By  Marty O’Neill - Insurance Agent

So your 1040 is filed and you are now anxiously waiting for your refund. What do you plan on doing with it? Go on that long-awaited cruise, get a new set of golf clubs or buy that wide-screen TV you’ve had your eye on? There are so many ways you could spend your refund, but there may be better alternatives to consider.

According to the Internal Revenue Service, over 75 percent of American taxpayers received a federal tax refund, with the average around $2,500. It’s what you do with your refund now that may create a better financial future for you and your family later on.

Instead of spending your refund this year, consider funding an Individual Retirement Arrangement (IRA), setting up a college savings fund for a child, or paying down credit card debt. These options will help to improve your financial situation.

First on your list of priorities should be paying down any high-interest credit card debts you have incurred. By paying only the minimum each month, you may be paying just the interest (or less) on the debt and little or nothing towards the principal. Paying down the debt can free up additional money for other important financial needs.

If debt is not a problem, your tax refund could provide you an excellent opportunity to fund an existing IRA or establish a new one. For the 2007 tax year, you can contribute up to $4,000 to an IRA. If you are 50 years or older by December 31, 2007, you can add an additional $1000 to the account. Making a tax-deductible contribution to a Traditional IRA is an option if you are not participating in an employer-sponsored retirement plan or, if you are participating, your Adjusted Gross Income falls within eligibility guidelines.

A Roth IRA may be a more appropriate choice, depending on your eligibility. Contributions to a Roth IRA are not tax deductible. However, qualified distributions are received free from federal income tax.
Your refund could also be used to fund a Coverdell Education Savings Account (ESA) or 529 Plan for your child. Contributions are not deductible, but withdrawals to pay qualified educational expenses are free from federal income tax.

One thing to remember after you’ve decided the fate of this year’s refund: the check you received is not a windfall but the return of an interest-free loan you provided the government.

Regardless of the pleasure you may get from receiving a large check each tax year, adjusting the amount withheld by Uncle Sam to reduce the amount of future refunds may be an appropriate course. You may not get a refund in April, but there may be more in each paycheck to contribute to a Coverdell ESA, 529 plan, IRA or to pay down debt throughout the year.

Take some time to consider your options before making the down payment on that cabin cruiser. The earlier you start saving for your future, the more you may have during your retirement.

If you have questions about these options and others, you owe it to yourself to contact a financial services professional that you know and trust. Your financial future may depend on it.

Long Tern Care!!! If you haven’t heard of it get ready, it is the hottest topic in the insurance industry. As Baby Boomers move toward their senior years this subject is getting more attention. The reason? Well, there isn’t one clear answer. However, concerns include Baby Boomers who have, or currently are, caring for elderly parents and don’t want that responsibility to fall to their children. Another reason is the increasing costs of quality care, and an average life expectancy that grows each year.

All of these factors, and more, have people looking toward Long Term Care and exploring their options for their December years.

The following article published in the January 1, 2008 Detroit Free Press gives an overview of the Long Term Care arena and some concerns that are associated with this insurance coverage. For more questions on Long Term Care please contact me through this website–Marty O’Neill, Insurance Agent
January 1, 2008

BY RUBY L. BAILEY
FREE PRESS STAFF WRITER

Teresa Alexander can usually spot a good deal. She’s snagged cars at cost, computers on clearance and her suburban home at an auction for an estimated 40% less than what it was worth. But after months of research resulting in stacks of information from four insurance companies, Alexander still can’t figure out whether long-term care insurance is a good deal for her. The pile of envelopes covered with six months of dust attests to her inability to decide.

“Every time I reach for that pile, I get a headache,” said Alexander, 51, who’s using her maiden name and won’t reveal the city she lives in for fear of receiving more calls and letters from insurance agents. “There’s too many ways to go wrong and end up either paying for something I won’t use or drop it and not have my care covered when I need the help.”

A growing number of consumers like Alexander of southeast Oakland County are considering long-term care insurance. Experts anticipate Michigan’s large population of people 60 and older will add to the nation’s 8 million policyholders as they seek ways to pay for long-term care. Seniors, who now make up 12% of the state’s population, will comprise 15% by 2020 and 19% by 2030, according to estimates from the U.S. Census Bureau.

In Michigan, roughly 137,000 residents had long-term care insurance policies in 2005, up from 127,000 in 2004, according to the state’s office of long-term care. Long-term care insurance pays for what health care plans typically don’t — stays in nursing homes and assisted-living facilities or in-home assistance.
Experts estimate that nearly half of those 65 and older will spend some time in a nursing home or need long-term care. And not everyone will meet Medicaid’s stringent income requirements to qualify for nursing home benefits. Medicaid, run jointly by the state and federal governments, will pay for nursing home care after most of a person’s assets have been depleted.

