Billions of dollars in retirement savings are unnecessarily lost each year.

The Employee Benefit Research Institute estimates that about 59 percent of Americans aged 56 to 62 are at risk of not having enough money to cover basic living and health care costs in retirement. Since Social Security is not likely to cover all expenses at retirement, many people choose to save using a 401(k) or other defined contribution plans that provide savers control over their retirement assets.

The Problem
In today’s tough economy, many families have been hit by a job loss, pay cut or pay freeze. Rising costs on everything from groceries to gas leave many families with nothing to fall back on in the event of a medical emergency or unexpected household expense, such as a roof repair. With such limited resources and banks not lending, more Americans have no alternative but to borrow from retirement savings.

If a borrower cannot repay an outstanding 401(k) loan due to death or disability, however, his or her retirement savings may be at risk. The borrower’s loved ones may be left with less than 20 percent of the original balance of the savings plan after state and federal taxes have been paid on the outstanding loan. Unfortunately, approximately $6 billion of retirement assets are unnecessarily lost each year when uninsured 401(k) loans are defaulted on due to death or disability.

A Solution
Retirement plans could prevent this by providing insurance for loans taken from savings plans.

For a reasonable monthly cost, a fully insured loan provides the peace of mind of having the outstanding loan balance protected. In the event of the borrower’s death or disability, the insurance would repay the full amount of the outstanding loan. This automatic repayment lets the disabled borrower or a beneficiary direct the rollover of the plan balance to an IRA account, thus avoiding any leakage of retirement savings.

Learn More
To learn more about protecting your savings, visit http://www.protectmyretirementbenefits.com.

There could be big news for the nation’s smallest businesses in this country and the people who work for them.

The Small Business Jobs and Credit Act provides an important tax break for the over 23 million self-employed Americans who represent 78 percent of all small businesses in the U.S., according to the National Association for the Self-Employed (NASE).

Until now, the self-employed couldn’t get the same tax benefit for health insurance expenses that others enjoy. Other companies can fully deduct the cost of health coverage as a business expense, saving a significant amount in payroll taxes. Now, the self-employed can take a one-year tax deduction for health costs in determining their payroll tax (self-employment tax).

Here are some tips on this new deduction:
To qualify for this deduction, self-employed business owners must meet the following criteria:

1. File an IRS Form 1040, Schedule C tax form or Schedule E with earned income-this includes sole proprietors, single member LLCs and sole owner S Corporations; and
2. Pay self-employment taxes via IRS Form 1040 Schedule SE; and
3. Pay for individual or family health coverage.
4. The deduction is available for health costs paid in 2010. Business owners can ask their tax professional if they may take advantage of the deduction when preparing taxes for the April 15, 2011 deadline.
5. To calculate savings, simply add up your total 2010 health insurance costs and multiply that by 15.3 percent. If, however, your annual income is above the maximum wage limit subject to payroll (FICA) taxes, currently $106,800, then you’ll get a lower tax benefit.

Join entrepreneurs across the country who are urging their legislators to make this tax deduction permanent for the self-employed. Find your lawmakers at the NASE’s Legislative Action Center at http://www.NASE.org.

How much insurance do I need?
If you need a commercial policy, take the time to understand available coverages, limits and deductibles. Your state likely requires you to carry higher liability limits than what a personal insurance policy offers. And in some cases, your clients might require you to carry minimum liability limits. Find out which—if any—requirements apply to your business.

How can I save money in the off-season while still protecting my vehicles?
If you’re a landscaper or snowplow driver, consider switching to comprehensive-only coverage instead of canceling your policy in the off-season. This coverage protects your vehicles against incidents such as vandalism or hail that can happen when they’re sitting for long periods during the off-season.

If you do decide to cancel your liability insurance, check with the Department of Motor Vehicles first. There may be some additional steps you need to take to comply with the insurance laws in your state.

How fast will my insurance company get me back on the road if I file a claim?
Look for a company that resolves claims quickly. The faster it takes care of your claim, the faster you can get back to work.

Also, ask if your insurance will cover a rental vehicle or provide downtime payments.

That way, if your truck’s out of commission, your business will stay profitable.

What else can I do to save money on insurance?
Your vehicle insurance could be as much as 40 percent of your total operating budget. Ask whether you qualify for additional discounts. Progressive offers several, such as an experienced business-owner discount and a discount if you have a general liability or business owner’s policy. You could also save by increasing your deductible or paying your premium in full.

