Life Insurance, Auto Insurance, and More in Alaska

I have divided this article into four different sections, each detailing its heading. I hope this makes it easier for you to get the information you require.Auto Insurance in AlaskaThe state of Alaska requires that every single motor vehicle registered there needs to have at least liability auto insurance. Under this State law; all owners of motor vehicles and/or drivers of the same must have the minimum amounts of liability auto insurance, which are:- $50,000 for death or injury to any one person per accident- $100,000 for death per accident or total injuries- $25,000 for property damage per accidentIn the event of an auto accident that resulted in property damage, personal injury or death amounting to more than $500; all drivers involved in the accident must show their auto insurance proof. Aside from auto accidents with damage greater than $500, the driver must also present proof of auto insurance any time they are requested to do so by an officer of the law and when comes the time to renew registration. If the driver fails to show proof of auto insurance for accidents with $500 dollars or more worth of damage, the drivers license will automatically be suspended for a period of 90 days to one year. The length of the suspension depends on the drivers driving record. Also, in case of an auto accident here, the guilty drivers auto insurance shall cover the expenses that were caused because of the accident.Home Insurance in AlaskaYou probably would not know this, but compared with to other states, Alaska pays more for home insurance. The reason for this is that they are always at a risk of floods and sub-zero temperatures. Though they have experienced a high increase in home insurance coverage in the past year, there are several ways to save on home insurance. The first is to compare the different insurance companies and see what each of them have to offer. This will enable you to get the right insurance at the price that fits your budget. Second is asking around about the different types discounts. You can ask your insurance company for the discounts you qualify for. And last is that increasing the deductible can save you a decent sum of money. By increasing the deductible, you are basically telling your Alaska Home Owners Insurance Agent that you are going to do everything you can to avoid any claims.The most common home owners insurance coverages are:HO-1 – This is for lighting, fire, vandalism, theft and smoke.HO-2 – This is the same as the HO-1 only with additional perils, such as building collapse, water damage and falling objects.HO-3 – This is “all perils”. Depending on your budget, you can choose between basic and all perils. But what is ultimately important is that you have home insurance which will protect you in case of disaster.Health Insurance in AlaskaAlaska health insurance enables most residents to be able to afford the increasing cost of health care. Those who have health care are able to escape medical debt, which occurs in two out of five locals. Considering the statistics, it is important, and certainly more cost effective, to have health insurance. Although health insurance varies; most policies pay for hospitalization, surgery, medical tests, pediatric care, doctor visits, and maternity care. Generally the exceptions are cosmetic surgery, hearing aids, dental care, eyeglasses, preventive care and experimental treatments.Those who are denied by private insurance companies because of medical conditions, the Alaska Comprehensive Health Insurance Association will offer them health insurance. Under the program of the association, those with medical conditions can get insurance on different terms.Life Insurance in AlaskaWhen it comes to life insurance, the two most common life insurances in the State of Alaska are term and permanent life insurance.Term life insurance protects the holder for short periods of time. This is usually over a period of one to several years. This means that the insurance pays only if the person dies during the covered period. Also, since the period covered is only of short duration, the premium is significantly cheaper than permanent life insurance.Permanent life insurance protects the holder for the rest of their life by a guaranteed death benefit. This means that the coverage is for the entire life of the person. The premium for this type of insurance is of course higher than term life insurance.In the unstable economy today, it is important to have life insurance for the family. This will enable those who are left behind to get on with their lives without financial difficulties. You might want to consider getting life insurance especially if your family depends on your financial contribution. Compare life insurance now and you might be surprised at how affordable it is and how easily you can squeeze it in to your monthly budget.If this article or a part of this article was beneficial to you, be sure to visit my website(s) as listed in the resource box below.

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Can You Invest Your 401(K) Plan Directly Into Real Estate?

