Auto Warranty Company Fake Testimonials, Endorsements, Recommendations and False Claims…

We are often questioned on why we don’t post any testimonials of our happy customers on our website. It is unfortunate, but it is become the practice of many companies, both reputable and not reputable, to either create their own testimonials or higher a public relations firm to do it for them. This is obviously a dishonest and poor way to run a business. We choose not to post testimonials, though we have many, as we simply will not fall into this group.

So how is a consumer supposed to know what companies are reputable and what companies are not? The last thing a customer wants to do is invest their hard-earned money in a warranty program that will simply not pay claims as they promise. The best way to protect yourself as a consumer is to make sure you follow the following guides…

• First, make sure the company you choose for your warranty coverage has been in business 10 years or more so they have shown experience successfully paying claims, not simply selling plans and collecting premiums.
• Second, make sure the plan you choose is directly underwritten by a US-based, A rated insurance carrier. Many “so-called” auto warranty companies are simply corporations or risk retention groups and have no financial or insurance backing. Having a directly underwritten plan means that if the warranty administrator ever fails to exist, your claims will automatically be paid by the insurance carrier and your coverage will be valid regardless.
• Third, you want to choose a company that has an A+ rating with the Better Business Bureau, and perhaps more importantly has been accredited by the Better Business Bureau.

The bottom line is that as you research the different coverage available to you, do not only look at the items covered and the price of coverage, look at the tenure and reliability of the company you are purchasing from. Though we are not the only company in the auto warranty industry, we are one of the best. To obtain a quote visit our webpage.

 

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5 Ways Critical Illness Insurance Can Be a Financial Life Saver

It was a world-famous heart surgeon, Dr. Marius Barnard, who created critical illness insurance, as he saw how the financial stress that accompanied cancer, heart attack and stroke was killing his patients. This type of insurance typically gives you a lump-sum cash payment if you are diagnosed with one of the illnesses specified in your critical illness policy.

No matter how you’d use the money, critical illness insurance always does one thing: It reduces financial stress.

But one of the challenges of critical illness insurance is understanding the many ways you can use the benefit—the money paid out—if you ever need it. Here are some of the ways I have seen:

1. To pay for deductibles, co-pays and other out-of-pocket expenses related to health care. This is the most obvious use, especially as deductibles and out-of-pocket expenses for health insurance plans continue to increase.

2. Expenses not covered by health insurance like travel, hotels, babysitting, etc. I know a person who had a great health insurance plan. He was diagnosed with colon cancer. His doctor told him, “You need to go to MD Anderson.” Complicating the whole issue, he and his wife had just had a child. So, they took his father-in-law along to watch his son. He had to charge airfare, meals and the hotel costs to his credit card. Several years later, he was still paying off that credit card.

3. Income protection, especially for the self-employed. If a self-employed person has an income-protection plan, including disability insurance, it most likely will have a 90-day elimination period before benefits are paid. One self-employed person I know was diagnosed with cancer. She would take her chemo treatments on Fridays. Then she would use the weekend to recover and try to be back at work on Monday or Tuesday. She did not miss enough days from work to meet her elimination period. Did cancer impact her income? Significantly!

4. Mortgage protection. Many people purchase life insurance so that if anything happens to them, the family’s home will be paid off and the family will be able to stay in the home. But what’s more likely to happen while paying on a mortgage—death or a critical illness? Depending on age, you could be as much as four times more likely to suffer a critical illness while paying a mortgage than to die.

Typically, insurance that covers from two to five years of mortgage payments will help significantly through the transition. A great thought-provoking question is, “Would it reduce your financial stress if you are diagnosed with cancer to know your mortgage will be paid for two years?”

5. Retrofit a home or car. I had a woman tell me that her husband had had a stroke. The couple had to take out a second mortgage to make modifications to their home, including a wheelchair ramp, significant changes to their bathroom, and the widening of doorways to accommodate the wheelchair.

No matter how you’d use the money, critical illness insurance always does one thing: It reduces financial stress. There is always emotional stress for a family with a family member who has a critical illness. Emotional stress increases directly with financial stress. A critical illness plan reduces the financial stress, which then reduces emotional stress. If you’d like to learn more about this important coverage, contact your insurance agent or advisor.