Bankrolling long-term care out of pocket can be costly. A stay in a private nursing home averages $5,340 a month in Michigan, while assisted-living facilities cost $2,430 a month, according to the state Medicare/Medicaid Assistance Program. A home health aide costs an average of $21 per hour.
Depending on the policy features chosen, long-term care insurance could cover any of those forms of care, saving thousands of dollars.

Dropping policies
But here’s the catch that has tripped up Alexander and others: The policies can be expensive, and a person may never use the benefits after paying for them for years. The average policy costs $1,800 to $2,500 a year, and many increase every three to five years. Policies with inflation riders are available but add at least 30% to the cost, insurance agents and experts said. Features vary — including what type of care is covered, when coverage starts and the daily payout amount for care. In 2001, the Government Accountability Office found 60% or more of long-term care policyholders allow their policies to lapse within 10 years of purchase.

“You essentially paid in thousands of dollars, and you essentially got nothing out of it,” said Gail Jensen, a Wayne State University economist and gerontologist whose 2004 study of 1,375 seniors with long-term care insurance found that 204 let their policies lapse after two years. “It’s not just a one-shot deal. You’re committing for the rest of your life. Once you drop the policy, you lose the coverage.”

Jensen said her study showed people dropped the policies because they could not keep up with the payments. And there’s a chance that the insurer may not pay when the benefits are needed. The U.S. House Energy and Commerce Committee is investigating accusations that insurers Conseco and Penn Treaty erroneously denied legitimate claims while collecting billions in premiums. Industry-wide, insurers took in $9.5 billion in premiums in 2006, up from $8.25 billion in 2004, according to the American Association for Long-Term Care Insurance, the industry’s trade organization. In 2006, the industry paid $3.3 billion in claims, according to the association.

And because more people are purchasing the policies at younger ages, the long-term financial commitment is growing. In 2007, the average age of a policy buyer was 58, down from 67 in 2000, according to the association. Some experts recommend purchasing the policy at a younger age, when rates are likely to be lower and consumers are less likely to be turned down because of illness. One in five applicants is denied because of health issues, insurance agents and consumer experts said. But it also means more years of premiums and the increases that could make the policy financially burdensome.

Investing as a strategy
Bob Hull is waiting to find out whether his premiums will increase next year. His insurance plan, which he bought five years ago, allows for premium adjustments every five years.

“I’m anxiously awaiting that decision,” said Hull, who lives in Farmington Hills and didn’t want to give his age. Hull pays more than $1,500 yearly for his policy. “Depending on what they raise it to, I’ll have a little heartburn.”

If the premium doubles, as he fears it might, “I’ll drop it,” said Hull, who chose his plan after comparing five companies. His policy includes options for assisted living, in-home care and nursing home care. “To heck with it. I’ll fund it myself.” Self-funding is a route WSU’s Jensen says could work for some.

“I would take the money that I would be paying as a premium and I would invest it in a no-load mutual fund,” Jensen said. “I think the advantage of doing that is that you can accumulate a significant nest egg there. It can go a long way in helping to pay those long-term care expenses.”

Robert Hawyer, 67, said he considered long-term care insurance for himself and his wife, Marilyn, about 10 years ago. But he couldn’t afford the $2,500 yearly premiums.

“I knew it would start there and go up,” Hawyer of Trenton said. In 2002, his wife was diagnosed with Alzheimer’s disease. Long-term care insurance may have helped pay for someone to assist her at home, but Hawyer wonders whether the company would have refused to pay or whether he would have dropped the policy before his wife’s diagnosis. “With that insurance, there are so many ifs,” Hawyer said. “My advice: Put some money aside either way. No matter what, they always take cash.”

Being prepared
But insurance agent Tom Varner of Long-term Care Financial Partners in Metamora said many people may not be disciplined enough to sock away thousands now to pay for care later. “There’s so many misconceptions, and there’s denial and procrastination,” said Varner, who likens long-term care insurance with car, life and homeowners plans. “You’re insuring a huge risk down the road. It may or may not happen to you. That’s always the fly in the ointment.”

That was Joe Kent’s thinking when he bought a long-term care insurance policy three years ago at age 46.
“You have to consider, ‘Gee, I could be on this Earth for another 30-40 years and not be in a position to earn a living,’ ” said Kent, who lives in Addison Township. He pays more than $1,000 yearly for his policy. “Health insurance isn’t going to pay for long-term care. So what is? Your own assets. If you own stuff, you can kiss it good-bye.”

Alexander has wavered between a save-all-the-money-she-can plan and a double-pronged approach of setting aside savings and supplementing it with a bare-bones long-term care insurance policy to keep premiums low and, she hopes, affordable for the next several years.

“The alternatives just stink,” said Alexander, whose New Year’s resolution is to make a decision about a policy. “And either way, you’re betting your future.”

Insurance companies, the good ones that is, have built trusted relationships with their clients. There is a bond that occurs between the people of a community and those who help them in their hour of need.