Your 401(k) plan (or 403(b) or 457 Plan for that matter) is likely managed by one of the following companies: Ameriprise Financial, Credit Suisse Securities, Deutsche Bank, Edward Jones, Graystone Consulting, J.P. Morgan, Merrill Lynch, Morgan Stanley, Oppenheimer & Co., Raymond James, RBC Wealth Management, UBS Financial Services, or Wells Fargo Advisors. These companies and their financial advisers control most of the retirement wealth in the United States.Now, ask your financial adviser if you can invest directly in real estate with your current plan. They will probably tell you that you cannot invest directly in real estate, but they have a number of Real Estate Investment Trusts (REITs) you can choose from. Even though a REIT has real estate in its name, it is not an investment in property. REIT is an investment in a fund that obtains its cash flow from investment properties. It is different from a direct investment in real estate.REITs do not typically let you leverage your investment, which is one of the most powerful forces for creating long-term wealth. Even with an investment in a REIT, your retirement portfolio is likely 70 percent or more invested in various mutual funds, all of which experience stock market volatility. That’s neither diversification nor smart asset allocation investing. The Internal Revenue Service will let you invest directly in real estate, but your plan administrator will not. Why? Because they’re not set up to handle the administration nor do they earn a commission by recommending direct investment in real estate.Let me give you an example: Say you have only one asset, $200,000 cash and no liabilities. You decide to invest $100,000 in mutual funds and $100,000 in direct real estate investments, both of which are appreciating at 6 percent per year. The only difference is that you can borrow additional money from a bank to buy more properties. You obtain a 20-year amortizing loan at 5 percent. To be conservative, you borrow only $300,000, so you have a 75 percent loan-to-value ratio. After 20 years, your mutual fund investment has increased to $320,714, while your real estate investment has increased to $1,282,854, an increase of $962,140 over the mutual fund investment. That’s a 300 percent increase in value with the same $100,000.What about the payment of the debt over the 20-year holding period? The mortgage has been paid off by your tenant who operates his business on your property. You get the tax benefits of depreciation and interest write offs, if you’ve invested personally. If you’ve invested your money through a Self-Directed 401(k), that money is growing tax-deferred or tax-free, depending on whether you have a Traditional or Roth account.You think this is unrealistic? The only unrealistic expectation is to think that your mutual fund accounts have appreciated at 6 percent. According to Dalbar, Inc., the average mutual fund investment has gone up on average of 3.27 percent over a 20-year period. The National Association of Realtors, on the other hand, reported that real estate has appreciated in value an average of 6 percent over the past 30 years, even with the downturn in the economy that occurred in 2008.If most financial advisors preclude you from investing directly in real estate, how do you invest in real property with your 401(k) account? The answer is, you don’t with your company 401(k) account. The only money you should be investing in your company 401(k) account is enough to get the full matching funds. For instance, if you are making $100,000 a year and your company offers a 4 percent match, you invest $4,000 in your company 401(k) to get the 4 percent match. They do a 100 percent match up to 4 percent of your income. Then you create a Solo or Individual 401(k) account with an administrator/custodian that handles Self-Directed Accounts and invest the rest of your retirement funds in that account up to the $51,000 contribution limit if you’re under 50 or $56,500 if you are 50 or older.So, if you contributed $4,000 to your company 401(k), and your employer matched it with another $4,000, you can contribute $43,000 to your new Self-Directed Solo 401(k) account. If you’re 50 or older, it would be $48,500. That amount can be invested each year for you and your spouse, if you have it set up properly. There are no income limits.Eligibility for a Solo 401(k) account requires two things: (1) the presence of a self-employment activity; and (2) the absence of full-time employees. So you set up a consulting business either as an S-Corporation or limited liability company (LLC) and pay yourself a salary, 100 percent of which can be contributed to your retirement fund. Then you invest in commercial, income-producing real estate investments. It’s that simple.

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Rhode Island Divorce Attorney – Dealing with Credit Card Debts

