverage, rates and term to policies from not just one, but many of America’s top insurance companies.

You won’t find a more objective or more efficient life insurance examination than with Efinancial. That’s because unlike most insurance agents we’re not here to sell you any one policy or any one company.

As Socrates said, an unexamined life is not worth living. But an examined life insurance policy is worth living with and living well!

The New York Times’ runaway bestseller, “Freakonomics,” was a worldwide sensation that sold more than four million copies in 35 languages and changed the way we think about number-crunching and socio-economics.

Now, the distinguished writing team of  University of Chicago economist Steven D. Levitt and journalist Stephen J. Dubner has released “Super Freaknonmics: Why Suicide Bombers Should Buy Life Insurance.” The mix of sharp thinking and great storytelling uses the same no holds barred, street-smart approach to exploring societies ills, asking (and answering) questions like” “What’s the best mathematical way to catch a terrorist?” “What do hurricanes, heart attacks and highway deaths have in common?” Or, “Why are doctors so bad at washing their hands?”

Illustrating the statistical science of datamining, the authors showcase research on how economists use information to both unearth and debunk startling trends in society. They examine whether TV has caused a rise in crime? Or whether hospital emergency rooms can do more harm than good for the average patent? Or whether  eating Kangaroo save the planet?  One such case study looks at the efforts to identity terrorists from a databased standpoint by looking at personal financial trends, including life insurance, to tell them apart!

For example, when looking at the metrics of known terrorists or those most likely to become a terrorist, the candidates were predominately men between the ages of twenty-six and thirty-five that were disproportionately likely to: own a mobile phone, be a student and rent, rather than own, a home.

There were also some prominent negative indicators. The data showed that a would-be terrorist was disproportionately unlikely to: have a savings account, withdraw money from an ATM on a Friday afternoon, or buy life insurance.

The no ATM-on-Friday metric would seem to be a proxy for a Muslim who attends that day’s mandatory prayer service. The life insurance marker is a bit more interesting. Let’s say you’re a twenty-six-year-old man, married with two young children. It makes sense to buy some life insurance so your family can survive if you happen to die young. But insurance companies don’t pay out if the policyholder commits suicide. So a twenty-six-year-old family man who suspects he may one day blow himself up probably isn’t going to invest money in life insurance.

In the above example of a bank examiner was able to use these financial and lifestyle ijnfo-metrics to take a database of millions of bank customer and generate a list of about 30, uninsured, and highly suspicious individuals! That’s Super Freakonomics!

A Life Insurance Trust is an irrevocable, non-amendable trust which is both the owner and beneficiary of one or more life insurance policies.

Upon the death of the insured, the Trustee invests the insurance proceeds and administers the trust for one or more beneficiaries. If the trust owns insurance on the life of a married person, the non-insured spouse and children are often beneficiaries of the insurance trust. If the trust owns “second to die” or survivorship insurance which only pays when both spouses are deceased, only the children would be beneficiaries of the insurance trust.

In the United States, proper ownership of life insurance is important if the insurance proceeds are not to be subject to  federal estate taxation. If the policy is owned by the insured, the proceeds will be subject to estate tax.  To avoid estate taxation, some insureds name a child, spouse or other beneficiary as the owner of the policy.

There are, however, two drawbacks to having insurance proceeds paid outright to a child, spouse or other beneficiary. Doing so may be inconsistent with the insured’s wishes or the best interests of the beneficiary, who might be a minor or lacking in financial sophistication and unable to invest the proceeds wisely.

The insurance proceeds will be included in the beneficiary’s taxable estate at his or her subsequent death. If the proceeds are used to pay the insured’s estate taxes, it would at first appear that the proceeds could not be on hand to be taxed at the beneficiary’s subsequent death. However, using insurance proceeds to pay the insured’s estate taxes effectively increases the beneficiary’s estate since the beneficiary will not have to sell inherited assets to pay such taxes.

The solution to both drawbacks is usually an irrevocable life insurance trust.

