Life insurance providers in the US may not be using genetic information to make underwriting decisions right now, but the lobbying efforts of a Maryland-based interest group to limit legal restrictions in this area suggest that the industry’s unofficial moratorium on the use of genetic information may eventually come to an end.  So reports the latest edition of Genomeweb.com’s Pharmacogenomics Reporter.

The passage of the Genetics Information Non-discrimination Act in 2008 appeared to have quelled fears of genetic discrimination in the US — at least regarding health insurance and the workplace. However, life insurance companies are exempt from GINA and most states do not restrict the use of genetic information in life insurance underwriting.

A Maryland-based interest group for life insurers is lobbying the state legislature not to pass laws restricting the use of genetic information — an effort that underscores the prevailing view of payors that genetic data is no different than other clinical factors in making underwriting decisions.

“We use these genetic test results in underwriting exactly as we use all medical information: with care and based on sound scientific basis or clinical or actuarial relevance,” the League of Life and Health Insurers of Maryland said in a statement to the Maryland Insurance Administration’s Genetic Testing Workgroup last September. “We know of no problem of misuse of genetic information or tests in the underwriting of life, disability income, or longterm-care insurance.”

Where do you stand on the issue of using genetic information for insurance underwriting purposes?

When calculating the need for life insurance, the conventional, “inside the box” thinking typically takes into account the need to replace just one income…the income that is lost by the primary income earner who is no longer there to make a financial contribution. But like so many things in life, the most simplistic, top-of-the-head way of thinking about a problem is not always the most useful.

Tragically, when the life of one parent in a young family is lost, a paycheck is only one part of what disappears into the enormous void that is suddenly created. The working partnership that existed between two parents role-playing is forever changed. The multifaceted roles that were performed by both spouses in running a family can hardly be filled by a single parent alone.

In so many cases today, the reality of the situation is that both spouse’s income earning potential is affected when one is lost. As a practical matter, when both parents work, many families will need to take into account two incomes when calculating life insurance need.

Thinking it over, the idea of “over insuring” seems far fetched especially when buying term insurance is so inexpensive.

Let’s take one example:

* The head of a household decides on $500-$600,000 in a term life insurance policy, for several reasons. First, the coverage needs to replace a good portion of the breadwinner’s lost income. With the main income earner removed, the spouse would very likely need to continue to work, or potentially to find a job.

There’s also the mortgage. After the surviving spouse pays off the mortgage and puts money into a child’s 529 account, how much will be left? How far will the income last if a widow or widower decides not to work for 6 months in order to provide their children with more stability?

When another quarter of a million dollars can cost as little as $22 dollars/month, the lifestyle implications are clear. Calculate the consequences of what will befall two incoems, not just one. In the final analysis, two incomes are what can be at stake.

With “Nine Small Financial Steps That Will Pay Off Big in the Future,” financial advisor and  consumer advocate Suze Orman offers readers some valuable advice for 2010.

In a recent article, Orman puts (1) savings, (2) retirement and (3) life insurance among the top priorities for personal financial planning. Orman’s recommendations for savings include admonitions to “save a bit at a time” and exercise more personal financial self discipline. In planning for the future, Orman encourages 401(k) participants to “max out their company match” and to invest in a Roth IRA. She rounds out her 2010 recommendations with a call to create the “most loving documents in existence” — a living trust, a durable power of attorney and a will. She concludes with a recommendation to guarantee “peace of mind” by purchasing a life insurance policy.

Experts note that more one-third of all adults carry no life insurance and the majority of those adults who do carry life insurance rely on more limited group life polices obtained through an employer.

Suze Orman notes, “If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance. Keep it simple and buy term life insurance; it’s good only for a specific number of years and then expires. That’s okay — life insurance wasn’t meant to be permanent; it’s there to protect your family before you’ve had a chance to accumulate enough funds (through investments and savings) to do so.”

She adds, “Most people should get a 20-year level term policy that has a value equal to 25 times the amount of annual income your family needs to live securely.”

To ensure that you are getting the best value when purchasing a life insurance policy, experts say to conduct research and compare life insurance quotes and prices online for different policies. Life insurance costs can vary widely depending on variables such as age, health, and whether or not a person smokes. There are a number online sources that a consumer can consult when considering life insurance: The American Council of Life Insurance (www.acli.com) has a range of information and brochures, and Efinancial.com offers a fast, secure and effective way to compare insurance rates at America’s top companies.

