Driving Without Car Insurance In NC Might Soon Cost You Your Car

A bill, recently introduced in the NC House of Representatives by Representative George Cleveland, referred to as house bill 602, proposes to confiscate uninsured vehicles operating on NC highways. Cleveland is frustrated with the number of uninsured drivers on our highways and wants to step up the costs of noncompliance to get drivers’ attention.  If passed into law, then these rules would take effect December 1 2013.

In NC car owners cannot renew their license plates without first proving insurance is in place on the car associated with that tag.  However, once past this hurdle, some insurance policies are later cancelled while the driver continues to operate that vehicle on the highways.  The NC State Highway Patrol issued 24,436 citations last year to drivers without insurance.  Some estimates put the number of uninsured drivers on our highways as high as 15% of the total of all vehicles on the road.

As an aside, when I first became an insurance agent in the early 1980’s, uninsured motorists insurance coverage cost the average driver about $3 per year per car.  Now, that number has skyrocketed to nearly $150 per vehicle.  Part of this explosive increase in costs has been related to the introduction in the mid 1980’s of underinsured motorists coverage, but there is no doubt that the costs of uninsured drivers in our state is something that everyone who buys insurance here has to bear. 

The bill says that the confiscated vehicle will be placed under the possession of the sheriff of the county in which the violation occurred.  It goes on further to state that the sheriff shall restore the motor vehicle to the owner, only after proof of insurance is obtained.  In addition, this bill would require the owner to pay the sheriff for costs actually incurred by the sheriff towing, processing, and storing the vehicle.  There is no mention of limitations on these fees and expenses so we could see widely differing costs for uninsured motorists from one county to the next.

One other area of consideration in this bill deals with the rights of the lienholders to a confiscated vehicle.  After all, they actually hold title to the car until the loan is paid off.  Section 3 says that the lienholder may petition the court to reclaim the vehicle for sale to satisfy the lien.  The allowance of this reclamation is up to the discretion of the court however and if the vehicle is returned to the lienholder then that party has to return to the state any proceeds of the sale over and above the balance remaining on the loan on that vehicle. 

This bill is a drastic measure and may seem a bit heavy handed but there are some additional provisions in the bill that will soften the blow for some violators.  There are exceptions that can be made for technical errors that may have led to a lapse in insurance coverage.  Also, there is a grace period that allows the driver to obtain insurance in order to avoid the vehicle being sold by the state though during that time they will not have access to their vehicle.  I think it is clear that the state of North Carolina would rather not get into the used car or car auction business so they will hope that most people will purchase insurance right away to get their car out of the impound lot.  But I think it is a useful consideration that a violator that has no insurance is not allowed to just drive off from the traffic stop and endanger others with no means of paying for the accident that he or she may cause.

You have to believe that if the bill does become law, and if its successfully force more uninsured drivers to purchase insurance on their vehicles, then over time the rest of us will see reduced uninsured motorists insurance rates.  And that is only fair.

At Clinard Insurance Group, located in Winston Salem, NC, we help thousands of families each year with their NC auto insurance.  We would love to help answer any questions you may have about this or your home insurance.  We can also help you with your life insurance and business insurance, so feel free to give us a call today at 877-687-7557.

NC Auto Insurance Modernization Act – An Interestingly Political Fix

Right now there is a bill that is under debate in the NC House of Representatives.  This bill attempts the change the way that auto insurance rates in NC are made, allowing each insurance company to come up with their own rates as opposed to the current system of having the NC Rate Bureau propose maximum rates to the insurance commissioner for approval or denial.  This bill, called House Bill 265, in my opinion, is a step in the right direction and would allow for more of a free market approach to rate making but also includes some proposed changes that might generate huge problems for the auto insurance consumer down the road.  And I am left wondering why our legislature is working so hard to fix our auto insurance system that is stable and competitive, while ignoring the exact same rate making problems for home insurance that is actually causing homeowners in our state such difficulty when they try and buy or even renew home insurance.  Trying hard to fix something that isn’t broken while ignoring a crisis going on around them must just be a talent found only in politicians.

