Fortunately, the characteristics of life insurance for most people are easier to deal with than trying to figure out what they need and why. Here are 10 ???mythconceptions??? encircling life insurance???and the clarification:

1. I???m Single with no dependents, I shouldn???t need any coverage.

Even single people need at least a basic policy to cover final expenses. As the old adage goes??????we know we???re going to pass way; we just don???t know when.??? The last thing we want to do is leave a legacy behind of unpaid medical bills, funeral cost, and personal debits. Some life insurance policies have a cash accumulation component that people can use tax-free in the future for personal needs. Single with no surviving family can provide an endowment to a charity, alma mater, or their church.

2.???????????? I have coverage at work, why would I need to have any more.

You might not, at least not today. While most employer policies can be adequate for single people with no dependents, the same may not be true for couples or people with dependents. In all most every case when you leave your place of employment you cannot take your life insurance with you. Leaving your family exposed and burdened with final expense costs. For those few exceptions whereas part of a retirement package, the coverage you do receive is generally reduced to a basic amount to cover funeral costs and nothing more.

3.???????????? I???ve always been told that buying term insurance and investing the difference is smarter.

Not necessarily. Term Life Insurance is like leasing a car; you get to have for a while, but then the term ends. The two factors that affect the cost of life insurance is age and health. As we get older if it???s one thing we can count on is that our health will change and not usually for the better. The cost of term insurance can be exceptionally high as we get older and your health may disqualify you from getting life insurance once your term expires. Most people lack the investment discipline to truly invest the difference saved by buying term insurance (just being honest). Life gets in the way; we need a new car, pay for a wedding, help out our children, or take care of an ailing parent. Any of these plus several other reasons could prevent adequate money set aside to cover final expenses.

 
4.???????????? Only the income provider should have life insurance

Not True. A stay-at-home parent raising a family is one the most costly services one provides. The cost of day care, cleaning, and attending necessary activities to name just a few, will either take work time away from the breadwinner or need to be hired out; all of which far out way the cost of a policy premium. Not the mention the cost needed for final arrangements and expenses.

5.???????????? Premium costs out way the benefits. I can???t afford it.

For some a life insurance policy will need to be something we save for by trimming the budget. If the only reason for not purchasing a life insurance policy is because you think you cannot afford the premium, then we need to ask ourselves a few questions. What is cost of not having a life insurance policy? Does my family have enough money in the bank to cover my funeral costs? Will my family have to beg for money or barrow the money to cover my cost burden? With some many different insurance companies and the many different policy types and coverage???s available to consumers there is a policy out there that will fit into any budget.

6.???????????? I???m over 60 what???s the point of getting life insurance now.

This is a big mythconception. The purpose of having life insurance is to prevent passing along a legacy of debit and burdening our surviving family with the costs associated with final expenses. Over 60 life insurance makes sense if we???re going to leave behind any debits and with the different insurance companies and the different policies available the cost for new policy or adding to an existing policy will cost much less then you think.

7.???????????? I???m under 35 I don???t need life insurance.

Again, not true. Young people sometimes feel their invincible, they???re not sick and in perfect health so what???s the point??? ???I???ll get it later?????? Life Insurance is much cheaper when we???re younger and with the new products and their features currently available to consumers it can truly be the life line your family needs should you become disabled or prematurely pass away.

8.???????????? My Mortgage is covered; that???s all I need.

Not necessarily. Life insurance to cover a mortgage is designed to cover that debit only. While it might mean you family will not have to relocate it does not replace the lost income a breadwinner provides the household. Nor does it provide funds for funeral costs which could be as high $12,000 on average. Also, a lot of these types of policies only cover the mortgage if an accident occurs and not from health related conditions. Get with an insurance professional to help explain the type policy you have.

9.???????????? My health is so bad there???s no way I can get life insurance.

You???ll be surprised to know that far more is available then you see on mainstream media. While the cost for some of these types of coverage can be slightly higher there are companies available to consumers that can fit your goals and needs as well as your budget.

10.???? It???s better for me to invest the money then it is to buy life insurance

Codswallop. Until your investments or liquid assets exceed your current and future debits you need life insurance. You take an enormous risk in relying on investments in your working years, especially if you have dependents and family dependent on your income. If you pass way prematurely, there may not be enough income to your family once your investments are depleted. The risk of the Wall Street casino is just to great not to life insurance to off-set the risk.

