What Makes Life Insurance Rates Different?

A few years ago I met a young woman who was married and had two young boys with a third child on the way. She was a server at a local restaurant and I was there at the request of the owner to talk to the staff about various insurance products. The server, who I will call Sue, asked me about life insurance coverage on her husband. She was very concerned because she felt her husband worked a dangerous profession and she did not want to be left with three kids to take care of on her own if something were to happen to him.

I asked Sue some basic questions like her husband's age and general health condition. "He's healthy as a horse, but stubborn as a mule, especially when it comes to life insurance," she said. "He wants to get a policy through his work, but I know we can get it cheaper elsewhere." 

She was right. Sue had done her homework and figured they needed at least $250,000 in life insurance coverage for her husband. At his age, the policy he wanted to get through the "worksite" insurance company was going to cost around $70 each month. When I ran a quote for her the same policy was less than $40 each month. 

I sat down with the two of them a few days later and presented my illustration. She knew it was a good deal and appreciated the savings I was offering. He, on the other hand, argued vehemently against it. At first I couldn't understand what his objection was. Sue was getting visibly upset with him while he acted as if I was taking advantage of him. 

After a painful hour of this I asked him what would make he want to pay close to double for the same policy. He said, "I don't want to have to worry about having that $40 in my bank account each month. I'd rather they just took it out of my paycheck!" Sue, furious at him at this point, looked at her husband incredulously. 

"So this is about convenience?" I asked. 

"Yes," he said meekly. I had heard this argument before, but Sue didn't understand it. Needless to say, I didn't get the application. The tension was palpable as I packed up my papers. Sue apologized for her husband's behavior. 

People are funny sometimes. They are willing to pay extra, and in this case nearly double, for the weirdest things. I had heard the "convenience" argument many times before, so it wasn't new to me. "If they just take it out of my pay I don't have to worry about it," has been the refrain of many people. 

So why was the price of that "convenient" policy so much higher than the one I offered? In a nutshell, it had nothing to do with convenience but everything to do with underwriting. 

You see, I spent a year selling working with the same company that was offering his payroll deducted coverage. The policy Sue's husband was wanting was "simplified issue", which means that the application just had a few health questions. No medical exam, no blood or urine specimen and probably no request for medical records. That puts a lot of risk on the insurance company, and that risk gets passed along to the consumer in the form of higher premiums.

On the other hand, if an insurance company requires a paramed exam, along with requesting medical records from the applicant's physician, that carrier's risk will drop dramatically. And with that decreased risk comes decreased premiums. 

This made sense to me years later when I worked for another insurance company and our manager called a 10-year term policy a "sucker bet". He explained it like this. "A fully underwritten life insurance policy will require an exam and medical records. If nothing shows up from there, the odds of the person dying in the first five years of the policy are extremely low. Basically, the company is collecting premium for 10 years when they are only insuring the last five years of the policy."

Underwriting can find potential risks and problems, thus weeding out those potential early claims. For example, I had a guy apply for a policy who was declined because his liver enzymes were very high. The client was surprised to hear this and I recommended he go to a doctor. Sure enough, he found out he needed a transplant, but it was too late. He passed away a few months later.

As for Sue and her husband, they split up not long after I met with them. She told me he was too hard headed for her and has since remarried. She and her new husband have plenty of life insurance and she has peace of mind.

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!

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!

Should There Be Humor In Insurance?

Selling insurance is a serious business to most people. Let's face it, life insurance, disability insurance and other lines like cancer and accident plans are heavy subjects. Sitting with a client and talking about how their family will handle it when they die isn't the happiest discussion of the day. And asking them how they think their loved one will handle the family's finances if they can't work or become chronically ill is necessary, but not the kind of conversation one considers enjoyable. 

As an agent and insurance broker, I've had people tell me that they just want to avoid these doom and gloom topics. I completely understand that our everyday lives are full of negativity and bad news, especially with a pandemic and economic troubles in the news each day. But some topics, like making sure that your family is taken care of, have to be considered.

With this in mind, I try to keep the conversation serious, but not too serious. Half of the battle is to keep a good demeanor and let the client know that the seriousness of what we are trying to accomplish, which is securing the financial future of a family. 