House Bill 265 has at its heart a more free market approach to auto insurance rate making in North Carolina.  And I can certainly support that.  Currently our system of rate making is a two-step process.  First of all, the NC Rate Bureau, an entity owned and supported by all of the insurance companies that do business in our state, proposes maximum rates that could be charged for auto insurance.    These proposed maximum rates are sent to the insurance commissioner who can approve them or partially approve them or even modify them or reject them entirely.  Ultimately then, the insurance companies can charge the maximum rates, or provide discounts from these rates to charge something below the maximum rate.  This works just fine as long as the maximum rates are nowhere near the break even point for the insurance company on that kind of insurance.  In auto insurance the rate that you pay is almost certainly somewhere far below the maximum.  But with home insurance in NC right now, the maximum rates are just too low for most insurance companies to make money.  And if they can’t make money then they leave or they start trying to find ways to reduce coverage.  And getting a rate increase out of an elected commissioner during an election year is nearly impossible.  So the current system can hamstring itself sometimes. 

Right now, the NC, our homeowners insurance marketplace is in crisis. Weather related losses have left insurance companies losing money on home insurance.  Rates have been held down by the insurance commissioner and some insurance companies have left the state entirely while others are cancelling huge blocks of homeowners policies from their books.   To prove a point regarding which rate making process should actually be under the legislature’s wish list for change,  a homeowner in NC will find it very difficult to buy home insurance in North Carolina without also purchasing auto insurance from that same insurance company.  Why?  Well because the insurance company knows that it will make money on the auto while losing it on the home insurance.    

I can support the portion of this bill that allows insurance companies to make their own rates, whatever they may be, for North Carolina Auto Insurance.  I trust that a free and open rate making marketplace will probably generate much better results for all consumers than will one that is dependent on the political will of an elected insurance commissioner.  But I have one huge concern with this new bill.  The current wording would allow insurance companies to develop their own coverage forms for auto insurance.  This could be a huge change from our current law which requires all insurance companies to sell the same auto insurance form.  Differing policy forms could make comparing one auto policy to another unreasonably complicated for the average consumer.  Apples to apples quotes will be a thing of the past, though the real problem could be that most consumers may not realize this.  The dark side of this kind of change is that at least some auto insurance buyers will purchase their insurance based solely on the lowest price offered.  This might mean that they don’t have the protection that they need after an accident happens.  I have been advised by some insurance company personnel that in the states where differing policies are allowed, most insurance companies tend to sell the same basic coverage to everyone.  So this may not be a big concern though the risk to the consumer seems pretty large from my perspective.

There is also one other possible bad consequence of this legislation.   This bill would make insurance company membership into the NC Rate Bureau voluntary.  Might this mean that the large auto only insurance companies would leave the bureau and as a result leave this organization without the funding that it needs to survive?  And if this happens, what then will become of our home insurance market which is currently in crisis due to rates that are too low?  Might  this deepen the homeowners insurance crisis in NC?  These are questions for which I can find no concrete answers.

At Clinard Insurance Group, located in gorgeous Winston Salem, NC, we work hard to help all insurance buyers become informed consumers.  We currently insure thousands of families all across NC and we can help you with any of your insurance needs from home insurance and auto insurance to business insurance or life insurance.  Give us a call, toll free, at 877-687-7557 and we will be happy to put our expertise to work for you to help you find the coverage you want and need at the lowest possible price. 

The Driverless Car And Auto Liability Insurance – One Problem Solved, A New One Created

Make no mistake, the technology for a future in which cars drive themselves is heading our way at breakneck speed.  Some say the technology is decades off while others think we will begin to see these cars on the road as early as the year 2020.  This new technology promises some great benefits to our society such as fewer traffic jams, fewer accidents, lower auto insurance rates as well as better fuel economy for cars on the road.  But before we can get to this point, whether or not we have developed the technology itself, our society will have to solve some very sticky legal liability issues.