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The Truth About Home Warranties And Are They Worth It?

When you buy a new home you always have the option of purchasing a home warranty that, theoretically, covers the cost of repairs to various appliances and other home systems. But are these home warranties worth it and what should you be aware of before you actually buy one of these?

Before I get into some of the nuts and bolts behind these home warranty products let me explain that I actually managed the extended warranty program for Circuit City Stores for a period of time and these home warranties are a very similar product. In addition, I've studied the economics of insurance before and home warranties are basically insurance policies. So I know a fair amount about the economics of home warranties.

A Home Warranty Is An Insurance Policy

When you buy a home warranty - and they start around $420 - you are basically buying an insurance policy. The reason this is important to recognize is that insurance companies are in business to make money and that means that they expect to make money on the average policy they sell, which means that on average the people who buy these policies will lose money. Buyers will most likely pay more for the policy than they receive in return over the life of the policy.

Then why would you ever buy an insurance policy? Because you are willing to trade off the certain cost for a very uncertain cost. The insurance company can play the averages game but many consumers cannot or don't want to play that game and they are willing to pay a premium for the certainty. This is especially true as it relates to health care where a catastrophic illness can cost over $1 MM.

But when it comes to home appliances and other systems what is the worst thing that can happen? Maybe you need a new air conditioner or a refrigerator that might cost you a couple of thousand dollars. So for people who can handle that type of expense out of the blue, there is no need for them to buy an insurance policy - they basically "self-insure" from their own savings. But if a new air conditioner would break the bank then you might want to consider getting a home warranty.

How To Beat The Home Warranty Companies At The Averages

There is one advantage that the homebuyer has over the home warranty companies. They know more about what is being insured than the warranty company does and this asymmetrical information allows them to make a better decision about when to buy the warranty than the companies can make about when to sell the warranty. In fact, the companies will pretty much sell a policy on any property to any buyer because they just can't afford to inspect every home before issuing a policy. But a buyer is going to be more likely to buy a policy when they can see that a home has been poorly maintained - e.g. a trashed short sale - and is, therefore, more likely to develop problems. That's what I did when I bought my short sale. I bought a policy from Home Warranty.

This asymmetrical information leads to a problem for the warranty companies called adverse selection - the tendency of these companies to get stuck with bad deals. Consequently, they have to raise their prices to offset this bias, which means that anyone who buys such a warranty on a well-maintained property is overpaying.

Beware The Exclusions

It's important to understand what you are really buying when you get one of these home warranties. The contract is full of fine print which excludes a huge list of situations that you would reasonably expect to be covered such as:

  • Improper installation
  • Plumbing fixtures
  • Whirlpool jets
  • Ejector and sump pumps
  • Doorbells associated with intercom systems
  • Alarm system repairs above $400
  • Security video equipment
  • Central vacuum cleaner repairs above $400
  • The remote components of an automatic garage door opener
  • Ice and water dispenser in a refrigerator. In fact, it's not even clear if they cover the ice maker in the standard policy. I don't think they do.

That's just a small sample of my WarrantyOnWarranty Home Warranty contract. The entire list is enormous. But you can buy a higher cost policy that will cover some of these excluded items. Like I said...these guys are in business to make money.

Beware The Pre-Existing Condition

Just like in healthcare these home warranties have pre-existing condition clauses. When you call in a claim they will ask you a series of questions and if your answers indicate that you don't know for sure that this item ever worked properly since you owned the home then they will simply deny the claim. Now you can buy a premium plan that will cover unknown pre-existing conditions but, even then, if they somehow determine that you knew the item wasn't working when you bought the plan they will deny coverage.

Beware The Deductible

Just like in healthcare you have to pay a deductible for every claim made. On my Home Warranty contract, it's a trade call fee of $100.

The Warranty Company Does Not Guarantee All The Work Performed

This one really burned me up. The home warranty companies contract with various repair companies to actually perform the work and they will make sure that your reported problem is ultimately solved. However, apparently, and once again I can only speak from my experience with Home Warranty if the contractor's work directly or indirectly damages your home or appliance you are on your own to work out the issue with the contractor. WarrantyOnWarranty will do nothing to help you resolve the issue other than note a complaint in their system for future reference in dealing with the contractor even if WarrantyOnWarranty sent out an unqualified contractor in the first place.

