Insurance Quotes and Rates for 2009

by Adam Alter

The insurance industry is reporting that insurance premiums across the board have increased an average of 6% entering 2009. Studies show the main factors that increases premiums are claims and business costs, but inflation plays its part as well.

For example, in the health insurance sector two major issues are driving costs up. One is that people living unhealthy lives and having more claims. The second is that the cost of health care is rising due to sue happy consumers. All we typically hear about in the news is the patient that was screwed over or mistreated. At the same time, even though it's not as news worthy, there are lots of frivolous and ridiculous lawsuits of people wanting to blame their doctor for their problems.

As expected, this is causing many to look for discount plans from the self-employed to the corporate groups small and large.

To continue using the health care industry as an example, the health insurance companies are trying to keep their insurance quotes competitive. These insurance companies are fighting back and attempting to direct consumers down a healthier path. By offering better coverage on routine checkups and recommended test procedures for conditions by age and high risk categories, they can increase early diagnosis which can often decrease the degree of treatment required. This saves money for everyone as well as pain and even potential deaths of the consumers.

To some it may sound extreme that they must push us for regular checkups and to think twice about everything we do in our lives as to whether or not it's considered "healthy". However, this is all they're left with in order to continue being able to stay in business and consumers be able to continue paying for their insurance. What this presents to those comparing insurance quotes to find the best rates and coverage is more fine print and policy details to take into account. Be more responsible in finding the right plan rather than jumping into a policy that leaves you uncovered when you need it most.

Some people in all sectors are opting for policies with very high deductibles to just cover an extreme case that could bury them financially. They're paying out of pocket for their needs such as with small auto repairs, or health checkups and if there's an emergency they're covered. This makes people be more responsible for their lives rather than paying an insurance company and milking everything they can from it. The advise when going this route is to go with the highest deductible you could possibly afford with home insurance, auto insurance, health insurance, and the many insurance types under and between those main categories.

Other than raising deductibles and reducing claims, the best way for the consumer to save the most amount of money is to compare their rates regularly with what is out there available. Websites like http://www.usinsuranceonline.com/ have free services that will pull insurance quotes from multiple providers allowing quick and easy comparisons of rates and coverage. There's no obligation and no spam attached to filling out a profile.

source : GoArticles.com

Tips for Saving Money on The Insurance Premium

by Franchis Adam

In many countries getting a driving license and that too in just a single attempt is a big deal. There are people who celebrate if they get their driving license in their teenage. The reason why Driving licenses are so important is that without driving license one is not legally allowed to drive a vehicle.

Apart from the driving license there is another requirement which one has to fulfill before driving a vehicle and that is auto insurance. Auto insurance is a vital part of the legal requirement which one has to fulfill in any condition and if anyone found guilty in this regard then he will be punished. The punishment could be fine or few months' imprisonment or both.

Another than the legal requirement there are many benefits of auto insurance like medical cover for the owner, car repairs etc. But the reason why people ignore the insurances and don't feel the need of these policies is the cost of the insurance. Most of the people think that they will never use these insurance as they are the safe drivers but they do not think about the uncertainties that can happen to them. This is why govt. put a bar that every car owner has to sign up an insurance policy for their vehicle.

If one is worried of the cost of the insurance policy then it doesn't mean that he should ignore the need of insurance. There are ways in which one can cut over the cost of the insurance policies and this will help them to get a car insurance policy for their children.

Here are few tips through which one can lower down the car insurance expenditure.

1. In every car company there is a provision in which the customers get the chances of paying a lower premium. This is kind a facility for the car users and they can avail this only in one condition by driving safely. A spotless driving record can award them with a kind of special discount which could be more than 50% amount of the total premium. Avoiding all the traffic rules violation also helps in it.

2. Avoid those cars which fall under the higher risk category. There is a wide range of cars available in the market which has upgraded and advanced safety measures. Also if one owns a car which falls under the risk category then he can install the safety kit in their car, which is easily available in the market.

source : GoArticles.com

Global Threats

Globalization and free market are expected as the global effort to improve efficiency. Global trade to help many countries to develop more quickly. Globalization is also considered to make the developing countries gain access to knowledge that can not be obtained previously. Globalization is as if the progress that must be accepted developing countries, if they want to grow and fight poverty effectively. But for most people in developing countries, globalization does not bring the promised economic benefits (Stiglitz, 2002:6).

Globalization in practice, developing countries must pay for the welfare of the efficiency of the world's developed countries. South efficiency of the global fund for the benefit and progress of the North. Market failures or failure, market failure occurs everywhere, not only because of the conditional demands for the realization of the market that can be self-regulating is not met (because of the assumption realization of the competition-free for the formation of a pure free market is not proven empirical-realistic), but also because of the economic interests and nonekonomi that must be maintained and through efforts to distort the market significantly (Swasono, 2003:83).