Credit cards are often one of the most consistent types of debts that is dealt with in Rhode Island Divorce case.Credit cards can pose their own divorce difficulties. Some years back, at the beginning of my divorce practice, I thought that credit cards would create the same issues as any other debts. I quickly learned from a few practical case experiences that credit cards come with their own considerations that may or may not make a difference to your client.So what makes credit cards different?First and foremost, because of the explosion of the internet in the last decade or so credit cards are easy to apply for and if a person has a decent credit rating they are pretty easy to get, not only in your own name, but in a spouse’s name as well.Another aspect of credit cards is the “authorized user.” The authorized user is a person who is authorized to use the card to charge things but is not obligated to pay the credit card bill itself. An authorized user is usually placed on the credit card account by the primary cardholder and receives their own card in order to make charges against the account. It is only the primary credit card holding that is held liable for paying the credit card bill.A third aspect of credit cards that consumers are generally aware of that can play a role in a divorce is their high interest rates. Credit card interest rates can run from 9% to 29% interest or more and can fluctuate with the market or even with the timeliness of your payments depending upon your contract with your credit card company.One other challenge that may affect the equitable distribution of credit card debt is what I call the “shifting balance.” The shifting balance occurs when a primary cardholder, either with or without discussing it with his or her spouse will shift the outstanding balance on one credit card to an entirely different credit card that is usually offering a promotion of say “O% APR for the 1st Six Months for Balance Transfers” or “0% APR for the 1st Three Months for Balance Transfers PLUS a $5,000 Credit Line Increase for Qualified Participants”.Now let’s take an example or two to see how one or two of these factors could affect a divorce proceeding.Christian and Teresa get married in their late 20′s. Both of them have good paying jobs and impeccable credit. The housing market is a bit pricey so they decide to wait so they can get a house that really suits them. Things are fine for about a year or so when Teresa gets a promotion which requires her to travel overseas for business negotiations. Teresa gets a credit card offer and without discussing it with Christian she qualifies for a $10,000 credit line. While traveling for business Teresa develops a need for fine clothing if she is to get further ahead in her career.In a short period of time she charges up $10,000 of designer clothing which she slips into her closet in their apartment a bit at a time.Meanwhile, the housing market has dropped somewhat and Christian wants to look at houses. Teresa tells Christian that she thinks she’ll be up for a promotion soon and it will make it financially easier to make the purchase if they wait. Christian agrees that it’s a good idea.Teresa actually does get a promotion and immediately calls her credit card company to get a credit line increase. Her credit card company increases her limit to $22,500 and on her next tip Teresa uses up all but $200 of her credit line.Again Teresa brings the clothing home and slips it into her closet unnoticed. The next day Teresa’s manager calls to tell her that as a bonus they are sending her to Las Vegas for five days next month.Teresa is very excited and since Christian is working late she fills out a credit card application using his information and income and requesting a credit card balance transfer of all the monies on her card to this new card. She also indicates that she is to be an authorized user on the card.A week later the credit card comes in the mail approved for Christian for $45,000 as the limit and it already has Teresa’s balance transferred to it so that now her own card has a zero balance.Teresa goes to to Las Vegas and gambles the night away, using up her credit card limit. She’s not satisfied so she pulls out the card she took out in Christian’s name and gambles it to its limit. It’s not until the plane ride back that Teresa realizes the severity of what she’s done.For several months Teresa is able to intercept her credit card bill as well as Christian’s but she is late on two of the payments and the credit card companies penalize Christian’s card by increasing the interest rate from 9.19% to 29% on everything charged over the 0% balance transfer. Teresa begins making double and triple payments on the card in Christian’s name in order to repair any blemishes to his credit but she is too late.Christian goes to the bank to get pre-qualified only to discovery that a card has been taken out in his name with a less than perfect payment history and a balance of just under $45,000. He is worried that his identity has been stolen but when he calls the credit card company and they fax a few statements to him he realizes that the charges all coincide with the places Teresa has been going.Christian gets home and confronts her about the credit card in his name. Teresa denies it adamantly for about 2 hours and then admits what she did. He asks her if there is anything else he should know about and she tells him “No”.Christian is very upset and very hurt that his wife actually stole his identity and damaged his credit when she knew how important it was to him and how necessary it was to get a house. Christian asks Teresa to meet him at the bank tomorrow to see if they can still prequalify for a house. Teresa refuses and says she likes their apartment.Christian goes to the bank the next day and the bank representative pulls Teresa’s credit at his request. Christian sees the credit card and the poor payment history. The banker makes it clear that there is no way Christian and Teresa will pre-qualify for a house based upon the outstanding debt and payment history. The banker suggests that it will take several years to repair the damage that has been done.The banker recommends that Christian file a fraud report with the credit card company and file a report with the Rhode Island State Police. Christian doesn’t want to do that.Christian is crushed by Teresa’s betrayal of trust and he files for divorce.What issues might arise regarding this credit card debt?1. Does it matter that Teresa’s action in opening an account with Christian’s information is a criminal offense?2. Can Teresa claim that her clothing purchases were for her employment which benefited the marriage and therefore were marital debt?3. Since Christian refused to fill out a fraud report and a Rhode Island State Police Report has he conceded that the debt belongs to him? Or has he conceded that it’s marital debt?4. If Teresa can legitimately take business tax deductions for the clothing she purchased as well as the gambling losses during her business bonus trip, should that affect the amount of debt that Teresa should be responsible for in the divorce?5. Is there anything the family court judge can do to repair or minimize the damage done to Christian’s finances and his credit?6. Can any of this be considered marital debt when Christian had no idea this debt was accumulating?7. If Christian thinks he shouldn’t have to pay anything, what is the most likely amount he could be ordered to pay and where does that amount come from?There is at least one more issue that affects Christian significantly in this whole scenario. Can you identify it? It could make a huge difference financially to Christian. If you were Christian, wouldn’t you want to find it.

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