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Insuring Your Life after Death: The Need for Life Insurance

Insuring Your Life after Death: The Need for Life Insurance

Two things are certain in this world: death and taxes. Unfortunately, taxes are such a certainty, they even exist upon death. Because of these certainties alone, life insurance can be the answer many families look for when dealing with the less-than-perfect financial loss of a loved one. While many people view life insurance as a luxury to be bought and paid once necessities are out of the way, the truth is, life insurance is as much of a necessity as food, clothing, and shelter if you have any semblance of a family, whether it be a spouse and children, siblings, parents, or even an ex-spouse. Life insurance insures their life after your death and makes sure everyone is financially whole, even if they are emotionally in pieces.


Taxes and Death Expenses

It costs money to die. This is entirely apart from any estate tax, although that might be an issue as well. There are costs to bury or cremate a person. Then, the costs to appraise, administer, and probate a will and property disbursement must be added to the overall outpouring of money during this already difficult time. Without life insurance, your loved ones are left to worry about one more piece of the puzzle, which there may not be any liquid assets to cover. This may be the most costly endeavor your family will face and is the most obvious reason everyone should purchase even the smallest possible life insurance policy.


Peace of Mind

Once those issues are covered, it is important to review your family’s financial needs and well-being in the event of your death. Life insurance can be a wonderful resource to not only ensure your family’s financial well-being, but keep complex finances in order even when you are gone. For instance, business partners may utilize life insurance policies to cover the purchase of the partner’s business interest in the event of death. The payout will be enough to compensate the remaining family for the deceased party’s portion of the business while allowing the partner to both buy out his deceased partner and continue business as usual.

Life insurance is also a great resource to ensure large expenses will be covered in the event of the provider’s death. For instance, you may set up the policy to go to a child’s trust to be earmarked for college tuition. Or, your spouse may benefit by having the mortgage paid off to allow her additional money for living expenses without your added income.

This money can even be used for the added expense of retirement of the surviving spouse, such that she does not become dependent on the children. This can also be an amazing benefit for those with special needs children. Life insurance can be purchased to help cover the costs of raising a special needs child and caring for that child upon your death. Along with a proper estate plan and will, your child should be covered financially even when you and your spouse are no longer physically available to help.

The benefit to life insurance policies over other financial avenues is the non-existent transfer costs. Life insurance payouts are tax free and do not cost additional fees, such as administrative or legal fees. The money only becomes taxable upon the survivor’s death as a part of his or her estate, if your state has estate taxes. Therefore, life insurance becomes a desirable tax-free financial tool for your heirs. 

Contractors are Now using Drones for Large Construction Projects

Contractors are Now using Drones for Large Construction Projects

Drones are becoming a household concept. More and more industries are looking for the best way to utilize drones safely and effectively to help save time and money for any task. Drones are even becoming something discussed around the home for personal use, especially when dealing with repair and maintenance issues around the house. However, using a drone for business is not that cut and dry. At home they may cause issues, however, businesses must adhere to regulations for their industries as well as insurance issues that could ultimately cause more trouble if ignored. The construction industry sees drones as a huge asset to their business. However, if the proper steps to obtaining and using drones are ignored, the fines and lawsuits could easily put a construction company out of business. Therefore, it is important to know and follow the rules before purchasing a drone for your site.


The Preliminary Work

Before you even purchase a drone, first you must complete some preliminary research and work. For instance, did you know you must receive approval from the FAA to operate a drone? The FAA has guidelines that must be learned and understood when applying for approval for use of a drone (or UAV: Unmanned Aircraft System) on a construction site. In addition to applying for approval from the FAA, you must have a new section of your employee handbook or operations manual that deals with the use of drones, risk management, and safety procedures. This includes proper employee training regarding drones and their proper usage on a job site. In addition to training your employees and receiving an FAA approval, you must prepare to hire drone operators or train current employees on drone operations and have those operating employees pass the required aeronautics test for them to serve as a drone operator.

Finally, the last piece of preliminary work that must be completed before purchasing your first drone is the insurance test. It is important to contact your insurance provider or broker to determine the following items:

  • Does your insurance cover drones?
  • If not, do you need a policy or rider that will cover drones on your worksite?
  • How much will this extra coverage cost, and is it cost effective in the long run?
  • Once coverage is purchased, how long will it take to go into effect?

Your insurance broker should be able to sit with you to discuss these and other issues which may pop up as the results of drone usage on a job site. Most importantly, when dealing with insurance, never assume anything.  Many policies specifically exclude drone usage and specific policies need to be purchased just for this type of issue.


Continuing Issues

Once you have set everything in motion and have purchased your first drone, your job has not ended. Each job site must be analyzed properly to ensure you are within the proper guidelines of the FAA in regard to drone usage. For instance, drones are not allowed to fly over people that are not directly involved with your project.  Therefore, if you are in a busy commercial district, it may be wise to leave the drone at the office or only do work with the drone during off business hours. This and many other regulations will play a constant issues for each job.

Furthermore, since drones are a relatively new technology, the issues involving drones are constantly changing and being updated.  Should you choose to utilize drones for your construction projects, dedicate an individual within your company to constantly check for updates regarding drones in your industry and adjustments you may need to make to accommodate their usage.

Finally, be prepared to always mitigate risks for each job that may occur. Drones are a great opportunity to save money and keep employee injuries down. However, they are new and still being analyzed and understood. Therefore, there is still quite a bit of unknown risk involved. Each job site may offer a different risk as well, therefore, it is important to know your risks in advance and prepare accordingly.  

Interested in using drone technology for your construction company? Contact the experts at Skyline Risk Management, Inc., (718) 267-6600 to get proper coverage for all your business needs. 


What is Product Liability Insurance?

What is Product Liability Insurance?


