Last month, Glenn Neasham, an independent insurance agent, was ordered to spend 90 days in jail on a felony-theft conviction for selling a complex annuity to an 83-year-old woman who prosecutors alleged had shown signs of dementia.

The agent’s conviction, by a state-court jury in Lake County, Calif., is sending shivers down the spines of Mr. Neasham’s peers across the country. They can’t recall another case where an agent was sent behind bars for selling an annuity.

The guy talked the woman into putting $175,000 into an equity-indexed annuity. His commission: $14,000 (8 percent). I know it’s not the same product, but the commissions for $175,000 put into American Funds mutual funds are 3.5%.

Wow!

There is a quick way to end these abuses: stop paying bigger commissions for these products.

Now, it’s important to note that we do not have all the information. I just think putting an 83-year old into an equity-indexed annuity is not looking out for her best interest.

Let the ticked-off insurance agents’ vitriol begin…

Their list of the 20 least expensive cars to insure:

1. Toyota Sienna LE: $1,111
2. Toyota Sienna 4 cyl: $1,114
3. Jeep Patriot Sport: $1,116
4. Jeep Compass Sport: $1,118
5. GMC Sierra K1500 Regular Cab: $1,121
6. Chevrolet Silverado 1500 Regular Cab: $1,125
7. Dodge Grand Caravan SXT: $1,129
8. Ford Escape XLS: $1,137
9. Toyota Sienna 6 cyl: $1,139
10. Chevrolet Silverado 1500 Extended Cab: $1,143
11. Dodge Journey SXT: $1,143
12. Honda Odyssey LX: $1,146
13. Kia Sportage: $1,151
14. Hyundai Santa Fe GLS: $1,152
15. Jeep Wrangler Unlimited Sport: $1,154
16. Nissan Frontier S King Cab: $1,162
17. Nissan Frontier SV King Cab: $1,163
18. Hyundai Tucson GL: $1,166
19. Ford Escape XLT: $1,167
20. GMC Canyon: $1,167

The 20 most expensive cars to insure (I don’t have to worry about this list):

1. Audi R8 Spyder Quattro Convertible: $3,384
2. Mercedes CL600 BI-T Coupe: $3,307
3. Mercedes S600 BI-T: $2,948
4. Audi R8 4.2 Quattro Coupe: $2,903
5. Porsche Panamera Turbo: $2,738
6. BMW 750i Hybrid: $2,701
7. Porsche 911 Turbo Convertible: $2,674
8. Porsche 911 Turbo S Convertible: $2,674
9. Mercedes CL65 AMG Coupe: $2,669
10. BMW 750Li Hybrid: $2,641
11. Mercedes SL63 AMG Convertible: $2,615
12. Mercedes CL63 AMG Coupe: $2,613
13. Jaguar XKR Supercharged Convertible: $2,585
14. Mercedes S63 AMG: $2,542
15. Mercedes C63 AMG Coupe: $2,532
16. Audi A8 L Quattro: $2,513
17. Mercedes SL550 Convertible: $2,458
18. Nissan GT-R Coupe Turbo: $2,457
19. BMW 750XI: $2,446
20. BMW 750i: $2,430

You can read about their methodology here.

“Although the benefits of permanent life insurance exist, the costs must also be weighed. I recently replaced one of my term life insurance policies with a new policy bearing a $1 million death benefit and an annual premium of $465 per year, so in preparation for this chapter I reached out to several life insurance agents to see what the cost would have been for permanent life insurance policies with the same death benefit. The answers? A comparable whole life policy was 20 times more costly—$10,380 per year! The universal or variable life policies would cost around 10 times the amount that I am paying for my term policy. I’d rather control the fate of that extra money than trust a life insurance company to manage it.”

I’m about halfway through The Ultimate Financial Plan: Balancing Your Money and Life* and I have to say, I’m impressed. The main author, Tim Maurer, clearly has the reader’s best interest at heart throughout the book. Good stuff for someone just starting out.

*Affiliate Link

The poor economy has led Americans to cut corners on their life insurance—at levels not seen in half a century, according to a new study.

Only 44% of U.S. households have individual life insurance, according to the latest Trends in Life Insurance Ownership, a study conducted every six years by Limra, the investment research company.

That represents a 50-year low in U.S. life insurance ownership, according to the study, and means there are 11 million fewer households with life insurance than there were six years ago.

That little snippet was taken from this short article one of my friends posted on facebook this morning.

The article went on to state that people aren’t focusing on life insurance because they are have other financial priorities like retirement planning. This is sad when you figure that a $500,000 term insurance policy can be had for $20 to $30 per month. Who can’t afford that?

After I got off the phone with our agent, I sent a message to a friend of mine who runs a local insurance agency. He and his wife have older kids too and I thought he’d be a good source for some tips. Here is what he sent me:

When you add a new driver to an existing car, you can expect the rate on that vehicle to increase by as much as 40 – 50%. If you add a new driver and a new car, you can expect that vehicle to cost around $600-$700 for coverage without comp and collision. With comp and collision, $1000+.

Most carriers have discounts for drivers that make good grades. They get a discount for drivers ed. The premium is usually lower for girls than boys (not much).

The premium drops some when they reach 21.

One thing I always suggest is for parents to find a car that’s safe and they can pay cash for. Don’t include comp and collision to keep the rate down. If Jr wrecks it, he’s on foot until he fixes it or earns the money for a replacement.