However, sometimes a little humor injected into a conversation lightens the mood. I'm not advocating wearing a clown outfit when meeting with clients. But I do think that tossing in a little humor doesn't hurt anyone and keeps it all in perspective. Check out the video below to see how a bit of humor is okay.

A good example of this is when I discuss life insurance with a client. Part of the talk usually involves funeral costs. The average funeral runs about $7360, according to the National Funeral Directors Association, and there are usually some other expenses associated with death, like a brief hospital stay. To be safe, I may give a client an illustration for $10k. I sometimes will include a second illustration for $15k and show that as well. 

When the client asks why I show two illustrations I say, "The first quote covers the cost of your funeral. The second one is for the funeral plus an open bar for your mourners." That usually gets a chuckle. I even had one client take the higher coverage.

In my 20+ years in the business, I've worked with people who tried to be either too serious, or thought that they were standup comedians. Personally, I try to get to know my client a bit before trying to inject jokes. And I have even had clients who took a dark subject, like their own death, and made light of it. 

One client of mine began by telling me, in front of his wife and kids, that he had been shopping around for someone to cremate him and was on the hunt for the best rates. "I think I've got a guy down to $750, but I want him to guarantee that rate." His wife looked on in horror as he laughed at his own comment. "She's worried that the crematorium will increase the price when I'm not around to argue," he said with a sly grin. Dark humor at it's best.

Someone once said that people won't always remember everything you say, but they will remember how you made them feel when you said it. I don't expect my clients to remember every facet of the policy they are considering, but I do want them to feel comfortable and know that I'm looking out for their best interest, hopefully with a little humor.

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!

What's The Deal With State Insurance Licenses?

If you have a driver's license in one state, you can still drive legally in other states. The same holds true with marriage. If you are married in one state, the other states will recognize your marital status. 

This isn't true if you have an insurance license, which makes selling insurance in the United States a tricky affair. As a licensed insurance agent, I have to hold a "residence" license, which as the name implies, is from South Carolina, where I reside. However, if I want to sell a policy to someone from a different state, I have to pay that state a separate fee for a "non-resident" license. Imagine having to get a new driver's license in every state you drive through.

The basic rule that is taught to insurance agents is that you should have a license in the state where the client's feet are in at the time of the application. If I am in South Carolina but I'm taking an application on someone who is in Tennessee, I have to hold a valid non-resident license for the Volunteer State. 

As an agent who markets on the internet, I have to be cognizant of where clients are calling from. I am licensed in three states currently (South Carolina, North Carolina and Virginia), and hope to get some paperwork finished with Tennessee soon. 

For an independent agent like myself, this can create a lot of problems that can be very expensive. Each state has its own fees, which come due every two years or so. One solution that I devised is to have other agents on hand who have licenses in other states. For example, my great colleague Jeanne Doran, is licensed in the state of Maine. We also have another agent, Travis Burt, who is licensed in 12 states. This helps us tremendously when clients contact us from out of state. 

But from a insurance company perspective, dealing with all of the state insurance departments can be a logistical nightmare. Let's assume that the ABC Insurance company has a life insurance product, a whole life policy. ABC takes that policy to the insurance commissioner of Virginia, for example, and has to get it approved. The insurance department must also approve the brochures, applications and any other applicable forms. 

Now let's assume that ABC is wanting the same policy approved in Texas. No problem, except they would like to have a section of the brochure printed in red ink instead of black. 

Imagine having to do that with a couple dozen products in all 50 states. Each state would have their own version of the necessary forms and applications. And some of the states may not approve of the insurance product at all. 

All of this costs companies and agents a lot of money each year. As the world gets smaller through the world wide web, the insurance industry needs to work with insurance commissioners to make sure that the residents of a state have access to the latest and most innovative products. As Surf Financial Brokers grows its network of agents we hope to be able to provide great life, disability, long term care and short term home health care insurance polices, as well as our super line-up of cancer, accident and critical illness plans.

Please check out our website and let us know if we can help you. And 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!

Life Is For Living (Great Video)

As we go through September and wind down another Life Insurance Awareness Month (LIAM), I hope you all are doing well and keeping your spirits high. There is a lot going on in the world that can add stress to all of our lives. The Covid-19 pandemic, racial strife and political tensions are just a few things that are in the news. But there is also all of the daily issues we deal with personally, such as employment and financial burdens. 