Over the past few years these trusted insurance companies have moved toward helping their clients in other forms of finance and financial planning. Insurance companies are now big players in the banking and financial management arenas. They have taken a holistic approach to helping clients not only protect their wealth but grow it as well. Today you will find an article published by the Associated Press that addresses this very issue–Marty O’Neill, Insurance Agent

(c) 2007. The Associated Press. All Rights Reserved.

DES MOINES, Iowa (AP) - Your insurance company is likely handling more than policies these days. Investments, retirement plans, even car loans and checking accounts have been added to some service portfolios as insurance companies expand into the traditional realm of banks.

Accelerating the trend are baby boomers looking to build their wealth before retirement.

Many traditional insurance companies — with slogans like Allstate’s “You’re In Good Hands” and State Farm’s “Like A Good Neighbor” — have cultivated relationships of trust in insurance. They appear to have succeeded in transferring that trust into banking and management of their customers’ retirement assets.

A Forbes magazine ranking of the nation’s top 25 financial services companies, based on 2006 revenue, included 10 insurance companies, including State Farm, MetLife, Allstate, Prudential Financial and New York Life Insurance.

Bloomington, Ill.-based State Farm Insurance Co., the nation’s largest auto and home insurer, branched out into banking in 1999 and into other financial services areas a few years later. Through its 17,800 insurance agents in the United States, the company offers mutual funds, savings accounts, even car and bank loans.

“When you purchase a new auto, you need to perhaps borrow some money to purchase the vehicle and then you need to buy some insurance. When you’re purchasing a new home, you need a loan, obviously, and you need insurance,” said State Farm spokesman Dick Luedke.

“It’s planning for your financial future and insurance is part of that and banking is part of that and investing is a huge part of that.”

State Farm, a mutual company therefore not publicly traded, still makes most of its profit from insurance. Banking and mutual funds make up just 2.6 percent of the company’s accounts.

Yet State Farm’s bank held $13.7 billion in assets as of June 30, according to the Department of Treasury, ranking in the top 1 percent of all U.S. banks based on total asset size. Its retail mutual funds business closed 2006 with nearly $3.9 billion in assets under management, a gain of about $1 billion last year, its fifth year in business.

Bob Hartwig, an economist and president of the New York-based Insurance Information Institute, a nonprofit trade group, said many insurance companies have branched out to broaden their revenue stream.

“The traditional insurance industry is very cyclical and can have some very bad years, such as years when there are major catastrophes,” Hartwig said. “For decades, federal law prohibited insurers from getting into banking and financial services but that depression-era legislation was swept away in 1999. For the last eight to nine years, insurers have been able to get into this in a big way.”

Des Moines-based Principal Financial Group Inc., founded in 1897 as a mutual life insurance company serving bankers, took advantage of the regulatory changes to transform itself, becoming the nation’s leading 401(k) retirement plan provider.

Only a quarter of Principal’s operating profit still comes from individual life and health insurance. The rest comes from managing securities, real estate and other investments in the United States and abroad. The company provides asset management and retirement services in Argentina, Brazil, China, Chile, India and Mexico.

Principal CEO Barry Griswell said the insurance industry’s transformation is due to the attractiveness of the financial services industry.

“The fact that we have the aging of the population, we have a lot more wealth created in this country. We have more families in the higher income levels creating a lot more savings,” Griswell said in a September interview. “We have everybody positioning for the future of the baby boom generation as they really ramp up their retirement savings.”

The baby boom generation is Principal’s growing focus, he said.

“When they start retiring, those assets they’ve accumulated primarily out of 401k and others will flow largely into individual IRAs,” Griswell said. “So probably the one area we’re putting most emphasis on going forward … will be the retail mutual fund. We currently have $50 billion in assets under management. I would like to see that get to $100 billion fairly soon.”

The trend is not expected to peak for many years, he said. Baby boomers are just nearing retirement, and those born at the peak of the boom in 1957 still have a decade or more of work ahead of them.

Obese Drivers Facing More Serious Injuries in Auto Accidents
Thursday, December 13th, 2007

In addition to the numerous problems our country is facing with obesity, add auto accidents to the, excuse the pun, growing list. This article by Dharam Shourie outlines an increasing issue with the reltaion between auto injuries and body weight–Marty O’Neill, Insurance Agent.

(c) 2007 Asia Pulse Pty Limited.

By: Dharam Shourie

New York, Dec 8 (PTI) Being obese may increase the risk of perilous diseases like diabetes, heart attack, stroke and cancer. And it can be fatal in one more way — it enhances the risk of dying in a car crash.

More than 42,000 deaths and three million injuries result annually from motor vehicle crashes in the United States. An estimated 26 per cent of the population or about 60 million people are obese, according to data compiled by the Centers for Disease Control and Prevention (CDC).

The study was conducted by the Meharry-State Farm Alliance which is a joint venture of Meharry Medical College, an historically black academic health center in Nashville, Tennessee State and State Farm, which insures cars and is the leading US home insurer.

For its study, the Alliance analyzed 2002 data from the CDC’s Behavioural Risk Factor Surveillance System.

