By Gregory Sessa

If you owned stocks or mutual funds at the start of the 21st century, you no doubt felt the financial pain of the market’s crash. Between the stock market’s peak in March 2000 to its subsequent bottom in October 2002, and then the drop again in 2008 and 2009, the combined market value of companies traded on the New York Stock Exchange and NASDAQ fell tremendously.

While the stock market has recovered to a degree, that’s little solace to those whose portfolios were decimated by the market’s drastic drop. Many consumers who are especially risk averse, such as retirees and those nearing retirement, are wary of ever returning to the stock market, given its inherent risk.

During the same time as the stock market freefall, nearly all consumers who purchased a relatively new type of fixed annuity, called an index annuity, did not lose a dime of their original principal. This prompts consumers to ask, “how is this possible?”

The reason index annuity owners can feel secure about not losing their principal is because 100 percent of the principal in an index annuity is backed by the financial strength of the issuing insurance company. Congress mandates that insurance companies back your money, dollar for dollar, in capital reserves. FDIC insurance in contrast has less that $2 in reserve for every $100.00 in your account! Index annuity owners earn a guaranteed minimum rate of return and potentially can earn more, depending on their annuity’s index linked rate of return.

The issuing insurance company links the index annuity’s interest rate to a select external index. Most index annuities have interest returns linked to the S&P 500 or the Dow Jones Industrial Average and some are linked to other indices. The index-linked interest rate earned is usually a percentage of the growth of the index. It is important to note that index annuities are not securities, nor should they be considered a direct alternative to securities.

Knowing that consumers may occasionally wish to tap the funds in their accounts for emergencies or other reasons, most index annuity issuers allow some sort of annual withdrawal, up to a set amount without assessing withdrawal charges. A feature in the newest annuities today can guarantee income that the client can never out live no matter how the market moves; up, down, or side ways. The income is guaranteed for life without annuitization and the amount left over in the contract value will pass to their heirs.

Annuities are sold in amounts as little as $2,000 to $5,000 and offered by some of the most highly ranked and financially sound companies in the insurance industry. Index annuities also are unique because purchasers do not pay any up-front sales charge.Your insurance agent is compensated solely by the issuing insurance company. When you buy an index annuity, 100 percent of your principal goes directly into the contract. Some even offer a bonus of up to 10% so 110% of your money is working for you from day one.

If you are interested in diversifying your assets with guarantees of safety and security, lifetime income you cannot out live, index linked gains with unique features, and peace of mind to let you sleep at night, the index annuity is right for you.

Can Index Annuities Offer Peace of Mind and Guarantee Income For Life? is a post from: Dough Defender

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Maybe you don’t need to worry about protecting the structure itself, but what about your stuff and yourself? All it takes is for the 6yr old upstairs to turn on the bath and forget to turn it off. If you don’t have a renter’s insurance policy you can kiss your electronics goodbye. Most of the time the landlord’s homeowners policy will cover the damanges to the property, but his policy won’t cover your belongings. You’re expected to have a policy of your own to cover that. Many renter’s insurance policies will also cover the expenses of an alternative place to stay while the damages from floods and fires are being repaired, usually under the category of additional expenses due to your claim. Renter’s insurance policies also protect you against liability if anyone else is injured in your home including court settlements and legal fees.

Standard Renter’s Insurance

The standard renter’s insurance policy, the HO-4 policy is for renters. There is also a policy specifically for condo owners, the HO-6 policy. Both HO-4 and HO-6 cover losses to your personal property from 16 types of perils:

• Fire or lightning
• Windstorm or hail
• Explosion
• Riot or civil commotion
• Damage caused by aircraft
• Damage caused by vehicles
• Smoke
• Vandalism or malicious mischief
• Theft
• Volcanic eruption
• Falling objects
• Weight of ice, snow, or sleet
• Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance
• Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, an air conditioning or automatic fire-protective system
• Freezing of a plumbing, heating, air conditioning or automatic, fire-protective sprinkler system, or of a household appliance

Sudden and accidental damage from artificially generated electrical current (does not include loss to a tube, transistor or similar electronic component)

Floods and earthquakes are not included. If you live in areas at high risk of floods or earthquakes, then you’ll need to buy a separate policy or a rider. If you live in an area prone to hurricanes, you may also need to buy a separate rider to cover wind damage.

If you have expensive items to insure, ask about having an endorsement added to your policy to cover those items – and get them professionally appraised!