The holiday season can be crazy in a normal year. As I watched the news a few nights ago I was struck by a story about how shopping for gifts will be different this year. A lot more online sales, less people in the malls and shopping centers. Of course, we all know that the emphasis should be on our families and loved ones, not spending money we don't have. 

I think back to a sales meeting years ago when I was working with a large insurance company. Most of the agents, myself included, were bemoaning the fact that no one wanted to buy life insurance during the holidays. No one wants to take on another bill when there's a flatscreen TV to be purchased. 

Our manager was leading the meeting and rolled his eyes at our complaining. "You don't get it," he said as if we were a bunch of crybabies. "You say you sell life insurance, but you don't understand who you are selling it for or why you are selling it!"

Then the manager launched into a lengthy diatribe which made sense to me. I will spare you all of the details but the essence was that we, as life insurance agents, were not communicating our message properly, that we were not selling something to be used by the client (assuming that was who we are insuring), but instead it would be used by the client's family. The only thing the client would get out of it was the peace of mind knowing that if something should happen to them, their spouse and children would be able to stay in their home and continue their lifestyle without more financial worries thrown onto them. 

It all made sense to me, but how does one communicate that message during the holidays? As a father and husband I have my policies in place, but I also want my family to enjoy a few gifts that I can offer. The most important present, of course, is not one that can be opened (unless one opens a policy packet). 

So I ask you to do one thing for your family from now. If you do not have life insurance, use our life insurance quoting calculator in the upper right of this blog and get a ballpark estimate* on how much it would cost to ensure your family would be okay if something were to happen to you. There's even a button on there to find out how much you need. 

And if you do have insurance already, check to see if you have enough. Odds are you don't, and that is okay, as long as you do something about it. 

Check out the video and book a phone appointment with us to discuss how we can help you can give your family the best gift this year. 

*All rates are subject to underwriting.

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 Courageous Conversation About Life Insurance

Last week I had lunch with an old friend who also happens to be a client of  mine. He has been very successful working in the computer industry for about 20 years but is starting to get restless. Apparently his work has become, in his opinion, very boring. I asked him to tell me what he liked and didn't like about the work. "I do the work, I get paid, and then I have to put in a bid again to do the work again," he said. 

He began to "pull back the curtain" about his job and tell more details about who his clients were, how he acquired them and what he was paid for his time. Then he threw me for a loop and said, "So give me some of the secrets of your work."

Actually, there are not a lot of secrets. I try to keep everything as transparent as possible. My friend did not looked convinced. He said, "Do you use a bunch of high pressure sales techniques?" 

"All the time but apparently they are too subtle for people to pick up on," I said, laughing at the absurdity of it all. There was a time when life insurance agents had a reputation for being "high pressure". My first job in the business, selling accident plans door-to-door, was like that. We were trained to be like attack dogs, not to take "no" for an answer. If someone gave us an objection we had a binder full of memorized rebuttals throw back at them. 

As I have mentioned in an earlier post, I have replaced high pressure sales with "good pressure" sales. That means that I want to do what is right for a client, but sometimes, the client doesn't understand what is in their best interest. 

For example, let's say I am in the home of a young couple who has a couple of kids and a mortgage. One spouse may insist that they only need $100,000 of coverage but I think they definitely need more. That $100,000 won't cover the balance of the mortgage, much less cover other things, like funeral costs, replacing income and paying off cars and credit card debt. My job is to make those items part of the discussion. 

The reasons why the client is resistant to increase the amount can vary, but it usually comes down to cost. That's when I realize I have not done my job correctly because I haven't explained the value of my product in a way that this client can appreciate. 

"So if your spouse is stuck with less money than they need to keep the family in their home they love, has to take a second job, and has to go into debt to bury you, is that something you're okay with?" I ask, making sure the spouse is present. Is that "high pressure"? I don't think so. It's a reality check. In the business we call that a "courageous conversation" because most people don't know, or want to know, what really is going to happen when they die. 

As a professional insurance agent, I have to help them face the reality of the situation. There is no yelling or subliminal messages going on. My intentions are good in that I want this family to feel secure. I realize they may have a budget, and I can work with that. "Let's put it like this. If you purchase this coverage and died next week, your spouse will come to me and ask me, 'Will my family be okay?' What do you want me to tell them?" 

