Does Your Kid Need Juvenile Life Insurance?

You may need life insurance after getting married or having a child, but do you need it from the day you're born? Advocates of juvenile life insurance say "yes" and hail the policies as financial planning essentials, while critics argue they're a waste of money.

Just like grown-up life insurance, two types of policies are available for kids: juvenile term insurance, which provides coverage until age 23 or 25 and offers the family a death benefit to cover unexpected funeral expenses for the child; and juvenile permanent insurance, which includes both a death benefit and a savings reserve that builds "cash value" as the child ages. Here's what a family needs to know.

Child death benefit pros and cons
Companies offering juvenile term life insurance talk about how the policies can provide a family with "peace of mind" by offering financial assistance -- namely, a death benefit -- "if the worst were to happen" to the child.

Juvenile term policies are sold on the idea that the death benefit is not designed to replace income, as it would be for an adult, but instead is geared toward covering burial and funeral costs if a child passes away.

Pros: Funerals are expensive. According to the most recent survey by the National Funeral Directors Association, the average cost is about $4,300, and that doesn't even include casket and cemetery expenses.

Cons: Chances are remote that a parent would ever need to pay for a child's funeral. The U.S. Department of Health and Human Services estimates that only 0.03% of U.S. children die between the ages of 1 and 4. And then, for children ages 5 through 14, that mortality rate drops by about half.

Since the death of a child is so unlikely, purchasing juvenile life insurance strictly to cover potential funeral costs is "very short-term thinking," says J. Robert Hunter, director of insurance for the Consumer Federation of America, a nonprofit consumer advocacy group based in Washington, D.C.
If families are concerned about covering unexpected funeral costs, Hunter says, they'd be better off creating a college savings fund and pulling from that if needed, rather than purchasing a juvenile life insurance policy.

Savings component pros and cons
The real advantage of a juvenile life policy is for saving, says Jack Dolan, spokesman for the American Council of Life Insurers, a Washington, D.C.-based trade group.

"What we see more clearly year after year is that the savings in a cash-value life insurance policy provide a good, solid return. And, particularly when you're in a low-interest-rate environment, it becomes an attractive means of saving," he says.

Pros: Dolan points out that the insurance plans offer tax-deferred growth, and many come with guaranteed returns, meaning your money will increase regardless of what happens in the financial markets as long as you keep making premium payments.

Unlike money kept in other savings vehicles for children, such as 529 college savings plans and Coverdell Education Savings Accounts, a juvenile life insurance policy's cash value doesn't have to be used solely for education but can be used by a grown child for other purposes, such as wedding expenses or to launch a business.

An added bonus is that children who have permanent, cash-value life insurance won't have to worry about qualifying for a policy as an adult, adds James Garfinkel, the founder and CEO of New York-based New Amsterdam Life and a director of the nonprofit Juvenile Life Insurance Foundation.

"(Juvenile insurance) guarantees the future insurability of the child, regardless of their future health, lifestyle or residence," Garfinkel says. "It's issued without any physical exam whatsoever."

Cons: Cash-value life insurance comes with fees, service charges and commissions that can prevent a policy from generating any actual returns for at least a decade, acknowledges Garfinkel. He says the rewards come over the long haul.

Hunter says the fee structure of juvenile policies makes it difficult to understand what a child's policy is really worth.

"It's much better to put money in some kind of an investment account to build to college years," he says. "It's much more understandable. It's much more transparent."

If putting money aside for college is indeed the goal, 529 prepaid tuition and college savings plans can generate returns more quickly than juvenile life insurance, and some of those plans offer state tax incentives or matching grant money that isn't available with the insurance policies.

Sun Life Financial Offers Group Dental with United Concordia Alliance Network

The Employee Benefits Group of the U.S. business group of Sun Life Financial Inc. (NYSE: SLF, TSX: SLF) today announced that Sun Life’s Group Dental plans now provide access to the United Concordia® Alliance network. Available to customers as of March 1, 2013, the arrangement provides 27%1 more dental provider access points to Sun Life dental customers than the Advantage Plus Network, which the new arrangement replaces.

Sun Life Dental offers dental PPO plans in all states, with coverage for employees and dependents. Employers can customize many plan features, including deductibles, benefit waiting periods, coinsurance levels, and plan maximums. Optional benefits include built-in routine care, orthodontia for children and adults, and an annual maximum rollover benefit. Fully-insured plans can be structured as 100% employer-paid, 100% employee-paid (“voluntary”), or as a shared-funding model (“contributory”).