Insurance trusts may be funded or nonfunded. A funded life insurance trust owns both one or more insurance contracts and income producing assets. The income from the assets is used to pay some or all of the premiums. Funded insurance trusts are not commonly used for two reasons:

The additional gift tax cost of transferring income producing assets to the trust and
the grantor trust rules of IRC §677(a)(3) cause the grantor to be taxed on the trust’s income. Unfunded insurance trusts own one or more policies of insurance and are funded by annual gifts from the grantor. Customarily, the trustee of the insurance trust is authorized, but not required, to either purchase assets from the insured’s estate or loan insurance proceeds to his or her estate. Since the trustee of the insurance trust possesses all incidents of ownership in the insurance policy, the insurance trust provides the insured’s estate with liquidity while shielding the insurance proceeds or assets purchased with the proceeds from estate tax when the insured dies, provided the trust has the appropriate Settlor and trustee.

Efinancial can assist with the creation and management of a Life Insurance Trust. Ask us how!

When thinking about life insurance coverage, a central question for parents is “How much does it cost to raise a child?”  The U.S. government has answers.

Middle-income U.S. parents of a child born in 2008 can expect to spend $291,570 for food, shelter, and other necessities to raise that child over the next seventeen years, up from the 1960 low-low price tag of $25,230, and $204,060 in 2007, according to a  report from the U.S. Department of Agriculture (USDA).

According to the USDA’s report, Expenditures on Children by Families, providing housing represents the largest expenditure in raising a child, averaging $69,660 or 32 percent of the total cost over the seventeen year period. Food and child care/education were the next largest expenditures, averaging 16 percent of the total cost. Transportation — driving the kids here-and-there — accounted for 14 percent of the cost.

USDA notes that the cost estimates in the 2008 report did not include the medical costs associated with childbirth, and that some of the highest modern-day costs, such as child care were “negligible” in 1960.

The More you Have, the More you will Spend
The report also notes that total family income affects the cost of raising a child. A family earning less than $56,870 per year can expect to spend a total of $159,870 on a child from birth through high school. Similarly, middle-income parents with an income between $56,870 and $98,470 can expect to spend $221,190; and a family earning more than $98,470 can expect to spend $366,660.  Keep these costs in mind when you shop for the best rates in life insurance.

If you work at a desk job these days, you may be risking a lifestyle that is far too sedentary for your own longevity. The elevator-serviced amenities of the modern office mean we’re getting less exercise. Match that with our breakneck pace workaday schedules,  fast food lunches and a stressful commute to and from the workplace. These factors challenge even  today’s office worker to safeguard their physical fitness as well as their fiscal fitness on the job.

Still,  there are far more dangerous jobs than office work. There high-risk occupations represent a real threat to life and limb, and make it tougher to get life insurance with or without a medical exam.

The U.S. Department of Labor has revealed data that demonstrates how fishermen (and fisherwomen) along with other workers in fishing-related professions were the most likely to die on the job in 2008. Of 39,000 fishing workers in the nation, 50 were killed, a rate of 128.9 per 100,000 full-time workers. Rough seas, unpredictable deadly weather and isolation during emergencies all make the job more unsafe than any other. The perils of netting a job in the fishing industry have even been dramatized on the small and large movie screens, like the popular documentary TV series, Deadliest Catch, and the Hollywood blockbuster, The Perfect Storm.

Logging workers and aircraft pilots have the second and third deadliest jobs. Eighty-two loggers died last year from work injuries, according to the Lavor Board. Ninety aircraft pilots died in crashes and other accidents.

Transportation incidents are the most common cause of fatalities, overall. This year, 40.5% of the worker deaths, 2,053 of them, were transportation-related. More than half were highway incidents, which have been the most common killer every year since the Labor Department started tracking workplace fatalities in 1992. Equipment- and objects-related injuries came in a distant second, accounting for 923 fatalities, or 18.2%.

“While putting in 57% of the total hours worked by Americans, men made up 92.7% of the workplace fatalities. The relatively few women killed were more likely to die from on-the-job homicide, though: 26% of the female workplace deaths were murders, compared with only 9% of the male deaths,” according to the department. “For several occupations with high fatality rates, including truck drivers and farmers, and several industries with high fatality rates, like construction and mining, men constitute a much larger part of the total employment, In addition, women are often employed in occupations and industries, like trade and leisure/hospitality, where homicides are more prevalent.”

