It was the wedding of your dreams
and the honeymoon of a lifetime. Now
you're settling down to enjoy married
life. You'll probably do a lot of things
to nurture your marital bliss - from
slipping little love notes into each
o t h e r ' s
brief cases
or lunch
bags, to
l e a r n i n g
the "right"
way to
argue. But
don't for-
get the
more mun-
d a n e
things you
need to do
to protect your life together - includ-
ing updating your homeowners insur-
ance.
"Marriage creates tremendous life
changes," says Jeff Beyer, senior vice
president and chief communications
officer of Farmers Insurance Group.
"One or both partners may change
their names. Households and finances
get merged. One party may move into
the other's current home, or they may
move into a new house together.
Whatever your housing arrangements,
marriage means you will need to
update your insurance to reflect your
new marital status."
Updating your policy involves a bit
more than simply notifying your insur-
er of new names. Beyer offers the fol-
lowing tips to make sure your home-
owners insurance meets your new
needs as newlyweds:
1. What's in a name? When it
comes to your insurance policies,
everything. If you or your spouse is
changing your last name, be sure that's
reflected on your policy - both in
terms of the policyholder and benefici-
aries.
2. Inventory your stuff. Modern
marriages are commonly the merging
of two households, since most couples
have lived on their own prior to mar-
riage. Go through the entire house -
yes, even the garage where you've
stashed everything that doesn't fit in
the house. Open drawers, closets and
crawl spaces. Make a list of all high-
value items, including household
appliances, electronics, jewelry, china,
silverware, stemware, etc. This process
will not only help you update your pol-
icy, it can also help eliminate items
you don't need or that you have multi-
ples of - like microwaves, toasters, and
other items.
3. While you're making your
inventory, take some pictures as well.
Photograph or videotape your belong-
ings in every room of the house. Write
brand, make, serial numbers, models,
years and dates of purchase on the
back of photos of high-value items. If
possible, staple original receipts or
photocopies of receipts to the photos
as well.
4. Store your inventory list, video-
tapes and photos in a safe place. These
items will be invaluable if you ever
need to make a claim. Consider a safe-
ty deposit box in your local bank or
giving a copy to your Farmers insur-
ance agent. Or, store originals at home
in a fireproof box and complete copies
at the home of a relative or friend. You
may also choose to store the photos
online.
5. Ask your insurance agent to add
high value items - like jewelry, furs, art
or antiques- to your policy. Otherwise,
your policy may not adequately cover
these items in case of loss.
Beyer notes that protecting your
possessions does not have to be hard
work.
To learn more about protecting
your possessions, visit
www.farmers.com.
Courtesy of ARA Content
If you owned stocks or stock mutu-
al funds at the start of the 21st centu-
ry, you no doubt felt the financial pain
of the market's crash.
Between the stock market's peak in
March 2000 to its subsequent bottom
in October 2002, the combined mar-
ket value of companies traded on the
New York Stock Exchange and NAS-
DAQ fell by $9.3 trillion -- the equiv-
alent of more than $31,000 for every
man, woman and child in America.
While the stock market has recov-
ered slightly since 2002, that's little
solace to those whose portfolios were
decimated by the market's drastic
drop. Many consumers who are espe-
cially risk-averse, such as retirees and
those nearing retirement, are wary of
ever returning to the stock market,
given its inherent risks.
Yet during the same time as the
stock market freefall, nearly all con-
sumers who purchased a relatively new
type of fixed annuity, called an index
annuity (IA), did not lose a dime of
their original principal. This prompts
consumers to ask, "How is this possi-
ble?"
A Newer Type of Fixed Annuity
The reason IA owners can feel
secure about not losing their principal
is because 100 percent of the principal
in an IA is backed by the financial
strength of the issuing insurance com-
pany. Furthermore, IA owners earn a
guaranteed minimum rate of return
and potentially can earn more,
depending on their annuity's index-
linked rate of return.
An IA, like all fixed annuities, is
an insurance contract between the
issuing company and purchaser. In
exchange for holding the IA contract
for a specified period of time, usually
seven to 12 years, the purchaser can
expect to receive tax-deferred gains
and a lump-sum payment or series of
income payments when the owner
elects a payout schedule as provided in
the contract.
The issuing insurance company
links the IA's interest rate to a select
external index. Most IAs have interest
returns linked to the S&P 500 Index,
although some are linked to other
indices. The index-linked interest rate
earned is usually a percentage of the
growth of the index. However, IAs are
not securities, nor should they be con-
sidered a direct alternative to securi-
ties.
Index annuities typically earn
interest rates that vary from 40 per-
cent to as much as 125 percent of the
index to which they are linked. For
instance, an 80 percent rate would
mean that you would receive 80 per-
cent of your index's growth. Thus, a
$100,000 index annuity with an index
growth of 10 percent and a rate of 80
K
C
M
Y
The Citizen. Auburn, New York
Secure Your Future
Wednesday, January 31, 2007
11
What Newlyweds Need to Know About
Homeowners Insurance
Annuities continued on pg. 8
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