Researchers divided over 230,000 people into groups based on their body mass index (BMI), a measure of how overweight an individual is. The rate of always wearing seat belts was 82.6 percent for non-obese motorists (BMI less than 25), 80.1 percent for overweight motorists (BMI 25-29), 76.6 percent for obese motorists (BMI 30-39) and 69.8 percent for extremely obese motorists (BMI 40 and above). The gap climbed from 2.5 percent for overweight, to 6.0 percent among the obese, to 12.8 percent among the extremely obese.

The Meharry analysis revealed that millions of Americans are increasing their risk for injury or death in motor vehicle crashes by failing to use seat belts.

In a study published in the November issue of journal Obesity, lead author David Schlundit, a health psychologist, reported that people who are obese have lower rates of seat belt use than their lean counterparts. “As seat belts can reduce motor vehicle crash-related morbidity and mortality by 50 percent,” Schlundt asserted, “these findings suggest that many American motorists are unnecessarily at risk for death or injury in motor vehicle crashes.” Rates of obesity and extreme obesity reportedly are higher among African Americans and Latinos in the United States, suggesting that the obesity-seat belt relationship should be of particular concern to those interested in minority health and health disparities, the study says.

“One of the main objectives of the Meharry-State Farm Alliance is to reduce disparities in seat belt use and motor vehicle injury and death in minority populations,” said Kellie Clapper, State Farm assistant vice president, community relations.

“This research provides one clue about the reason for the disparity.”

Recently life insurance has come under the microscope as a story involving CNN’s Larry King came to light. Mr. King has been involved in controversy surrounding a buyout of his life insurance policy. This type of dealing is often based in fraud and, like lottery buyouts or litigation settlement buyouts, can often lead to payouts of only pennies on the dollar. The following article from the Washington Post sheds light on to this growing industry–Marty O’Neill, Insurance Agent

Copyright 2007, The Washington Post Co. All Rights Reserved

The deal the broker discussed with his well-heeled client seemed like a good idea: Buy a $10 million life insurance policy, and if the client wanted to raise some cash, the broker could sell the policy to an investor for a tidy profit.

So the client took advantage of the offer. The broker re-sold the $10 million policy later that year, yielding a $550,000 windfall for the client.

The investors who bought the policies, who remain unidentified, took over payment of the premiums and became the new beneficiaries. The client followed up that transaction by selling a second $5 million policy on his life, earning $850,000. Another unknown investor became the beneficiary.

But then the client had second thoughts. In a lawsuit, he claims he was not fully apprised of the ramifications of what he was doing. Further, he contends that the broker failed to tell him that the new policies, now in an outsider’s hands, would significantly reduce his ability to buy additional life insurance.

The client, CNN talk show host Larry King, thus became the subject of a cautionary tale in what insurance regulators say is a quietly but rapidly booming trend among wealthy Americans: selling one’s life insurance to strangers.

Comprehensive data on the secondary market for insurance policy sales is incomplete, in part because states regulate the industry and do not collect information uniformly. But industry analysts suggest that if the pace of life insurance policy re-sales over the past several years is any indication, the $30 billion that traded hands last year could easily grow to more than $150 billion over the next decade.

“The lure of easy money is seducing participants into the secondary market for life insurance and putting life insurers in compromising positions,” Fitch Ratings said in a special report in September. “The flow of capital to date and the potential for this market have created a gold rush atmosphere, increasing risks for all involved.”

In the King case, the talk show host alleges that Bethesda insurance broker Alan Meltzer did not properly review the tax implications for King if he sold the policies. The suit claims Meltzer did not disclose the full amount of commissions, fees and payments he received nor did he act in good faith to find prospective purchasers who would pay a higher price. The broker also did not properly advise King on whether he would have been better off keeping the new policies and selling older policies he held, the suit claims.

Meltzer, through his office, declined to comment. He denied the accusations in a response to King’s suit, filed with the U.S. District Court for the Central District of California. Meltzer contends in the response that King was “very interested in selling his insurance on the marketplace at a substantial profit. This is what happened.”

The broker also alleges that “Larry King pretends that he was interested in purchasing additional life insurance. . . . During each of the transactions complained of, [we] expressly told Larry King’s advisers that Larry King was better off keeping the new insurance rather than selling.”

King’s attorney, Marshall B. Grossman, a partner in the Los Angeles law firm Bingham McCutcheon, described the practice of flipping insurance policies as “an issue that has been hidden from view for too long, in part because many people who have been victimized are quite likely embarrassed and have sufficient means so that they just move on.”

Industry-wide, there are bigger questions about the ethics and legality of brokers selling policies so they can then flip them.

“If somebody owns several million dollars of insurance on my life who I don’t know . . . it would make me a little nervous to know someone had an interest in having me dead quick,” said Joseph M. Belth, editor of the Insurance Forum, an independent industry publication. “Because not only do they not want to have to wait for their money, but they don’t want to pay for the premiums for long.”

