Is My Agent Looking Out For My Best Interest?

A few years ago a friend (whom I'll call "Bill")  heard I was selling insurance. Bill and I hadn't been in contact for a few years as he had moved out of town, so getting a call from him was a bit unexpected. We chatted briefly and then he gave me his personal situation. Bill was doing well financially with a successful business, was considering getting married and had a few investments here and there. We discussed my practice and what I offered.

Then he asked, "What's the best insurance plan you have?" 

Knowing he was an analytical thinker I replied with, "What are you trying to accomplish?" 

He laughed and said, "That's the answer I was looking for. If  you had blurted out a specific product I'd know that you were probably looking out for you instead of me." He suspected, and perhaps rightly so, that a life insurance agent would push the product that would pay the highest commission. 

When someone calls in and asks for a specific product, say a 20-year term life insurance policy for $150,000, I know that they probably have done some research. I may ask a few questions to make sure it's what they need, but I do my best not to pressure someone. They have a need and a budget and I do my best to keep them happy. 

On the other hand, if you have an agent who aggressively promotes one insurance product constantly, they are not looking at your "big picture" holistically. A good example is the financial "advisor" who only pushes annuities. The commissions on these can be big and agents like to sell them because there are no health questions. Herein lies the problem. Not everyone needs an annuity, but the agent will make it sound like everyone does.

One of my former coworkers at a life insurance agency loved to take applications on clients who were tobacco users. He said it was a "premium enhancer" because their rate would increase, thus making his commissions go up as well. I watched him one day as he was getting basic information from a client. He asked if she smoked and she said that she did. "Good for you!" he said enthusiastically and patted her on the back.

On another occasion, a client answered that she did not use tobacco. He frowned a bit and said, "Too bad, all the cool kids are doing it." He tried to make it a joke, but I got the feeling he was disappointed in the client's good habits.

All of this leads back to that dirty word, "commissions". Unfortunately, people hear that word and think that someone is trying to take advantage of them. And yes, the higher the price of a policy, the more I make, but it's true in other professions too. 

Realtors work off of a percentage of the sale, but that doesn't mean I don't trust them. As I'm currently working with a realtor to sell some property I can say that he has gone above and beyond the call of duty and has put in a lot of hours. Having a rough estimate of what his commission will be doesn't give me pause. I know he's working in my best interest. 

I have learned from experience that when I can satisfy the client with my work I'll get referrals, which leads to more clients. And that is how I make my living, by looking out for the client, not my paycheck. 

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!

The "Why" of Insurance Sales

Last week I was listening to an life insurance selling podcast (yes, I'm a nerd) and the topic was on why people get into selling insurance and the motivation to stay in the business. In other words, if someone were to ask me why I sold insurance, what would my response be?

Naturally, the correct answer was that agents want to help people protect their families' financial security. They gave examples of handing claims checks to grieving widows who asked, "Am I going to be okay?" while small children played in the background. Knowing that this family could stay in their home while making a commission was their calling and these agents felt like they had accomplished something when they convinced the client to buy a policy.

On the other hand, agents who were in the business just for the money were the ones who never lasted long. Their intentions were short-sighted and self-centered. I began to ask myself questions. Was this me? Am I making this all about me? Am I a bad person?

I thought back to 1985 when I first got into the insurance business. At 23 years old I really didn't know what to do with my business degree from North Carolina State University. No one was beating down my door asking me to come work for them and my savings was starting to shrivel, so I answered a classified ad in the local newspaper. "Make $20k a year, no experience necessary". 

Not being jaded enough at the time, I believed everything that the recruiter said. The great pay and working for a top-notch company was going to be the answer to all of my dreams. Looking back though, he never mentioned anything about helping families out when their time of need came. And the accident plan we sold paid a whopping $37.50 each day someone was confined to the hospital. The plan was a loser and my co-workers and I probably knew it. 

I left that job and moved on. Eventually I worked for companies that I had actually heard of. Some of those companies had training programs and from time to time I would hear the old "why are you selling insurance" question posed again. 

My position had changed though. Now I had become a student of the game. I did enjoy helping families and the proof was in my first claim check delivery. The carrier I was working with would ask us to deliver smaller claims (under $10,000) in person. This was to accomplish two things: 1) We could express our sympathies in person for the loss of a loved one and 2) to get referrals. In regard to the latter, I could usually get a few names after handing someone a check for a few thousand dollars, so that was easy. 

