About the author:
Randy Taylor was first licensed as a registered representive, and insurance agent in 1983. He was first published in 1998. He has also spoken to financial advisor groups since 1995. California insurance Lic. # 0643596
Author: Randy Taylor Copyright 1/17/2014 , All rights reserved.
What is a Reverse Mortgage?
A reverse mortgage is a loan vehicle that unlocks or makes available part of the equity in a home to provide
seniors with cash flow to supplement their retirement.
Like any other financial decision you would need to consult with an attorney, tax person, or financial consultant before making any decisions.
How do they work? When you qualify, the equity you have built up can be paid to you and then used for any purpose while the home owner gets to continue living in the home without the need to make their monthly mortgage payments.
What are some of the Advantages?
The borrowers do not have to repay the loan until the borrower no longer uses the home as a primary residence; or until they do not meet the obligations of the loan.
The loan can be used to purchase a primary residence if you are financially able to pay the difference between the loan and the home purchase price,closing costs etc.
The borrower does not have to qualify for the new loan based on income guidelines.
Unlike a line of credit; you do not have to make payments..Instead the loan pays you.
You still own the home and must live in it.
What are some of the requirements?
The key issue is you have to own the home outright or have a high equity position.
You must be 62 years old or older
You are still liable for taxes and insurance on your own.
Are there downsides?
Of course there are.. The most obvious is that you are getting a loan and there will be costs involved.
Your remaining estate that would be passed on to your heirs will be reduced as you spend the equity.
You should contact HUD at 1-(800) 569-4287 and also your financial consultants before making any decisions. A counselor will also help when you apply with required training. This article is meant to be offered for informational purposes only and not to be interpreted as financial advice of any kind.
Showing posts with label Financial Advisor. Show all posts
Showing posts with label Financial Advisor. Show all posts
Friday, January 17, 2014
Tuesday, January 11, 2011
KEEPING YOUR FINANCIAL ADVISOR OR INSURANCE AGENT HONEST
Article #2 in the series: How to evaluate and compare an insurance company for financial strength.
Ask your advisor for a "Vital Signs Report" for any insurance company you are considering.
A "Vital Signs" report is an objective spreadsheet that summarizes and compares up to 8 insurance companies on 1 page; for several important financial safety criteria. This can help protect you from a biased or commission driven advisor from offering a company to you that is considered less than acceptable by honest and client focused advisors. You can even specify which companies you would like to compare.
What kind of information is on a Vital Signs Report?
First of all, 5 different and qualified rating agencies analyze key criteria such as the relative risk inherent in any insurance companies investment portfolios, asset growth, bonds in default and what types of investments the carriers are holding.
How can a layman interpret the results? This is made easy for you.
Each of the 5 rating services assigns a percentile rating to each carrier on the report.
The 5 ratings are then averaged and assigned a composite rating known as a "Comdex percentile" The higher the number, the safer the company is considered to be. My opinion is that an insurance company should have at least an 80% Comdex rating.
Aren't all insurance carriers about equal?
Not really. The example attached shows for example, that Transamerica Life has a strong Comdex rating of 93%; an elite number;while the well known AAA has only a 60% rating.
Are there safeguards for doing business with companies licensed in California?
Yes, there is a California Guarantee Association that protects the consumer up to certain limits for life insurance and annuity claims; but an agent is not allowed to discuss that with you prior to a sale since it is considered unfair marketing.
In summary, you should not only expect your advisors to make product recommendations from companies that are competitive; you should also ask for a financial safety comparison of the specific company recommended versus other companies that your advisor has researched. The vital signs report is an industry standard that is recognized and used by the more diligent advisors.
This article is not offered as investment advice; but is offered as a tool to help the layman compare insurance companies for financial strength.
A sample report is available by calling the phone number below and leaving your email address.
Randy Taylor
1(916) 601-5270
Ask your advisor for a "Vital Signs Report" for any insurance company you are considering.
A "Vital Signs" report is an objective spreadsheet that summarizes and compares up to 8 insurance companies on 1 page; for several important financial safety criteria. This can help protect you from a biased or commission driven advisor from offering a company to you that is considered less than acceptable by honest and client focused advisors. You can even specify which companies you would like to compare.
What kind of information is on a Vital Signs Report?
First of all, 5 different and qualified rating agencies analyze key criteria such as the relative risk inherent in any insurance companies investment portfolios, asset growth, bonds in default and what types of investments the carriers are holding.
How can a layman interpret the results? This is made easy for you.
Each of the 5 rating services assigns a percentile rating to each carrier on the report.
The 5 ratings are then averaged and assigned a composite rating known as a "Comdex percentile" The higher the number, the safer the company is considered to be. My opinion is that an insurance company should have at least an 80% Comdex rating.
Aren't all insurance carriers about equal?
Not really. The example attached shows for example, that Transamerica Life has a strong Comdex rating of 93%; an elite number;while the well known AAA has only a 60% rating.
Are there safeguards for doing business with companies licensed in California?
Yes, there is a California Guarantee Association that protects the consumer up to certain limits for life insurance and annuity claims; but an agent is not allowed to discuss that with you prior to a sale since it is considered unfair marketing.
In summary, you should not only expect your advisors to make product recommendations from companies that are competitive; you should also ask for a financial safety comparison of the specific company recommended versus other companies that your advisor has researched. The vital signs report is an industry standard that is recognized and used by the more diligent advisors.
This article is not offered as investment advice; but is offered as a tool to help the layman compare insurance companies for financial strength.
A sample report is available by calling the phone number below and leaving your email address.
Randy Taylor
1(916) 601-5270
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