In what is the insurance industry’s biggest acquisition in history, Prudential is buying American International Assurance’s Asia organization in the deal of the decade, a bet on the soaring demand in Asia for personal financial services.

The beleaguered American International Group Inc. will give up a cornerstone of its business, the part of it that represents the whole of the Asian insurance marketplace, in a government-approved deal worth a shattering $35.5 billion. The sale could reduce by nearly one-fifth the amount of federal bailout money still invested in struggling AIG.

The cash proceeds of the sale would allow AIG to pay back nearly 20 percent of the almost $130 billion in bailout funds that are outstanding. Together with an anticipated sale of American Life Insurance Co., or Alico, to MetLife Inc., the sale could net enough to eventually cover the Federal Reserve Bank of New York’s $47.9 billion investment in AIG.

With the purchase, Prudential is giving investors a chance to profit from Asian consumers’ growing use of financial services. As the region’s economic growth continues, so will the need for Prudential’s business.

This is NOT your father’s, or your grandfather’s, Whole Life Insurance, says  The Wall Street Journal. The old gray mare of life insurance — whole-life insurance — was “a shining star during the financial crisis.”

“Thanks to conservative investments in bonds, whole life—and its cousin, universal life—delivered positive returns during the financial crisis,” reports the financial news beacon.

But before you ride off with a new policy, realize that whole life is a horse of a different oolor compared to term life insurance. Because it is a permanent, long-term, investment-oriented account,  new buyers will typically face stiff start-up costs and up-front commissions that soak up most of the first-year’s premium, well before the policy’s investment performance gets growing.

Term life is still the “default recommendation” for most consumers, particularly those on tight budgets, remarked James Hunt, an actuary with the Consumer Federation of America.

Under a whole-life or universal-life policy, the insurer deposits your premium, less insurance costs and other expenses, into a “cash value” account. Insurers typically promise minimum interest payments of 3% to 4%.

Investment gains are tax-deferred, and you are able to withdraw tax-free much or all of what you put into the policy. The policies are a good way for many people who have maxed out contributions to 401(k)s and other tax-advantaged plans to save for a variety of purposes

Over 20 years, Mr. Hunt says, the annual investment return on whole-life policies from the best insurers approaches a tax-deferred 4.5% (tax-free if held until death), after adjusting for the value of the insurance and assuming dividend schedules don’t continue to decrease.

It makes a difference where you buy your policy. Look for a company known for both low annual costs and solid investment performance. Efinancial can help you compare whole life features from several companies.

The all-important point is that whole life’s performance edge plays out over decades, so don’t purchase it if you aren’t confident you can stick with it.

eHealth, parent company of eHealthInsurance, an online source of health insurance for individuals, families, and small businesses, has launched a new life insurance product offering, which allows consumers to research and comparison shop for life insurance.

According to eHealth, the new offering allows consumers to conduct side-by-side comparisons of quotes and life insurance policy benefits. Through a referral partnership with Seattle-based Efinancial, the company was able to launch its life insurance offering with range of products from life insurance providers.

According to eHealth, the new offering allows consumers to conduct side-by-side comparisons of quotes and life insurance policy benefits. Through a referral partnership with Seattle-based Efinancial, the company was able to launch its life insurance offering with range of products from life insurance providers.

The new offering gives consumers access to various life insurance policies including underwritten policies, which require a medical review; guaranteed issue policies, which are available without a medical review or health questionnaire; and issue policies, which can be applied for and approved online in a single online insurance application session by answering a few basic health questions.

In addition, the company also provides phone support, with access to Efinancial’s agents to answer any life insurance policy-related questions.

Second in a Series of Posts on the Haitian Earthquake Tragedy and Insurance

The magnitude-7 earthquake that struck just outside Haiti’s capital, killing many, and causing untold  property damage will cost hundreds of millions to repair. But most private insurers will pay little in claims, because the private insurance market is almost non-existent in developing countries such as Haiti.