Businesses on the fence about product liability insurance need only to search the internet for information about product claims and recalls for clear evidence that this is a "must have" for protection from the various regulatory commissions that will seek remedies for consumers.

With online information at their fingertips, consumers have become liability-savvy when it comes to products they purchase. Law firms are ready and able to represent plaintiffs on a contingency basis and bombard consumers with promises of financial windfalls. When it comes to actions regarding product liability, businesses need to consider the following five points:


1. Frequency: Currently product recalls are average two per day. The frequency can be attributed to the regulatory authority given to organizations like the Product Safety Commission, the Food and Drug Administration, and the National Transportation Safety Administration. You should also include national law firms that have the resources to haunt manufacturers with class action suits

2. Oversight: Since governmental oversight of products and their distribution has increased standards that manufacturers must comply with, increased civil and criminal penalties are a risk that businesses must mitigate. The FDA not only regulates products in the marketplace, but now they have the power to regulate how food is grown, harvested, and even processed.

3. Human ErrorAs long as humans are involved in production, it is impossible to guarantee that errors won't happen. Even with the most stringent safety protocols, errors happen that can result in a consumer injury or even death. When it comes to food products, the damage is not always limited to a particular product. For example, if a particular brand of food is recalled, over-zealous retailers may pull the entire brand from the shelf resulting in a massive financial hit to the manufacturer and distributor who must credit the retailer for the returned product. The act of regaining lost shelf space in a large retailer may be impossible without available resources. In this circumstance, a product liability policy will be invaluable for the business to be able to come out on the other side of a recall.

4. The Cost of a Product Liability ActionAlthough every case is different and most cases eventually settle, the cost of a product liability action is likely to put an uninsured manufacturer or distributor out of business. Damages that are taken into consideration regarding a settlement are as follows:

  • Level of harm
  • Lost Wages and loss of future income
  • Pain and suffering
  • Punitive damages

 

5. Low Cost of MitigationWith any foreseeable risk, typically the most affordable method of mitigation is to transfer the risk to an insurance carrier. Even with the amount of settlements that have been paid historically, product liability insurance and product recall coverage remain an affordable means of financial protection. Knowing that just one action could result in financial devastation, it is incumbent upon business owners to transfer this risk to an insurer.


Skyline Perspective

If your business provides any product to consumers, your company needs product liability coverage. In some cases, this coverage may be available as part of the General Liability or Business Owners' policy, but is important for you to confirm this with your insurance professional and not make any assumptions. The premium for this coverage will typically be based on the type of product, the sales volume, and the part your company plays in providing the product to consumers.

For more information and details about Product Liability and Product Recall Coverage, contact an insurance professional at Skyline Risk Management(718) 267-6600 for free and confidential consultation.


Final Expense Insurance: What, Why, & When?

Final Expense Insurance: What, Why, & When?

If you watch television at all, especially on the weekend, you've probably noticed commercials with some seniors talking about Final Expense Insurance. For most people, this topic is seldom discussed unless they've had to chip in for Cousin Ed's funeral because he died without life insurance. Final Expense Insurance may sound like a reasonable purchase, but the television ads aren't very specific about what it is.


What Is It?

All life insurance, no matter the product type, is a funding vehicle for a specific event or events that will financially affect you or your loved ones. It is, in simple terms, an affordable solution to a foreseeable financial problem:

  • Funeral and burial expenses
  • Final medical expenses
  • Debt reduction or elimination
  • Tuition expenses for surviving family members
  • Mortgage reduction or satisfaction
  • Income replacement
  • Financial legacy

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As clearly indicated in its moniker, Final Expense Insurance is life insurance that is specifically designated to pay final expenses at the death of the policyholder. It is typically purchased in amounts sufficient to pay funeral and burial expenses, and other final expenses left for surviving loved ones to deal with.

Although any type of life insurance can be used as a final expense policy, the type of insurance most preferred is Whole Life insurance, because coverage lasts for a lifetime and the premiums are guaranteed never to increase over the life of the policy.

Typically, insurance companies that offer Final Expense products will accept applications for people up to 80 years old and with some companies 85 years old. This is especially helpful for seniors who may have cashed in their regular life insurance policies or let them lapse because of financial difficulties. Also, many people go through life having their life insurance provided by their employer and then discover that they cannot keep it after retirement.


Guarantee Issue

Most life insurance companies that offer Final Expense Life Insurance also offer a "guarantee issue" product. This type of coverage is also referred to as graded benefit life and is an insurance plan that will cover you without regard to your medical history.

Typically, the policyholder must live two or three years before the full death benefit is available. If the policyholder dies during that period, the insurance company will return only the premium paid in up until death plus, in some cases, a small percentage of that amount added to the premium.


Why Purchase Final Expense Life Insurance

Final expense life insurance is the preferred product for people who want to designate a specific death benefit for their surviving loved ones to pay their final expenses. The policyholder wants to make certain they do not leave a funeral/burial expense debt to their survivors. With a moderate funeral costing about $10,000, you certainly don't want to have your grieving survivors responsible for paying for your funeral expenses.

For the many people who have waited until late in life to purchase life insurance, a final expense product may be their only option for obtaining coverage because of medical conditions or limited finances.


When to Purchase Final Expense Life Insurance

Most consumers understand that life insurance rates go up as you age, and for that reason, the earlier in life you purchase coverage, the less you will have to pay for it. Typically, hard-working individuals will put their careers ahead of their health and end up with medical conditions that could prevent them from purchasing a standard life insurance policy later in life. Fortunately, the guaranteed issue products offer a great solution, but with additional cost and a graded benefit period.

To speak with an insurance professional about Final Expense Life Insurance, contact Skyline Risk Management for help with identifying the most appropriate coverage at an affordable price.