Feature

What the experts say

Economy down, divorce up; Big deals on new wheels; Living it up on life insurance

Economy down, divorce up
New York divorce lawyer Daniel Clements’ phone has been ringing off the hook, said Keren Blankfeld Schultz in Forbes. Blame it on the economy. “Recession has always been a factor raising divorce rates,” says University of Chicago Business School economist and Nobel Prize winner Gary Becker. Couples are at a bigger risk of divorce, he says, when they have sudden swings of income in either direction. But messy breakups “can get even uglier” when times are tough, and unhappy couples can’t afford to go their separate ways. Usually the largest co-owned assets are houses, which in this market couples may struggle to sell. Divorcing duos who put their home on the market shouldn’t advertise their marital situation, as buyers will drive a hard bargain if they suspect there’s trouble in paradise. Often the best solution is for one spouse to buy the other out.
 
Big deals on new wheels
“With new-car sales at their lowest level in over a decade, dealers are getting desperate to move the metal before the 2009 models hit showrooms,” said Daren Fonda in SmartMoney. July is when incentives are at their peak, says Jesse Toprak of Edmunds.com. But don’t let an incentive steer you into an otherwise bad purchase, such as a model that won’t hold its value. “There’s always a reason something’s on sale,” Toprak says. It’s best to look for loan incentives. Right now many dealers are willing to merely break even on financing for the sake of making a sale, says Jack Nerad of Kelley Blue Book. Shop around for loans—and get pre-approved—before you start test-driving. Then see if the dealer can beat your pre-approved terms, perhaps with zero-percent financing. “It’s hard for a bank to beat that,” Nerad says.
 
Living it up on life insurance
It’s getting easier to cash in on your life insurance policy without having to die first, said Kimberly Lankford in Kiplinger’s Personal Finance. That is, as long as you’re okay with one “creepy” element of the deal: “The party on the other end profits from your death—and the sooner, the better.” Through an arrangement known as a life settlement, policyholders can sell death benefits to investors who pay an up-front “settlement” and assume the premium payments. “The size of a settlement varies with the insured person’s age, health, and life expectancy, but sellers generally get 20 percent to 30 percent of the death benefit.” Investors typically prefer policies for people older than 65 who have $500,000 or more in a cash-value policy or convertible term policy. But the market is growing as institutions such as Goldman Sachs and JPMorgan look to diversify their portfolios. You can get a ballpark estimate of your possible proceeds at Policysettlement
.com or via a life-settlement broker.

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