That's what my job is all about.

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!

Stay Healthy and You Can Save Money

This weekend I went to a grocery store that is a part of a large chain based in the southeast. They have a pharmacy that offers flu shots, which I get each year to ward off the winter's ailments. Even though many of my friends have said that it the vaccination doesn't work for them, for me it is a lifesaver. 

In the past I would get sick with a head cold at least three times each winter, with an additional case of the flu thrown in for good measure. However, since I began getting the flu shot about five years ago, I might have one good cold each year. This let's me work more, stay more active and overall feel better. As they say, an ounce of prevention...

One of the nice perks about getting my flu shot at this store is that they give me a gift card for $10 after my injection, which I promptly redeem for a lovely cheesecake. It has become a bit of a joke in our home when I walk in with the delicious dessert in my hand and a band-aid on my arm. "Ah, Chris got his flu shot again!" is the refrain as the family looks for forks and plates.

But the flu shot is a small part of a bigger picture. I'm not the healthiest person in the world, but I do the best I can by trying to eat right, exercise (mostly yard work, which works up a good sweat) and stay off of the carbonated sodas. All of this is done with intention from a lesson learned years ago. 

As an insurance agent, I also understand the value of the product I sell and know the price is better for people who are healthy. Realizing that I needed enough coverage to pay off my mortgage and some debt if I were to die unexpectedly, I applied for a life insurance policy. I also realized that I would need a paramed exam involving blood, urine and testing for height and weight. 

This was about the time that the low-carbohydrate diets were getting popular so I replaced my usual potato chips with pork rinds, thinking I had beaten the system. Boy was I wrong!

After the nurse did her job I found out that instead of my monthly premium going down, it went up by roughly $10 a month. Apparently my cholesterol was very high, and those stupid pork rinds were more than likely the culprit. 

I kept that policy for a year, then I reapplied with another company, this time eating a lot of salads. Why hadn't I thought of that the first time? I dropped some much needed pounds, got my insurance premium back to a reasonable price and I had a newfound respect for salads, which I still enjoy to this day.  

Odds are that you are not going to get much healthier than you are right now. Personally speaking, I have had my share of health problems in the last five years. Hypertension, stomach problems and borderline diabetes suddenly and unexpectedly became issues for me. I'm on medications to keep my numbers under control, but I could just as easily have had a heart attack, stroke or worse. 

What are you waiting for? Protecting your family's future should be a priority for you. Stay as healthy as you possibly can and get that coverage as soon as possible. 

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 I Really Need Life Insurance (Powerful Video)

If you are like most people you are inundated with information all day long. Commercials on television, radio and social media are everywhere for every kind of product. From the ubiquitous car insurance commercials with lizards to mobile phone companies, it seems that every company out there is doing their best to drown the others out.

There was an insurance company commercial in the late 1990's where the man was walking down the beach with a little boy. It was very sappy and ended with the man saying, "Did I mention he has his mother's eyes?" Not many people remember it, which is why that company changed gears altogether and decided to take their advertising campaign in a whole new direction, resulting in the Aflac duck. 

The problem with life insurance advertising is that it really isn't very good at explaining why people need it. A giant whale jumping out of the ocean doesn't motivate people to protect their family any more than a business card.  

In my personal experience I have noticed that people will make that insurance purchase when they see something happen to other people they know. Personal stories from their friends and family will move the needle. 

An example of this is long term care insurance. It seems that no one wants it until they have a sudden onset of health issues, like a stroke or cancer, or they see Grandma go into the nursing home and realize how much it costs. I have had many calls over the years because of the latter situation, by the way.

And it is the same with life insurance. People will call me after they find learn that someone they knew has passed away without any coverage and see the devastating effects it has on the family. GoFundMe pages and potluck dinners will only go so far. Having a young widow ask me "Will I be okay?" and knowing that her spouse wouldn't buy a policy is a punch in the gut for me. I feel like I didn't do my job somehow, even though I tried and tried. 

If you don't think you need life insurance, please watch the video below. 

As you can see, we don't buy life insurance for ourselves, but rather for our loved ones. Many of my clients say, "I don't want anyone getting rich off of my death." That's fine, but making sure your family can maintain their current lifestyle if you die will take some money that you probably don't have.

