How life insurance can help in debt management

Debts can be a serious issue and one must take required steps to resolve it before it becomes overwhelming. Debt management can be looked upon as a remedy for debt problems. However, while considering settlement you must remember that you may need to come up with a lump sum fund to repay the debt upon the lender’s demand.

Now, if you had money you wouldn’t have been in a debt situation to begin with. Hence, it becomes a concern for many to come up with the money while negotiating a settlement.  Life insurance policies, typically the whole life policies, play a crucial role in such situations.

Cash value is a typical feature of whole life plans and can be used as a resource for funds at the time of emergency. Cash value is the amount over and above the life coverage that gets generated from the premium paid on the policy.

Most of the whole life policies allow the policyholders to withdraw the accumulated cash value on the policy partially or fully after a certain period of time, which is normally after three years. This money then can be used towards debt settlement if required.

Advantages of using life insurance for debt management

Following are the advantages of borrowing from your policy.

• Anytime accessibility: Cash value is available to you anytime. You may need to contact your insurer/agent and request a withdrawal. This money is normally available within a short notice.

• No obligation to repay: Since you are taking the money from your policy, you don’t have the obligation to repay. Thus you can save yourself from getting into further debt. However, the amount along with interest would get deducted from the death benefit at the time of final settlement.

• You are charged lower rate of interest: The interest charged by the insurer is less than bank rates.

• Tax benefits: When you borrow against your policy, it’s considered as debt and hence non taxable.

Anyway, there are disadvantages too in using life insurance for debt settlement. But, those are relatively fewer in number than its advantages.

Bank Of America Offers To Repay Some Aid

Bank Of America Offers To Repay Some Aid

http://www.bloomberg.com/apps/news?pid=20601087&sid=aW0trv637ehw

Bank of America intends to repay a portion of the $20 billion federal aid received by it at the time of acquisition of Merrill Lynch & Co, the Wall Street Journal said quoting unidentified sources. The company also seeks to end its loss sharing agreement with the government on Merrill Lynch assets and may have to pay $300-500 million for that. A partial repayment of the federal aid will remove the company from the scrutiny of the Congress and the regulators. In January this year, the federal government had agreed to guarantee Bank of America’s assets worth $118 million to help it absorb Merrill Lynch and prevent a deepening of the financial crisis. The government had also agreed to be liable for 90% of any additional losses after the Bank of America has absorbed losses worth $10 billion. More and more companies are planning to repay government funds to avoid various restrictions on their functioning. Journal said quoting unidentified sources. The company also seeks to end its loss sharing agreement with the government on Merrill Lynch assets and may have to pay $300-500 million for that. A partial repayment of the federal aid will remove the company from the scrutiny of the Congress and the regulators. In January this year, the federal government had agreed to guarantee Bank of America’s assets worth $118 million to help it absorb Merrill Lynch and prevent a deepening of the financial crisis. The government had also agreed to be liable for 90% of any additional losses after the Bank of America has absorbed losses worth $10 billion. More and more companies are planning to repay government funds to avoid various restrictions on their functioning.

Tobacco Rules Challenged In Free Speech Lawsuit

Tobacco Rules Challenged In Free Speech Lawsuit

http://online.wsj.com/article/SB125174788118073575.html?mod=googlenews_wsj

Several tobacco companies such as Reynolds American Inc and Lonillard have filed a lawsuit seeking to block some provisions of a new federal tobacco law. These companies claim that the recently enacted law restricts their right to advertise their products by putting them under the ambit of the Food & Drug Administration. The companies are also objecting against provisions such as that make it mandatory for them to expand the size of warning labels besides including graphic images such as diseased lungs. This requirement will leave only a small portion of the packaging to display their own message, the companies argue. Although these companies are not against the provisions restricting the sale of their products to minors, they are questioning the regulations related to sale to adults. The law restricts the number of channels available to communicate with the adults, the companies say.

Harder To Find A Job In Retail

Harder To Find A Job In Retail

http://www.msnbc.msn.com/id/32452657/ns/business-careers/

It comes as no surprise that jobs in retail stores are getting increasingly difficult to get. There are two reasons for this. The first is that retail stores have been cutting down on their operations, closing down stores in areas where sales are low and reducing sales staff in others. To compound the problem, is the added weight of workers who have been laid off from jobs in the financial and construction sector. Such workers too are seeking jobs in the retail segment.

As a result, the number of applications for jobs are twice that of what stores used to receive a year earlier, and the number of people willing to take on short term jobs or jobs at levels way below what they are qualified for has seen a significant increase. News from the labor market continues to remain not so good, and the retail employment situation is an example of that.