Insurance policies initiated at the suggestion of an investor or third party can be problematic because they violate the industry’s principle of “insured interest.” Prohibitions against stranger-initiated life insurance date back to 16th-century England, when people would bet on whether ships and seamen would return to port. To remove overt financial incentives for a third party to take out a policy on a person and then see him dead, English courts mandated that individuals have a personal or economic interest in a person to buy insurance on him.

But the sale of insurance policies to third parties came into favor in the 1980s as a way for AIDS patients to get cash from their life insurance policies before they died. Those transactions were legal because the policies were not bought with the intent of flipping them. In recent years, however, with the number of wealthy baby boomers increasing, the opportunities for brokers to make commissions on policies for them has grown.

Over the past year, at least half a dozen states have warned consumers about predatory insurance brokers who offer to sell individuals expensive policies with the intent of turning around and selling them to third-party investors who will pay the premiums in exchange for becoming the policies’ beneficiaries.

“It is not illegal for somebody to approach Larry King and say there’s great value in a life insurance policy and I’ll loan you the money to pay for it,” said Doug Head, executive director of the Life Insurance Settlement Association. “But if there is a prearranged agreement to sell . . . or kickbacks to the policy owner to incentivize them to get into the deal, they’re all illegal right now, in our view.”

There is also a corporate version of stranger-owned life insurance policies that some in the industry would like to address. Last year, Wal-Mart ran into trouble for taking out life insurance policies on employees. The company reasoned that it had an economic interest in the employees’ well-being, making the policies valid. But opponents argued that employers should not collect death benefits from workers without their knowledge. Wal-Mart paid $5.1 million — the amount it collected after employees died — to settle a class-action suit brought by the workers’ estates and families.

Insurance companies generally support efforts to regulate the growing secondary market for life insurance because the high rate of payouts to investor-policyholders has the potential to cause havoc on the economics of the industry. At least 85 percent of life insurance policies lapse or are dropped by policyholders without companies ever having made any payout, according to Head and other industry officials. Prices for policies are set with that in mind.

If more and more policies wind up in the hands of investors seeking returns, insurance companies say they may have to raise rates.

State insurance commissioners and legislators responsible for insurance statutes recently have been working to present model legislation that states could adopt to address stranger-owned life insurance abuses and conflicts of interests by brokers.

Under a measure drafted by the National Association of Insurance Commissioners, life insurance policies could not be re-sold within five years of their origination. Currently, some states impose a two-year period, though some industry analysts suggest that neither waiting period would stop abuses.

Another model presented last weekend at the National Conference of Insurance Legislators’ annual meeting in Las Vegas requires brokers to disclose to policyholders that any change in ownership could affect their future insurability.

The District does not regulate life settlements and stranger-initiated life insurance policies, but its commissioner is proposing a bill that would regulate how policies may be sold on the secondary market and provide consumer protection provisions for stranger-originated life insurance policies. Maryland law does not specifically regulate the re-sale of policies. Virginia in recent years amended its statutes to say that policyholders no longer have to be on their deathbeds, as AIDS patients did a generation ago, to sell them.

Automotive technology is meeting the insurance industry in the form of safer cars, and thus safer passengers. The article below is from Dow Jones & Company and outlines the increase in autos which now meet the highest levels of safety ratings. Obviously, this safety leads to less injuries and lower insurance rates. Marty O’Neill, Insurance Agent

(Copyright (c) 2007, Dow Jones & Company, Inc.)

Safety-minded drivers now have many more vehicles to choose from.

Thirty-four vehicles received the highest safety rating in the latest crash tests performed by the Insurance Institute for Highway Safety, up from 13 a year ago. Asian car makers had the largest number of top-rated vehicles, with 17. U.S. car makers had six vehicles on the list, while Germany and Sweden had six and five, respectively.

The results, which are due to be released today, come as auto makers attempt to boost their safety ratings by adding air bags, crumple zones and crash-avoidance electronics — and as consumers increasingly seek out the latest safety features. Toyota Motor Corp.’s Tundra is the first pickup truck to make the list, and Fuji Heavy Industries Ltd.’s Subaru Impreza is the first small car since stricter criteria were introduced last year. They join Hyundai Motor Co.’s Entourage minivan, Daimler AG’s Mercedes-Benz M-Class sport-utility vehicle and Ford Motor Co.’s Volvo XC90 SUV, which were also on last year’s list.

To receive the top rating, vehicles have to be available with electronic stability control, or ESC, and get a top score of “good” in front-, side- and rear-impact crash tests. Other ratings in each category include “acceptable,” “marginal” and “poor.”

Drivers have long been drawn to vehicles that have more horsepower, luxury amenities or conveniences than the competition. But as creature comforts such as heated leather seats, CD changers and navigation systems have proliferated even among budget-priced cars, drivers and car makers have begun to focus on safety features. As a result, attributes such as side-curtain air bags, which cushion occupants in a side collision, and stability control systems, which help drivers avoid accidents, are now among the latest must-haves.