Some experts believe that we will solve all the technological problems of driverless cars and still not be able to put them on the roads because our legal system will lag behind in preparing for the world where cars drive themselves.    Or that the development of this technology will grind to a halt because of the lack of clarity about liability issues.  This is because when you remove the driver from the equation regarding the cause of an accident, you open the door to so many different parties that the uncertain liability exposure could stop the very driverless industry in its tracks.  Who should get the blame for an accident between driverless cars?  The technology designer, the parts manufacturer, the highway system, the auto manufacturer or the car owner or is there someone else who should shoulder this blame?

Right now there are about a half dozen different state legislatures that are working through these difficult issues independently.  Arizona has considered and debated some of the issues regarding driverless car liability but at this time has put no laws on the books.  Last year, California passed a law that directed its State Department of Motor Vehicles to come up with rules by 2015.  Florida passed a similar law giving its DMV until 2014 to come up with rules.

Nevada is the state that so far has gone the farthest toward some type of solution.  They recently developed a 22 page section of rules that govern driverless vehicles.  This set of rules licensed Google, Audi, and auto parts maker Continental AG to test their driverless vehicles on public roads.   These vehicles must first go through 10,000 hours of testing on closed tracks and the tester has to put up a $1 million bond to cover any potential liability.  After that they may qualify for some testing on public roads.

One of the problems with trying to make rules about liability is that we are facing a bit of a chicken and egg situation here.  Since we don’t have many of these vehicles on the road at this time we just don’t understand all of the issues that will arise.  It is hard to anticipate all of the potential problems that might occur when the technology itself isn’t even fully developed yet.   But the heavy hand of the auto manufacturers is already deeply engaged in the process.  Their fear is that if they are stuck with all liabilities from any and all accidents, then the driverless car revolution will never happen.  The Alliance of Automobile Manufacturers was able to work in a provision in the Florida bill which exempts the auto manufacturer from liability if injuries result from a modification of a self-driving vehicle.  They tried for the same amendment to the California bill but were unsuccessful.

In truth, there is great risk in having our many different states independently trying to develop a patchwork of different laws.  In the end, one overreaching federal law will probably better serve us so that manufacturers and driverless car owners as well as insurance companies can all know that they are working with the same sets of rules in every state.  At this time the federal government has been quiet on this topic but with the states activity here beginning to heat up, it is probably only a matter of time before this becomes a national issue that the federal government will have to address.

At Clinard Insurance Group, we feel that eventually driverless will mean lower car insurance rates for most all consumers.  Whether or not you will miss the silly car insurance ads on TV is up to you but they will be gone.  In the meantime though, car insurance as well as home insurance and life insurance are big budget items for many households.  We can help you reduce what you pay while still getting the coverage that you want.  Our ability to go out and shop the marketplace for the best rates for your particular situation is one of the big benefits that you get when you deal with Clinard Insurance Group.  We insure thousands of families all across North Carolina, South Carolina, Georgia and Tennessee.  Give us a call, toll free at 877-687-7557 and let us put our experience and know how to work for you today.

EFT And Your Insurance Policies – There Are Many Benefits For You!

I was listening to the radio this morning and heard the news that very soon, the Social Security Administration will no longer pay benefits by check.  Right now, 93% of payments now are handled by Electronic Funds Transfer, or EFT voluntarily but now the federal government wants to wean that last 7% off of paper checks.   I have seen a similar trend in the insurance industry with less and less people paying their monthly insurance bills by check and opting for EFT payments instead.  And there are greater benefits to you of signing up for EFT payments than you might initially think.