At the End of the Day????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

These 10 misconceptions are just a few of the misunderstandings about life insurance. What you need to take away from this is that until your assets can cover all of your debits current and future you cannot afford to leave life insurance out of your budget. Seek a life insurance professional to help you plan a legacy for your family.

Do I think annuities are the best thing since sliced bread? Well, it depends. Some things about annuities are great. Some products, like variable annuities, are not the best thing for an individual or family in certain situations or times (or any time in my opinion), but having some safer money is still a good thing for most people in most situations (fixed and fixed index annuities). I studied securities and securities law in graduate business school and worked as an intern with an investment bank, but I have yet to hear a very objective discussion of annuities from any securities-licensed individuals.

Two of the most common practices I observe of securities people on the web and with clients are lumping all annuities together and imparting the worst characteristics of one type of annuity on another type of annuity. These techniques work with well clients who are too trusting and fearful or don’t understand the basic definitions of the four common types of annuities. So let’s start there.

A fixed annuity is an annuity that pays a fixed rate of return for a period of time. For instance, for a given period say a year, a fixed annuity may pay 6%. After that period is over, interest is credited to the account and a new fixed rate is declared over the next period, in this case over the next year. A fixed annuity has guarantees for a minimum return of principal and a minimum return of interest credited. These guarantees will not make you rich; however, these guarantees do provide peace of mind because you will most likely never have to worry about losing your money. No matter how bad the economy gets for an extended time, the actuaries at the insurance company providing the annuity have calculated the required reserves to meet these guarantees.

The key benefits of fixed annuities are:

• As interest rates (in the economy) increase, you are rewarded with a higher credited interest rate.
• There are guarantees so you won’t lose your money.
• You know how much you’ll be earning for planning purposes.
• The longer you commit your money, generally the higher interest rate you’ll be credited (similarly to certificates of deposit – longer terms, higher crediting rates).
• The credited interest is tax-deferred as long as the money stays in the annuity or another tax-deferred vehicle.
• You don’t have to annuitize the annuity to remove your money.
• You earn interest on interest, interest on deferred taxes, and interest on the original premium, so called triple compounding.

The key disadvantages of fixed annuities are:

• Surrender charges for removal of funds before the term of the annuity is mature (just like a certificate of deposit at a bank charges a penalty for early withdrawal).
• There are tax penalties if you spend any of the money before age 59 1/2 like most qualified retirement programs.
• When interest rates (in the economy) go down, generally credited interest rates go down.

Fixed index annuities are similar to fixed annuities, except for a couple of key differences.

First, a fixed index annuity (formerly called an equity indexed annuity) is a type of fixed annuity with the potential to return more credited interest if the index employed does well over the crediting period. This means that your money isn’t in the market, so you can’t lose your money if the chosen index goes down. You still participate in the upside, but you do not participate in the downside. The basic advantages of fixed index annuities are the same as fixed annuities, only with the additional potential for an upside return compared to the fixed interest rate return of a fixed annuity.

The main disadvantage compared to fixed annuities is that if the index you chose to link to does not perform well, you may not make a lot of money for that period. Of course if you didn’t make a lot of money because the index went down, you most likely would have still been much better off than your friends in a mutual fund who probably lost money when you didn’t. The other aspect many people don’t understand about fixed index annuities is that you never make the market return when the market is up. This is the trade-off for never losing money when the market goes down. Typically fixed index annuities credit about 82% of the market return.?? This is analogous to loaning your money to a bank in a certificate of deposit. The bank may make 6.4% on your money, but the bank only credits 4.9% to you, the lender to the bank. Unlike a CD though, you don’t pay taxes until you remove money.

Another typical method of securities salespeople is to compare mutual funds with fixed index annuities. Wrong! A fixed index annuity is a savings tool with an insurance company which allows for upside potential of typically/usually 5-8% per year tax-deferred (on average for top quality companies). It should be compared with CDs (certificates of deposit) or government bonds, not mutual funds. No savings instrument will ever match the return on the S&P 500 in an up year. These vehicles are not designed for that. Instead, these fixed and fixed index annuities are designed to never lose money, like bank certificates of deposit.