For more information or to find a local agent, visit the website at http://www.progressivecommercial.com.

There’s a lot you can do in an hour to better your health.

Changes in health benefits can mean big changes to a family’s finances. During your company’s open enrollment period, spend an hour reviewing your health plan options so you can make smart, informed choices when it comes to your health and finances.

When it comes to making the most of your health benefits, here is some advice from Susan Kosman, Aetna’s chief nursing officer, and Tracey Baker, a Certified Financial Planner professional. They came up with four easy steps, available at http://www.besmartaboutyourhealth.com, to help you skip the stress, avoid the confusion, and get your health plan working for you in 60 minutes or less.

Prioritize
What is most important for the health and wellness of you and your family? Maybe it’s the cost of prescription drugs. Perhaps it’s being able to see out-of-network doctors. It could be dental or vision exams – or even discounts on wellness services like gym memberships. Assess your family’s health priorities and look for plans that cover these services.

Calculate
Tracking what you spend is a great way to make better choices about your health benefits. You wouldn’t buy a car without comparing it to other models and knowing what it would cost a month, would you? Follow these steps to ensure you are getting a health plan that works for you and won’t break your piggy bank:

Make sure you can afford the premiums. The health reform law passed by Congress aims to keep premiums in check. No one knows what will happen when new rules go into effect in 2014. For now, be sure to pick a plan that balances your health needs and your budget.

Review last year’s medical costs. Knowing what you spent last year on health care will help you effectively plan for the coming year. If you can, set up a flexible spending account (FSA), which is exempt from most taxes, to pay for your health spending. Because FSAs are mostly tax-free, you’ll be able to keep more money in your paycheck each month. Keep in mind that health reform will put a $2,500 annual limit on your FSA by 2013.

Check annual or lifetime limits. As a result of the health reform law, insurers will stop lifetime limits this year, and will eliminate annual limits in 2014. Be sure to check if your health plan has a limit – especially if you have a chronic condition like diabetes or asthma.

Look for other ways to save. Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs) are other ways to save pre-tax dollars for health expenses.

Predict
Look ahead to annual doctors’ visits or routine health screenings like mammograms or colonoscopies. Using these preventive services is a great way to save money and stay healthy.

Compare
If you have a choice between health plans, find the plan that gives the biggest bang for your buck. If you have just one option through your plan at work, or if you buy individual health benefits, make sure you use all of the services that are covered. After all, you’re paying for them. For instance, child immunizations and wellness discounts may be covered. Health care reform may make it easier to receive these types of services.

by: John Addison

When it comes to protecting your family, a life insurance policy can be one of the most important financial instruments you may ever own. Unfortunately, many people get uncomfortable when it comes to discussing life insurance and calculating how much coverage in enough. As a result, they may leave their family at risk.

How Much Is Enough?
Many people are underinsured or carry no insurance. In fact, it’s estimated that one-third of Americans have no life insurance at all.

While experts usually recommend purchasing a policy that is six to 10 times your gross annual income, the average policy is much less, equal to about 3.5 times a household’s annual income.

To help you get a better understanding of just how much coverage your family might need, here are some fast facts about life insurance:

What is it and what are you paying for? —At its core, the purpose of life insurance is to protect a family against the loss of income due to the premature death of the “breadwinner.” Another way to look at it is that you are paying for a substitute income.

Who needs it? —While some turn to different kinds of life insurance policies as a way to build wealth, the basic purpose of life insurance is to serve as a way to replace income in the event of an untimely death. Anyone who has people who depend on him or her for income support should have life insurance.

A wise insurance purchase can mean the difference between maintaining a family’s standard of living and a dramatically different lifestyle for those left behind.

What is term insurance and how does it fit into the scheme of things? —Term insurance is strictly for income substitution and is often favored by younger families that are still building wealth through investment and savings. By design, it lets young families buy more coverage for their premium dollars than other types of insurance.

Remember, with term insurance, you are paying for coverage and coverage alone. It does not accumulate a cash value over time in the same way other types of insurance-such as universal life-can.

Is having more than one policy a good idea? —Buy one policy and put the entire coverage amount into that one policy. Multiple policies mean multiple fees and could cost more.