Let’s begin with benefits that your insurance company may offer you if they don’t have to send out a paper bill and then process your paper check each month.  With your billing process set up on email and EFT, they will save money.  Going back to my original example with social security checks, the federal government says they can save over $100 million per year by converting all social security recipients to a direct deposit system.  Those savings are realized by insurance companies as well.  And some of them will share these savings with you.   For instance, Auto Owners Insurance will apply a $5 credit to your policy if you sign up for paperless processing with them.   And nearly every insurance company will waive the monthly installment fee on your policy if you sign up for EFT.  With some of them charging as much as $5 per installment per policy, this can add up in your favor pretty quickly.

Here’s a big advantage that policyholders who choose EFT billing from insurance companies gain: cancellation protection.  Imagine if you are out of town when your monthly bill comes in or if your monthly invoice just gets lost in the mail and you fail to pay it.  In the worst case scenario, you might have an uncovered loss that could destroy you financially.  But on the other end of the spectrum, you might still have to pay fees to reinstate your policy or you might owe fines to your license tag agency for a lapse in coverage on your auto insurance.   With EFT, you don’t risk a cancellation of your policy for nonpayment of premium, unless of course you don’t keep enough money in your account to cover the EFT payment withdrawal.

One of the most common objections that I hear from customers who are considering EFT for their insurance policies is that they don’t trust their insurance company with access to their bank account.   Or that they will end up with bounced checks because of an EFT charge they weren’t prepared for.   While I understand where this is coming from, I think these fears are mostly without merit.  EFT charge errors are extremely rare and in our experience, insurance companies are quick to correct their errors and pay any bank charges that they may have caused.  The fact is that you are going to have to pay the insurance payment one way or another so you will need to have the money in your bank account either way at some point.  But EFT provides you with one additional benefit to help prevent the overdraft problem.  They will let you choose which day of the month the money will be withdrawn.  So, if you get paid on the 1^st and the 15^th of the month for instance, you might want to choose the 19^th as the withdrawal date so that you are confident that you have money in your account each month to cover the EFT withdrawal.

One slightly different version of the EFT idea that I like even better is the automatic credit card charge for your insurance premiums.  There are two distinct advantages with using your credit card.  First of all, you won’t need to worry about keeping enough money in your checking account to cover the charge as you will be able to just pay it off when the credit card payment is due.  Secondly, if you have air miles or some other perks program on your credit card, you can now apply your insurance expenses to those perks and increase the benefits for yourself.

At Clinard Insurance Group, in Winston Salem, NC, we insure thousands of families all across North Carolina with their home insurance, auto insurance, life insurance and even their business insurance.  We would love to help you and your family find the best protection at the lowest possible rates.  Please give us a call, toll free, at 877-687-7557.

The New Political Football In North Carolina – Homeowners Insurance Rates

While the general public may not know it, anyone in the insurance business will tell you that the homeowners insurance market is in a state of turmoil.  Here’s why.  Whether you believe their crystal balls or not, most every insurance company that sells home insurance in this state has come to believe that they need higher rates in order to avoid losing money on those policies.  But the insurance companies  can’t simply raise their rates on their own because the rates that they can charge are regulated by the NC Insurance Commissioner.  The Insurance Commissioner is an elected position and it appears to me that our current commissioner must believe that raising homeowners insurance rates will jeopardize his political position and may even cost him his job at the next election.  When you put all of this together you have a volatile situation that can create problems for the insurance consumers here in North Carolina.

Recently I watched a Fox News story about this problem and I was struck by the man in the street interviews in that segment.  Fox News asked random strangers what they thought about the insurance companies needing higher rates.  To a person the same response was given by every person interviewed:  insurance companies are charging too much already and the insurance commissioner is doing the right thing by keeping rates low.  I don’t blame people for thinking this if they haven’t studied the problem, or if they haven’t thought through the ramifications of this kind of stance, but in truth, this kind of thinking is what gives the Insurance Commissioner his power and allows him to take the stand against rate increases that is creating so much misery in the homeowners insurance marketplace right now.  It’s really pretty simple.  If insurance companies can’t make a profit, then they will leave.  Those that choose to stay will have less competition and will have to find some other way to make a profit.  Right now their choices are to run an end run around the Commissioner to increase rates on a policy by policy basis, or take away or limit some of the protections currently included in the policy.  Much as we may wish it, we can’t squeeze water from a stone and if we continue to try and force insurance companies to lose money in this state we will see fewer and fewer choices for our home insurance in the future. 

