The insurance landscape is shifting. The days of relying on policies to cover small-ticket items like parking lot fender dings or water damage to attic relics are over. Gone too, for the most part, is the era when patients could expect full medical coverage through insurance. Except for those in a group health insurance plan, claim filers often receive jumps in premiums or notifications of dropped coverage.If insurance has changed into a tool you hesitate to use, why should you bother? Three reasons: you, your family and everything you own. It’s a means to protect yourself against catastrophic damage to your finances. Most people will need all of these five insurance policies at some time in their lives.

1. Life insurance
2. Disability insurance
3. Health insurance
4. Homeowner/renters insurance
5. Auto insurance

1. Do you need life insurance?

Do you need it?
The primary purpose of life insurance is to replace the income that is lost when someone dies. No working person should consider it out of reach — a healthy 40-year-old female can get a half million dollars in term insurance coverage for less than a dollar a day. At the same time, if no one is relying on you financially, you might not need life insurance.

How much coverage?
Your life insurance requirement translates to how much income your family would need if you died. It’s determined by what the ongoing financial needs are or soon may be. The needs are greater if you have to factor in taking care of aging parents or a disabled child.
In single-income families, you should consider how much in costs you’ll need to offset if the nonsalaried spouse is a caregiver, says David F. Woods, president of Life & Health Foundation for Education, a nonprofit organization for public education focusing on life, health, disability and long-term care insurance. Even though the caregiver does not earn an income, in the event of untimely death, his or her work on child or elder care, housekeeping and cooking may need to be replaced by paid help.

A lot of variables must be considered when determining the amount of life insurance to get, including your financial assets, spouse’s income plus any expected inheritance. Bankrate’s insurance calculator can help you determine the amount of life insurance you need.

Which policy?
There are two main choices when it comes to life insurance: term insurance (temporary) or whole life (also called cash value or permanent). Talk to your agent or adviser about which makes the most sense for you.
Once people hit their late 50s, they may drop term insurance because it gets more expensive, but that doesn’t mean they don’t need it, says Woods. The cost of cash-value insurance doesn’t go up as you get older, though premiums are much higher from the start. And although a payment lapse in term insurance means the end of your coverage, with permanent insurance, a portion of your investment, called the cash surrender value, is returned to you. That money can be used to keep coverage in force during times of unemployment or financial difficulty.

Conventional wisdom says that as your dependents become self-sufficient and your mortgage gets paid off, your need for life insurance decreases, but Woods has another take. “Even though the reasons you need it might change, the amount you need might even go up,” he says. “What you buy at 35 might fit your needs then, but as you get older your standard of living increases. And even though the mortgage is paid and the kids are through college, inflation and standard of living changes mean that you’ll want to make sure you leave enough for your spouse.”

Find out how to get the best price.

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Financial markets are generally good at responding to events, but lousy at reckoning with an uncertainty. The collapse of the US sub-prime mortgage market sent ripples into credit markets all over the world, because so many financial institutions had traded in these home loans, and other loans, without being overly concerned about the creditworthiness of the core borrower. The potential number of Americans who may default on their mortgages is at least known, and the potential cost to mortgage lenders, more than $100 billion, is significant. The continuing nervousness in the markets chiefly reflects uncertainty over who was left holding what in the elaborate games of pass-the-parcel-adding-wrapping-each-time that financiers have played avidly for years. We cannot really know how much to worry, until more institutions ’fess up to what is on their books.

The firms that have so far admitted to problems have done so only under duress. The suggestion that Barclays might be liable to pick up some of the tab has been made since one of its clients, a German bank called Sachsen LB, had to be bailed out after suffering heavy losses linked to the US sub-prime market. Barclays is denying that it has significant liabilities. But its involvement in setting up a special investment vehicle for Sachsen only three months before its collapse will concern people who expect such risky manoeuvres from hedge funds, but not from a high street institution. Like many banks, Barclays has something of a split personality: it is part buccaneering dealmaker and part retail bank serving the public. The onus is on it, along with other banks, to explain clearly what has been going on.

Banks have become increasingly sophisticated at parcelling up mortgages and other kinds of debt, and selling them on to a wide range of buyers as collaterised debt obligations (CDOs) and loan obligations (CLOs). By spreading the risk between pension funds, hedge funds, banks and insurers, this process has probably lessened the dangers to the financial system and to the “real” economy. But because this process is utterly opaque, it is impossible to gauge how weakened some companies are. The lack of transparency is not helped by so few people really understanding the complex financial instruments that have been involved: a CDO may sound confusing enough, but try getting your head around a CDO “squared”: the CDO of CDOs. The picture is complicated even further because so many banks have been playing similar games to the hedge funds and private equity houses they have been content to see reviled. Banks’ proprietary trading desks have made bets on the market and their corporate finance departments have made huge fees out of raising extraordinary amounts of debt for private equity deals.

