Time For a Change To This Blog

Not that many people noticed, but I took a week off from the blog last week as I tried to regroup a bit. I wanted to use the time to consider a few options. Partly from general burn out and partly because coming up with a new insurance related topic three times a week is harder than I thought, I mulled some stuff over and have decided to make a few changes. 

Part of the problem is that I continue to write another blog on sales and marketing twice a week. I appreciate that it makes me do research on new products and keeps my brain "flexing it's muscles", but it was becoming a bit much. 

After some consideration I will be changing the format here a bit. There will probably be only one (two at most) blogs each week, with less text and more video. This helps me because I'm a decent writer but I can knock out a short video on a topic in a minute or two, which is about the same time it would take you to read one of my blogs. 

I'm looking forward to sharing more information on life insurance, disability, long term care, accident and cancer insurance, as well as our other plans. 

To start us off on a lighter note, here is a good submission for you. If you have any ideas or suggestions, please leave us a comment. Thanks and please subscribe.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient, and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

I Sell Money

When I first got into the insurance business I didn't have a mentor or anyone to "show me the ropes" per se. I learned quickly that my sales manager had a financial interest in me selling, and one would think that he would want me, as well as the rest of the agents on his team, to succeed. And while it was true to an extent, I also learned that I needed a mentor who did not have any skin in the game when it came to my success. Basically I needed someone who could be objective and give me sound advice who would be looking out for my interests.

Since no one was stepping up to the plate to help me, I started reading books about sales and any information I could find about successful insurance agents. There were many motivational books and most of them gave the same basic information. One day, I came across an article about an agent who was deemed "The Greatest Life Insurance Agent of All Time". His name was Ben Feldman and his story was quite remarkable. 

I don't want to bore you with all of the details as you can look up the details on him with a simple Google search, but the simple fact is that he found a way to sell more life insurance as an agent than some entire companies at the time. When asked how he sold so many insurance policies he said, "I do not sell life insurance. I sell money."

You see, Mr. Feldman was able to clearly communicate what life insurance is. When a client buys a policy, they are actually buying a promise. That promise is that if the insured should die, the insurance company will pay a death claim which will exceed what the client has paid in. 

Mr. Feldman also was noted as saying to his agents, "Don't sell life insurance. Sell what life insurance can do." In today's world of life insurance, a policy can do a lot for a family when the insured passes away, but with all of the living benefits available nowadays, people can use them while they are still living. 

Let's face it, no one really wants to buy life insurance, or any other kind of insurance for that matter. It's not fun or something one can show off to their friends. But it is necessary, especially when others are dependent on us financially. Our children rely on us to provide housing and education, which costs money. Our parents, who always insists that they don't want to be a burden on anyone else, may ultimately rely on us to help with long term care costs if they haven't planned in advance.

And then there are others that may depend on us financially, like charities and churches. When a large donor passes away, that non-profit organization may need to find other donors to fill the missing gaps. And sometimes, those large donors will list the charity of their choice as a beneficiary on a policy.

Ben Feldman knew all of this and made sure he didn't sell just the steak, but the sizzle as well. Instead of saying he was selling life insurance, he would call it something like "a special educational package for your children's children."

So the next time you talk to a life insurance agent, remember, we don't just sell insurance, but we sell money, and a promise. 

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient, and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

Wrapping Up Disability Insurance Awareness Month

Memorial Day is upon us, which is the day we recognize all of the men and women who served in our military and made the ultimate sacrifice. It is an important day and too many of us don't take the time to appreciate these people. If you have an opportunity to attend a ceremony, you will be happy you did.

As it's also the end of May, we can close the books on another Disability Insurance Awareness Month (DIAM), which is when the insurance industry promotes the importance of disability insurance. Unfortunately, disability coverage is not top of mine for most people. Part of this is due to misconceptions of why to buy it and what it does.

For example, most group disability plans cover a few weeks "maternity" coverage, immediately after a child is born. I have worked in some of these groups, like schools and municipalities, when the employee decides to drop her coverage because "I already had my kids." I try to plea with people to keep their policy, not because I'm will lose a commission (I'm on a salary), but because there are so many other times when that policy will be useful.

