Category: Personal Finance

Getting Life Insurance Is Significant

Word of mouth is one of the most popular ways to introduce life insurance to people. A friend tells a friend, and that friend tells another, this means of marketing go a long way and is still useful. For many other individuals, they realize that it is essential after a loved ones pass away and that the finances are not what it used to be. You do not want to be the person to find out too late that there is a way to take care of your family financially when you are no longer able also.

It is insurance that all people need, especially if you have dependents. What will happen to your loved ones if you die tomorrow? Financially? Will they be able to get through each month without your income? Will they be able to keep their head above water when you have debt? It is where you will have to sit and calculate how much your family will need to settle all debt, school fees and more. Then you look for quote providing websites to provide you with quotations from various companies. An agent will contact you, and you can use them to find the most suitable and affordable policy.

There are two options to consider, whole and term life insurance policies. Whole life insurance is a policy that will cover you and your family’s entire life. You do not have to worry if a loved one dies that there won’t be money for the dependents left behind. Term life cover will not cover you for your entire life, but you will have to choose a term to be included for, and usually, it is anything between five and thirty years. Most people accept whole life insurance because you are covered for a lifetime. It is the more expensive option, but it is indeed the better one of the two. Although any protection is better than no cover. You choose the amount of cover you need, and the insurance provider will calculate a monthly or annual premium for you. When the insured person dies, the insurance provider will pay out a lump sum to the beneficiary of the policy. Things you can do with the life insurance money:

  • You can pay all your debt and have no one asking for their money.
  • You can use the money to pay for the funeral bills of the deceased.
  • You can pay off your mortgage and know that you have a roof over your head.
  • You can take your loved ones and go on a well deserved holiday.
  • You can start a new business as an investment in your future.
  • You can invest the money and live off the interest.
  • You can settle all your children’s education fees to provide them with a bright future.

It is a good idea to get life insurance, so make the right decision today.

Categories: Personal Finance

Government Regulations on Financial Institutions

Governments all over the world regulate the financial sector. This could be due to a number of reasons. These regulations affect investment and even performance of the sector.

In the aftermath of the global financial crisis of 2008, the banking sector in the United States became subject to a number of new regulations established by government legislation. These bank regulations continue to impact the administration and operations of banks and other ancillary financial entities. They also call for increased vigilance and safeguards to protect the government, financial institutions and most importantly, the people.

The Housing and Economic Recovery Act of 2008 was the first in a series of regulatory laws designed to strengthen the U.S. economy. This act was created to prevent home foreclosures through debt counseling and community development programs. This act also required mortgage lenders and other banking institutions to register with the Nationwide Mortgage Licensing System and Registry through the Federal Deposit Insurance Corporation (FDIC) while broadening the scope of the good faith estimate document to cover a wider group of loan products. Consequently, banks and lenders are required to conduct business with greater transparency towards their customers.

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To most people, government regulations are unnecessary as far as any business is concerned. There is also the question of what would happen when fraud or misrepresentation was committed? Every business even financial institutions know that and illegal matters would drag them down so why the regulation?

In the absence of regulation, virtually every industry would do the same thing, because legitimate enterprises know that being known for selling faulty products would ruin their reputation and put them out of business. Unfortunately, as a result of ceaseless propaganda from pro-government interest groups, most Americans have been brainwashed into thinking they need regulatory agencies to protect them.

A most provocative paper has just been published by the American Enterprise Institute, written by former U.S. Treasury General Counsel Peter Wallison, entitled “Why Do We Regulate Banks?” Mr. Wallison argues that “it is difficult to identify a sound policy reason for regulating banks. Most of the conventional explanations — inherent bank instability, deposit insurance, the Federal Reserve’s role as lender of last resort, or the Fed’s role in the large-dollar payment system — turn out on examination to be either unfounded or based on risks that the government need not take in order to foster growth of the economy.” Mr. Wallison goes on to detail “the huge costs to the taxpayers and the economy” caused by bank and S&L; failures that have been due to regulation. Finally, Mr. Wallison, who has had major regulatory responsibility, concludes as to the question, “Why do we regulate banks? That we do so because we want to, not because we must.”

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Financial institutions have no problem with being regulated. The only problem they have is the expense that accompanies the regulations. There is also increase in workload and thus need to hire more workforce to see the regulations implemented.

Regulatory compliance challenges are widely expected to create heavier workloads and spur hiring in the financial services industry, according to a new survey of executives in seven countries.

Governments, regulators and accounting standard setters have enacted and implemented numerous new rules in recent years in response to the recent financial crisis. The financial services industry has been a target of many of these new regulations, which executives report difficulty managing.

Almost nine in 10 respondents (88%) said they are challenged in managing regulatory change, according to a survey of 1,100 financial services executives conducted by staffing services firm Robert Half International. Executives from Canada, France, Germany, Hong Kong, Singapore, the UK, and the United States participated in the survey.

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Categories: Personal Finance