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* Mutual funds are NOT guaranteed or insured by any bank or government agency. Even if you buy through a bank and the fund carries the bank’s name, there is no guarantee. You can lose money. (see Part IV “Kinds of Mutual Funds”)

* Mutual funds ALWAYS carry investment risks. Some types carry more risk than others. (see Part IV “Kinds of Mutual Funds”)

* Understand that a higher rate of return typically involves a higher risk of loss. (see Part IV “Kinds of Mutual Funds”)

* Past performance is not a reliable indicator of future performance. Beware of dazzling performance claims. (see Part V “Comparing Different Funds”)

* ALL mutual funds have costs that lower your investment returns. (see Part V “Comparing Different Funds”)

* You can buy some mutual funds by contacting them directly. Others are sold mainly through brokers, banks, financial planners, or insurance agents. If you buy through these financial professionals, you generally will pay an extra sales charge for the benefit of their advice.

* Shop around. Compare a mutual fund with others of the same type before you buy.

WHY MUTUAL FUNDS?

Mutual funds can be a good way for people to invest in stocks, bonds, and other securities. Why?

* Mutual funds are managed by professional money managers.

* By owning shares in a mutual fund instead of buying individual stocks or bonds directly, your investment risk is spread out.

* Because your mutual fund buys and sells large amounts of securities at a time, its costs are often lower than what you would pay on your own.

This document explains the basics of mutual fund investing — how a mutual fund works, what factors to consider before investing, and how to avoid common pitfalls.

There are sources of information that you should consult before you invest in mutual funds. The most important of these is the prospectus of any fund you are considering. The prospectus is the fund’s selling document and contains information about costs, risks, past performance, and the fund’s investment goals. Request a prospectus from a fund, or from a financial professional if you are using one. Read the prospectus before you invest.

Before you buy a mutual fund, make sure it is right for you.

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Service oriented architectures and web services can provide real benefits to the finance industry says Julian Dobbins, senior marketing development manager at Micro Focus.

The reported increased profitability in the US and Europe suggests that retail banks are meeting the challenges of recent years.

They appear to have avoided the worst effects of major corporate collapses and increased regulatory demands, as well as the challenges posed by a more demanding and cost aware consumer.

Yet the ongoing and repercussive effect of these and other issues is changing the nature of the competitive landscape for good. The result will be a banking industry that has to be quicker, smarter and far more cost efficient in order to survive.

Paper transactions are being replaced by low margin electronic traffic. Key initiatives favour real time or T+1 transfer and settlement, necessary to aid liquidity and meet consumer demand. Those who can afford the investment have become revenue-generating hubs for second and third tier banks.

By achieving technological supremacy in transaction processing, they have leveraged their financial strength and considerable scale to enhance their competitive standing.

Sarbanes-Oxley insists that all US organizations have visibility and control of key functions. To enable this, a major operator must maintain fast and efficient global connectivity, and re-align business reporting and approval processes to successfully monitor enterprise risk, ideally from a centralized point.

The challenge for all banks, large and small, is not only to create a centre of excellence with established international standards of communication, but also to reconstruct and automate their business processes to maximize efficiency.

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Preliminary estimates show that damage caused to Caribbean countries by Hurricane Dean had not triggered new disaster insurance introduced in February by the World Bank, a bank official said on Monday.

The Caribbean Catastrophe Risk Insurance Facility aims to give islands immediate cash for rebuilding in the event of hurricanes or earthquakes.

Some 18 countries signed up for the insurance facility including Jamaica, Haiti, the Cayman Islands, St Lucia and Belize, which were affected by Hurricane Dean, which is moving toward Mexico.

Dean roared between the Lesser Antilles islands of Martinique and St. Lucia on Friday, then headed toward Jamaica packing 145 mile per hour (230 kph) winds as it moved about 70 miles west-southwest of the capital Kingston on Monday.

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Noah Richardson was shopping for a suitcase last week when he faced a familiar question: Do I have enough money in my checking account to use my debit card?

In the past, he would have paid for it with the card and raced home to find out if he was overdrawn or needed to add more money to his account. But this time, he pulled out his cell phone, visited the Wells Fargo mobile site and within seconds, he knew exactly where his account stood.

“I was pretty sure I had the money in the account but I didn’t know if the bills had cleared,” said Richardson, a 32-year-old San Francisco software designer who shares his checking account with his wife. “I was out and about but I was able to check if I had enough money to be able to use my check card … I felt more secure because I was on top of the situation.”

It’s all part of the world of mobile banking. Wells Fargo is the latest bank to add mobile service, following Citibank, Bank of America, Wachovia and SunTrust, all of which started similar services in the past few months. Most of the country’s top 20 banks are either offering the service or trying it out.

The mobile services, all free, allow customers to check balances, see recent transactions, move money between accounts and pay bills. Many also offer a way to find the nearest ATM or bank branch.

The jump to mobile banking gives customers more convenience and adds another function to the evolving cell phone, which has moved well beyond making phone calls. The service is a step toward turning the cell phone into an “e-wallet,” allowing people to pay for things with it.

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