“Insured losses will be minimal, despite the severity of the event,” said Robert P. Hartwig, president of the Insurance Information Institute, in a Wednesday interview. “The reason is that Haiti is one of the poorest countries in the world, with very little private insurance.”

In a more developed part of the world, such as California, a big earthquake would result in “billions” in insured losses, Hartwig said. “Insured losses in Haiti will probably be measured in millions, and not that many.” That is a tragedy for the Haitian society in and of itself.

“For this type of event, no one insurer has any kind of large exposure,” said Tom Larson, senior vice president of Eqecat Inc., a catastrophe insurance risk modeler. “One insurer might have lost everything they have insured in Haiti in this one event, but we don’t expect it to be a major event to any one of them.”

Eqecat estimated that the cost to rebuild Haiti will run into the hundreds of millions, but that much of that will come from international aid rather than private insurance payments.

So far, German reinsurer Hannover  has said it estimates a EUR20 million loss from the earthquake, though the company did not immediately say the nature of its loss.

A spokesman for Chubb Corp. said the company is not aware of any insured exposure in Haiti.

American International Group Inc., one of the largest commercial insurers, has not issued a public statement on the scope of the potential insured losses there.

Haiti will likely receive some help from its main catastrophe insurer, the Caribbean Catastrophe Risk Insurance Facility, a regional fund administered by participating governments. A spokesman said that Haiti’s earthquake coverage is up to $8 million, which would be paid from the fund in about 14 days, once the earthquake is categorized. The spokesman said he knows of little private insurance coverage in Haiti.

U.S. companies pledged more than $43 million in aid within the first 72 hours after the quake struck Haiti. U.S. aid, including individual donors,  is predicted to sharply increase in the aftermath of the tragedy.

According to the World Bank’s Natural Disaster Hotspot study, Haiti is one of the countries most vulnerable to adverse natural events.  The country’s weak infrastructure, degraded environment, and history of ineffective governments with serious fiscal problems all converge to magnify the size and scope of a natural disaster.

This was clearly displayed during the 2004 hurricane season when over 5,000 Haitians lost their lives following Tropical Storm Jeanne, and in 2008 when Tropical Storm Fay and Hurricanes Gustav, Hanna and Ike inflicted damages estimated at about US$900 million, or around 15 percent of GDP.

The earthquake disaster which has struck Haiti in 2010 has dwarfed even those staggering figures.

In 2007 The World Bank initiated  The Haiti Catastrophe Insurance Project. Its objective was to reduce Haiti’s financial vulnerability to natural disasters through insurance coverage against earthquakes and hurricanes.

The effort would be achieved by providing financing to Haiti to allow it to join the Caribbean Catastrophe Risk Insurance Facility (CCRIF) and purchase financial protection against catastrophic earthquake and/or hurricane events.

The pilot initiative represented the first entity created to protect small island states from the financial impact of natural disasters and had two main components with the first being to assist Haiti in joining the CCRIF through the financing of the entrance fee.

That fee was equal to the first year’s insurance premium of US2.57 million. The second project component was payment of annual insurance premium to assist Haiti in purchasing the catastrophe insurance coverage during the first three years.

Now a discrepancy has emerged in the aftermath of the earthquake. CCRIF said Haiti’s government  will receive a little under $8 million for earthquake damage.  The Eqecat catastrophe risk modeling firm in Oakland, Calif., estimated economic damages from Tuesday’s quake to be “in the hundreds of millions of dollars.”

CCRIF said the amount it will pay Haiti is approximately 20 times the country’s $385,500 premium for its earthquake coverage policy taken out as part of its disaster risk management strategy.

CCRIF announced that it is “hopeful that the rapid payment of funds under Haiti’s policy will assist the government and people of Haiti in addressing immediate needs as they begin the recovery and rebuilding process.”  Yet, while the amount being paid by CCRIF  is something,  it is nowhere near enough.

CCRIF is owned, operated and registered in the Caribbean for Caribbean governments. It is designed to limit the financial impact of catastrophic hurricanes and earthquakes to Caribbean governments by quickly providing short-term liquidity when a policy is triggered.