For instance, we had a gas leak in our dryer and WarrantyOnWarranty sent out Bender's Plumbing of Addison to fix it. They fixed the leak but after they left we discovered that the dryer was no longer venting outside. Bender's Plumbing was dispatched again to fix this problem but incredibly they decided it wasn't their problem. Reluctantly we paid an appliance repair guy $80 to fix it and he explained that when Bender's moved the dryer the vent hose disconnected and was then crushed as the dryer was moved back in place. If Bender's had known what they were doing they would have opened a panel on the front of the dryer to reconnect the hose and pull it out of the way as they slid the dryer back in place.

Bender's initially promised to send me a check for $80 but it never arrived and then they wouldn't return my phone calls. And even though WarrantyOnWarranty should never have sent out a plumber to do an appliance repairman's work they refused to help resolve this dispute.

Your Realtor Gets A Commission For The Sale Of A Home Warranty

And this is a lesser concern because it does not involve a lot of money but your realtor does get paid a small commission to sell a home warranty. It's around $70 I think, which is such a small amount that my company rebates it back to our clients to avoid any conflict of interest however small. But you should still be aware of this because some realtors will do anything for a buck.

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Umbrella Insurance for a Very Rainy Day

Many consumers are not aware of the benefits provided by an umbrella policy and many may not even be aware of the existence of such a policy. Others might just view it as an “upsell” offered by insurance companies and agents hoping to make some extra income. However, the policy actually offers significant benefit to individuals and, according to the Insurance Journal, the state of Maryland’s Insurance Administration has issued a consumer advisory explaining the policy’s benefits. If you don’t currently have an umbrella policy, you’ll want to read on to understand better what it can do for you and your family.

In your standard home insurance policy, there’s a limit of liability for personal liability claims. The usual coverage that’s automatically provided is generally $100,000. However, given today’s litigious society and the cost of medical care, a claim can easily exceed that amount. If you are a homeowner, your assets, including your house, can be attached in the event of a judgment against you. This is where an umbrella policy can really help out.

The personal umbrella policy is given its name because it acts as an umbrella over more than just your personal liability policy. Most people who have umbrellas use the policy as extra protection for both their personal liability and automobile liability coverages. For example, if you have a $1 million umbrella policy, it will provide the $1 million in protection if either your personal liability or auto liability policy limits were exhausted.

Keep in mind that this is a liability policy and not a property policy. Therefore, even though your home insurance policy has two main types of coverage, the umbrella only applies to the personal liability portion of the coverage. As an example, if you have not insured your home for the proper amount and have a large claim, the umbrella policy will not provide you with any benefit. On the other hand, if someone is injured on your property and sues you, the umbrella policy will be prepared to step in if your home insurance policy’s personal liability limit is exhausted.

It’s common for people to consider the umbrella policy as an optional item and not necessary. Even if they are aware of the existence of umbrellas, many people choose not to purchase them, thinking that a very large loss will never happen to them. Unfortunately, when something unforeseen actually happens, it’ll be too late to purchase the coverage. Umbrellas are generally inexpensive when viewed in relation to how much coverage they provide. That low premium is a good sign of the relative infrequency of loss contemplated by the insurance companies in underwriting the policies. However, just because everyone thinks it’s rare for a loss to occur doesn’t mean they don’t believe it will never occur.

You should also keep in mind that there might be some ways to save on insurance premiums by purchasing an umbrella policy. Because many insurance companies offer a multi-policy discount, you might find that it’ll defray the cost quite a bit. When I first started purchasing an umbrella policy, the discount I received from adding it to my existing home and auto policies with the same insurer almost covered the entire cost of the umbrella! Given its low cost and potentially great benefit, you should really invest in an umbrella policy.

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Hybrid Cars And Auto Warranties

Many motorists are starting to make the switch to hybrid cars for various reasons. The main two reasons are a sharp increase in gas prices and a desire to protect the environment. There are a lot of things that you should know about hybrid cars before you choose whether or not they are right for you.

1. Hybrid cars help to protect the environment. This is because they run on less gas and can help to reduce the amount of smog in the air by as much as 90%.