Finally, Car Sales Show An Increase

Finally, Car Sales Show An Increase

http://www.msnbc.msn.com/id/32261206/ns/business/

Ford Motor Co. is expected to release sales numbers on Monday which will indicate the first monthly increase in sales for the company in two years. Helped along by the Obama administration’s “cash for clunkers” program which has been received very well by buyers, this industry is expected to cross the annual rate of 10 million cars sold, for the first time in July.

The doubting ones would say that this push in demand is because of the discount being offered. While there is no doubt that this scheme has definitely contributed very strongly to the July numbers, it is spending schemes such as these which attract buyers back into the market. The tax rebate on first time house purchase too has been a good draw and has tempted many buyers into putting down a down payment for a house.

Buffet Says Second Stimulus May Be Needed

Buffet Says Second Stimulus May Be Needed

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN0944100220090709

Warren Buffett, the legendry investor has said that the US government may need to bring in a second stimulus package to revive the economy and put an end to the current recessionary conditions. Speaking during an interview, Buffett who is the founder of Berkshire Hathway said, although the financial and the economic situation had improved in the sense that there was no freefall, but there was no recovery visible yet. Rising unemployment remained an area of concern and could even go up to 11% before declining to a reasonably acceptable level, Buffett said.  A second stimulus package may in fact be required to boost the economy, although Obama administration has repeatedly said that there was no need for such a program.

Airlines Flying Low

Airlines Flying Low

http://www.msnbc.msn.com/id/31788577/ns/travel-news/

All US airlines have reported disappointing numbers for June. This is not really surprising. The airlines industry unfortunately is one which is affected by poor demand from all its customer segments. Leisure travel, which is more like the bread and butter of the airlines industry, is down because holidaying and vacationing is down. These are discounted tickets, but they do help fill up the seats.

The jam for the airlines is in business travel. With business being down, travel for business is naturally down. Companies are searching for cost effective ways to reduce travel costs and these include replacing of travel with tools such as video conferencing. The flight path for the airlines industry looks to be through troubled skies for a while yet!

The Market See Saw Continues

The Market See Saw Continues

http://news.yahoo.com/s/ap/20090625/ap_on_bi_st_ma_re/us_wall_street;_ylt=Ak4rJpBMHHQEWs9aOPjPkzOyBhIF;_ylu=X3oDMTJmYXJpbzQzBGFzc2V0A2FwLzIwMDkwNjI1L3VzX3dhbGxfc3RyZWV0BGNwb3MDMQRwb3MDMgRzZWMDeW5fdG9wX3N0b3J5BHNsawNzdG9ja3NqdW1wbGU-

Looks like investors really want the markets to move up. Any indication of good news, and we see them rushing in. After a moderate pullback, the Dow rose 173 points yesterday. This came after four days of losses.

The catalyst for this surge was earnings reports of a handful of companies which suggested that the economy looked to be turning around. The market was specially buoyed by the results of Lennar Corp. which said that orders for new homes jumped 63% during the second quarter and its revenue exceeded targets.

Encouraging earnings from the retail store Bed Bath and Beyond Inc too was looked at very favorably by the investors. It is now a situation where investors have had enough of the recession, and are willing to pick up any sign which shows that the future is bright.

The Pain Spreads

The Real Good News

http://news.yahoo.com/s/ap/20090608/ap_on_bi_ge/us_chrysler_dealers__last_days

First it was just the company Chrysler announcing filing of its bankruptcy petition. The immediate impact was felt by employees and suppliers. Gradually the impact has been spreading and it is now the turn of Chrysler dealers to feel the pain. Many have worked for years to get a prized dealership. They have now been informed that they are not profitable enough or do not feature in the company’s current scheme of things.
What does it mean for the dealer? While some are putting up a brave front and are saying that nothing really has changed and selling off their remaining inventory at the best possible prices. However there are many others who are getting rid of their inventory at prices lower than what they sourced the vehicles at. Tough times all around.

Fed Unlikely to React to Rising Bond Yields

Fed Unlikely to React to Rising Bond Yields

http://online.wsj.com/article/SB124355477324764533.html

The Federal Reserve believes that the recent rise in yields on treasury bonds may result in  improving the economy and reducing the risk of further financial trouble. Even though the government’s high cost of borrowing has raised concerns, the Federal Reserve is unlikely to react in the near future. The yields on ten year treasury bonds currently stands around 3.70%, much above the March level of 2.5%. Fed has continued the purchase of mortgage backed securities and treasury bonds in a bid to drive up their prices and push down yields. The Fed may eventually decide to step up the purchase of bonds to restrict the long term rates, but any action in the near term is unlikely. Rising yields could be viewed as signs of healing in the US economy.