Here’s a quick look at four trends that are happening in the NC homeowners insurance marketplace and the impacts that they are having on insurance consumers in NC.

The first trend is the bundling of home and auto insurance.  If you want to purchase homeowners insurance in NC, it is a strong possibility that you will have to bundle your auto insurance policy with that home policy or you will not be able to buy the home insurance.   Stand alone home insurance policies are called monoline home policies.  While 2 or 3 years ago, most insurance companies would happily write a monoline home policy, now  you would be hard pressed to find an insurance company that will do this for you.  The reason is simple.  Insurance companies can make a nice profit on your auto insurance but not on your home insurance.  Therefore, they will only write the losing policy (home), if they also get to write the winner (auto).  If you have both, this is not a huge problem although it does narrow your choices as a consumer.  But it is starting have a very negative impact on some senior citizens who have turned in their licenses and no longer drive and thus don’t have an auto policy.  Now they are losing their homeowners insurance and may have no way to get a new policy in place. 

Another trend that is becoming more and more common is the use of consent to rate forms in order to both cancel existing homeowners policies and to increase the rates on some homeowners as much as 250% or more.  This is an extremely inefficient way to increase rates as it is done on a policy by policy basis and is like trying to hammer a nail in with a sledge hammer.  For a more detailed understanding of why consent to rate is a problem for consumers and insurance companies alike, please read my blog on this topic by clicking here.  Oh, and if you receive a consent to rate form in the mail from your insurance company, please don’t just sign it and send it in without first consulting an insurance professional.  Give us a call at 877-687-7557 and we will help you understand your options.

The third trend illustrates how if insurance companies can’t get the rates they need to stay profitable, then they will start reducing the coverage.  We are now seeing most insurance companies increasing the minimum deductibles on all homeowners insurance policies that they write.  Long gone is the option for a $250 deductible and with some insurance companies you may not even be able to choose a $500 deductible option.  In addition, some insurance companies have also changed their deductible clause to double your deductible if you have a loss from wind or hail.  This change, and the next one I will mention shows you that the biggest loss problems that insurance companies have in this state come from wind and hail claims.

The last trend, which is still pretty rare but will probably be common on all policies in the next year, is the change in coverage on your policy for your roof from replacement cost protection to actual cash value protection  Insurance companies are now working on wording in their policies to make this change in the event of wind and hail claims for damages to your roof.   Right now, almost all policies will replace your damaged roof with a brand new one, even if your roof is almost completely worn out.  But in the future, this protection will be removed from your policy completely, or at best, you will have to pay an extra premium to get replacement cost protection for your roof added back to your policy.  Actual cash value protection means that when settling your roof damage claim, the insurance company will not pay you what it takes to replace your roof, but rather will pay you the replacement cost of your roof minus any depreciation for your current roof based on its age.  So, if you have a 20 year roof that is 19 years old, then you can expect to receive 5% of what it will take to put a new roof on your house after it has been damaged by wind or hail.  That could put a whole lot of homeowners in a difficult financial position.

The truth is that whether we like it or not, if insurance companies are unable to make a profit writing homeowners insurance in NC, then they will do one or more of three things.  Either quit and leave our state, or find ways to raise rates outside of the Insurance Commissioner’s control, or reduce the protections provided by the homeowners insurance policy.  All of these choices lead to unpleasant surprises for the consumer.  It is time for our Insurance Commission to stop playing politics with homeowners insurance in NC and let the free market operate in a way that will keep insurance options and choices open for all consumers.

At Clinard Insurance Group, located in Winston Salem, NC, we help advise thousands of families all across the state with their personal and business insurance needs.  We are dedicated to helping you find the best possible options for your home insurance, your auto insurance, your life insurance, and even your business insurance.  We would be happy to answer any questions you may have.  You can reach us by phone, toll free, at 877-687-7557.

