Life insurance premium financing is used by wealthy individuals to pay their life insurance premiums. By financing your premiums, it allows you to free up the funds that might have otherwise been used to pay your premium. Many wealthy people require a substantial amount of life insurance for business planning, estate planning, or for income replacement.

In a normal premium financing arrangement, you would apply for a policy at the same time you apply for a loan. The loan is usually arranged by the insurance company you are working with although there are many different companies that handle only the financing and do not deal with the actual insurance policy. While you are being medically underwritten for the life insurance policy, your loan is being processed. Assuming you pass the medical exam and qualify for the loan, the policy and financing are put into place at the same time.

The benefits of a premium financing arrangement is that it frees up business and personal money to be used more efficiently in other investment arenas. In addition, life insurance premium financing may minimize gift taxes, and can provide a greater rate of return on the death benefit paid through regular non-financed methods.

Life insurance premium financing loans may be repaid either by paying a monthly payment while you are alive, pay from the policy itself, or at the time of your death, proceeds from the policy will pay off the loan.

Interest on the life insurance premium financing loan is considered to be personal interest, and therefore, not tax deductible.

If you are considering a premium financing loan for estate planning, there are some tax issues you may want to consider. The life insurance proceeds will be included in your estate if you own the policy. If the life insurance policy is owned by an irrevocable life insurance trust, estate taxes on the death benefits may be avoided.

Before you consider financing your life insurance premiums you should be aware that the life insurance policy will have to earn returns of between 150 to 300 basis points over the interest rate of the loan.

In addition, you should ask what the loan commitment fee is, as well as knowing whether the life insurance premium financing loan is renewable, how long the term of the loan is, and if the loan extends well beyond your life expectancy.

Homeowners insurance is the ideal way to protect one of your lifetime investments, your house and also the pricey things kept in it. By purchasing this policy you insure your house and possessions against several threats such as natural disasters, theft etc.

If you are finding it difficult to calculate the extent of coverage you want, there are several ways to do it. For instance if you want coverage for reconstruction of your house then multiply the square foot of your home by the local building cost per square foot. To know the cost of rebuilding your house, also known as dwelling coverage, you can take the help of any local insurance or real estate agent.

For instance in Nevada an average of 1268 square foot home that was built in 1997 has a current dwelling coverage of $81000. However if the homeowners feel that they are underinsured by 27% and increased their coverage to $110,000, the monthly payment will increase by $7.50 per month.

Since most often the homeowners insurance also compensates for personal liability, you should also keep in mind how much coverage you require for certain legal expenses, medical expenditure or injury to any member of the house.

Though a standard homeowners policy comes with liability coverage of worth $100,000, insurance professionals usually advise to get of coverage of around $300,000 to $500,000 as liability coverage. To have this extra amount added to your standard homeowners policy, purchasing an endorsement is a wise idea.

You can also go for personal umbrella coverage in case the worth of your assets is more than $300,000 to $500,000. The umbrella cover is extremely useful once you are through with your homeowners or automobiles coverage. For instance if your colleague is injured at your house and revengefully sues you for $500,000, your homeowners insurance will cover for $300,000 and get exhausted but the amount left will be easily covered by the umbrella coverage.

For insuring your household things there are three ways. First is the actual cash value in which the policy pays for replacing your personal property using the method that is based on replacement cost of the thing minus the depreciation?

Second is the replacement cost strategy where you receive current amount for the thing you lost in any of the covered dangers. Though this way requires you to pay an additional premium but it can prove extremely beneficial in the long run.

The third option is the guaranteed replacement cost. This coverage means that there is no maximum payout applied to coverage of your insured personal possessions. You need to pay an extra premium but on the same hand increase your deductible to make the coverage somewhat cost-effective. Similarly the structure of our house is also to be insured in these three ways but with slight variation.

According to current facts and statistics presented by National Association of Insurance Commissioners in 2002 the average expenditure on homeowners insurance increased by 12% from $593 to $668 in 2003. Expenditure varies with the state. For example in 2003 Texas witnessed the highest average expenditure of $1328, in Oregon it was $461, Delaware $442 and Maine $462.