The increasingly wide gap between the rich and the poor has raised a lot more people in the Third World to become increasingly poor. In 1990, 2,718 billion population live with less money than $ 2 per day, whereas in 1998 the number of poor people who live with the money less than $ 2 per day is estimated to be 2,801 billion. This happened with the increase in total revenue in the current world average of 2.5% every year (World Bank, 2000:29).

Globalization has not succeeded in reducing poverty and ensuring stability has not been successful. The crisis in Asia and Latin America has been the economy and threaten the stability of developing countries, even the 1997 crisis and 1998 is a threat to the entire world economy.

source : http://msuyanto.com/baru/?cat=13

Banking (2)

Types of investment banks

• Investment banks "underwrite" (guarantee the sale of) stock and bond issues, trade for their own accounts, make markets, and advise corporations on capital markets activities such as mergers and acquisitions.
• Merchant banks were traditionally banks which engaged in trade finance. The modern definition, however, refers to banks which provide capital to firms in the form of shares rather than loans. Unlike venture capital firms, they tend not to invest in new companies.

Both combined

• Universal banks, more commonly known as financial services companies, engage in several of these activities. For example, First Bank (a very large bank) is involved in commercial and retail lending, and its subsidiaries in tax-havens offer offshore banking services to customers in other countries. Other large financial institutions are similarly diversified and engage in multiple activities. In Europe and Asia, big banks are very diversified groups that, among other services, also distribute insurance, hence the term bancassurance is the term used to describe the sale of insurance products in a bank. The word is a combination of "banque or bank" and "assurance" signifying that both banking and insurance are provided by the same corporate entity.

Other types of banks

Islamic banking

• Islamic banks adhere to the concepts of Islamic law. Islamic banking revolves around several well established concepts which are based on Islamic canons. Since the concept of interest is forbidden in Islam, all banking activities must avoid interest. Instead of interest, the bank earns profit (mark-up) and fees on financing facilities that it extends to the customers.

Banks in the economy

Size of global banking industry

Worldwide assets of the largest 1,000 banks grew 16.3% in 2006/2007 to reach a record $74.2 trillion. This follows a 5.4% increase in the previous year. EU banks held the largest share, 53%, up from 43% a decade earlier. The growth in Europe’s share was mostly at the expense of Japanese banks whose share more than halved during this period from 21% to 10%. The share of US banks remained relatively stable at around 14%. Most of the remainder was from other Asian and European countries. .^[7]

The US had by far the most banks (7,540 at end-2005) and branches (75,000) in the world. The large number of banks in the US is an indicator of its geography and regulatory structure, resulting in a large number of small to medium sized institutions in its banking system. Japan had 129 banks and 12,000 branches. In 2004, Germany, France, and Italy had more than 30,000 branches each—more than double the 15,000 branches in the UK.^[8]

Bank crisis

Banks are susceptible to many forms of risk which have triggered occasional systemic crises. Risks include liquidity risk (the risk that many depositors will request withdrawals beyond available funds), credit risk (the risk that those who owe money to the bank will not repay), and interest rate risk (the risk that the bank will become unprofitable if rising interest rates force it to pay relatively more on its deposits than it receives on its loans), among others.

Banking crises have developed many times throughout history when one or more risks materialize for a banking sector as a whole. Prominent examples include the U.S. Savings and Loan crisis in 1980s and early 1990s ^[9] the Japanese banking crisis during the 1990s, the bank run that occurred during the Great Depression, and the recent liquidation by the central Bank of Nigeria, where about 25 banks were liquidated

Source : http://en.wikipedia.org/wiki/Bank

Banking

Types of banks

Banks' activities can be divided into retail banking, dealing directly with individuals and small businesses; business banking, providing services to mid-market business; corporate banking, directed at large business entities; private banking, providing wealth management services to high net worth individuals and families; and investment banking, relating to activities on the financial markets. Most banks are profit-making, private enterprises. However, some are owned by government, or are non-profits.

Central banks are normally government owned banks, often charged with quasi-regulatory responsibilities, e.g. supervising commercial banks, or controlling the cash interest rate. They generally provide liquidity to the banking system and act as the lender of last resort in event of a crisis.