Learn More
Financial professionals at Primerica have created a guide that can show you how to take control of your financial life. To get a copy of “How Money Works,” write to Primerica, 3120 Breckinridge Blvd., Duluth, GA 30099. Visit them online at http://www.primerica.com.

The federal COBRA subsidy that helped make health insurance affordable for millions of laid-off workers and their families is beginning to expire for its first recipients on June 1, 2010.

The end of the federal COBRA subsidy could affect millions of Americans. Between September 2008 and March 2009 alone (the period during which the first to lose their subsidies originally lost their jobs), over 3 million Americans were added to the numbers of the unemployed. Many of these, along with their dependent spouses and children, enrolled in COBRA and benefited from the subsidy.

Some of those rolling off the subsidy may be able to continue their COBRA coverage for three additional months, though their costs will increase substantially. Those who can’t afford COBRA without the subsidy will be forced to seek more affordable alternatives immediately or risk going uninsured.

Here are three tips to help consumers navigate their health insurance options after COBRA:

Buy your own health plan–Beginning in 2010, health reform makes it safer to buy your own coverage. Your insurance policy can no longer be canceled just because you get sick, and insurance companies can no longer limit the total amount they pay toward your medical care. Plus, individual and family policies will be required to cover the cost of preventive screenings at no additional out-of-pocket cost to you. It’s still possible to be turned down for medical reasons, so work with a licensed agent such as http://eHealthInsurance.com to learn more.

Turn entrepreneur and get a break–Many of today’s unemployed earn supplemental income by consulting or running a small business. If you’re one of them, you may qualify for a small group health insurance plan. You can’t be turned down for group coverage based on medical history, and beginning this year, qualifying business owners will get a tax credit for 35 percent of their health insurance premiums. Talk to a licensed agent or accountant to understand how the rules apply to you.

Know your last options–Persons who can’t afford their own coverage or who have pre-existing medical conditions should contact the nonprofit Foundation for Health Coverage Education for help at (800) 234-1317. To learn more about your health insurance options after COBRA, visit http://www.eHealthInsurance.com.

Life settlement deals are increasingly popular, but not always wise.

The idea of selling your whole life insurance for a nice chunk of cash can sound appealing. Here’s how it works. A broker will offer you a settlement worth a certain fraction of your policy’s face value, which is generally more than the cash value amount. The broker then sells your policy to a buyer who will pay the premiums on the policy. When you die, the policy buyer gets the face amount.

One example given by Smart Money: A 75-year-old man with $1 million in life insurance might get $250,000 now from a life settlement. The investors would get $1 million when he dies.

For some people, the life settlement is a great choice. If they are struggling to make their insurance payments, if their beneficiary or spouse has died, or if they really need the money, it can be a good move.

The life settlement business is growing rapidly. It rose from $2 billion in 2002 to an estimated $18-19 billion through June 2009, according to The Economist. Of life settlements made in 2008, more than half of the policies were less then four years old.

The business is not regulated by the federal government or most state governments. Life settlement companies don’t have to disclose how they value policies, what fees they charge or what commissions they pay.

Caution: After a life settlement, you may owe capital gains taxes on the proceeds, and you might not be able to get more life insurance if you need it.

This new book by author and CEO Alton R. Cogert takes readers on a journey with an insurance company chief investment officer that is coping with some of the deepest challenges of his career.

While telling his fictional story, Uncertain Times shows how to develop, improve and streamline the investment process of a company in this unique and complex industry.

Whether you work for an insurer, regulate insurers, provide services to insurers or — like everyone else — are a policyholder concerned about how your insurer is run, this book will be invaluable to you. For example, health insurance is a key part of one of the greatest challenges facing the United States today. However, one area of interest, the relative safety and security amongst the companies providing health insurance, has not been discussed to any degree.

In fact, the safety and security of all of our institutions are continually being questioned in these challenging financial times. And insurance companies support many major aspects of our lives. We rely on them, but few people understand the process by which insurance companies invest their assets in order to guarantee policyholders’ benefits.

Cogert, is President and CEO of Strategic Asset Alliance, the leading investment consulting firm for insurers. Founded in 1994, the firm focuses on improving the investment process of insurers, since solid investment results flow from a successful process. Mr. Cogert holds a BS from the Wharton School of the University of Pennsylvania and an MBA from the Marshall School of the University of Southern California. For more information, visit http://www.saai.com.