Administrative Services are available to employer groups who prefer to self-fund their dental plans. Two plans can be offered for a Dual Select, or “high-low” plan design, providing employees greater choice.1
In July 2011, Sun Life entered an agreement with United Concordia that provided access to the Advantage Plus dental PPO network. Sun Life Dental plans will now be sold with United Concordia’s Alliance PPO network, which boasts 96,000 providers at over 246,000 access points across the country.

“Sun Life is a leader in disability insurance and is committed to the full array of employee benefits. We’ve provided group dental plans in the U.S. for over 20 years. We’ve thoughtfully and deliberately worked to grow our dental block with smart product development,” said Michael E. Shunney, Senior Vice President Distribution, Sun Life Financial U.S. “Our partnership with United Concordia is helping us take our dental offerings to the next level. The continued growth of their PPO network is a great win for us and for our customers.”

Sun Life provides Group Life, Disability, Dental, and Medical Stop-Loss insurance to over 33,000 U.S. customers, protecting over 10 million employees and their dependents, with $2 billion of in-force business. For more on Sun Life, visit www.sunlife.com/us.

Alliance Network applies only to dental plans underwritten by Sun Life Assurance Company of Canada and Sun Life Insurance and Annuity Company of New York. Excludes plans underwritten by Sun Life and Health Insurance Company U.S. The network is made available through an agreement with United Concordia Companies, Inc. Claims administration services are provided by United Concordia Companies, Inc. and regulations. Group insurance policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) in all states, except New York, under Policy Form Series GP-A and GC-A. In New York, group insurance policies are underwritten by Sun Life Insurance and Annuity Company of New York (New York, NY) under Policy Form Series GP-A and GC-A. Product offerings may not be available in all states and may vary depending on state laws and regulations.

Spanish have highest healthy life expectancy in Europe

They may be out of work and struggling with financial disaster, but the Spanish have the highest healthy life expectancy in Europe – and beat Australia, Canada, Norway and the USA as well.

Spain has an excellent healthcare system, ranked seventh in 2000 on the only occasion the World Health Organisation has compiled a league table. The UK was 18th. But it is not just the structures or even the skills of the doctors that matter. It is also the state of health of the people who arrive in the clinics.

Maybe the Mediterranean diet, heavy on fruit, salads, fish and olive oil, is responsible for the low death rate from heart disease – Spain has the 3rd lowest level of years of life lost. It also does well on a number of cancers – pancreatic, prostate, breast and oesophageal. Families still care for ailing relatives – taking daily meals to those in hospital is normal and premature deaths from falls are low.

Life insurance from marriage into midlife

Sliding out of your 20s and into your 30s means you're probably about to face some serious life changes. For many people, the next couple of decades are a time to focus on family, whether that means starting a new one or expanding the one you already have.

As your life moves on, your life insurance needs will, too. Here are the life insurance issues you may encounter at the mile markers people reach in their 30s and 40s.

Parenthood
As you add members to your clan, you'll also need to add life insurance to ensure your babies are taken care of if something happens to you or your spouse. For new parents, figuring out how much coverage you'll need isn't easy and means figuring what your family's future costs might be, says Glenn E. Stevick Jr., an adjunct professor of insurance at The American College in Bryn Mawr, Pa.

"When (new parents) think about life insurance, most people kind of focus on what we call 'final expenses.' What does it take to bury me or cremate me, pay off my debts, and so on?" he explains.

But what parents typically forget, he says, are the major bills the family will encounter in the future, such as the cost of sending the children to college. You need enough life insurance so the family would be able to cover these sorts of expenses if a breadwinner dies.

Most new parents in their 30s will need "somewhere between 15 to 20 times their income" in life insurance coverage, says Onofrio Cirianni, a partner with New York-based EisnerAmper Financial and Insurance Services LLC. People in their 40s will need 10 to 15 times their income, he says.

Employers provide many families with a head start toward their life insurance needs. According to the U.S. Bureau of Labor Statistics, 73 percent of full-time workers in the private sector are eligible for some life insurance benefits through their company.

To do a comprehensive analysis of your family's potential expenses in the future and determine how much coverage you need beyond your employer-sponsored life insurance, Cirianni recommends enlisting the help of an insurance agent or financial planner.

Remarriage
Most people get married in their 20s, but it's not uncommon to walk down the aisle again in your 30s or later. A survey released in 2011 by the U.S. Census Bureau shows that the median age for second marriage is about 36 for men and 33 for women.

Life insurance needs are different for those in second marriages, especially when stepchildren are involved, says Sonali Virendra, a vice president with New York Life Insurance Co. In addition to examining each spouse's income, assets and debts, couples also must factor in alimony and child support payments they may be making or receiving, and coordinate with their exes to ensure that all children are adequately covered.