Stephanie Sanford says injuries she suffered from a head-on collision that destroyed her sedan earlier this year persuaded her to look more closely at safety ratings. She recently bought an Acura MDX, an SUV made by Honda Motor Co. that was named a top pick by the Insurance Institute. “I wanted to make sure it had all the stars,” says the Denver flight attendant, referring to high scores in crash tests.

Car companies have rushed to make their vehicles more crash-resistant by strengthening their bodies and adding air bags and electronic collision-avoidance systems. Some are paying particular attention to redesigning seats, seat belts and headrests to better protect passengers when the car is hit from behind, which has been a weak spot for many vehicles since the Insurance Institute began rear-impact crash tests in 2004. Indeed, another 23 vehicles would have made the top-rated list if their seats and head restraints hadn’t fallen short.

The test results also show that car makers are moving faster than ever to make vehicles more appealing to consumers through safety improvements. Some cars made the list only after their makers quickly made changes to improve their safety ratings. Making such design changes in the past could take several years.

Seats and head restraints in BMW AG’s X3 and X5 sport-utility vehicles, and the Honda Accord sedan, Element SUV and Odyssey minivan received “good” ratings for 2008, compared with “marginal” or “poor” ratings a year ago. Volkswagen AG’s Audi reworked the seat and head restraints on its midsize A3 to improve the car’s rating to “good” from “acceptable.”

There are also vehicles that received top ratings this year in categories that weren’t represented in last year’s top picks, which also helped expand the list. These include two convertibles — the Volvo C70 and General Motors Corp.’s Saab 9-3 — in addition to the Tundra and the Impreza.

The auto industry’s newfound agility in making last-minute tweaks to vehicles reflects growing consumer awareness of safety, science, marketing and even how cars are made. Consumers increasingly research a vehicle’s safety ratings along with quality and reliability records before buying. In response, car makers have recognized the appeal of safety as a marketing tool and often refer to crash-test results in their advertising.

Consumer demand and government regulations will continue to make safety more of a core element in vehicle design, says Rebecca Lindland, an analyst with research firm Global Insight in Lexington, Mass. As fuel-economy standards increase, for example, some cars will become smaller and lighter, necessitating new safety features, she says.

“Federal mandates will drive some of this, but it’s also happening because of consumer demand,” says Ms. Lindland.

The Insurance Institute, a research group funded by the insurance industry, says its ratings are designed to make it easier for consumers to identify the vehicles that provide the best protection in the most common types of crashes.

The institute’s ratings are based on frontal offset crashes at 40 miles per hour — in which part of the car’s front end is hit — and side impacts at 31 mph. The two-step rear-impact tests include measurements of the head restraints. Vehicles whose head restraints are judged “good” or “acceptable” are tested in a rear impact of 20 mph to a stationary vehicle. The group began frontal-impact testing in 1995, adding side-impact tests in 2003 and rear tests in 2004.

By Marty O’Neill, Insurance Agent

When people get ready to walk across a public road, they usually look both ways first to see if any motor vehicles are coming. Unfortunately, this isn’t the case with animals, including certain large ones. Too often, the result is a motorist’s nightmare: a collision with a deer, moose or elk. The animal usually comes out second-best in this type of close encounter, but the toll on vehicles and their occupants can also be substantial.

Each year, more than 150 people die in animal-vehicle collisions, the Insurance Institute for Highway Safety says. The Insurance Information Institute estimates some 1.5 million such collisions cause about over $1 billion in damage annually. While animal-vehicle collisions can happen any time of year, fall is the peak season for deer-car crashes. That’s mainly because autumn is both mating season and hunting season, so deer are more active and more likely to roam beyond their normal territory.

No foolproof way has been found to keep deer, moose and elk off highways and away from vehicles. Deer whistles have their advocates, but the Insurance Institute for Highway Safety says there’s no scientific evidence to support claims they work as intended. Some studies suggest roadside reflectors – designed to reflect light from vehicle headlamps and cause deer to “freeze” rather than cross the road – reduce crash frequency to some extent.

There are ways you can lessen an unplanned meeting with a deer, moose or elk. Here’s how:

• Be aware of your surroundings. Pay attention to “deer crossing” signs. Look well down the road and far off to each side. At night, use your high beams if possible to illuminate the road’s edges. Be especially watchful in areas near woods and water. If you see one deer, there may be several others nearby.
• Be particularly alert at dusk and dawn, when these animals venture out to feed.
• If you see a deer, moose or elk on or near the roadway and think you have time to avoid hitting it, reduce your speed, tap your brakes to warn other drivers and sound your horn. Deer tend to fixate on headlights, so flashing them may cause the animal to move. If there’s no vehicle close behind you, brake hard.
• If a collision seems inevitable, don’t swerve to avoid the animal; your risk of injury may be greater if you do. Hit it, but control the vehicle. Report the crash to the police.
• Always obey the speed limit and wear safety belts.

