News & Views
Meeting the insurance needs of clients since 1939.
GMAC Study Reveals 1 in 5 American Drivers Unfit for the Road
Each year, GMAC Insurance conducts a survey to determine how many American drivers would meet today’s basic requirements to obtain a driver’s license.
The 7th annual GMAC Insurance National Drivers Test results projected that 18 percent of Americans—or 36.9 million people—would fail the test with a score of less than 70 percent.
Though the average score across the country was 77.9 percent, up from last year’s 76.2 percent average, 85 percent of test takers could not identify the correct action to take when approaching a steady yellow traffic light, and about 75 percent were unaware of safe following distances.
The results revealed some interesting statistics:
- Kansas held the top spot for the second year in a row with an 82.9 percent average score, while Washington D.C. fell to last place with a 71.8 percent average score. This marked the first time in four years that New York did not fall to the bottom spot.
- More than 27 percent of women failed the test, while only 13.6 percent of men failed.
- The Midwest was dubbed the best driving region, while the Northeast was considered the worst.
- Thirty-four percent of drivers in New York and Washington D.C. failed the test.
- Older drivers achieved higher scores than younger drivers. However, there were strong indications that the youngest test takers, aged 16-24, are becoming better drivers.
The survey took into account 5,130 licensed drivers aged 16-65 and included participants from all 50 states and the District of Columbia. The online exam consisted of 20 questions taken from state Department of Motor Vehicle (DMV) exams, with regional differentiators, such as what to do when driving in a snow, eliminated to create a universal set of questions.
Identity Theft continues to be a growing problem (see article from Market Watch). Here are some simple things you can do to protect yourself
- Buy a shredding machine and shred any paperwork that contains account numbers or social security numbers.
- Review your credit report from any of the credit report companies. Annual Credit Report.com is the best place to obtain your credit report.
- Avoid using ATM machines at locations other than your bank or a nationally recognized bank
- Use only secure Internet sites when purchasing on line
- Never carry your social security card
- Have your social security number removed from your drivers license (this is optional in some states)
- Purchase identity theft coverage on your homeowner’s policy! Identity theft coverage can be very inexpensive when compared to the alternatives in modern day living. Call us at 330-782-5621 or email us at support@steinhauseragency.com for more information.
Do You Have The Right Business Plan?
Regardless of the size of your business, or whether it is a sole proprietorship, partnership, LLC, or a corporation, there are several types of retirement plans to choose from that can reduce your tax liability and increase the retirement savings of you and your employees.
The benefits a business can derive from sponsoring a retirement plan include:
- Boosting morale and productivity;
- Retaining good employees and thereby saving on hiring and training costs;
- Attracting experienced employees in today’s competitive environment;
- Helping employees save for their future since Social Security retirement benefits alone may not be an adequate source of income for most retirees.
Through proper design, you can eliminate additional unseen costs in the administration of your 401k plan. For a quote to match your current plan and costs, please give our financial services department a call at 330-782-5621 or e mail us at andy@steinhauseragency.com.
L&H Trends Ins and Outs of Beneficiary Designations
Most people don’t pay a lot of attention to their life insurance or retirement plan’s beneficiary designations. Singles generally name a family member such as a mother or father as the primary beneficiary and then name a sibling as a contingent beneficiary. Married insureds (or retirement plan participants) typically name their spouse as the primary beneficiary and their children as contingent beneficiaries. Sounds simple, right?
Not quite. Most people fail to update their beneficiary designations as events in their personal lives change; others fail to understand that naming minor children as beneficiaries will create problems in the event of their deaths. This also applies to an employer’s group term life insurance benefits.
Turning to the basics, a big advantage of life insurance contracts and 401(k) plan accounts is that the proceeds are immediately paid to the named beneficiaries. This means that the proceeds will not be subject to probate unless the deceased’s estate is named as the beneficiary, saving time and expense. However, it can be a two-edged sword if the deceased person’s beneficiary designation was outdated. For example, if an individual named his sister the beneficiary of his 401(k) plan balance and then failed to update the beneficiary designation after he got married, the proceeds will be payable to the sister and not the spouse.
Another common problem is a divorced person wanting to name his/her minor children as the primary beneficiaries. Depending on the state of residence, minor children cannot directly receive the proceeds of a life insurance policy, annuity or retirement plan if they are named beneficiaries. To remedy this, name a guardian to receive the proceeds for the child’s benefit, or set up a trust for the child that will be named as beneficiary. Upon the insured’s death, the trustee will become the legal owner of the proceeds and since the child will be the trust’s beneficiary, they will receive the trust’s proceeds. Examples of the beneficiary designation in this case include: “Trustees of the John Smith Trust Agreement dated 01/01/00,” “Trustee of the John Smith Irrevocable Trust dated 01/01/00” or “John Smith for the benefit of Jane Smith and John Smith.”
More issues can arise if several children are named as beneficiaries and some of them have children. In the event one of the adult offspring predeceases the insured parent, the insured must decide how such grandchildren will share in the proceeds with their other living children, with the question being whether everything will be divided equally or whether the grandchildren will split what would have been their parent’s share.
The issue can be solved by understanding the methods of distributing property to family members and heirs: per stirpes (“branches of the family”) and per capita (“by heads”). For example, say there are three adult children and one of the three dies having two children of their own. Under a per stirpes distribution, the two children of the deceased parent will each receive one-half of their deceased parent’s one-third share of the proceeds. Under a per capita distribution, the two children of the deceased parent will receive one-quarter of the proceeds along with the two adult children who would also receive one-quarter shares each. The same problem regarding having minor children named as per capita beneficiaries would remain if they are minor and legal guardians had not been named and/or a trust had not been set up.
It’s important for independent agents to raise this issue with their customers during annual reviews. Remember to consult a customer’s attorney when it comes to estate planning, especially if it involves trusts documents. And, independent agents are well advised to review their own beneficiary designations.
THE RIGHT LIFE INSURANCE—Many people are unsure about their life insurance purchase(s). Is term insurance the proper fit for my needs? Should I take a chance on the flexibility of universal life insurance? Is whole life insurance right for me? Those questions can be answered by knowing what you want out of your policy. Do you have a short-term need for coverage or a specific problem? Is premium amount a major concern? Yes answers to these questions would lead you toward a Term policy.
Do you have a long term need but your budget will not allow a large or consistent premium? Do you want the ability to save money when money is more available? Do you want to tie your investment planning to your insurance program? Yes answers here might lead you toward universal life.
Do you need a forced savings plan? Can you budget more money now for future benefits? Do you want your final planning to begin today? Do you want guarantees through out your entire life? These yes answers may lead you toward a whole life contract.
These questions may help you determine what type of insurance you should consider; they are only a starting place to decide your life insurance program. Give us a call at 330-782-5621 or send an email to support@steinhauseragency.com to discuss the various plans or combinations of plans that best suits your needs.