When I sit down with a client to discuss life insurance I ask a lot of questions, especially about finances. It can be uncomfortable sometimes but we discuss items like:

• Debt. Credit cards, mortgage, car loans, etc. can be paid off with life insurance proceeds. Why would you leave your family with a bunch of bills?
• Income. It doesn't matter if you are the main breadwinner or working a part-time job, you still contribute and that loss of income will need to be replaced. 
• Education needs. Do you want your kids to go to college or technical school? Wouldn't you like them to concentrate on their studies instead of worrying about student debt?
• Final expenses. Yes, this is your funeral costs, but should also include the costs "associated with death". Odds are you may be in the hospital for a few days before you die, and of course, that won't be cheap either. 

Give us a call or schedule a phone appointment with us from our site. We're here to help you protect what is most important in your life. 

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!

September Is Life Insurance Awareness Month

The life insurance industry has designated September as Life Insurance Awareness Month (LIAM) , which is when we in the business do our best to educate people about the different type of policies and the many ways they can be used.

For instance, did you know that the cash growth inside a permanent life (universal or whole life) is tax-deferred?  Or that traditional life universal life policies' growth is based on interest rates?

As part of the promotion, Brooke Shields is once again the spokesperson for LIAM. She saw firsthand the unique challenges that arise when someone passes away without life insurance when she served as an executor of a friend's will. 

And now, with the reality check provided by the pandemic, Brooke's message is that there is no time to wait. People need to protect their families with life insurance now. But don't just take my word for it. Check out the video. 

With this in mind, it makes sense that the theme for this year's LIAM is "Reality Check: The time for life insurance is now!" Life changes quickly and priorities shift. Life insurance can help you protect your loved ones financially-now and for the future. Get it now. 

How many friends and family members would you guess have life insurance? Do you have it? The answer is that only 54% of households have life insurance. And 44% of people believe they would struggle to pay living expenses within six months if a primary wage earner died. (Alarmingly, 28% said they would feel the strain within one month and 11% would feel it within one week, according to a 2020 Insurance Barometer Study/LIMRA. 

Knowing the benefits of life insurance, as well as the risks of going without it, why do so many households remain underinsured? Maybe it is because so many people just do not understand how life insurance works, the cost and the benefits. 

The perception: They think life insurance is expensive.

The reality: It really isn’t. Many people can be insured for the price of a daily cup of coffee.
The recommendation: Book a phone appointment to one of our representatives at Surf Financial to get a free life insurance quote. Or check out our free quoting tool in the upper right of this page. We’ll work within your budget to develop a plan that’s right for you.

The perception: I don’t need life insurance.
The reality: Life insurance has more uses than you might think. It can cover bills, pay for funeral costs, replace income in a household, serve as an inheritance for a loved one, fund a child’s education, provide an important donation to a charitable organization and so much more.
The recommendation: Everyone could benefit from life insurance. Consider the impact you make- providing wages, caring for your family members and friends, volunteering for local causes and more. What would happen if it stopped? Life insurance can help your loved ones avoid a financial burden.

If you have questions about the types of life insurance or the ways to use it for estate planning, tax strategies or other uses, please let us know. With all the crazy things going on in the world right now, the one thing you can depend on when it comes to the financial security of your family is having a proper life insurance policy in place. Covering you, as well as your family, could be one of the greatest gifts you can provide for you loved ones. 

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!

Leave A Gift To Your Favorite Charity With Life Insurance

Every year people all across the country donate millions of dollars to their favorite charities, churches and non-profit organizations. Many of these folks are not too concerned about having their names put on a plaque or other accolades. Their motives may be different from one another, such as a tax write off or just wanting to know that they are making a difference somehow. A few dollars here and there can add up for a charity, but what if you could leave a sizable amount to your favorite non-profit? What if that amount is more than you had ever considered giving away?

You can donate tens of thousands of dollars through the use of a life insurance policy by naming a charity as a beneficiary. It isn't a new concept but it is underutilized. And there are a few ways to do this.

There are some life insurance policies that have a "charitable giving" rider. It allows you to name a non-profit to receive a percentage of your death benefit. The one issue is that there may be limits in place that have to coincide with the IRS's maximum gift giving amounts. The advantage is that these riders eliminate having to create a charitable trust and usually don't cost any extra. The charity does have to be a legitimate 501(c)(3) entity in the eyes of the Internal Revenue Service.