An immediate annuity is an annuity where you give your money to an insurance company and the company begins paying you immediately, just like the name says. These products are useful for some purposes, but aren’t commonly used for a regular income stream because of the generally lower interest crediting rates. A special type of immediate annuity is commonly used for one of the higher net worth strategies we use with some clients.

A variable annuity is a whole different animal than a fixed annuity, a fixed index annuity, or an immediate annuity. To sell a variable annuity, one has to be securities licensed. This is because when you purchase a variable annuity, you allocate your premiums into investment accounts such as mutual funds and stocks. As you can see, because your money is “invested” instead of saved, your money is at risk. That’s right! With a variable annuity you can lose your money, while with the other three basic types of annuities you have guarantees to protect all (fixed) or a majority (fixed index annuities) of your premium and your minimum credited interest.

There are two main reasons I never recommend variable annuity products to my clients. The first is you can lose your money when most of my clients want safer money, not more risky money. The other reason is most variable annuities have high annual costs, so if the markets you invested in are down, you also get to pay the high fees on top of your other losses. Not a pleasant scenario for most people, but one that played out again and again from 2000-2002 and worse still in 2008.

All types of fixed, fixed index and immediate annuities depend on the quality of the insurance company backing the annuity product. This is why most knowledgeable annuity representatives stick with the financially-strong and consistent insurance companies when helping their clients choose an appropriate annuity.

Remember, most liquid assets except cash have premature or removal surrender charges (or just removal or sales charges). This applies to stocks, certificates of deposit, annuities, mutual funds, etc. Don’t get hung up on surrender charges. Instead, find a financial advisor who has your needs at heart and works with the top companies. This advisor will match your needs to the term of the fixed or fixed index annuity you select together. Just like certificates of deposit, generally the longer you allow your money to be tied-up, the higher the typical average return (if your advisor places your money in a solid product from one of the top companies). If you have a longer time horizon, a longer surrender charge time frame is not the worst thing because of the higher average interested credited tax-deferred verses the shorter surrender charge terms with generally lower average yields. The point is to plan your access around when you hit 59 ?? years old or other age when you know you’ll need the money. Remember, these are savings vehicles, not mutual funds. The top companies are rock solid and have some of the most innovative products and (flexible) crediting methods.

You also will need to know more about some basic financial planning concepts, but that’s for another article. Additionally, there are annuities that have bonuses (sometimes good, sometimes bad), annuities with tuition credit for your children or grandchildren, and annuities that can be used to help a charity, your kids’ education, and your retirement all at the same time. These will all be covered in future articles. And before some cockamamie securities guy goes off, yes, usually the yield on bonus annuities is lower after the initial bonus is awarded than other annuities. But for the top quality companies, many of the average 5 or 10 year yields are in line with the other, non-bonus annuities of a similar term/surrender charge schedule. Yield is not always the most important feature of a financial vehicle or instrument. Sometimes other features and lower risk are more important than the yield. Try telling that to a stock broker sometime!

Don’t let securities people scare you away from safer money strategies by jumbling everything annuity together and using the disadvantages of one type of product (like a risky investment in a high cost variable annuity) to be superimposed on all annuity products. If they’re not honest with you from the beginning, it’s doubtful they’ll be honest with you over the long haul! If you want to learn more about safer money strategies where all of your money is not at risk in the market, you’ll need to talk to a licensed safer money strategies expert, not your typical stock, bond, or mutual fund broker. If they were trying to help you make your money safer, you wouldn’t have lost so much from 2000-2002 and again in 2008.

Contact Us Today for More Information On How an Annuity could in your portfolio!

The process of legacy planning focuses on three areas:

• Personal Capital (the relationships we???ve developed)
• Academic Capital (gained knowledge, our imagination & creativity)
• Financial Capital (our tangible assets & wealth)

The plan development is meant to encourage and uphold the family values and goals making the family stronger well into the future.

The most important first step in the planning process is a meeting (the discovery stage) with the patriarch & matriarch of the family; in other words the husband & wife who are responsible for the accumulated financial capital. This first meeting should be led by a professional person capable of instituting your legacy plan.

During this meeting it is very important that your values, hopes & desires as well as concerns are articulated so that recommendations from the professional later on, convey your needs. This discovery stage is best located where the family leaders feel comfortable & safe, generally their home, so that the feelings expressed on family values, how to use the money, and concerns are open and honest.

