Does The Non-Breadwinner In The Family Need Life Insurance?

Recently I was reading an article on all of the reasons people fail to buy life, disability and other types of insurance. Apparently there are a lot of misconceptions floating about and I wanted to take the opportunity to hopefully correct these ideas. Taking them one at at time I hope to explain these misconceptions over the next few posts.

Last week I was talking with a couple who were doing okay financially. They realized that they were fortunate enough that one of them could stay home with their small kids while the other was the main breadwinner. In this situation, the wife worked and the husband stayed home and had a small consulting business, which by their estimation was "more of a hobby". I took that as meaning he didn't bring a lot of money into the household.

We discussed life insurance for the wife and ran the numbers to pay off the debt and replace her income for a few years. They both agreed that she needed to be covered. When I asked about the husband, there was a bit of confusion. "He really isn't contributing to the bills, so I don't think he needs a policy," the wife said.

The husband, who I thought would pipe up and say something, sat there nodding in agreement. I asked a couple of simple questions: If he were to die unexpectedly, how much would she need to pay for childcare? Or would she want to take time off from work to stay home with the kids?

This was obviously something neither had considered. Especially when neither of them had family nearby. The kids were young and only one was enrolled in school, so the other child would need to either be enrolled in a daycare or preschool, or they would need to have someone come into the home, like a nanny. 

When I explained what that kind of care costs, they were taken aback a little. I tried to ease their concern and let them know that a term life insurance would be much less expensive and, in the event of the husband's death, could cover the expenses for childcare plus his funeral costs, which they also failed to plan for. 

When a family member is not the breadwinner, it doesn't mean that they don't need life insurance. As a matter of fact, we even offer a disability policy on stay-at-home parents to help replace the costs of daycare. 

What are your thoughts? Leave us a comment below.

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!

The Passing of Alex Trebek

I think most of us can agree, 2020 has been a horrible year. And to make it worse has been a series of celebrity deaths to cancer. Neal Peart, Chadwick Boseman, Eddie Van Halen and, most recently, Alex Trebek, have all succumbed to various forms of the disease. Though it may have been a surprise to the public when it happened, it may have been expected for them, as they had been diagnosed long before.

Cancer rarely sneaks up on someone and kills them. People usually don't feel well, so they go to the doctor and get diagnosed. Boseman had been diagnosed four years before passing away in August. Neal Peart had known for two years he was ill and swore his close friends to secrecy. And Van Halen had been receiving treatments off and on for nearly 20 years.

Alex Trebek was a different story though. He went public with is diagnosis of pancreatic cancer in March of 2019. He remained on television throughout it all, looking healthy and maintaining his good grace. "Jeopardy" fans knew he was sick and sent good thoughts and prayers. I was one of them.

It's important to note that he taped his last episode on October 29. That was just a week or so before he passed away. (His final episode is scheduled to air on December 25). 

What does this tell us about cancer? For one thing, it can affect anyone, regardless of status. Cancer does not care if someone is a celebrity. However, when a famous person dies of cancer, it does bring the spotlight to the disease, even when there is a pandemic of Covid going on around us. 

We also know that there are different types of cancer. Van Halen's throat cancer was treated in a much different way than Boseman's colon cancer. As patients, they received treatments like surgery, chemotherapy and radiation, but in varying degrees and doses.

Also, people handle their diagnosis differently. Some prefer to keep their illness private, revealing it only to friends and family, while others feel comfortable going public. I can fully understand both sides of it, but when a celebrity goes public with an illness, cancer or anything else, it brings attention and awareness. This can translate to funding for research into cures and treatments. 

What can you do? First and foremost, ask your doctor about screening options. Depending on your age and family history, your doctor may suggest a screening of some type. Finding cancer early can increase your odds of surviving. 

Of course, you can also purchase some sort of cancer insurance. There are a lot of options to fit your needs and budget. All of them pay you, not the doctor or the hospital, so you can use the money as you need. 

We offer traditional cancer treatment plans, that pay you based on the treatments you receive. For instance, these plans pay benefits for an initial diagnosis, hospital confinement,  surgery, prosthetics and other treatments. These plans can pay out a fairly high amount of money but remember that cancer treatments can take months or years, and you'll need to stay on top of everything like receipts and travel mileage for out-of-pocket expenses.

There are also lump sum policies that will pay one lump sum of money. Many people prefer this method as the benefit is pre-determined at the time of the application and they don't have to worry about turning in receipts for months on end. And one of our carriers who offers the lump sum option also includes free genomic testing, which can assist your caregivers in developing a treatment plan.

We also offer a combo cancer/heart attack/stroke plan, for those who are concerned about these three health issues. 

If you would like information or a quote, go to our website and set a phone appointment that works for your schedule. 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! Thanks!

Universal Life Anyone?

From time to time I will have a client tell me "I know nothing about life insurance, but my friend says I need whole life" or "The guy on TV says to buy term and invest the difference".  Oddly, no one suggest Universal Life (UL) to their friends.

UL's can be a great fit for a life insurance game plan if structured correctly.  Unfortunately, they can also be confusing to agents and clients alike.  Here are some things to consider before purchasing a UL.

1.  The growth in traditional UL's are based off of interest rates.  Back in the 1970's and 1980's, when interest rates were very high, UL's were sold as investment vehicles.  When interest rates dropped, so did the growth of the policies. 
2.  The cost of insurance increases as time passes.  Unlike a whole life policy, whose costs drops with time, UL's fees increase.  If the costs surpass the growth (see #1) the policy will "eat at itself". 
3.  UL's are considered "flexible premium" policies.  An agent can offer you a minimum, maximum and target premium.  We recommend not going with the minimum, as it looks attractive but can end up with no cash value at some point.
4.  Indexed UL's are based on an "index" which reflects the markets instead of interest rates.  These can be used for retirement supplements (again, if structured correctly) and can be more affordable than a whole life.  Indexed UL's are great for the conservative person who doesn't want to be directly in the market and still needs life insurance protection for their family.

I've seen people use UL's for all kinds of purposes, including final expense (if you're healthy it can be a lot less expensive than a whole life plan) and retirement supplements (the cash value can accumulate well if structured properly). 

In the current economic situation that many individuals and families are faced with, a good UL can protect your family and provide an extra income stream in your later years. 

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

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.

New Year, New Insurance Plan

As we enter 2020, one of the things we should put at the top of our list of resolutions is making sure that our families are taken care of if something should happen to us. A review of our current plan can fix any potential landmines that could impede our goal.

Years ago I met a guy, we'll call him Chad, who was a confirmed bachelor. We talked for a while and he decided that he had no use for life insurance. We parted on friendly terms and I let him know I would be keeping in touch. About a year later, I called him and everything had changed. His brother had died and Chad was now the legal guardian of an 18 year old boy who had some severe learning disabilities. Chad was blindsided by this change of status and we set him up on a life insurance plan to provide for the boy if Chad should die.



By checking up on Chad instead of forgetting about him, we resolved a potential problem. Chad knew he needed to do something, but kept putting it off until I called him. It all worked out.

The moral of this story is that we should use the beginning of the New Year to make resolutions, but to also follow up on our old ones as well.

Happy New Year and let us at Surf Financial Brokers know if we can do anything to help you plan your family's financial security.

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

Special Needs Trusts

It seems like the topic of special needs planning drops into my lap every 3-4 months.  In the course of a conversation with a new client I'll learn that there is a special needs child in the picture.  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's assumed that one of the other two kids will take responsibility for their sibling down the road, nothing is written in stone.  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!"

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.

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