Insuring future earning stream

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PostPosted: Wed Mar 27, 2013 7:23 am   Post subject: Insuring future earning stream  

My name is Michelle and I'm a pet psychic by profession. Since I don't make much by doing this, am gradually getting worried about my future. Can I insure my future earning stream, anyhow? If yes, how? What kind of insurance do I need?


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PostPosted: Wed Mar 27, 2013 2:34 pm   Post subject:   

Quote:
I'm a pet psychic by profession
Maybe if you were a human psychic you might have seen this coming:
Quote:
I don't make much by doing this




When you ask,
Quote:
Can I insure my future earning stream
what I think you mean is, if I don't make it as a pet psychic, will some insurance company provide me with an income? The answer is no.



Can an insurance company provide money to your heirs if you die? Yes, we call it life insurance. How much do you need? Not enough information to even begin to say.


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PostPosted: Thu Mar 28, 2013 6:33 am   Post subject:   

Pet psychic! A really weird profession I must say! Do people really pay you? What is your job responsibility, in fact?



Anyway, there is no such insurance I guess. However, in the United States, there is something called Unemployment Compensation (a type of social welfare benefit), which can be meaning to you. If you are unemployed, you get a monthly unemployment benefit (a sum which is taxable) paid by state governments, funded in large part by state and federal payroll taxes.



Check out the following link to know more:



http://www.irs.gov/Individuals/Employees/Unemployment-Compensation



Each state has it's own way of handling the unemployment insurance program. Check with your state's Department of Employment for information.



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PostPosted: Thu Mar 28, 2013 11:08 am   Post subject:   

Quote:
Anyway, there is no such insurance I guess. However, in the United States, there is something called Unemployment Compensation (a type of social welfare benefit), which can be meaning to you. If you are unemployed, you get a monthly unemployment benefit (a sum which is taxable) paid by state governments, funded in large part by state and federal payroll taxes.


First, there is no portion of unemployment insurance benefits funded by state payroll taxes -- unemployment is a federal benefit administered by the state. Employer contributions are made under the Federal Unemployment Tax Act (FUTA), and not all employers are required to make FUTA contributions (certain religious organizations, for example, are generally exempt from FUTA, but they pay the employer's share of Social Security and Medicare contributions).



Any state payroll tax money pays for the administrative expense, not the benefit itself, which is why states, like California, sometimes run out of money to pay benefits, because the federal government dictates the benefit and doesn't supply enough money in proportion to the actual claims -- so it benevolently allows the states to "borrow" uncovered UI claims money to avoid defaults in paying the benefits Congress doles out.



Second, nearly all self-employed people do not pay federal payroll taxes, so they are not covered for unemployment benefits. States rarely have any separate/parallel programs for the self-employed. It is not a crime to apply for a benefit to which one is not entitled, but it is a waste of time and resources.



As a "psychic", the OP should have seen this coming.


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PostPosted: Thu Mar 28, 2013 11:30 am   Post subject:   

Quote:
First, there is no portion of unemployment insurance benefits funded by state payroll taxes -- unemployment is a federal benefit administered by the state.




I did say exactly this. Perhaps, something went unsaid. Anyway, thanks for the detailed analysis. Smile



Quote:
Second, nearly all self-employed people do not pay federal payroll taxes, so they are not covered for unemployment benefits.




In this case, the OP is unlikely to avail the benefits. Moreover. she hasn't stated from which state she belongs.



Quote:
As a "psychic", the OP should have seen this coming.




LOL! Wink


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PostPosted: Thu Mar 28, 2013 12:19 pm   Post subject:   

Quote:
I did say exactly this.
I think you meant to write "I did NOT say exactly this" because you follow that with "Perhaps, something went unsaid."



Perhaps you did not pay attention to what you wrote:
Quote:
you get a monthly unemployment benefit (a sum which is taxable) paid by state governments, funded in large part by state and federal payroll taxes.


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PostPosted: Thu Mar 28, 2013 4:59 pm   Post subject:   

Why don't you try some other profession, for I have never heard of any such thing you have mentioned about. And no, there definitely is no type of insurance that can insure your income stream. It would rather be be better for you to get a life insurance, and start saving for your retirement. However, that would be possible only if you can start earning more, and for that I guess you may have to think hard!!!

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PostPosted: Fri Mar 29, 2013 12:01 am   Post subject:   

Quote:
It would rather be be better for you to get a life insurance, and start saving for your retirement.
Are you recommending one thing or two things for the OP to do?



Saving for retirement and purchasing life insurance are not the same things. Retirement plans do not fulfill death needs, and life insurance is not a retirement plan.


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CA-licensed Life & Disability Analyst. CA Insurance Lic #0596197. Also investigating insurance company abuses, and providing litigation support/expert witness services. Send me your questions, and I'll send you my answers.
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