Clearly, it was the World Bank’s intention to safeguard against what has happened in Haiti.  But the disaster has far outscaled the cost for recovery. A tragic lesson is not enough insurance, not for a family, but for an entire  nation.  Learn more about life, health and home insurance protection at America’s advocate for financial security with a free insurance rate quote at Efinancial.com

Links to ways  you can help donate to Disaster Relief in Haiti can be found on the following Google page: Support Disaster Relief in Haiti.

Can the new age of social media and “crowdsourcing” ensure better investment advice? A Website that works more like Digg or StumbleUpon than MarketWatch lets the voice of the people be heard loud and clear.

At Efinancial, we know that getting only one point of view or learning about just one product or company is as limiting as “tunnel vision.”  After all, you can’t choose the right financial value if you don’t have a choice.  The same idea goes for Investimonials.  The goal of the social site is to help users cut through the “spammy” or ” scammy”  financial sites that litter the web, by offering a comprehensive hub of user reviews for each product.

Investimonials is launching with eight categories, including the top rated Brokers, Newsletters, DVDs, Books, and websites, but plans to have “dozens” over the next few years. The site already has 3,000 products ready to review, though the vast majority of them are waiting for reviewers just like you to comment to them.

Users who complete a review on the site,  will be rewarded with ‘iv bucks’, which can be traded in for prizes.

EliteTrader, an age-old competitor has been around for a decade and possesses more than  one thousand total reviews.  Investimonials has a fres h new outlook. Like any social media site, it will be the people who write and read the site who decide its success.

We at Efinancial place a premium on the value of a “guiding hand” helping to save you money at every turn while you shop (that’s the power of our Internet guidance when shopping for life insurance).

So we can’t help but admire InvisibleHand, a handy download for your Internet Web browser that shows a discreet notification when the product you’re browsing can be bought for a lower price elsewhere.

InvisibleHand works automatically while you browse to find you better deals on products from more than 100 top retailers in three different countries. It’s effortless comparison shopping that’s designed to work for you as a seamless addition to your standard browsing experience.

That’s very much akin to what Efinancial.com can do for you in the life insurance category, helping you find the lowest life insurance premiums among America’s top insurance companies, but of course men and women cannot live on life insurance alone!  Why not give InvisibleHand a try!

How are you using technology to give you the advantage of locating the best prices on the things you buy, be they holiday gifts or life insurance savings?

Interested in a fast, easy-to-absorb guide to personal financial news and information you can “eyeball”  literally at a glance.  Mint.com (www.mint.com), a leading online personal finance service from Intuit, Inc., has condensed it down to a salvo of messages in bite size Twitter chunks of just 40 characters each.

The new “Money Tweets” service deliver news and advice from from across the Twittersphere, and synthesizes it in a single, streamlined platform at www.mint.com/twitter.

Money Tweets includes five categories, allowing people to home in on whatever content most interests them:

• Topics – Collects information relating to budgets, saving, investment, loans, and retirement feeds. Sources range from industry leaders, such as Morningstar (@morningstarinc.) and the Wall Street Journal (@WSJ), to bloggers with cult following and specific expertise, including Wisebread (@wisebread), Stocktwits (@stocktwits) and Budgets are Sexy (@budgetsaresexy).
• Tweets about Mint.com – Tracks, in real-time, what people are saying about Mint.com.
• Tweets from Mint.com - Updates followers on the latest from Mint.com -product upgrades, new blog content, economic indices and awards or speaking opportunities. This tab helps people keep up with what the company is doing, and shows the interaction between the Mint.com team and customers that happens in the Twittersphere.
• Questions – A question of the day – based on spending patterns, budgeting tips or other relevant topics – helps users learn from each other and crowd sources fun and useful tips and tricks.
• Popular – Keeps followers on top of hot financial topics, anything from the bailout, interest rates or Bernie Madoff. Money Tweet tracks and reports on volume and trending patterns over a selected period of time.How has Twitter influenced the way you manage your money? Could you benefit from financial advice in short message bursts?