At the end of the discovery stage the following questions should be answered:

• What???s important to you about your wealth? Providing financial security or allowing pursuit of a specific passion?
• What do you want for your children and grandchildren? Beyond ???things???, what values do you want your heirs to typify?
• Do you want to be remembered by your local charity, faith based church, or alma mater?

Once all of the information is collected your professional advisor will set a second meeting where he/she will recommend the financial vehicles best suited for you to facilitate your goals. Depending on the product(s) you choose there are many options that will not only convey your values & goals but also, may offer additional living benefits to protect your family.

Having a legacy plan in place is the single most important first step you can take in creating lasting values and wealth to your heirs while protecting your assets. The financial vehicles you choose in your legacy plan can become part of your living trust which will help to avoid the emotional issues that will arise from administrating your estate. Your planning will give you the peace of mind knowing your legacy and heirs will exemplify the values & goals you worked so hard to obtain and develop.

Single premium life insurance is a valuable investment when it comes to wealth creation and transfer. With this type of life insurance, a single premium is deposited, creating an immediate death benefit that is guaranteed until the owner passes away. The death benefit will depend on the amount deposited, gender, age and health of the insured. In many cases, the single deposit will be multiplied by a factor of two or more when the death benefit is calculated. Typically the younger the insured, the higher the benefit received. For instance, a 65 year old healthy, non-smoking woman who deposits $100,000 into a single premium life policy could pass $200,000 or more in death benefit to her beneficiaries. Moreover, the benefit is income tax free to her recipients!

Benefits to the Insured

Single premium life insurance can also benefit the insured or the purchaser during his or her lifetime. The cash value in a fully funded policy will grow quickly and can provide income to the purchaser if needed. In turn, the purchaser can also surrender the policy for its cash value at any time. A few policies guarantee the cash value to be no less than the one time deposit. This way, if the insured needs to surrender the policy due to unforeseen circumstances, he or she is guaranteed to get the investment back. The insured also has the option of taking a loan against the policy instead of surrendering the contract if desired.

Other policies have the option of an accelerated death benefit* that can be drawn on to pay for long term care coverage. By invoking this rider, the woman in the example above would have $200,000 available to her for long term care expenses in her home or a nursing home facility- and these benefits could be received income tax free. In this example she avoids premium payments into a traditional long term care policy and still rests assured that she has significant nursing home protection if necessary. The insurance policy improves the estate in two ways. The life insurance policy will pass increased wealth to the beneficiary or protect an estate from the considerable costs associated with long term care. (*The accelerated death benefit can also be utilized if the insured is diagnosed as terminally ill with twelve months or less of life expectancy.)

Investment Options

There are various investment options in single premium life policies. The most common policy, traditional whole life, has a guaranteed interest rate and is the least aggressive, which makes it very dependable. Other policies such as universal life have different interest rate structures and can use an equity-index or variable engine to increase the policy value. Generally whole life is most appropriate for seniors, while universal life might appeal to younger consumers.

Many elderly consumers feel that they are not healthy enough to purchase life insurance in their golden years. This is simply not true. Simplified underwriting allows many seniors to qualify for life insurance. With simplified underwriting, there is no physical or blood work needed. So long as the proposed insured can answer no to a few questions, underwriting can be done using the answers on the application and a quick telephone interview. The fact is single premium life insurance is not difficult to purchase. Those who feel they are in extraordinary health can choose to go through advanced underwriting and may qualify for increased insurance benefits.

Tax Advantages of Life Insurance

Certainly the advantage of life insurance over an annuity, a savings bond, a certificate of deposit or other investment is the favorable tax treatment of a life policy. The entire death benefit is passed income tax free to the beneficiary. However, the death benefit can count toward the gross value of an estate for estate tax purposes. To avoid estate taxes, some policies are owned by the beneficiaries or an irrevocable life insurance trust. It is crucial to work with a knowledgeable agent and attorney if estate taxes are a concern.

Often single premium life is considered a modified endowment contract or MEC by the IRS. The policy can be taxable to the owner if gains are withdrawn- just like an annuity or savings bond can be taxable to the owner. If the owner is under the age of 59 ?? the IRS can access a 10% early withdraw penalty. Thus these policies are best utilized when the funds are likely not needed in the immediate future.

In conclusion, life insurance can be one of the safest and most dependable investments for many families. Life insurance is especially valuable due to the favorable tax treatment and guaranteed returns associated with these policies. It is important to choose a well rated company and an informed advisor to select the best possible policy for your future.