Types of retail banks

National Bank of the Republic, Salt Lake City 1908

National Copper Bank, Salt Lake City 1911

• Commercial bank: the term used for a normal bank to distinguish it from an investment bank. After the Great Depression, the U.S. Congress required that banks only engage in banking activities, whereas investment banks were limited to capital market activities. Since the two no longer have to be under separate ownership, some use the term "commercial bank" to refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses.
• Community Banks: locally operated financial institutions that empower employees to make local decisions to serve their customers and the partners
• Community development banks: regulated banks that provide financial services and credit to under-served markets or populations.
• Postal savings banks: savings banks associated with national postal systems.
• Private banks: manage the assets of high net worth individuals.
• Offshore banks: banks located in jurisdictions with low taxation and regulation. Many offshore banks are essentially private banks.
• Savings bank: in Europe, savings banks take their roots in the 19th or sometimes even 18th century. Their original objective was to provide easily accessible savings products to all strata of the population. In some countries, savings banks were created on public initiative, while in others socially committed individuals created foundations to put in place the necessary infrastructure. Nowadays, European savings banks have kept their focus on retail banking: payments, savings products, credits and insurances for individuals or small and medium-sized enterprises. Apart from this retail focus, they also differ from commercial banks by their broadly decentralised distribution network, providing local and regional outreach and by their socially responsible approach to business and society.
• Building societies and Landesbanks: conduct retail banking.
• Ethical banks: banks that prioritize the transparency of all operations and make only what they consider to be socially-responsible investments.
• Islamic banks: Banks that transact according to Islamic principles.

source : http://home-students.blogspot.com/2008/10/banking.html

Income from discharge of indebtedness

Although a loan does not start out as income to the borrower, it becomes income to the borrower if the borrower is discharged of indebtedness. ^[18] Thus, if a debt is discharged, then the borrower essentially has received income equal to the amount of the indebtedness. The Internal Revenue Code lists “Income from Discharge of Indebtedness” in Section 62(a)(12) as a source of gross income.

Example: X owes Y $50,000. If Y discharges the indebtedness, then X no longer owes Y $50,000. For purposes of calculating income, this should be treated the same way as if Y gave X $50,000.

For a more detailed description of the “discharge of indebtedness”, look at Section 108 (Cancellation of Debt (COD) Income) of the Internal Revenue Code.^[19]

United States taxes

Most of the basic rules governing how loans are handled for tax purposes in the United States are uncodified by both Congress (the Internal Revenue Code) and the Treasury Department (Treasury Regulations — another set of rules that interpret the Internal Revenue Code).^[2] Yet such rules are universally accepted.^[3]

1. A loan is not gross income to the borrower.^[4] Since the borrower has the obligation to repay the loan, the borrower has no accession to wealth.^[5]

2. The lender may not deduct the amount of the loan.^[6] The rationale here is that one asset (the cash) has been converted into a different asset (a promise of repayment).^[7] Deductions are not typically available when an outlay serves to create a new or different asset.^[8]

3. The amount paid to satisfy the loan obligation is not deductible by the borrower.^[9]

4. Repayment of the loan is not gross income to the lender.^[10] In effect, the promise of repayment is converted back to cash, with no accession to wealth by the lender.^[11]

5. Interest paid to the lender is included in the lender’s gross income.^[12] Interest paid represents compensation for the use of the lender’s money or property and thus represents profit or an accession to wealth to the lender.^[13] Interest income can be attributed to lenders even if the lender doesn’t charge a minimum amount of interest.^[14]

6. Interest paid to the lender may be deductible by the borrower.^[15] In general, interest paid in connection with the borrower’s business activity is deductible, while interest paid on personal loans are not deductible.^[16] The major exception here is interest paid on a home mortgage.^[17]

Type of Loan

Secured

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan.

A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security — a lien on the title to the house — until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter — often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer.

A type of loan especially used in limited partnership agreements is the recourse note.

A stock hedge loan is a special type of securities lending whereby the stock of a borrower is hedged by the lender against loss, using options or other hedging strategies to reduce lender risk.^{[citation needed]}

Unsecured

Unsecured loans are monetary loans that are not secured against the borrowers assets. These may be available from financial institutions under many different guises or marketing packages:

• credit card debt
• personal loans
• bank overdrafts
• credit facilities or lines of credit
• corporate bonds

The interest rates applicable to these different forms may vary depending on the lender and the borrower. These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may come under the Consumer Credit Act 1974.

Abuses in lending

Predatory lending is one form of abuse in the granting of loans. It usually involves granting a loan in order to put the borrower in a position that one can gain advantage over him or her. Where the moneylender is not authorised, it could be considered a loan shark.

Usury is a different form of abuse, where the lender charges excessive interest. In different time periods and cultures the acceptable interest rate has varied, from no interest at all to unlimited interest rates. Credit card companies in some countries have been accused by consumer organisations of lending at usurious interest rates and making money out of frivolous "extra charges". ^[1]

Abuses can also take place in the form of the customer abusing the lender by not repaying the loan or with an intent to defraud the lender.

source : http://home-students.blogspot.com/2008/10/types-of-loans.html