Being alert at all times while driving is your best defense against any type of accident.

By Marty O’Neill, Insurance Agent

Wake up, America! A financial crisis could be looming for which you are not prepared. This is the loud and clear conclusion of a recent Roper study about long-term care which shows that most Americans have done little to prepare for what could be one of the largest expenses they’ll ever face – their long-term care. The American Society on Aging (ASA) released the study.

“This study is a real wake-up call for people to start thinking about long-term care,” said ASA’s Jim Emerman. “People need to take the first step of getting some guidance about their long-term care needs. Careful planning can help preserve your options and protect your assets if you ever need long-term care in a nursing home, an assisted living facility or even in your own home.”

But the Roper study of people 45 and older shows how few are actually taking that important first step. More than four in five (86 percent) of the people surveyed said it was important they have enough money to be able to choose a long-term care setting if they or a loved one needs it. But only 37 percent have actually started saving money to cover those costs.1

At the same time, while the overwhelming majority (89 percent) believes it’s important or very important to have some type of private or government coverage for long-term care, only 17 percent have bought insurance that specifically provides it.2

Long-term care is for people who need help taking care of themselves after an injury, illness, stroke or disease. While most people think of it simply as moving into a nursing home, it can also include having a healthcare aide come to your home or staying in an assisted living facility. Surprisingly, 40% of the people who need long-term care are actually quite young, working adults under the age of 65 who need help after an accident or an injury.3

Why aren’t people planning for this vital need? After all, we plan for retirement, for college and other important things. The survey, which was funded by State Farm4, found considerable confusion about long-term care. For example, almost half the people surveyed mistakenly believe their health insurance or disability insurance will pay for long-term care. Others are not aware that Medicaid will only cover long-term care if you’ve used up almost all your financial resources. And, in the most telling comments of all, half said since they won’t need long-term care until they’re older, so there’s no need to think about it now.5 It’s time to wake up and change that way of thinking.

Given the fact that 71.8% of people over the age of 65 will need some form of long-term care, families need to consider long-term care insurance as part of their financial plan. Long-term care insurance can help protect assets, preserve choices and provide independence.

Families should at least be discussing their individual needs with someone they trust.

1 The Roper survey findings will be posted on statefarm.com® at www.statefarm.com.
2 Study conducted by Roper ASW, August 2002. Released by State Farm Mutual Automobile Insurance Company and the American Society on Agency (ASA), April 2003.
3 GAO analysis of information from the Department of Health and Human Services and the Institute for Health Policy studies at the University of California, San Francisco. As cited in, “Long-term Care: Current Issues and Future Directions, General Accounting
Office Report to the Chairman, Special Committee on Aging, U.S. Senate.” (GAO/HEHS-95-109). April 13, 1995: pg. 7. The level of coverage provided by long-term care insurance depends on the type of policy you purchase. Some types of care received may not be covered by long-term care insurance.

Insurance companies are working quickly to keep their products in pace with the changing environment and weather related issues. The following article outlines plans and changes the insurance industry is working on to keep in-line with weather and environmental changes–Marty O’Neill, Insurance Agent
FORT LAUDERDALE, Fla. (BestWire) - The global insurance industry vastly expanded its efforts to respond to global warming in 2007, more than doubling the climate change-related products and services that existed just 14 months ago, a new study from the environmentally focused institutional investor group Ceres found.

Presented to the annual meeting of the International Association of Insurance Supervisors by Evan Mills, staff scientist with the U.S. Department of Energy’s Lawrence Berkeley National Laboratory, the report details 422 industry initiatives from more than 190 firms in 26 countries, that each look to respond in one way or another to climate change and its related risks. Mills had earlier completed an August 2006 survey that identified 192 climate-related products.

Mills found 13 insurers that have pledged to become carbon neutral, with the U.K.’s Aviva successfully reducing emissions by two-thirds between 2000 and 2005 through the purchase of carbon offsets. An even more ambitious program by Tokio Marine & Nichido has seen the Japanese insurer pay to reforest 12,000 acres of mangrove trees throughout Southeast Asia, originally with the goal of becoming a carbon neutral organization before realizing the program also offered storm surge protection benefit for typhoons and tsunamis.

Though insurance company emissions aren’t typically perceived as a significant problem, Mills noted an eightfold spread in carbon dioxide emissions by 20 insurers who voluntarily responded to questionnaires offered by the Carbon Risk Disclosure Project, with the median insurer reporting greater emissions than those in the transportation or housing sectors.

“These emissions per employee are more than those employees emit in their own personal cars or their homes,” Mills said. “Some people like to say insurance is not a polluting industry, and sure it’s not making steel or things like that, but the emissions are not trivial. So, reducing their own emissions is a sensible thing for insurance companies to do.”

