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Small Business Planning For The New Year
Group Life Insurance: Are You Actually Covered?


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The opinions expressed herein are my own personal opinions and do not represent my employer's view in any way.

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# Monday, December 31, 2007
Monday, December 31, 2007 3:15:48 PM (GMT Standard Time, UTC+00:00) ( General Life | Term Life )

As the year 2007 nears the end, it's a good time to evaluate your business. Begin the new year with a detailed business plan in place, as well as defining your goals. Go beyond the profit and loss figures; maybe it's time to research using new suppliers, a new marketing strategy, etc.

Use the arrival of the new year as a time to step back and re-focus. By financially planning for your business, you give yourself an advantage. Being proactive rather than reactive can have positive results. You need to have a budget in place to ensure a positive cash flow. This needs to cover not only expenses such as payroll, but contingencies as well. Money will need to be set aside for taxes, capital expenditures, overhead, etc.

Look ahead to what you wish to accomplish in the coming year. You may wish to buy new computers, or upgrade your technology. This is also a good time to consider whether you need to hire more people to accomplish your new projections. If you don't already have it, group insurance can be a useful tool in attracting and retaining qualified personnel. It's also a wise decision to decide on changing your corporate identity. Changing your corporate identity may mean different liability and tax considerations; many of which are required to be done in the first few months of the year.

If you are partners in a small business, it can be beneficial that all partners have a term life insurance policy. These can be taken out, with the other partner named as beneficiary in order to insure the business. Agree on the amount and the length of term you wish to purchase; this will safeguard your business should something happen to one of the partners.

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# Monday, December 17, 2007
Monday, December 17, 2007 3:09:46 PM (GMT Standard Time, UTC+00:00) ( General Life | Term Life | Whole Life )

Chances are, if you have employee benefits, you have some type of life insurance coverage included. While great attention is paid to the details of the health insurance component, many people don't pay attention to the life coverage. It's important to know exactly what your group insurance covers, and to be sufficiently insured.

Group life insurance has it's own advantages and disadvantages. It can be cheaper because the costs are pooled. This means that everyone enrolled in the plan, regardless of gender and/or health habits will pay the same amount. As well, marketing and sales costs may be absorbed by the insurer.

However group life insurance usually has a maximum coverage amount. Most plans will offer coverage around $25,000 and may not go any higher than three times your salary. Depending on your needs, you may require additional insurance coverage. Use the insurance calculator to figure out how much you really need, and purchase additional coverage if needed.

Another important factor is whether or not your group insurance is renewable. Most group life insurance is issued as renewable term, which means the premiums can increase at a steady rate. There is usually no guarantee of renewability and/or the cost of premiums. The master policy may also be revised without consulting the employees, which means you may not consistently have the same coverage and/or rates.

Your group life insurance will usually only cover you for as long as you remain with the same employer. This means that you may find yourself without coverage when changing employers but not having the same optimal health status as when you first started. This could be reflected in higher premiums if you apply for individual life insurance coverage. This is also applicable if your employer changes their insurance carrier. If you retire, you may not be covered anymore, and at a time when life insurance is important.

It is important while you are still in good health, are planning on getting married, buying a home, etc. to know how much coverage you need. If your group benefits does not sufficiently cover you, then you may want to consider buying an additional policy to make sure all your needs are met. This can be done with either a term life or a whole life policy; talk to your broker about which is best for you. If you are planning on retiring and do not have any other life insurance, you can apply for Guaranteed Issue coverage. If you were not sick and/or injured when your group life was terminated, you will eligible to apply for the same amount of FollowMe Life coverage as you originally had. Your spouse can also apply with this program.

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