One of my old sales managers would tell us that when people hear the word "disability", they think of someone in a wheelchair who has been seriously injured in a car accident. The truth of the matter, however, is that over 85% of disability claims are for illnesses, with cancer being the leader in that category. (Heart disease and other cardiovascular illnesses are not far behind.)

Of course there are those people who do get injured. I spoke with a teacher in western North Carolina who had been in a car accident. Someone "t-boned" her car and broke her femur. She was out of work for four months while she went through physical therapy. Of course, her policy did what it was designed to do, which made her a strong advocate for disability insurance among her coworkers.

But what is your disability policy designed to do? Your policy is actually "paycheck" or "income" protection. If you were to get sick or hurt and were unable to work, your policy would help you pay the bills. And we all know that those bills don't stop coming just because you are a very nice person. 

There are those people who don't necessarily need a disability insurance policy. They may have passive income, like rental properties or other investments, that will provide some money to pay monthly bills. For most people, though, this is not the case.

If you have an employer who offers a disability policy, take a good hard look at it. And if you are a business owner, a contract employee or otherwise self-employed, you may want to consider an individual disability policy. They have a few differences from the traditional group plan but can be an integral part of your financial plan.

Have a great Memorial Day and remember those who gave all for our freedoms.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient, and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

3 Reasons Why Self-Employed Don't Buy Disability Insurance 2023

One of the most undersold insurance products is individual disability insurance (DI). The reasons for this vary, but many people think of disability as something they should buy through their employer as part of a group plan. There are around 15 million self-employed Americans, the vast majority of which do not have an individual disability policy. Why is this? Here are a few reasons why this is the case.

1.Business owners, contract employees and otherwise self-employed think that DI is expensive. The premiums of DI vary because of many factors. Your occupation is a huge factor in determining the rate you pay. In a nutshell, the more dangerous or labor intensive your job is, the higher your premium will be. It makes sense that a mechanic who works with heavy machinery will pay more than a banker who works behind a desk. 

Also, the amount of coverage you need will be based on your income. The more you earn, the more money you will need if you are out of work.

Even though the price may seem high to some, realizing that DI is actually insures their income helps people see the actual value of the coverage. I ask clients what their greatest asset is and get answers like their car or home. Then I point out that their number one asset is their ability to earn a living, which makes one able to purchase the car or home. That's when they see the value of DI.

2. The application and underwriting process seem difficult. An application for DI is just a bit more involved. Like life insurance, there are health questions. Additionally, there are questions about income and the type of work one does (see above). Some insurance carriers will want to verify income at the time of the application, usually by obtaining tax records. Other companies will do this at the time of a claim. 

As a self-employed person, your income can vary from year to year. I discussed this with one claims rep from a company I represent. She understood completely and said, "We just want to make sure this person was working when they filed a claim." 

A few years ago I had a client who was a personal trainer. The application included a question which asked something like "Does your job entail heavy lifting?"  I had to write an additional letter to the underwriter that the client had to lift weights to demonstrate to his clients proper form. After much confusion the policy was eventually issued.

3. Agents don't always understand it either. I'm not trying to throw anyone under the bus here. As a matter of fact, this is one of the reasons why I personally don't do a lot of Medicare supplements. I would rather refer that out to another agent in our brokerage who understands the product and sell what the clients needs. 

I have met many good life and health agents who just do not feel comfortable selling individual DI policies. There are too many "moving parts" they say. Or they just don't understand how the policy works with Social Security disability, therefore, they can't explain it properly to their clients. Find an agent who is familiar with the product.

If you are self-employed, an individual DI policy may be a great way to make sure you can pay your monthly bills in the event that you are sick or hurt and unable to work. Let us know if you have questions, and as usual, please stay healthy!

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient, and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

Making Insurance Accessible To All

As we all know, the internet has changed the way people do business. More importantly, it's also changed the way businesses do business. 