2. There are many beneficial features in hybrid cars. They have good gas mileage and can get anywhere between 50 and 60 miles per gallon of gas. In addition, they do not need to get plugged in like an electric car because they will recharge as you drive. Also, they have a lower depreciation value and can be resold much easier. Lastly, if you drive a hybrid car, you may be able to get a tax rebate from the government.

3. A hybrid car will produce less noise. When you bring it to a full stop, it shuts down. This is helpful because you save gas. This is even more beneficial for drivers who are constantly driving in stop-and-go traffic.

4. Hybrid cars tend to be a bit more expensive. Though this is the case, the money is not wasted. Between the amount of money you save on gas and the amount of money you save on maintaining a hybrid car, it amounts to the total that you spend buying the car.

If you choose to switch to a hybrid car, it is wise to protect this investment with an auto warranty. An auto warranty will help lower the costs of maintenance and repair bills.

 

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Be On The Lookout For Fraudulent Auto Warranties

 

 

Purchasing an auto warranty is a risk if you don’t know the rules and regulations of the warranty. It is wise for vehicle owners to think about hiring a professional car consultant who can help them through the sometimes-tricky process of buying an auto warranty. Buying an auto warranty without assistance poses a greater risk of purchasing a fraudulent warranty.

A fraudulent auto warranty is generally a warranty that offers a great variety of features and prices so well that it just too good to actually be true. However, the seller that is claiming that they provide this auto warranty won’t actually provide all of the services they are offering to the consumer. In the used car market, fraudulent warranties are common. This makes it important for consumers who are looking to buy used car warranties to be careful throughout the purchasing process.

Due to the circulation of fraudulent auto warranties, the US administration made a law that protects consumers that is called the used car warranty law. This law is also well known as the lemon law.

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3 Things To Be Aware Of About Your Auto Warranty

Any car owner can have peace of mind when taking the car to the shop for repairs and maintenance when the car is covered by an auto warranty. Auto warranties cover the cost of repairs and maintenance on the car. Here are three things to be aware of about your auto warranty:

1. Thoroughly read through the warranty so that you are completely knowledgeable about how long the coverage lasts and what parts of the car are covered by it.

2. Know where the auto warranty is coming from. Is it coming from an aftermarket auto warranty company or a manufacturer? It is important know exactly who is handling your policy.

3. Know the terms of your warranty and make sure that you perform all required maintenance on your car. Auto warranties only remain valid if you get specific work done to your car. In addition, keep a record of all repairs and maintenance performed on your car in the event that you need to take care of a claim.

Auto warranties put your mind at ease when you bring it to the shop to have work done. If you want to get the most out of your auto warranty, it is essential to be knowledgeable about all of its details.

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June Wedding? Give Your Spouse a Gift of Peace of Mind with Term Life Insurance

Summer bride or groom? Term life insurance makes the perfect wedding gift!

On June 11, my husband and I celebrated our sixteenth wedding anniversary. Yep, I was a “June bride,” and as you might guess, I do a fair share of reminiscing whenever June rolls around each year. I pull our wedding and honeymoon photo albums off the shelf, and we page through the memories. We recall the joys and the struggles of just starting out as a married couple. We think back to where we started and how far we’ve come in taking charge of our future.

Term Life Insurance: The Gift of Peace of Mind

In hindsight, one thing I wish we did earlier in our marriage is to explore life insurance options. As a newlywed, you want to look out for the well-being and financial security of your spouse, right? Term life insurance is one way you can do that. Term life, like whole life insurance, offers a way to help ensure the love of your life can live comfortably if the unthinkable happens to you.

According to the 2014 Insurance Barometer Study by Life Happens and LIMRA, about one-half of Americans say they would feel the financial impact of the loss of the primary wage earner in their household within six months of their passing. One-third of those surveyed believe they’d feel the impact within just one month!

Term life provides a death benefit (a payout) to your beneficiary (your spouse) if you die while your policy’s term (the length of your policy) is in effect. You can choose the term length; the most common term periods are 10, 15, 20, 25, and 30 years. The shorter the term, the lower the premium, and you can renew policies before they expire if you want to extend them.