When you think about what not to get a kid….all the high powered sports cars. It’s not that the insurance co. won’t insure them—they will and collect large premiums to do so. But it’s just not smart sending a new driver out in a high powered car or truck.

Insurance companies check for tickets and accidents when given a reason to do so, i.e.. lots of accidents and claims. I suggest setting a higher deductible and not claiming small things that can be paid out of pocket. Of course if other parties are involved, that still won’t help. But if jr runs into your garage door, you may want to pay that yourself and “bank” your future claim for a time when you must make a claim.

Hope this helps.

Mike Roby Insurance (facebook)

Now, there are some things we could probably do to drop our rate a bit. I think the insurance representative ran the numbers with comprehensive and collision, which would have definitely increased the premium. I’ll learn more as my son gets closer to driving. He’s even going to be responsible for some of his premium. He’s also going to be driving our 2002 Buick Rendezvous. Won’t that be cool?

The bottom line is insuring a teen driver is expensive! What’s been your experience with having teen drivers? What things did you do to lower the premiums so that you didn’t have to eat bread and water during the teen driving years?

Yes, I realize that we live on the Gulf Coast and that our area has been hit with two hurricanes in 3 years. But…we have never filed a claim. Never.

Looking through our old insurance renewals, I noticed a trend:

2005 – $1,430
2006 – $1,528 (6.9% increase and this was a year after Hurricane Rita)
2007 – $1,655 (8.3% increase)
2008 – $1,725 (4.2% increase)
2009 – $2,072 (20.1% increase!!!!!!!!!!!!!!!!!!!!!!!!)

And, that premium includes a couple of discounts. Now, along with those increases there were increases in the limits of liability, which is $228,000 for our home. We also have a 2% deductible for our dwelling.

It also didn’t help that we had the mold fiasco of the early part of this decade. People were getting their entire homes gutted and re-done and their insurance companies were footing the bill. Talk about a scam!

I put in a call to our insurance agent to see if some adjusting can be done. I’m not optimistic.

How much are you paying for homeowner’s insurance? What does it cover? What is your deductible?

Here’s the clincher:

It’s for a $25,000 whole life insurance policy!

This guy was unable to sleep because he was worried about his family and $25,000 of life insurance is the answer.

Anyway, the commercial piqued my interest so I went to the Colonial Penn website to look around. I found out that they also offer term insurance so I ran a quote for the heck of it. Here’s the quote I got for both a 5-year and 20-year term insurance policy for a 38 year-old man:

A $25,000 20-year term life insurance policy runs $37.25 per month. Doesn’t seem too bad does it? Well, it’s not too good when you shop around. I went to IntelliQuote.com and did a quick quote and found out that a $25,000 20-year term policy runs around $10 per month. The same $37 monthly premium would buy you a $500,000 policy!

The only difference is that there is no medical exam required with the Colonial Penn policy, which most likely is not the case with the IntelliQuote companies. Still, I don’t think the extra $27 per month is worth not having to take a medical exam.

I guess Colonial Penn has to charge so much to pay for all those commercials.

I got my renewal in the mail this week. It looks like I’m going to have to give back some of that savings.

The renewal premium is $731, which is $84 more than my policy from 6 months ago. It doesn’t seem like that much of an increase but if they do this to me every six months, I ain’t gonna be happy! If I annualize the new premium, it makes premium $1,462 per year, which is still a lot cheaper than the old policy.

I asked the agent about this and she said that Travelers raised their rates and that my renewal reflected that. Now I know why the insurance company went with a 6-month policy! Every six months they have an opportunity to raise rates.

Health plans are drawing scrutiny for offering financial incentives to entice doctors to prescribe cheaper generic medicines, including paying doctors $100 each time they switch a patient from a brand-name drug.

Pharmaceutical companies have long gone to great lengths to try to get doctors to prescribe their brand-name pills. They spend billions of dollars, plying physicians with samples, educational lunches and speaker fees. But as the patents for a growing number of blockbuster medicines expire, some health insurers are trying to trump those perks with bonuses or higher reimbursements for writing more generic prescriptions.

The idea, health plans say, is to save everyone — patients, employers and insurers — money. And many doctors argue that it’s only right to reimburse them for spending time evaluating whether a cheaper generic alternative is better or as good for a patient.

But the more aggressive approaches, such as cash rewards for each patient switched from a given list of drugs, are coming under fire for injecting financial incentives into what some patient advocates and legislators say should be a purely medical decision. Medical societies are also concerned that such rewards may put doctors in the ethically questionable position of taking a payment that patients know nothing about.

Source: Doctors Paid To Prescribe Generic Pills ($), Wall Street Journal

Call me crazy, but I don’t see what the big deal is. If a generic drug does the same thing as the higher-priced name-brand drug, what difference should it make to the patient which drug the doctor prescribes? Besides, haven’t the big drug makers been doing essentially the same thing as the health insurers by giving gifts and perks to the doctors? The drug companies aren’t doing this out of the goodness of their hearts. They’re doing it to sell more drugs. Now the insurance companies are fighting back.

Some people are calling these payments unethical. I would say that they’re only unethical if the generic drug is inferior to the name-brand drug. Right?

Bottom line: I’m for anything that will lower the price of healthcare.