Not that long ago if you needed someone for a specific service, you "let your fingers doing the walking in the Yellow Pages". Now I make that reference to my college age daughter and she doesn't know what I'm talking about. Everything from entertainment to financial services has gone digital, and for those who aren't offering some sort of web-based platform, they may as well be throwing a chunk of their marketing dollars into the garbage. 

This struggle is real in the insurance industry as well. The old school method of getting a referral, meeting with them in their home or office over several appointments, and hoping to get an application completed (along with more referrals) has lost some of it's appeal. For younger, more internet savvy consumers, doing their own research and making online purchases is the norm. 

At the same time, these younger people are less interested in selling insurance, mostly because of the old school methods that still are being taught in training offices throughout the country. According to a 2017 article by the World Economic Forum, the average age of a life insurance agent was 59. Considering that agents tend to sell to those around their own age, millennials are, for argument's sake, not being properly attended to when it comes to their own life insurance needs.

In 2007 I went to work for a large life insurance company. We were the "best of the best" according to the management, so you would think that we could attract agents who would succeed and thrive. Our managers boasted that we were ahead of our competitors in agent persistency, because we had a rate after three years of 17%, opposed to 10-15% by our peers. This meant that if they hired 100 agents today, a whopping 17, on average, would be around after three years. And they were actually proud of this.

For the consumers, though, this is bad news as well. How many times have you purchased life, disability or other kind of insurance, only to find out that your agent is no longer with the company?  

As a society, we have become numb and/or jaded when it comes to having bad service. This is why a growing number of people are cutting their ties to agents and buying financial services from the internet. The television is full of ads letting us know to get car insurance, life insurance and investments straight from our computers. Convenient and quick. 

But what about the personal service? What if we have questions or concerns or need to file a claim? Are we destined to having to call an 800 number each time we need something. Even worse, what if we have to speak to someone who is out of the country? Is that good customer service?

At Surf Financial Brokers, we have tried to combine the best of both worlds. Our quoting tools for life insurance, dental, vision and hearing plan, cancer insurance, hospital indemnity insurance and accident plans make it easy and quick for people to find a policy within their budget. And if they like what they see they can start an application.

At the same time, if they want a more personal touch they can book a short phone appointment with one of our agents who can help with our products, including others like Long Term Care and disability insurance. We want to help anyone who recognizes they need insurance to be able to get it in the way they want. 

Let us help you find the right product for your needs.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient, and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

How Does The Disability Waiver Of Premium Work?

For many people, buying life insurance is a chore. Having to research the different types of policies, from term to whole life, as well as dealing with an agent and maybe even scheduling a paramed exam, can make the whole experience is less than enjoyable. And don't even start with the litany of "optional riders" that can be tacked on to a policy, increasing the cost and leading to more confusion.

But before you decide you don't want any riders, let's take a look at a few of them over the next few posts. You might decide which ones will work well for you in the long run. 

In this post I want to discuss the Disability Waiver of Premium (WP), which is available on nearly all types of life insurance, as well as other insurance plans too. Generally speaking, this rider makes sure that if you (or the payor of the policy) become disabled and are unable to work, the premiums will continue to be paid so that your policy does not lapse. Think of it as insurance on the life of your policy.

One of my favorite clients and I were discussing this rider one afternoon and he said, "I never thought of this before, but the last thing you need if you can't work is for your life insurance to get pulled out from under you. That's when you need it most." He was correct.

This rider is usually so inexpensive that I will urge clients to take it, as the cost is inconsequential. For example, a policy that may cost around $30 each month will see a premium increase of less than a dollar. Seriously, this is never a deal breaker. I have even worked with agents who don't even discuss it with the client and tack it on anyway. 

I have a client who purchased a policy from me about 10 years ago. A few years ago she was in a very bad accident that has left her permanently (as far as I know) disabled. Since we had added her WP rider on at the time of the application, she does not have to make any premium payments until doctor says she can go back to work. Every six months or so she receives a form from the insurance company (I get copied on all of this) that she passes on to her physician. The doctor completes the form saying that she is still disabled and she continues to get her life insurance paid for. 