The death benefit from your term life policy can help your spouse make ends meet by providing funds to cover expenses such as:

  • Rent or mortgage
  • Car loan, gasoline, and automobile maintenance and repair
  • Utilities
  • Health care
  • Your funeral expenses

That peace of mind would be a rather meaningful gift to your beloved, don’t you think?

An Affordable Show of Affection

Naturally, you might be hesitant to look into life insurance because of the cost. You’re not alone; 80% of people surveyed in the Barometer study overestimated the cost of life insurance.

Life insurance, particularly term life insurance, is far more affordable than most people think. With term life, you can get especially low premiums when you’re young and healthy—so applying when you’re “just married” could work in your favor. I wish my husband and I would have thought of that when we said our “I dos” back in 1999!

Whether you’re getting married (or have recently married) in June or any one of the eleven other months, I hope you’ll give securing your financial future some thought. A good start would be to find out how much a term life policy might cost you by using an online life insurance needs calculator and getting a confidential, no-obligation quote online.

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Fixing the Life Insurance Marketplace

The life insurance market is characterized not only by an absence of reliable price information but also by the presence of deceptive price information...the deceptive sales practices found in the life insurance industry constitute a national scandal.” So testified Professor Joseph Belth, an expert on the life insurance industry, before Congress in 1973. Can this statement, from more than 40 years ago, still be as true today?  And is it possible for such deplorable industry practices to be occurring without being in the spotlight of public attention?

The short answers are yes. To this day the life insurance industry too often relies on inadequate product disclosure, misinformation, and fraudulent practices, thereby costing consumers billions of dollars annually. Industry executives have for years acknowledged that no one would buy many of their companies' products if they were appropriately informed.

The free market economic system is built upon informed buyers making educated decisions. Yet so many life insurance industry chieftains who regularly sing the praise of our economic system fail to acknowledge that their businesses haven't satisfied the system’s prerequisites or played by its rules.

Empirical proof of the life insurance market’s dysfunction is readily apparent by examining the very products life insurers and their agents sell. While a select few cash-value life insurance policies can provide excellent competitive value, perhaps 95% of such policies sold provide value no informed consumer would accept. This marketplace’s dearth of information also afflicts tens of millions of policyholders at annual renewal; if properly informed, millions of them currently could readily obtain much better value. Consumers of the industry’s other main products, annuities and long term care insurance, also face enormous disclosure-related problems.

The root of the age-old problem is the inadequate disclosure of information surrounding cash-value policies, such as whole life policies, where the annual cost is not the annual premium. Professor Belth and I have both long recommended disclosure about a policy’s annual costs and rate of return on its cash-values.  

The attached table of an actual insurance policy’s historical performance (see below) shows how this information on a policy’s annual costs and rates of return on its cash-values can be presented on a year-by-year basis and summarized over the duration with average or aggregate measures. Similar cost and rate information can be calculated on any and all prospective new and in-force policies via online consumer-friendly analytical tools. Understanding policies from this framework, and with solid knowledge of the differences between illustrated future values and actual future performance, enables consumers to assess the competitiveness of a policy’s costs and rates. For example, a healthy 40 year-old male can  compare his policy's costs with benchmarks that are available in the marketplace and its rates of return with suitable alternative investments. 

A cash-value life insurance policy’s unique intrinsic economic advantages arise from its Congressionally-granted tax privileges, not its highly touted permanence; after all, a term policy can be converted or exchanged into a policy providing lifelong, permanent coverage. These tax privileges, which are given directly to policyholders, however, are not a basis for which insurers can charge consumers; no one pays thousands of dollars to set-up an individual retirement account (IRA). Consequently, when selling such cash-value policies as whole life agents routinely make assorted misrepresentations. Agents often misleadingly state: 1) that a whole life policyholder pays for a lifetime of costs upfront, and that doing such and owning his/her coverage is better than endlessly renting it; 2) that buying a whole life policy at a younger age locks in a lower level cost for life; and 3) that the annual costs of a whole life policy can actually decline as the insured ages because these policies can pay dividends. These three common agent statements, and myriad variations of such, are deceptive.