My first claim check delivery was too an elderly gentleman in a small town. At first I thought he was the deceased and was a bit confused. The house was old and there was a wooden wheelchair ramp which had seen better days. When the gentleman came to the door he acknowledged who he was and clarified that his son had been the one that died. He told me how his son, a truck driver, had been found dead in the cab of his semi, which was now parked in front of the house. Apparently a heart attack was the cause.

At that moment I realized that this man was in emotional pain and I was doing something good by bringing him this check. He beamed as he mentioned that this was the first good news he had received in a while. On top of it all, I learned that I was his first visitor in a few days as well, and since he was wheelchair bound, he didn't get out much. We talked for over an hour as he told me about his son and his own career. I found my "why". That short amount of time with him had brightened his day as well as my own. 

Over the years my "why" changed for the better. Over the years I've delivered several checks (most companies mail them out nowadays) but I still think back to that gentleman who helped me understand that my real job isn't selling a policy, but convincing someone to let me help them secure their finances at a time of loss and sadness. 

If you need help finding a policy for you or your loved ones, let us know. You can book an appointment on our calendar and we'll help you over the phone. And as always, stay healthy.

Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient.

Should You Buy From a Captive Agent or an Independent Agent? 2023

Did you know that there are different kinds of life and health agents? The differences lie in the type of company your agent represents and their pay structures, but these factors end up resulting in the type of insurance you buy, whether it's the best product for your needs or not.

Imagine a shoe store that only sells even number sizes. Unfortunately, you wear a size 9. The salesperson, who may or may not be honest, will try to tell you that they have something "close enough" for what you need. You try on the shoes and they are either too big or too small. The salesperson is limited in what he or she can sell, so they are going to try to get you to purchase what they have on hand.

In the insurance world, we have captive and independent agents. Captive agents typically are contracted to work with one company (unless that company has an agreement with another carrier) and are not allowed to shop around with other carriers. Typically, these are companies that carry your home and auto, but not always.

Why would an agent want to be captive? One reason is that you only need to learn one set of products, so you don't get spread too thin. Also, the company will normally provide supplies, office space and other perks, like training meetings and coaching. Sometimes they will even offer a salary or a draw for the first few months. This is great for a new agent trying to get their feet wet in the business. The downside is that the commissions are lower. A lot lower.

On the other hand, an independent agent works on their own, paying for their own overhead and making larger commissions. But the offerings to the client are much more expansive, as these agents can shop around literally hundreds of companies to find the "shoe" that fits the clients precise needs.

I knew a couple of agents years ago that ran a captive office. They loved to talk trash about whole life insurance, mainly because their company didn't carry it. I'm not a huge fan of whole life, but there are times when it fits the bill, so I make sure I have a couple of good carriers at my disposal when I need it. These two didn't have that luxury, as they only sold term and universal life. 

Don't get me wrong, some of my favorite people do well as captive agents. And when I show them what I can offer my clients they usually look surprised. Few of them offer indexed universal life, so when I explain to them how it works I get mixed reactions, from slight envy ("I wish we offered that") to outrage ("This is obviously a horrible product or we would sell it!").

An older agent once summed it up as follows. "Captive agents work for a company that can fire them. Independent agents work for the client and can fire the company if they don't treat the client well."

As you can see, we at Surf Financial Brokers are independent agents. We don't have a sales manager whispering in our ears about hitting sales quotas or any obligation to any of our carriers. Simply put,we enjoy having he resources to get the right size shoe on the foot in a comfortable and affordable way.

Stay healthy and let us know if you need anything.

Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient.

Do You Have Any Insurance That Covers Coronavirus?

Lately a lot of people have me, as well as the rest of the insurance industry, if there are any policies that cover the Covid-19 or Coronavirus. The answer is of course, yes. We can quickly cover a few:

• Major medical - As with all ailments, your major medical has few exceptions, and the virus is not one of them. As usual, you'll still on the hook for co-pays and deductibles, but that is insignificant if you're in the hospital for a few days or longer.
• Hospital Indemnity - Speaking of hospital stays, a hospital indemnity (HI) plan is usually offered through work, but Surf Financial Brokers has started carrying an HI plan that can be offered on an individual basis. 
• Disability Income - A traditional DI plan will cover you and your paycheck if you are out of work due to the virus, or any other illness. There may be an elimination period (the time before your benefits actually begin) of between 0-30 days, so check your policy. 
• Life insurance - If you have life insurance and die from the Coronavirus, your beneficiaries shouldn't have to worry about the company not paying the claim. First of all, legally the carrier has to pay under the terms of the policy, which is a legal contract. Secondly, it would be a public relations nightmare if the insurance company arbitrarily decided to not pay. 