Here's where things get really interesting. After discussing this situation with the insurance company, I found out that if the term of the policy ends (in her case it was a 20 year term) and she is still disabled, they will convert the policy to a permanent whole life policy for her at no charge. Needless to say, she was very relieved to hear this when I passed the information along. 

I have worked with other carriers that will convert in the middle of the term if someone is permanently disabled. The most interesting case was a fellow agent who took out a policy on his son when the boy was very young. Around age 4 the boy was diagnosed with autism and the father was able to get the WP to kick in and convert at the same time. 

The point of all this is that I don't want you to dismiss the rider when it can offer great value in a time of need. Discuss all of this with your agent or drop us a note on our website. In the meantime, please stay healthy!

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life, disability, long term care, cancer, accident and other insurance coverages in North Carolina, South Carolina, Virginia, Tennessee and Georgia. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

Who Brings Your Family Money When You Die?

Last year when my father passed away, I found myself as the executor of his estate with many responsibilities. In addition to finding a realtor to handle the sale of my father's home and hiring contractors of various sorts for quotes and repairs, I was also on the hook for making sure bills got paid. Where was that money supposed to come from?

Unfortunately for me, my father had not updated the beneficiaries on any of his life insurance policies in over 40 years, which is insane and downright criminal. All of his named beneficiaries has died way before him, including my mother who had died nine years earlier. That left us creating his estate's bank account with the little cash that was in his checking account and waiting a few months for the policies to pay to the estate instead of his heirs. 

In that time, I realized that when someone dies there are a lot of people with their hands out wanting money. Here are a few: 

1. Contractors. As previously mentioned, we had to figure in the cost of repairs and upgrades to the house. Some we dealt with and others we passed along to the prospective buyers because they were just too much for us to afford.
2. Attorneys. Our attorney let us know from the beginning of the process what the estimated bill will be at closing, so I have to make sure that money is on hand when we need it.
3. Accountants. Be prepared to pay someone to handle your deceased loved one's tax preparation for up to 2 years (if they died before filing the previous years taxes plus the preparation of tax forms for the years in which they died), plus possible estate taxes. 
4. Funeral costs. I've mentioned before how my father pre-planned his funeral but didn't pre-pay. In other words he made a wish list. Inflation took it's toll from the time he chose his casket to when he would actually use it. 
5. Lien holders. This was one I didn't expect but a deceased person still may have debts to be paid off. My father was taking money from a Home Equity Line of Credit (HELOC) which we were unaware of until his death. We settled up with the bank after the sale of the house but I can imagine other people have all kinds of debts that need to be taken care of with cash.
   

Of course with everyone coming forward and asking for money was stressful, however the one bringing us money to take care of these things was the insurance company. When all the others have their hands out, one is bring the much needed check. 

Think about your family for a minute and consider them being in a situation like that. Having to handle funeral directors, lawyers and other bill directors while grieving is a tough situation to put them in. You can avoid it by making sure you have enough life insurance available for them to handle easily and without going into debt or needing a GoFundMe page. 

To help you determine how much life insurance coverage you need, we have included on our quoting software a calculator. It asks for numbers regarding your debts, including mortgage, as well as how much savings you have put aside. You may find out that you don't need as much as you previously thought.  

If you have questions about making sure your life insurance will ease the burdens on your loved ones drop us a note. In the meantime, please stay healthy! 

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

Why Should I Update My Beneficiaries?

As I mentioned a few weeks back, updating your beneficiaries on your policies is an important part of owning life insurance. How often you should do these updates is up to you, but in a perfect world we would have a reminder.

When we change our clocks those two nights of the year, we're also reminded to check the batteries in our smoke detectors. What a great way to take care of the important task that could save the lives of your loved ones. And doing the "maintenance" on your life insurance policy is just as important to your family.

I recommend you pick a day, say Independence Day for instance, to review your life policies. By taking a few minutes you may realize that your the person you originally chose to get your death benefit is no longer in the picture. As our lives change from marriage, divorce and death, so do the people and situations that can impact your family upon your death.