A.M. Hyers has been working in the insurance business since 1997. He owns and operates Ohio Insurance Plan. This is a content rich website designed to give consumers information on many insurance policies including annuity products, Medicare supplements, life, health and long term care.

Article Source: http://EzineArticles.com/?expert=Adam_Hyers

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Juvenile life insurance is a popular new option for tax-advantaged wealth transfer. Juvenile life insurance is a flexible financial product insuring the life of a child, providing lifetime insurance coverage and tax-deferred savings. A parent or grandparent can “gift” the annual contribution to the child via a custodial account or to a trust, utilizing the frequently overlooked annual gift tax exclusion.

Because minors generally cannot directly own an insurance policy, an adult custodian (typically a parent) is appointed to manage the policy and use the funds for the benefit of the minor child under the state’s Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) until he or she reaches the age of 18 or 21 (depending on the state).

A gift of juvenile life insurance can assure a legacy of tax-advantaged growth that can benefit multiple generations, since the future proceeds of the policy will be received tax-free by the designated beneficiaries. For 2011 and 2012, in addition to the annual $13,000 gift tax exclusion, each donor has a lifetime gift tax exemption of $5 million (up from the $1 million exemption in place for 2010). There has never been a better time to give generously to family, friends and loved ones. After 2012, the lifetime gift tax exemption reverts to $1 million with a maximum 55% gift tax rate.

Parents and grandparents who are making substantial gifts need to be aware of the generation skipping tax (GST tax). Congress established the GST tax to prevent a glaring loophole by taxing transfers to related individuals more than one generation away (e.g., grandparents to grandchildren) and to unrelated individuals more than 37.5 years younger. A GST tax is imposed even when property, such as life insurance, is left in trust for a grandchild. For example, suppose a grandparent sets up a trust that leaves income to her children for life and then the remainder to her grandchildren. The part of the trust left to the grandchildren will be subject to a GST tax. For 2011 and 2012, the GST exemption has increased from $1 million to $5 million.

The increase in the GST exemption, along with the increase in the gift tax exemption, provides affluent families an opportunity to purchase juvenile life insurance for children and grandchildren and transfer significant wealth without current taxes and avoid estate taxes from being imposed on future generations. The 2010 tax bill also raises the individual estate tax exemption to $5 million. For individuals seeking to further reduce their taxable estate and ensure responsible management of the juvenile life insurance policy, a parent or grandparent can create an irrevocable life insurance trust to own the policy and designate a trustee to manage the account for the beneficiary.

According to the non-profit Juvenile Life Insurance Foundation, when a trust or other person owns the policy, the cash value or future proceeds will not be included in the taxable estate of the deceased. Wealth advisors recommend planning now, the estate tax exemption returns to $1 million with a maximum estate tax rate of 55% after 2012.

Article Source: http://EzineArticles.com/?expert=James_Garfinkel

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Here’s something to consider: every family can benefit from a solid wealth transfer plan, regardless of your bank account. And without exception every family will benefit from a well-drawn up will. In fact, a will is one of the three main backbones of a solid wealth transfer plan; you’ll also want to include a power of attorney, and a revocable trust.

First and foremost, if you do not have a will, the bulk of your estate may be lost to legal fees and taxes. An estate doesn’t have to mean millions of dollars; even a modest savings account and some simple investments, such as a 401(k) plan, a pension, a mutual fund or two can be an estate-and their proceeds can be the difference between leaving a child with “something” versus those monies going to the government, leaving a child with burial expenses (that can exceed $10,000).

A will helps to allocate any investments you have and can help to provide guardianship for minors-though on its own, it is not complete. Certain assets, such as retirement assets, only transfer according to beneficiary designations. A will is an excellent and very necessary first step for a wealth transfer plan. It is, though, only a first step.

You’ll want to consider a power of attorney, as well-a trusted individual who can make decisions for property, health, or disability issues. Choosing the right person is key; in some cases, you may have one power of attorney chosen for health issues, another for property. Making this decision and trusting the right person means that in the event of your incapacity, you (and your estate) will still be taken care of.

The third element to consider is a trust-again, not just for the “very wealthy”. Set up properly, a trust helps to pass along wealth or assets to heirs, beneficiaries, charities-even while you are still alive, with favorable tax treatment. Discussing trust options should be an integral part of your wealth transfer planning.