Actual Cash Value vs. Replacement Cost

Each renter’s insurance policy will be different in the amount covered for your belongings. Some policies will cover the actual cash value (ACV) of the item and some will offer reimbursement of the replacement cost.

ACV coverage only covers the amount the item was worth at the time it was damanged or stolen. Factoring in the deductible, you will receive less reimburement under this coverage. Leaving you short when you need to purchase your items brand new.

Replacement cost coverage will cover the the actual cost of replacing the item minus the deductible. Replacment cost coverage will come with higher premiums, but also higher payouts if you do need to file a claim. Look out for limits on high value items. For large ticket items you may need to add a rider to make up any difference in the cost of replacement and the policy coverage limits.

Take Inventory

It is important to take a full inventory of your belongings in order to receive full compensation in the event of a claim. A complete inventory will list each item you own along with it’s value and serial number if it has one.
When you create your inventory, go through each room and photograph or videotape the room. Make sure to include open closets and drawers, along with any storage spaces. Keep the photos or videos in a fire proof safe or a safe deposit box to keep them safe from the perils you’re trying to protect yourself from. More on creating your personal belonging inventory can be found here KnowYourStuff.org.

Renter’s insurance is often provided along side your auto policy and it’s fairly inexpensive to add. Everyone should be covered, you never know when the “just in case” will get ya!

Renter’s Insurance: Learn the Facts is a post from: Dough Defender

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Do you know someone in need? Give anonymously to them now! Just tell us their name and address and how much you want to give to them. We’ll send them a check for that exact amount.

These tough times are hitting all of us hard. I have been watching someone I love struggle financially for the last year, my mom. She lives in a place where the cost of living is simply out of control. She works two jobs and still doesn’t make enough to live.

She’s trying desperately to hang on to her full time job with the state for another 12 or so years so she can retire with the awesome benefits associated with a government job. She will get lifetime health insurance and a lifetime annuity if she can make it another 12 years. Unfortunately, until then they are going to pay her peanuts and she will struggle financially until she retires and possibly after that.

Since the recession has squeezed every penny out of her, she’s fallen further into a financial grave. So far in that she was in danger of loosing her home. Like so many others across the nation and the world she was unable to pay her rent and was faced with a terrible reality. She was loosing sleep and beginning to panic when all of a sudden she received a wonderful gift in the mail. Someone has become aware of her situation and has decided to send help her way.

My mom recently received a check in the mail for $1000.00, this saved the day and allowed her to pay her rent. She is now current on all of her bills. This generous soul used a great program called Giving Anonymously.

Visit their site today and send someone you love an anonymous monetary gift. This is a wonderful way to help someone in need without embarrassing them or igniting any of the other negative emotions associated with receiving help that is badly needed at the cost of others.

Make someone’s day and donate to their cause through Giving Anonymously today

Giving Anonymously is a post from: Dough Defender

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The most common insurance policies we talk about with regularity are Health Insurance, Auto Insurance, and Homeowner or Renter Insurance. These policies are obviously on the top of the must have list.

Considering the probability of catastrophe and the fact that you have an emergency fund available (you should have at least $1,000 in liquid funds set aside for emergencies only) you can go with higher deductibles and save on premiums.

As for Health Insurance, never go without it! The number-one cause of bankruptcy is medical bills. I have them myself, thanks to a very nasty flu this year. You can also to with a larger deductible here to save on your premiums or go with a Health Savings Account (HSA) allowing you to save for the higher deductibles in a tax-free savings account. Therefore, you have the deductible ready when you need it and you avoid some taxes!

Typical employer benefits programs should also offer Life Insurance and Long-Term Disability Insurance. Take advantage of these programs! Twenty-year level tern insurance equal to roughly ten times your income will cover your loved ones “just-in-case.” Long-Term Disability Insurance is a good idea to ward off the “just-in-case” as well. As we enter our thirties the probability of becoming disabled increases 12 fold, aim for a policy equal to at least half of your income.

As we age the probability of the need for in-home care or nursing home care increases dramatically. You can offset these costs by investing in Long-Term Care Insurance. Considering the high cost of health care ($40,000/year for a typical nursing home), it is a good idea for all older adults (65+) to invest in this kind of policy. Encourage your parents to get it!

Adequate insurance can protect your wealth make sure you are insured!

Are You Covered? Insurance Can Save You Money! is a post from: Dough Defender

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