The construction industry suffered the largest number of deaths. Its fatality rate per 100,000 full-time workers was only 9.6, less than a 10th of that of people in fishing, but that added up to 969 deaths in 2008, no less than 19.1% of all U.S. workplace fatalities.

What about those who work in Wall Street finance? People in finance and insurance actually had the lowest fatality rate of any occupation — 0.3 deaths per 100,000 full-time workers, or just 24 people across the nation. Good thing they aren’t jumping from buildings like during the stock market crash of the 1920’s.  Not without life insurance!

We get some important questions at Efinancialblog.com about saving readers money.  One such query regarded the “Return on Premium Term Life Insurance” or ROP for short. What is it and should I be concerned about it, or even buy it where available?  In this case, an excellent answer has been provided across the blogosphere by Certified Financial Planner Jeff Rose and his blog “GoodFinancialCents.com.”

Jeff writes about how a young business owner client inquired about purchasing a term life insurance policy to provide financial security to his wife and young child in the event of his unexpected passing.  A term life policy makes total sense for his situation, but what he wanted to add is something called a return of premium rider.

For those who are not familiar, the return of premium rider allows the policy holder to get a full refund of all the premiums paid at the end of the contract.  At first, it sounds like a pretty good deal.  The most common complaint that consumers have with life insurance is that if you don’t die, all the money goes directly to the insurance company.  If this is the case, then purchasing the return of premium rider seems totally worth it. Or is it?

No Brainer or Break Out the Calculator?

As Jeff points out, at first glance the return of premium rider seems like a no-brainer.  He writes “One piece of information that you need to know is that the rider comes with a price. The ROP rider on average will run 20%-40% higher than purchase a policy without it.  In addition, you have to keep the policy for the entire contract period to get a full refund of your premium.  The bigger question is the central one: Does it make sense to pay more for the rider since you know you’re getting all your premiums back?”  Let’s take a closer look….

More Math: ROP Rider vs. Regular Term Insurance

To illustrate the cost difference between purchasing regular term insurance vs. one with the ROP ride, Jeff ran a test for a 30 year old male, assuming he was in excellent health.  We’ll examine a quote on a 30 year term life policy with a $1,000,000 face value. Without the ROP rider, the annual premium will cost approximately, $720 per year for a total of $21,6000 premiums paid over the 30 year period. By adding the ROP rider, the premium jumps to $1,180 per year, for a total outlay of $35,400.  That’s a total difference of $13,800 premiums paid ($460 per year) or a 63.88% increase.

If we take the difference of $460 per year and invest it and average 6% over the 30 year period, you will have accumulated $36,366 over the 30 year period.  Subtract the $21,600 you paid in premiums over that period and your net amount is $14,766.  As you can see in this example, purchasing the ROP rider seems to make sense.  But wait — what happens if  we average an 8% return?

If we are able to average 8% return over that same period, we accumulate a total of $52,110 and after subtracting the premiums were left with $30,500.   Compare that to the $35,400 we would get back with the ROP rider, and we’re still in the red.   If we can average closer to 10% return, then we have a greater chance for the normal policy to be more economically viable.

Getting Smart: The Other Important Considerations

The scenarios Jeff ran were different than what he had predicted.  However, when he analyzed the cost differential, he was relying on a few big assumption. First, that the  person could afford to pay the higher premium. Secondly, that the erson will keep the policy for the entire 30 year period. Finally, that the the cost of insurance won’t decrease.

When Does Purchasing ROP Rider Make Sense?

Typically, you wouldn’t purchase ROP on policy as long term, as 30 years.  Where it is more common is with term polices of  10 to 15 year in length.  With such a shorter time horizon, the ROP makes more economic sense.

Would an ROP rider make sense for you? Is this something the insurance industry should take into account when designing new life insurance products?