Any or all of the above policies should pay a claim if you were to get sick from the Covid-19 virus, but be aware that the life, HI and DI plans may pre-existing conditions exclusions. In other words, don't expect to get a policy issued if you just had the virus.

For a list of policies offered by Surf Financial Brokers, click here. Some even have interesting videos.

Most importantly, please stay well, healthy and practice social distancing as much as possible.



Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient. 

The Differing Types of Life Insurance, Part 2 (The Term Life Talk)

In a previous post we discussed the reality that there are different types of life insurance and that all are good for some people, but not all are necessary for all people. As this series progresses, we'll take a look at each type of life insurance and discuss their pros and cons. For now let's look into term life coverage.

Term life is, as it's name states, good for the term of the policy. A 20-year term is good for 20 years, and in that 20 years, the price won't go up on you. At the end of the term, in this case 20 years after the purchase date, the policy will typically end. In some cases the insurance company will continue to policy as an annual renewable term (ART), which means each year the price will increase.

When is it a good idea to buy term coverage? Most people will purchase this during their working years, which is usually when they can quantify the time they need coverage. For instance, if you are pretty sure that your home will be paid off in 20 years and in that same amount of time your kids will be grown and on their own, a 20 year term policy is appropriate.

My favorite term life story is about a friend of mine who told me he borrowed money from a relative and needed to secure the loan with a life policy, in case he died before he was able to repay the loan. The insurance carrier required a paramed exam and my friend's wife was confused when the nurse showed up at their house. Apparently he did not tell his spouse about the loan and had to come clean.

Term life can be very affordable, as it is only coverage for death and builds no cash value. You can't borrow against it either. With this in mind, it's can still be a great value.

There's a school of thought that states that people shouldn't buy permanent coverage, which we'll discuss later, but instead should buy term and invest the difference in premium. My experience shows that people will purchase the term coverage and say that they'll do the investment part at a later date, which never comes.

A great feature of most term policies is a conversion feature. This allows you to convert all or part of the coverage to a permanent policy with no health questions or additional underwriting. Let's assume that in 10th year of a $500,000 policy you have a heart attack. Even though you've survived, the heart attack may prevent you from buying additional coverage. But you can convert, say $25,000, to a permanent policy. The remaining $475,000 will still be there, but now you have some coverage for final expenses that will always be there for you, as long as you pay the premium.

Note: When you convert a term policy, the premium is based on your age at the time of the conversion, not the age you originally purchased the policy.

Term life insurance can be a great fit for young families and people on a budget. If you aren't sure if term would work for you, drop us a note. Or you can book your own phone appointment from our website. We want to make buying insurance easy for you. In the meantime, 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!

The 3 Stages of Retirement

When we think of retirement planning, we usually think of traveling, visiting the grandchildren or working in our garden.  Looking forward to age 65 is a milestone for a large number of us, but the reality can be quite different.

Did you know that only about 15% of Americans fully retire at 65? Most will just continue working or cut back on the hours they work. And self-employed people, such as business owners or 1099 employees just keep working as well because they know the boredom will set in and want to stay active.

When I talk to groups about retirement years, I go over the three stages of retirement:

• The Go Go Years - This is when we think of retirement as traveling and having a good time.Visiting the grandchildren, going on cruises and days full of pickleball sound great, and if you have some money saved up you can move to a great retirement community. 
  
• The Slow Go Years - As the name implies, maybe we need to take it a bit easier. "Piddling" in the garden and staying closer to home. Sometimes a health related issue or an accident begin this part of the process.
  
• The No Go Years - Serious health problems and aging keeps us in home or a facility. This can also be the time when you can go through most of your savings due to healthcare costs, even if you are not in a facility. As a matter of fact, home healthcare services can cost up to twice as much as a nursing or assisted living facility.
  

Unfortunately, when planning for those retirement years, we fail to plan for the No Go years. Some have their heads in the sand, not thinking it will happen to them. According to the Motley Fool, 69% of people will need long term care insurance. And you're likely to need it from 1 to 3 years. Given that care in a facility isn't cheap, and in-home care is even more expensive, why not shift the burden of the costs to an insurance carrier instead of wiping out everything you've worked your whole life for?