It’s a deadly statistic. The top two causes of death in the United States are responsible for more than 50 percent of America’s annual death toll. If that doesn’t “hit us where we live,” this just might — where we reside in the U.S. has a strong correlation with how we will die.

The Center for Disease Control and the National Institutes of Health break out the 15 most common causes of death as follows:

1. Diseases of the heart   28.5

2. Malignant tumors   22.8

3. Cerebrovascular diseases   6.7

4. Chronic lower respiratory diseases  5.1

5. Accidents (unintentional injuries)   4.4

6. Diabetes mellitus  3.0

7. Influenza and pneumonia   2.7

8. Alzheimer’s disease   2.4

9. Nephritis, nephrotic syndrome, and nephrosis   1.7

10. Septicemia (blood poisoning)   1.4

11. Suicide   1.3

12. Chronic liver disease and cirrhosis   1.1

13. Primary hypertension and hypertensive renal disease   0.8

14. Parkinson’s disease (tied)   0.7

15. Homicide (tied)   0.7

Looking at the leading causes of death listed above, just five account for over 70% or 7 out of every 10 deaths. The  two major killers, heart disease and cancer, account for over half of all deaths in the country.

Not surprisingly, researchers found that states with the highest rates of cigarette smoking — Kentucky and Tennessee — also had the highest rates of heart disease deaths. The researchers say that if cigarette smoking declined in those states the number of early deaths from heart disease would also decline.

The researchers also found that male residents of some states have five times the risk of dying young from heart disease compared to other states. To see where your state ranks for heart disease and stroke, visit this Interactive Map.

While affordable life insurance can’t prevent any of these causes of death, it can make sure that financial protection will survive the catastrophe!

Last week’s news that Wall Street investment bankers were looking to replace bundled mortgage-backed securities by bundling life insurance policies shows a wanton disregard for the integrity of the financial system and for the resilience of the market system itself.  The contemplation of such a model in the immediate aftermath of the most severe banking crisis in 80 years, should be a clarion call to hasten the needed regulation in financial services.

Under a life insurance bundling scheme,  elderly people strapped for cash would ostensibly sell their life insurance policies for pennies on the dollar (maybe up to $400,000 on a $1 million policy), and Wall Street would buy them, bundle them and sell them to investors.

Securitization of a commodity is, in many ways, a sound business practice, especially if you’re the banker doing the selling. But, just as mortgage-backed securities carried a level of risk that made them more like gambling than investing, life-insurance bundling means the security sold is not what it seems. Like mortgage-backed derivatives, life-insurance derivatives would deal with a finite pool of money whose value will not increase over time: at some point, one of the gambling investors will find there is not enough money to cover initial investment plus interest.

Like mortgage-backed derivatives, life insurance derivatives have a fatal flaw in terms of long-term investment value, according to J.E. Roberston writing in Cafe Sentido.  At the end of the day, someone somewhere will be unable to resell the bonds based on specific policies, because the high investment value will no longer be supported by the cash payout. This is the definition of a pyramid scheme: there is only the money people are putting in, and eventually, when one after another investor takes their payout, there is nothing left for those who stay in the game too long.

Against such an exotic and illusory concept, the news that traditional bankers are actually making money in the current economy by doing something simple –  Getting back to basics — is getting short shrift.

Remember the 3-6-3 banking rule: pay depositors 3% interest on their savings, make loans at 6% interest, and leave the office by 3pm. Sounds like a pretty good life. Bankers who are following this golden rule, without exotic investment bundling, are doing just fine.  Here are some of the other tenets of a traditional banking system which bear repeating:

-  Investigate the borrower, write the loan, and hold the loan until it’s paid off.
-  Don’t sell or securitize loans.
-  Never have a rigid SOP when reviewing a loan and be willing to work with the borrower.
-  Always be stable enough to survive the bad times, and hopefully, have the capacity to grow because of it.
-  Never put yourself into a situation where you require any funds from government stimulus (e.g. bailout money).