"If you have a family that's now a blended family, you need to now redo (a life insurance analysis) you may have already done in the past," Virendra notes.

Aging
Another major life insurance concern facing those in their 30s and 40s is time. Those who are eyeing life insurance, whether to cover a new baby or protect a new spouse, should do so as soon as possible to get the best rates, says Cirianni.

"Unlike investing, insurance always requires someone to be underwritten, and you have to qualify for it," he explains. "There's no better time to look at what amount of coverages you're eligible for than when you're young and healthy."

In most cases, life insurance premiums rise steadily as policyholders age. Plus, the older you get, the more likely you are to develop a condition that could spike your premiums dramatically or even render you ineligible for life insurance altogether, Cirianni says. Conditions such as obesity, high blood pressure, cardiovascular issues, high cholesterol and abnormal liver function can increase your insurance rates by up to 50 percent.

"It's really unfortunate because where there may have been an opportunity to set up coverage earlier in life, they (now) may be stuck with a higher premium," he says.

To sidestep higher life insurance charges as you progress through your 40s and 50s, Cirianni says to start the needs-analysis process early and maintain healthy habits.

Fitch Rates Manufacturers Life Insurance Subordinated Debt 'A-'

Fitch Ratings assigns an 'A-' rating to Manufacturers Life Insurance Company's (MLI) recently issued debentures:

The debentures are fully and unconditionally guaranteed on a subordinated basis by parent, Manulife Financial Corporation (MFC). Fitch anticipates that the net proceeds will be used for general corporate purposes, including refinance debt. These subordinated debentures receive no equity credit in Fitch's financial leverage ratio.

At Dec. 31, 2012, MFC's financial leverage was 25%. Pro forma financial leverage, including the CAD200 million subordinated debentures increases incrementally but is expected to decline modestly in the intermediate term driven by improved organic capital generation and maturity of debt.

Fitch considers MFC's debt service capacity as below average for the rating as fixed-charge coverage on reported earnings was 3.5x and on a core earnings basis 5.6x in 2012. Fitch expects core earnings-based, fixed-charge coverage to exceed 5.5x in 2013.

On Feb. 11, 2013, Fitch affirmed MFC's and its primary insurance related operating subsidiaries' ratings, including The Manufacturers Life Insurance Company (MLI) and John Hancock Life Insurance Company (U.S.A.) (JHUSA). The Outlook is Negative for all ratings.

How to Develop Effective End-of-Life Plans

Retaining control over life decisions and maintaining dignity as the end of life approaches are top priorities for nearly everyone. These objectives can be achieved by good planning and the preparation of the proper directives under your state's laws. These safeguards have been greatly improved in many states in recent years. Still, experts say, few seniors have the right tools to make sure their end-of-life wishes are followed by family members and caregivers.

People often think of such matters only when they or a family member are seriously ill. But if a stroke, dementia, or another incapacitating event occurs, it may be too late. If people cannot make decisions for themselves and do not have directives or a power of attorney in place, decisions may be made for them that they would never have agreed with if they had been able to decide.

Michael A. Kirtland, an elder care attorney in Colorado Springs, Colo., says there are two ways to make sure your final wishes are followed: one is through legal documents, and the second is by communicating your wishes to anyone who might be involved in carrying out those wishes should you become incapacitated.

"Everybody ought to have either a will or revocable living trust," he says, with the preferred document depending largely on applicable state law. "Everybody ought to have a medical power of attorney ... and everybody should have a living will." Elder care lawyers in other states interviewed by U.S. News were not always in favor of living wills. But they all advocated a power of attorney for healthcare reasons, also called a healthcare proxy in some states. And some attorneys said they also recommended a separate power of attorney for property matters in addition to a healthcare proxy.

"A lot of these documents have different names in different states," says Wendy Sheinberg, who practices on Long Island. In New York, the power of attorney cannot be used to make medical choices, she says, so a healthcare proxy is needed. "The healthcare proxy becomes effective at the time when you are unable to make medical decisions for yourself." However, the proxy is not limited to end-of-life situations. A living will, by contrast, does speak to end-of-life decisions, she explains. As such, it may include very specific wishes in the event a patient's condition is terminal and they are unable to speak for themselves.

The healthcare proxy, or power of attorney, leaves more specific decisions in the hands of the healthcare agent or advocate who you designate as your proxy. For this reason, attorneys say, you should find someone (usually a family member) you trust who either agrees with your wishes, or at least promises to carry them out. Often, the agent is required to sign the healthcare proxy as well, to acknowledge an understanding and acceptance of his or her role.