With automobile emissions a major focus of climate change scientists, insurers rolled out several products that reward policyholders for “green” driving behaviors. For more than a year, Travelers has been offering a 10% discount for U.S. drivers of hybrid vehicles, while Axa has introduced similar incentives in France, Canada, Thailand and Ireland. The coverage is now widely popular in Japan, with Sompo Japan Insurance and Tokio Marine & Nichido signing up 3.25 million and 6.23 million policyholders, respectively, in just under two years.

Mills also identified 19 companies that now offer “pay-as-you-drive” personal automobile insurance, including U.S. firms GMAC and Progressive Corp. By making premiums more proportional to miles driven, the programs can reduce total miles driven by 10% to 15%, he said, adding that coordinating such programs with global positioning systems helps to insulate them from fraud.

French insurer AGF now has 250,000 pay-as-you-drive policies in force, representing about 20% of its new customers. Other firms — such as Axa, Allianz and Cooperative — are offering “carbon neutral” car and travel insurance, while Insurance Australia Group provides customers an opportunity to purchase “carbon-offset” services through the company’s Web site.

Carbon offset, trading and risk management services are offered on a much broader scale to commercial enterprises through programs crafted by global names like Swiss Re, American International Group and Marsh, Mills said. Swiss Re, in particular, has pioneered cost risk hedge products such as carbon-delivery insurance and carbon-credit price volatility insurance, in connection with the $30 billion European carbon emissions trading market.

The past year also has seen the introduction of new liability products for energy management businesses, who often cannot be covered under traditional errors and omissions policies, Evans noted, with Lockton Risk Services offering group liability coverage for home energy auditors. Energy savings insurance contracts have begun to appear in the Lloyd’s market, while Munich Re has been offering new “exploration risk” coverage for firms seeking out sources of geothermal energy.

Fireman’s Fund last year introduced “green buildings” insurance in the United States, offering 5% premium credits for commercial properties with certain energy efficiency features, as well as a promise to rebuild to a higher green standard following a loss. Evans reported that AIG’s Lexington Insurance Co. is set to introduce a similar product later this year in the residential property market, while Sompo has been offering the coverage since 2003. The report notes that green practices can reduce building emissions by up to half, and that buildings acount for more than 33% of all U.S. greenhouse gas emissions.

But despite notable progress in the industry’s response, Mills said his overall evaluation still was that insurers hadn’t done nearly enough, particularly given the threats they face. Though hurricanes receive the most attention, among the severe weather that a massive shift in climate patterns could portend are more severe heat waves, lightning, droughts, insect infestations, wildfires, mudslides, winter storms, torrential rains, hail and flood, Evans said. He also expects the industry could be facing climate change-related increases in claims for political risk, fiduciary liability, pollutant releases, mental health, general liability, infectious disease, roadway liability, and directors and officers liability.

“We have hundreds of examples (of climate-related initiatives), but of course, most insurance companies aren’t doing anything,” Mills said. “These are companies with modest initiatives, but it’s not as if this industry is rushing in to anything. I’m focusing on the best practices, but they are by far the minority.”

Mills suggested regulators could help spur further changes in the industry by seeking “appropriate disclosure” of insurers’ carbon disclosure, while not going so far as to require “excessive onerous reporting,” and pointed to the 113 insurance companies that already have voluntarily responded to the Carbon Risk Disclosure Project. He similarly challenged regulators to promote “risk-based pricing with sensitivity to affordability.”

“I know that’s a very difficult balancing act, and I’m glad I’m not the one who has to do that, but the price does need to send a signal,” Mills said.

(By R.J. Lehmann, Washington bureau manager: raymond.lehmann@ambest.com)

By:  Marty O’Neill, Insurance Agent

Chances are, either your home or the home of someone you know, has a fuse box.  Fuses function the same way breakers do—to cut off power if an electrical circuit is overloaded.  Both fuses and breakers can be very effective in protecting your home against an electrical fire.

However, one problem that can arise with fuses occurs when someone inserts a fuse of higher amperage than the circuit is designed for.  For example, a homeowner tires of replacing blown fuses and inserts a 30-amp fuse where a 20-amp fuse should go, the 30-amp fuse allows more current into the circuit than the circuit was designed to accommodate.  The fuse “blows” indicating that the circuits are overloaded. These must be replaced as the fuse element burns up.  A fire can result.

If you have a fuse box, it’s a great idea to have an electrician inspect it and check the wire size to install the proper fuse bases. Type S fuses should be used in aging fuse panels to prevent over fusing. Type S fuses are the only type allowed by the National Electrical Code in new fuse box installations.

Whether you have a fuse box or a breaker box, have your electrician tell you the size of your electrical service to make sure it is sufficient. Years ago, 60-amp or 100-amp service wasn’t uncommon; but most families today have electrical appliances that demand more service.  It’s smart to get an electrician’s opinion on whether an update is needed since modern homes are typically wired for minimum 200-amp service.

Electrical fires are all too common, and many homes in the U.S. need electrical updates.  Please take whatever action necessary to update the electrical service in your home.