Regardless of the size of your estate, you likely want to be the one who controls how it is distributed. “Gifting strategies”, therefore, should be a part of your discussion with your advisor – the amount to pass along to key individuals, and when, to be sure that the gifts are passed along intact with favorable tax treatment.

Planning for the distribution of an estate of any size can seem complicated-but with the advice of a savvy professional, you can be sure that your assets pass along to your heirs or beneficiaries as you’d wish. Just be sure not to leave the creation of a will, a power of attorney, and / or a trust to “another day”-plan ahead now, revisit your plan annually, and your beneficiaries will be well-taken care of, as you’d intended.

Guido Aloisi, the President of The Financial Solutions Group, provides advice on wealth management and wealth transfers. For more information visit thefinancialsolutionsgroup.com.

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This is extremely powerful over time. An Indexed Universal Life policy has 2 differences/benefits (many, really but here are 2) that no other account can match: An annual lock-in and a floor that never lets your investment go negative. With those 2 features alone, you’ll outpace virtually every investment on the market! For parents looking for great place to save for their children, this is ideal. It offers far more than any bank savings account could offer. Plus, it has an additional death benefit attached.

Indexed Universal Life insurance have been virtually overlooked as ideal investments because of the perception that it’s “life insurance”. However, this is only one small part of the power of Indexed Universal Life insurance. An IUL policy has more living benefits than the actual death benefit that is also attached to the investment.

An IUL policy is designed as a permanent cash-value life insurance product that is designed to outperform Whole Life and Universal Life without the catastrophic downside risk. In fact, zero downside risk! IUL policies are linked to major market indexes like the S&P 500 or a foreign index or a combination thereof, but your money is never in the market. The insurance carrier bears all the risk. Most policies have a guaranteed rate of around 3% and the non-guaranteed rate which is tied to the market index you choose and some are actually uncapped. Meaning, your able to earn unlimited gains. If the market index is negative for the year, your downside protection within the IUL policy will protect you from these losses. However, you also benefit from any positive market returns each year. Never a negative return is a powerful way to build a retirement account at any age! Depending upon the carrier, the guaranteed return on these policies is usually 3% while the cap each year is around 15%. Some carriers have no caps on what you can earn (call us for those).

Whether you’re looking for a policy for your children or you’re in your 20′s or 30′s and beginning to save for retirement, we’ll build you a custom policy from a top rated insurance company. We’ll search the market for you and build a unique policy that meets the guidelines and performance you’re searching for!

Ginn Insurance is a licensed insurance broker. We help families, business owners, individuals, corporations and others build custom life insurance policies that are designed for their specific need. Visit us at http://www.GinnInsurance.com for further information or Email: Info@GinnInsurance.com

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By Ben Dwyer

Merchant account pricing can be categorized as pass-through, bundled or a mix of both. Pass-through pricing is the most transparent, flexible and least expensive form of pricing. Bundled and mixed pricing models, although currently more prominent in the marketplace, are opaque and result in inconsistent and often greater processing costs.

Pass-through pricing is commonly referred to as interchange plus for the way in which base processing charges of interchange, dues and assessments are billed and reported separately from markups.

Separation of processing costs is the primary component of interchange plus pricing that opens the door for a host of other benefits that ultimately lead to greater transparency and lower costs. Primary benefits include transparent reporting, the receipt of interchange credits and cost reductions (such as the proposed Durbin Amendment), and a consistent card markup independent of interchange qualification.

Interchange plus processing statements provide a complete picture of charges including interchange-level detail. This detailed reporting makes it relatively easy to reconcile costs and optimize interchange expenses.

The majority of credit card processing costs are the result of interchange fees. The detail provided on an interchange plus processing statement makes it possible to analyze and optimize interchange costs.

Interchange plus pricing allows acquiring banks to pass interchange credits and reductions along to their merchants. This is something that is not possible with bundled pricing and results in hidden costs.

The separation of base costs and markups on an interchange plus merchant account results in a consistent markup regardless of interchange qualification. This consistent markup eliminates surcharges, lowers costs and makes comparing merchant account quotes much easier than with bundled pricing.

The transparent, consistent markup of interchange plus pricing makes comparing merchant account quotes relatively straight-forward. Unlike with bundled pricing, there are no surcharges based on a provider’s generalized pricing tiers.