Insurance may not be the first place you look for a significant deduction on your federal income tax return this tax season, but it definitely shouldn’ t be your last.

The most common deduction for medical insurance often goes unnoticed by a large segment of the workforce.  The premiums your employer pays under a group health insurance plan with pre-tax money are never included in your W-2 wages, and so are never taxed.  That’s a deduction you may never have realized you were getting,

A bride and groom can safeguard their wedding day with insurance for the reception, the caterer, the flowers, the limousine and the honeymoon. Now, a University of Illinois professor is suggesting that the same couple insure their marriage against breaking up.  The innovative new idea? Divorce insurance!

To create such an insurance product, underwriters think like statisticians identifying several “risk factors” associated with divorce that could figure out who would qualify and how much the insurance would cost. These include age, work location and education level, among other factors.

Critics say the idea may never make it to the altar since divorce is not a “fortuitous event” like an earthquake or hurricane. It’s a matter of choice, which presents a “moral hazard.” Couples choose whether to get divorced, or whether to do the things that get them divorced.  One soluton to the dilemma may be to have a “blackout period,” such as two or more years after you get married and buy the insurance before untying the knot.

Buying divorce insurance when you get married sounds a little like a pre-nuptial agreement. You’re hedging your bet in case till death do us part comes apart. If you’ve planing a wedding, you may want to consider life insurance fore newlyweds before divorce insurance.

It’s a human tragedy when a terminally ill patient’s life or death struggle comes down to how much they will pay in estate taxes. But that is the unintended consequence of  what could happen  at the stroke of midnight on January 1, 2010 when changes in federal tax law dictate  that the estate tax will disappear for one year.

One wealthy, terminally ill real-estate entrepreneur told his doctors he is determined to live until the estate tax law changes. “‘Whenever he wakes up,’ says his lawyer, ‘He says: “What day is it? Is it Jan. 1, [2010] yet?’”

Starting Jan. 1, the estate tax — which can absorb up to half of a wealthy person’s estate — goes on hiatus for a year (UNLESS reinstated by Congress before the year is up, which can make it retroactive back to January 1!). For families facing end-of-life decisions in the immediate future, the change is making one of life’s most trying episodes considerably more taxing, emotionally and in every other way.

No one believed that Congress in its ultimate wisdom, with all the deficits looming, with a recession and two wars … would ever allow the estate tax to lapse. But that’s what is happening. As USA Today reported, “The seeds of the impasse were sown in 2001, when Washington enacted legislation that gradually raised the tax’s exemption ceiling while also cutting the tax rate.

At the time, estates valued at $675,000 or higher were subject to the tax. And they were taxed at a rate of 55%. This year’s exemption threshold is $3.5 million, and the tax rate is 45%. The levy brought in an estimated $26.5 billion in gross collections in 2008, according to the IRS.

The levy is set to disappear for 2010. Barring any agreement to extend or change the 2001 law, the tax is scheduled to resurface in 2011 at a rate of 55% on estates valued at $1 million or higher.

During the time the tax is not in effect, it would be replaced by a 15% capital gains levy on inherited property that’s sold. That could be a deep bite, according to  Michael Halloran, president of the National Association of Estate Planners and Councils.

Will this New Year’s Eve have maudlin and morbid consequences for patients on life support when it comes to taxes?  That is an ethical line no person should ever be induced to cross.  What’s your view on what some call the Estate Tax and others the Death Tax? Online term life insurance broker Efinancial, an advocate for proper estate planning and affordable life insurance rate quotes wants to know!

Claremont McKenna College and University of Washington collaboration says whether you’re a cautious investor or a high roller, heredity’s at play

Investor behavior is largely determined by nature rather than nurture according to a new study by finance professors at Claremont McKenna College and the University of Washington. By studying twins and their financial behavior, researchers found that genetics account for one-third, on average, and as much as 45 percent of investor behavior. Other factors previously studied, such as age, gender, education, wealth and home ownership, when combined explain only five to 10 percent of investor behavior.

The study, “Nature or Nurture: What Determines Investor Behavior?” cross-referenced nearly 38,000 twins in the Swedish Twin Registry, the world’s largest, with comprehensive personal financial data–stocks, bonds, real estate, cash–collected by the Swedish government. This data allowed a comprehensive method to measure genetic versus environmental impact on investing and personal finance.