There's a myth that the government will take care of you. Signals from politicians show differently and we don't recommend you rely on it.

Fortunately, there are options and depending on your age and health, you can find something in your budget. The long term care insurance landscape has changed over the last few years. Many insurance are acting as if they no longer want to be in that part of the business by selling off those books of clients to other carriers, while others have changed their policies by decreasing the rich benefits they previously offered for years.

However, there are still a handful of carriers still offering long term care policies. And now we even offer a short term home healthcare policy which is a great way to stay in your own home affordably. In addition to these options, many life insurance policies now offer "living benefits" in their coverage which can help with the dilemma of being chronically ill.

If you would like more information about planning for your future healthcare costs, contact us or use our "Books a Free Consultation" tool. We'll be happy to have a phone conversation with you. And as always, 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!

Special Needs Trust

It seems like the topic of special needs planning drops into my lap every 3-4 months.  Occasionally when discussing life insurance needs with a family, I'll learn that there is a special needs child in the picture. Each time the topic comes up, I learn a little more about how folks are using a mixture of community organizations, local government agencies and private funds.  Like a snowflake, all situations are different, but in many cases they can be handled nearly the same.

Let's look at an example.  A middle-aged couple has 3 kids, one of which is autistic.  While it is assumed that one of the other two kids will take responsibility for their sibling down the road, nothing is written in stone. And a myriad of things can go wrong. The siblings may not want, or be able to care for their special needs brother or sister.  Mom and Dad can care for the child up to a point but someone is going to have to care for them as they get older.  And what happens when Mom and Dad pass away?

Most importantly, special needs kids grow to become special needs adults.

A Special Needs Trust is typically the answer.  First and foremost, I highly recommend you find an attorney who has a couple of these irrevocable trusts already approved by a judge.  As an attorney friend of mine said when discussing this topic with me, "Do not let an lawyer 'practice' on your client!" Especially since the trust is "irrevocable", meaning it will nearly impossible to make changes later. 

A Special Needs Trust works like this:  The trust is established but without any money inside. The money comes from a second-to-die life insurance* policy on the parents.  The logic behind this is that if one parent dies, the surviving parent can still care for the child.  At the death of the second parent, the life insurance policy is paid to the trust which then can help support the special needs child/adult.
The key to all of this is planning.  As I stated earlier, all cases are different, however taking the time to prepare can really lessen the stress and financial burden down the road.

A second-to-die policy is usually less expensive than a traditional life insurance policy because the insurance company does not have to pay out the benefits until two people die, instead of one. Yes, both will have to go through the underwriting process, so if one of the parents is in poor health it can easily throw off the affordability factor. In my experience, most of these parents are younger and it is a non-issue.

I have learned that there is a community of special needs parents. These great people network and willingly share the resources and information they have acquired with each other. However, whenever I talk to them not all are aware of the special needs trust or may have heard bits and pieces of information. In my community of North Myrtle Beach, SC, I have tried to find local attorneys who have had special needs trusts approved by the courts (again, no practicing!) and keep them available for referral. In turn, the attorney recognizes my role in the process as well. 

If you have questions or additional information to share, please do so in the comments section, or drop us a note on our website. And feel free to book a free consultation with us to speak over the phone. As always, please stay healthy.

*We suggest a second-to-die guaranteed universal life policy.  For more information, contact us through our website at Surf Financial Brokers.  

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.

"You're Going To Be Great At This!" now available on Amazon.com

Recently, Chris Castanes, the president of Surf Financial Brokers, has released his first book, "You're Going To Be Great At This!", a humorous look at his career in sales.  Part primer and part memoir, this books gives you the inside scoop on recruiters, sales managers and crazy customers.

If you are considering a career in sales or are already in the business of selling, this book can give you the lay of the land so that you will see the obstacles before they become problems.  Drawing from a career selling insurance, office supplies, retail and even telemarketing, "You're Going To Be Great At This!" is filled with lessons learned and plenty of "dumb stories".

And if you are a customer, client, buyer or consumer, there's something in the book for you as well.  With a mixture of humor and a little bit of bad taste, "You're Going To Be Great At This!" might give you a chuckle or two.

"You're Going To Be Great At This!" is available on Amazon.com in paperback and Kindle edition and can be found here.