Bundled pricing is named for the way in which interchange, base processing costs and markups are combined and passed to the merchant in an oversimplified format. Bundled pricing is often referred to as “bucket” or “tiered” pricing because fees are generalized into tiers or buckets called qualified, mid-qualified and non-qualified.

Major pitfalls of tiered merchant account pricing include inconsistent buckets, hidden costs, inconsistent markups and difficult reconciliation, all of which contribute to greater overall processing expense.

The tiered pricing model makes it possible for merchant service providers to dictate which rate tier or bucket an interchange category qualifies. A provider’s ability to influence how interchange is routed results in something called inconsistent buckets, because not only would you need to know a provider’s rates in order to compare quotes; you also need to know how they qualify interchange to determine the markup for each category.

The bundling of costs on tiered pricing prohibits interchange credits and fee reductions from being passed to merchants, resulting in what can amount to significant hidden expenses.

The card markup on the tiered pricing model varies per interchange category making reconciliation difficult and contributing to greater processing expense.

Reconciling processing costs by referencing a tiered merchant account statement is difficult at best and impossible at worst. Interchange detail is typically not disclosed on a tiered merchant account statement leaving the merchant to guess how interchange categories are qualified. In this case, an educated guess is as close as a merchant can come to reconciling actual processing costs.

Find the best credit card processor and save an average of 45% by allowing credit card processors to compete for your business at CardFellow.com. Sign up, receive multiple bids, choose the best option, and save. Lower your business’s credit card processing fees today!

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• Your money grows tax-deferred
• Your money can be taken out Tax-Free
• Asset Class
• Min. guarantees
• Upside Potential & No Downside Risk
• Do not pay income tax during retirement
• Money is liquid
• Extend retirement cash flow for up to 30-40 years

If you were to gather a room full of small to medium sized business owners and ask them what task they least like and understand, payroll would be at the top of the list for almost everyone in the room.

Because most business owners are not accountants and were not math majors in college, the responsibility to pay your employees while being compliant with government regulations is generally confusing and cumbersome. All of the current state and federal regulations can give you a real headache.

Thankfully, for small to medium sized businesses, there are services that offer outsourced small business payroll solutions. Businesses can choose to outsource just their payroll accounting, and payroll processing, to firms who specialize only in this field.

Payroll service companies can easily handle small business payroll tasks with ease and accuracy, allowing small and medium sized business owners to better utilize their administrative time growing their businesses and making more sales.

Payroll accounting is one area where you, as a small business owner, can really benefit from the outsourcing trends of today. Payroll processing, through outsourcing, insures that the job is done correctly with all of the latest rules and regulations taken into account.

Payroll accounting companies devote their time and care to keeping up to date on all of the latest requirements. Because this is their area of expertise performed daily, they do it very well.

While many of us think of payroll as simply a paycheck, there is so much more to the task. Payroll accounting includes: payroll checks, direct deposit, debit cards, federal and state withholdings, tax liability registers, check registers, unemployment taxes, tax forms, and so much more.

By outsourcing this responsibility, you can free up your time and still stay on top of all of your reporting and filing deadlines. The payroll service company will keep you apprised of everything you need to know and make sure that you stay in compliance. That is what you pay them to do for you.

In the online age, no matter your location, from New Orleans, Louisiana, to Juneau, Alaska, an experienced small business payroll service company can serve you wherever they are based.

Another wonderful benefit to contracting this job out is that you can have a bookkeeper to process your accounts payable and accounts receivable, while at the same time they do not have to have the specialized knowledge required to process and file your payroll.

This means your bookkeeper can be paid substantially less, and this is an efficient savings for your bottom line. Payroll service companies charge very reasonable rates and are well worth you considering.

No matter what industry you are in, if you have employees then you have a need for payroll to be processed. By attempting to do your own in-house you might find that your bookkeeping staff will be expensive and still will miss something that they were simply not aware of.

By outsourcing your payroll services you can insure that the job is done correctly and in a timely manner. Your payroll accounting company will insure that you meet all guidelines and timelines as well.

If payroll efforts keep you from more productive, revenue producing activities, there is a cure. Payroll Rx is a small business payroll service company – on time, easy to understand and personalized for you. We have a plan for every size business and every payroll need. http://www.payrollrx.com/

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