In NC Now Your Auto Taxes and Tags Will Be Combined On One Bill

The way you pay your vehicle property taxes in NC is on the brink of a big change.   The State of NC is now beginning to phase in a new billing program that will combine your license tag renewal bill with the bill for the property taxes due on your vehicle.

Each county in NC charges a property tax for the licensed vehicles in their county.  Before this change was passed, each county would send a separate property tax bill for each vehicle in the county.  These taxes were generally due on the anniversary date of the day that you first registered your vehicle.   In 2013 this is all changing.

With the passage of General Assembly House Bill 1779, the Tax and Tag Together program was created.  This program combines the renewal bill for your license tag with your property tax bill for your vehicle.  By the time this new program is fully phased in, sometime in mid 2014, everyone will receive a combined bill for both license tag renewals and vehicle property taxes.   Both will be due at the same time, both are payable to the NC Division of Motor Vehicles.

This new Tax and Tag Together program will begin phasing in by mid 2013 as the DMV begins sending out registration renewals that will include the property taxes with each bill.  By mid 2014, all vehicles will be included in this program.  The DMV will disburse the property tax funds of your tax payment to your county tax office.  This means that once your vehicle is phased in to the new program, you will no longer be able to pay your vehicle property tax payments at your county office. 

It has only been a few years now since the NC DMV connected your annual vehicle inspection renewal to your tag renewal and this rule has not changed.  This means that you still must have your vehicle inspected before you pay your tag renewal.  With this new program, your vehicle tax will be due at the same time as well.  So, you will have three things that you must do at the same time every year: Get your vehicle inspected, pay your tag renewal and pay the property taxes on that vehicle.

You should receive a notice with the new tax bill and registration renewal by mail.  But keep in mind, if you have recently moved and have not notified the DMV of your new address, then you will likely miss this notice and could be subject to penalties and interest if you are late paying your property taxes.  In addition, if you have moved to a new county and not notified the DMV, then the tax bill that you receive might be inaccurate so you will have more to work out before you can renew your tags.

Last of all, don’t forget that NC law states that if you have a tag in your possession, then you must have auto liability insurance in force as well.  So if you sell your car, don’t forget to take off the tag and turn it in to the NCDMV office before you call your insurance agent to ask them to remove this car from your insurance policy.

At Clinard Insurance Group, we want all of our customers to be informed insurance buyers.  If you have any questions at all about any of your insurance policies, or if you need help with a new auto insurance  or home insurance policy, please call our office at 877-687-7557 and we will be happy to help you.

How Many New Cell Phones Have You Had Since You Last Updated Your Life Insurance Policy?

All of us who are old enough to remember the days before cell phones, will probably agree that how they have evolved over that time is nothing short of miraculous.  If I showed a person from 1982 what I can now do with my phone, they would think I was a magician.  Think back to the early days of cell phones when they were huge, clunky, expensive devices that could really only accomplish one task – making a phone call.  Similarly, the lowly life insurance policy has been evolving on an equally dynamic path, however fewer people have taken notice of these changes.  And as you read on, you will see that it has been in the best interest of the life insurance industry not to tell you quite as much about these changes.   But there is no doubt about it, if you have an old life insurance policy, and if you are also healthy, then you might benefit greatly from an upgrade.

One of the biggest revolutions in the life insurance industry began in the early 1980’s, with a brand new product called Universal Life Insurance.  Universal life policies had an advantage over traditional cash value policies in that they were much more flexible.  For instance, with a universal life policy you could allow the cash value build up to take the place of the death benefit or you could even let it pay your premiums for you for a while if you had enough cash value in your policy.   The next evolution of this tool allowed for the cash value to be invested in funds that mirrored the stock market, generating huge returns in bull markets but of course creating problems for policy holders in bear markets.