Understanding the comparative benefits of life insurance isn’t nearly as complex as some insurance agencies would have you believe. Especially since you can count the main differences between one type of insurance and another on one hand.  Let’s see which type gets a thumb’s up!

Type One: Term Life Insurance

Term life insurance is the simplest, most common, and for most people, the most practical type of life insurance.  The way Term Life works is simple:  you purchase coverage for a specific period of time (or “term,” usually 20 or 30 years).  If you die during the specified period of time, your beneficiaries receive the value of your policy.  If not, the contract becomes worthless. The premiums are usually lower than other  types of life insurance because they have no cash value. When the term elapses, so do the payments. You don’t get your term life insurance premiums back.  Term life is likely the best choice for probably 95% of all Americans due to its simplicity and low cost of coverage.

Type Two: Whole Life Insurance

Whole life insurance is similar to term life insurance except, as the name suggests, the policy lasts for life rather than a specific term.  Since eventual payout is virtually certain, premiums are generally significantly higher for whole life than term life;  however, most whole life policies have an investment component whereby the life insurance company offers a low “guaranteed rate of return” on the policyholder’s premiums.  Of all the various types of life insurance, whole life is perhaps the most attractive to many consumers because of that “guaranteed rate of return.”  If you decide to cancel your policy, you can  retrieve a portion of your premiums back along with a minimum return.  Unfortunately, whole life policies are rarely as attractive in real life as in theory.  The various costs and restrictions associated with these policies often completely wipe out any benefit from the investment component and then some.  Still, the idea of getting your premiums back is appealing to some.  Keep in mind, if something sounds too good to be true, it usually is.  Tread very carefully if you decide to purchase whole life insurance over term life.

Type Three: Universal Life Insurance

Universal life insurance is probably the most confusing of the 4 major types of life insurance.  The creative idea with this product is  that you can decide how much to contribute above and beyond a set minimum life insurance premium in an investment vehicle chosen by the insurance company, which is usually restricted to bonds and mortgage-backed securities (the red flags are waving on that score).  Any investment returns then go into a cash-value account which you can use to pay premiums, accumulate value, or even use as collateral to borrow money.  The rules determining how exactly returns are calculated are indecipherable unless you’re a contract lawyer, and the investment options generally carry exorbitant expense ratios.  There may exist some specific situation where it makes sense to purchase a universal life policy, but it is  far from clear.  It is almost always preferable to keep your insurance and investing activities separate.

Type Four: Variable Life Insurance

In essence, a variable life policy is simply a universal life policy with a wider array of investment options, sometimes including a self-directed option.  Variable life policies have all the disadvantages of universal life policies as well as a few of their own.

And the Best Type of Life Insurance Is…

Most insurance shoppers favor term life insurance over the other forms in all but the most unusual of circumstances.  Whole life insurance comes in second, if only because the for-life aspect of these policies require you to continue paying premiums long after it makes sense for you to do so (for instance, life insurance is far less necessary when you no longer have dependents).

At the just concluded Finovate 2009 Conference in New York City, the theme centered on innovation in all things financial, with a special emphasis on grooming the next generation of smart investors, savers and budgeters, today’s young people.

Thankfully, entrepreneurs are sensing the need to educate young people about personal finance so they can recognize true value in financial products and services and separate fact from fiction. A wonderful learning tool is Cents City, created by a Washington D.C. teacher of the year and an avid video gamer. With Cents City, Felix Brandon Lloyd and Todd Waits have created a city in cyberspace where kids can learn about saving, budgeting, and credit. The starter version is free, or you can upgrade to the “Passport Edition” for $4.95.

Slightly older kids (aged 15 and up) who have real money to play with can learn how to budget and invest at Tile Financial. Tile Financial teaches teens and young adults how to manage their money, while it also prioritizes giving back to the community.

For the those of us who are basically big kids at heart, there’s Kapitall. Kapitall offers a new way to invest that makes choosing stocks feel like a really slick (yet educational) video game. As co-founder David Neubert says, “We want to do for investing what Apple Macintosh did for computing.”

How are you teaching young people the lessons of finance?