The first, and often hardest, step toward creating final directives, experts agree, is having an extended conversation about how you want to be treated at the end of your life. Elder law attorneys say they may devote many hours to helping people not only select the right healthcare advocate, but open up and seriously think about how they want to end their life. The discussion usually begins between spouses and spreads to other family members. But in the case of an older parent whose spouse has died, an adult child often triggers the discussion.

"They are very hard conversations to have, and they are important to have," Sheinberg says. "This can't be over the phone. You have to sit down with these people and say, 'I trust you, I love you, and I'd like you to be the person to make medical choices for me.' You have to really sit there and have that conversation." Family dynamics often make choosing the best advocate difficult, and a spouse or child simply may not agree with a person's final wishes or be able to carry them out when the time comes.

"In discussing your desired medical choices with the person who you ultimately name as agent, it is important not just to tell them what choice you would like made, but to also explain your decision-making process and what values you consider important in formulation that decision," she adds. "Understanding a principal's decision making process can be helpful if the agent later confronts a situation that they did not specifically explore ... The goal of these documents is to empower someone else to make the decisions you would make for yourself but for the incapacity, having a deep and heartfelt conversation about these things goes a long way toward meeting that goal."
"Clients have weird thought processes that lead them to choose particular healthcare agents," says Will Lucius, an elder law attorney who works at Paul A. Sturgul Law Offices in Hurley, Wisc. "Rather than selecting an agent that can make can and will actually follow the person's wishes, clients often choose their agents in order of priority by age or who is in close proximity. These choices, while convenient, can often lead to individuals being selected as an agent who are simply not the most appropriate person."

Gregory S. French, an elder law attorney in Cincinnati and president of the National Academy of Elder Law Attorneys, says he favors separate powers of attorney documents for healthcare and property because they require different attributes in an effective agent. "I often find the best advocate for care and well-being may not be the best person to manage finances, and vice versa," he says.

"The sad cases I see are people with debilitating conditions, and they wait and wait and wait," says Kirtland. "If people would come to me as their health issues are first discovered by their physicians ... then I can provide some help." If they wait until their decision-making abilities are compromised, however, they may not even be able to execute advance directives, and key decisions will be taken out of their hands.

"When their spouse is suffering from advanced dementia and they're looking at the door of a nursing home," Lucius notes, "they're not terribly interested in having a will or doing estate planning. They're trying to figure out how to come up with $7,000 a month to afford the nursing home."

"I don't think you can ironclad final-care wishes," sums up Howard Krooks, who practices elder law in Boca Raton, Fla. "I think you can state what you want but then [you have to] cross your fingers. It's a question of whether the healthcare providers are on board with what you say you want done." The medical profession's goal to preserve and extend life may still be in conflict with end-of-life wishes.

"I think that that is starting to get stripped away, and the concept of dying with dignity is starting to take hold," Krooks says. "But it's going to take some time."

Life Technologies Stays at Neutral

We recently reiterated our Neutral recommendation on Life Technologies Corporation (LIFE), a global biotechnology tools company. While we hold a favorable view regarding Life Technologies’ Genetic Analysis sales that received a strong boost from the Ion Torrent franchise; economic uncertainties lowering discretionary spending, NIH funding cut and unfavorable currency were the major headwinds for the company during the reported quarter. The stock currently carries a Zacks Rank #3 (Hold).

Why at Neutral?
Life Technology’s fourth-quarter adjusted earnings per share (EPS) of $1.11 remained in line with the Zacks Consensus Estimate but were down 5.7% year over year. Adjusted revenues increased 4.5% at CER to $999 million, ahead of the Zacks Consensus Estimate of $990 million.
Life Technologies enjoys a strong position in the life sciences market and we are impressed with the strong momentum of its Ion Torrent franchise. Moreover, the company is working on expanding its portfolio with several product launches.

In Feb 2013, a dozen new products for the Ion Torrent platform were launched, aimed at expanding clinical research across the globe.These new products enabled the Ion Torrent semiconductor sequencing technology to expand 1,000-fold in just 2 years and gain a 60% market share of benchtop sequencers.
Also, the recent acquisitions of BAC BV, Navigenics, Pinpoint Genomics and Compendia along with new distribution agreements in China and Chile would enable the company strengthen its diagnostics franchise and extend its footprint in emerging markets.

However, Life Technology’s exposure to the U.S. government funding is somewhere between 10% and 15%, depending on the level of funding. The recent sequestration cuts (implemented with effect from Jan 2, 2013) that curbed the NIH (National Institutes of Health) budget by 8% are expected to restrict the company from opting for medical innovations. Based on the NIH budget cut, the company provided a conservative 2013 outlook.