“We found that genetics explains differences in investor behavior much more than everything else that people have proposed,” said Siegel.

To separate genetics from environmental drivers of financial behavior, the researchers compared each twin pair’s stock market participation, asset allocation, and portfolio risk. In all three measures, the data showed a significantly higher correlation between identical twins than non-identical twins. Correlation of a random sample of the population is close to zero. This stark difference between the identical and non-identical twins relative to the general population is strong evidence that investing behavior is, in significant part, hereditary.

“We found that the correlation among twins held true, no matter what their age and life experience,” said Barnea. “Although family environment has a limited impact on young twins’ behavior, that disappears as they age.”

The researchers considered 716 twins from the Swedish registry who were raised apart and found their average correlation in investing behavior to be virtually identical to those raised together, adding more evidence that genetics drives investor behavior.

“There is always going to be some part of you that is predetermined at the moment you are born, and we’re learning that the way you invest is at least partly hereditary,” said Cronqvist.

The full study is available for download at http://papers.ssrn.com/abstract_id=1467088.

Is it possible to put a value or a price on human life?  Strange as it may sound, that is exactly what underwriters and insurance companies attempt to do when they are qualifying an applicant for a life insurance policy.

One of the first considerations an insurance company will make when evaluating a new customer is whether the amount of insurance being applied for is consistent with the net worth of the individual. These underwriters need to do what can sound a bit inhuman, but the calculation of “human life value” is used by life insurance companies to determine the maximum amount of insurance that they can offer you.

How does the calculation work?  The “life value” is based either on the financial assets of the insured, or the  earning potential, typically whichever is greater.  An asset calculation is pretty straight forward, as the insurance company will generally insure you for the same amount of  total financial assets you possess with no questions asked.  Earning potential gets a  bit more complicated but the conventional guidelines are to follow an Age Income Multiplier.

Here’s the basic formula:

Age 20-35 30x
Age 36-40 20x
Age 41-45 14x

Age 46-50 12x
Age 51-59 10x
Age 60-65 7x 66+ 5x

There is one more factor to figure in to determine the total amount of life insurance a company can offer you. That is your income. Depending on your income earnings, many insurers will only allow you to pay a certain amount of your income towards insurance.

For example,  if you make less than $80,000 you are only allowed to contribute up to 5% of your income to life insurance. If you make between $80,000 and $120,000 it goes up to 8%, between $120,000 and $250,000 it’s 10% and over $250,000 is decided on an individual basis. If you want to maximize your human life value then you would get the most insurance you could.

Two-thirds of customers are dissatisfied with their life insurers and nearly half would be inclined to bolt to a competitor if they could get a better deal, according to consulting firm Accenture Ltd.

A survey of 5,600 consumers in 14 different countries and 10 industry sectors was conducted between April and May of 2009. About 2,500 of the participants were asked to evaluate their life insurance providers.

The U.S. Debt Clock, as you may have never seen it or imagined it, at USDebtClock.org is both a dazzling Internet dashboard of dynamic, constantly updating digits and a sobering assessment of the state of our national economy at any given nanosecond.

Counting up both U.S. National Debt and US Private Debt in real time, the modular calculator breaks down debt by taxpayer and citizen. The tote board displays Mortgage Debt, Personal Debt and Credit Card Debt as well as State and Local Debt.

The digital display contrasts the red ink, or pixels, of debt calculations against the green ink, of the U.S. Gross Domestic Product and other sources of income include U.S. Federal Tax Revenue, including average Tax per Citizen with breakdowns of state, corporate and local revenue,.

Scroll down the Web page and you can take stock of America’s Currency and Trade numbers, Personal Savings sums, Social Security and Prescription Drug Liability costs, and as they say, a whole lot more.

Not associated with any government agency or funded by any active political party, organization or lobbying group,. the creators of the U.S. Debt Clock Web site explain its purpose is to “inform the public of the financial condition of the United States.” It also serves to present “a real time snapshot of the country’s balance sheet.”

Although the numbers involved are enormous, it is still easy to see the relative balance between wealth generated and wealth consumed.

Can you tell financial time? What’s your take on the U.S Debt Clock? How do you interpret America’s financial vital signs?