If you have a cash value life insurance policy in force, whether it is fully paid up or even if you are still paying premiums each month, please read on, this article could make you a lot of money.   Let’s take a look at some of the issues that make a switch to a more modern policy an important issue for you to consider.

A good place to begin would be with mortality tables.  These are tables which attempt to predict how long the average person will live given their current age. These tables are used to develop the rate you will pay for your life insurance protection. Now, when you purchased your cash value life insurance policy, it is more than probable that your insurance company calculated the premium that they charge you each month using mortality tables that are now out of date.   People are living longer now than they were just a few years ago and longer lifespans will generate lower life insurance rates.  But if your policy is locked in to an old mortality table, then you paying rates that anticipate that you will live a shorter lifespan than now may be the case. If you were to replace that policy with one just like it that used more modern mortality tables then you should see a reduction in your cost of life insurance even though you are older now.

Administrative costs – People who own cash value life insurance policies that are 15 years old or older may be paying for clerical workers who have long since been sent home.  Let me explain.  Older life insurance policies have built in administrative costs to cover the clerical costs of maintaining those policies.   You see, back then life insurance companies, which were very slow to automate operations and embrace computer technology, had not automated a number of their clerical functions, even simple ones like adjusting the growth or interest on the cash value of your account.  Using hundreds and even thousands of clerical persons to handle this was very expensive.  With all of those clerical employees they had to rent office space and maintain premises as well as offer benefit programs to keep these employees.  Most of that is all gone now and computers have taken on these tasks.  But, if you have an older policy, those expenses are still built into your rates and you are now paying for ghost employees and empty office buildings. And these expenses are pure profit to your life insurance company.  I hope your life insurance company is sending you a nice gift each Christmas because they have to love you for hanging on to that expensive policy which has huge profits built into it for them.   A new policy will save you from this expense.

Indexing – the new way to grow your money.  Most of the older, cash value life insurance policies have very rigid investment plan that severely limit how your money can grow.  Indexing, in the context of life insurance, refers to a technique where your money is invested in very safe, low yielding investments for the most part, while the insurance company purchases options on stock market indexes with a small portion of your funds.  When the stock market goes up, they can convert these and capture a nice percentage of the stock market gains.  What this means for you in general terms is that your cash value can now earn a large percentage of any stock market gains while avoiding any losses when the market goes down. When it comes to long term investments like the cash value in your life insurance policy, avoiding losses is often more important to long term success than capturing gains.  Indexing is a powerful tool that can help you end up with a lot more money in the long term inside your life policy.

Long Term Care – some cash value life insurance policies can now allow you to use a portion or even all of your life insurance death benefit before you die to use on long term care for yourself as you age and become unable to care for yourself.  This is a powerful feature because it does not require you to move to a long term care facility to collect the funds.  You can use your life insurance death benefit before you die to help allow you to continue to live in your own home and hire care givers to help you stay there as long as you are comfortable with that.  When you need to move to a long term care facility you can use the money for that as well.  Most long term care policies are not this flexible and besides, their cost is very high.  Here you are just using your death benefit as a living benefit for yourself.

Retirement Distribution Option – this new feature is found on fewer new policies but is catching on and may soon be very much more common.  Some of these new cash value life insurance policies let you to create a bucket where you can dump in money for your retirement, either from a 401k or from non tax deferred funds, for instance if you sell your home or inherit money.  Either way, the advantage is that you will be able to create a lifetime income that you can’t outlive.  This means that as long as you are alive you will receive monthly payments no matter how much that adds up to over your life time.  And the real power of this bucket is that you will be able to generate a much higher monthly dollar amount than any other method of distribution will allow.  This could make a big difference in your retirement lifestyle.

Clinard Insurance Group, located in lovely Winston Salem NC is dedicated to helping all insurance buyers become better informed consumers.  We insure thousands of families all across North Carolina.  If you would like help with your home insurance, your auto insurance, your life insurance or even your business insurance, please call us, toll free, at 877-687-7557.