Regulations prohibit such misrepresentations, but they have never been enforced. These and other misrepresentations are all designed to distort a cash value policy’s fundamental difference. For agents, the essential difference between whole life and term insurance is the quantum difference in the sales commissions – up to 5-9 times larger on whole life policies than on term policies. No one familiar with the paramount role that compensation incentives tied to the origination of subprime mortgages and the repackaging of such default-inevitable, toxic securities played in creating the Great Recession can doubt the perniciousness of the life insurance industry’s age-old problematic sales practices.

A successful consumer-agent relationship can only be built on trust, so predicating it upon inadequate disclosure is inherently counter-productive to all. While inadequate disclosure appears to be in the insurers’ and agents’ interest, it actually has made consumers so leery of agents that the age-old distribution process is so terribly inefficient and ineffective. Americans’ under-insurance – having woefully less life insurance than needed or appropriate - reaches new records every year. Some insurers’ policy lapse rates raise fundamental questions regarding the products’ suitability that regulators have never examined. And, the facts that the typical life insurance agent sells less than one policy per week and that four out of five new sales recruits fail out of the business within a few years are further proof of this industry's failed business approaches.

Given the nature of the problem, improved disclosure and publicity of such have always been known to be two indispensable parts of the inevitable solution. Contrary to general opinion, however, there is no need to wait to for this industry’s state regulators to act and mandate disclosure. The necessary disclosures, after all, are not proprietary or esoteric. As is shown in the table, life insurance policies, like an automobiles’ horsepower or MPG, can be disclosed, not only by the manufacturer but by anyone with the necessary expertise and this information is now available online.

Without publicity though, this public good of disclosure remains undiscovered. Reform of the life insurance industry has always merely been a battle of wills. Reformers have had to confront industry, an uninterested or uninformed media, regulators not understanding their jobs or unwilling or unable to do them, and/or reformers’ own doubts about ever succeeding. Financial markets can be fixed when appropriate policy disclosure for consumers is heralded and becomes pervasive.

When will this information be publicly disseminated, so that everyone knows about it and can use it, thereby initiating the long-overdue repair of the life insurance marketplace? This disclosure-driven transformation will produce the myriad and well-documented benefits of genuine economic competition: consumers will obtain better value; insurers will improve the efficiency of their production processes; and agents will act and be seen as trustworthy professionals. Clearly, the sooner this time comes, the sooner Americans can start saving billions of dollars per year, the better for everyone.

 

Actual Historical Performance of a Whole Life Policy
$250,000 issued 20+ Years ago (in 1989) to a 45 Year Old Male, Best Health
*Annual Premium $5815 Paid All Years
** Notes below provide additional information

Age During Year

Insurance Death Benefit

Cash-Value

Total Annual Costs

Annual Dividend Rate

45

            251,425

  408

            5,444

10.00%

46

            253,954

 5,134

            1,556

10.00%

47

            256,890

10,188

            1,624

9.25%

48

            260,927

 15,823

            1,520

9.25%

49

            265,684

21,955

            1,403

8.50%

50

            271,380

28,709

            1,310

8.50%

51

            278,019

36,119

            1,235

8.50%

52

            285,871

44,344

            1,064

8.50%

53

            295,056

53,487

            998

8.80%

54

            305,332

63,521

            919

8.80%

55

            316,703

74,519

            844

8.80%

56

            328,867

86,417

            907

8.80%

57

            341,858

99,309

            787

8.60%

58

            354,658

112,782

            889

8.20%

59

            366,807

126,628

            1,022

7.70%

60

            378,831

141,112

            1,176

7.50%

61

            391,554

156,699

            1,160

7.50%

62

            404,738

173,322

            1,284

7.50%

63

            418,387

191,040

            1,425

7.50%

64

            429,215

207,946

            1,601

6.50%

 

 

 

Avg. Rate:

8.43%

 

**Insurance Death Benefit shows the amount the policyholder’s beneficiary would receive after his death
Cash-Value is the cash amount the insurer gives to the policyholder if he cancels his contract
Total Annual Costs show the amount expensed from policy premiums (and policy cash values if and when necessary) to pay for sales, claim, administrative, capital charges and any other miscellaneous costs, such as premium taxes.
Annual Dividend Rate is the rate earned by policyholder, net of investment management costs, on policy cash values, that is, values after costs.        

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