My father passed away last year and we eventually found a few life policies. Unfortunately, none of the beneficiaries were up to date, leaving us in a position where the insurance company had to  pay the benefits into my dad's estate, instead of paying directly to his heirs.

One of the advantages of life insurance over leaving directives in a will is that the policy is a contract in the eyes of the law, thus taking precedent over a will. However, if the beneficiaries have predeceased the insured, you may have to wait for those proceeds.

While checking your life insurance policies, you may as well check all of your other policies as well. Many non-life policies also have beneficiaries that you may have forgotten about. Have a cancer plan through work? It's probably got a beneficiary. These types of policies, called worksite, voluntary or ancillary products, pay you a benefit directly, but if you die in the middle of medical treatments, the policy will pay any leftover proceeds to whomever you name.

I had a client in North Carolina who was in an accident and was eligible for benefits as he was in the hospital. Unfortunately he died a few days later and his family didn't realize there was an accidental death benefit until I mentioned it to them. The policy also paid his beneficiary for the other benefits while he was receiving treatment.

Just like you do maintenance on your car or home, take the time to do a quick check up on your policies, or ask us to take a look at them for you with no obligation. In the meantime, please stay healthy.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!

Do I Have To Pay Taxes On Disability Insurance?

If you have been receiving disability benefits from an insurance company you may be wondering if you are responsible for paying taxes on those benefits. The answer really depends on the type of coverage you have and how the insurance premiums are being paid.*

For instance, if you are receiving benefits through a plan that is offered through your employer and the employer is paying the premiums, then those benefits are taxable as income. However, if the premiums are being deducted from your paycheck your benefits are tax-free.

Another time it will be taxed is when it is deducted from someone's paycheck on a pre-tax basis. Yes, pre-taxing the premium will look like you are paying less, but having your benefits taxed when you need them most is not worth the savings. (FYI Life insurance should never be pre-taxed either).

Let's consider what happens if you have an individual disability policy that you have purchased on your own. In a nutshell, the same rules apply. If you are paying for the policy with after-tax dollars then the benefits should be tax-free. However, if you own a business and have the premium payments coming out of the business's checkbook, then those benefits will be taxable. 

The IRS says that Social Security disability benefits may be taxable if one-half of your benefits, plus all of your other income, is greater than a certain amount which is based on your tax filing status. Even if you are not working at all because of a disability, you would still have to count any unearned income such as tax-exempt interest and dividends. If you are married and file a joint return, you also have to include your spouse's income into the calculation, even if your spouse is not receiving any benefits from Social Security.

This all may sound confusing but the concept is a simple one. If you are paying for your disability coverage, whether it comes from your personal bank account or through payroll deduction, you more than likely will not have to pay taxes on the benefits if you should need to file a claim. However, if the premium payment is coming from your employer or you decide to pay it out of your business account, then it will probably be taxable. 

You may not have a choice when it comes to your employer offering to pay for your coverage. I have seen instances when the employer pays for a Long Term Disability (LTD) policy, which does not start paying benefits until 3 or 6 months after the date of the disability, so the employee needs to fill the gap for those first few months without coverage with a Short Term Disability (STD) policy. 

The key here is awareness. If your policy is being paid by your employer, and if you are out of work due to illness or injury, your benefits could be much less than what you would expect. Using easy math for an example, let's assume you make $100 each week. Your disability policy pays 60% of the gross pay, so if you need to file a claim you should be receiving $60, but if it's taxed, that could drop to below $40. Ouch! And finding this out after the fact makes matters even worse if you have tried to set a household budget in place. 

With all of this in mind we still think of Disability Insurance as part of the Holy Trinity of insurance (with life and medical insurance). It's an important yet overlooked part of a financial game plan, especially in the midst of a pandemic. If you have questions about coverage, drop us a comment. In the meantime, please stay healthy!

*The advice here is in general terms and we suggest you consult your tax professional for specific information.

Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!