For those who would like to donate higher amounts of money without worrying about IRS limits, the best option is to take out a policy and then donate it to the charity. By transferring ownership of the policy, the charity can control the proceeds. 

For instance, let's assume you donate a policy to your church. Given that the policy will accumulate some cash value (I wouldn't suggest a term policy in this instance) the church can access that money for small emergencies, like a new refrigerator when one dies, rather than wait for someone to donate a fridge.

And since the church is the owner of the policy, they will be receiving the bill for the premium payments. As the donor, you can just write a check for the premium amount to the church and write it off your taxes.

When you do pass on to your great reward, the church, or whatever charity you choose, can receive the death benefit and use it at their discretion. I typically throw out examples like naming a Sunday school classroom after you or a scholarship fund.

Naming the charity of your choice is the simplest way of making sure a non-profit receives the death benefit from your policy. It doesn't offer with the tax advantages that come with donating your policy, but it still reduces the donor's estate by the amount of the death benefit.

If you aren't completely sure how you want to distribute your death proceeds you can name the charity as a revocable beneficiary. This gives you some flexibility in case your financial situation changes, or if you decide to no longer fund that charity. For example, a few years ago, a large non-profit was in the news because their board members were using funds to take expensive vacations. I don't think any of us would want to know that if we died we would be paying for a nice trip to the Bahamas for someone else. If that is the case, you can always change your beneficiary.

If you have a charity or non-profit that is important to you, give us a call and let us help you find a way to endow them through a life insurance policy. 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!

Is Life Insurance Taxable?

About once a year or so I will have someone ask if they have to pay taxes on life insurance proceeds. It's an interesting question, but generally speaking most life insurance benefits are not taxed, but there are a few exceptions. Here are a couple of things to look for.

Most of the time an insurance company will pay a death benefit in one lump sum. However there are times when the policy pays out in installments. The principal is held in an interest-bearing account and pays the benefit over a series of years, like an annuity. The original death benefit is tax free but the interest is taxable. 

Another way it can be taxable is if your life insurance is part of your estate, but this is only a problem if  your estate value is above the estate tax limit, which is over $11million this year. Not a problem for most of us, but one way to avoid this is to make sure your beneficiaries are updated. For instance, if your beneficiaries have died already, the company will generally pay the estate instead of surviving heirs. 

An exception is if the surviving spouse is the beneficiary, as spouses are generally exempt to estate taxes, even if they exceed the estate tax limit.

Generally speaking, life insurance involves two people - the insured, who is also the owner (and payor) of the policy, and the beneficiary. However there are times when there is a third person in the mix. This happens when the insured and the owner are two separate people. When this happens the IRS considers the benefits to be a "gift" from the owner to the beneficiary. 

The good news is that because of the way the gift tax works, you probably wouldn't have to pay it anyway. The tax wouldn't be due until your death and unless your estate is over that $11million threshold.This being said, you should still report any sizable gifts to keep track and stay honest with the IRS.

There is also the issue of "cashing out" permanent life insurance policies, like whole life or universal life. These policies build cash value internally and feature the option of letting you take out some or all of the proceeds if needed. A rule of thumb is that if you don't take out more than you have put in, you should be fine. 

The other option is to take out the funds as a loan. I know of clients who use this option instead of getting a loan from the bank, mostly for the convenience and not having to fill out a lot of paperwork. They will repay the loan and sometimes then repeat the process, as they "warehouse" their money in the life insurance policy. Be aware that if you "cash out" part of the face amount or take it as a loan, when you die, the insurance carrier will pay the benefits minus the amount you borrowed or cashed out.

One thing to keep in mind is that permanent cash value life insurance policies have the possibility of becoming a Modified Endowment Contract (MEC) by the IRS guidelines if you overpay your premiums. With life insurance having a special status, some people will take advantage of paying in more than the stated premiums and the IRS will allow this up to a limit, but beyond that limit your proceeds could be taxable.  

As I stated earlier, the tax liability of life insurance proceeds rarely is an issue, but for those clients who have in depth questions I always suggest they talk to a CPA or even check the IRS website. 

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!

Buying Life Insurance During a Pandemic

With the pandemic all around us, people are starting to look seriously at life insurance to protect themselves and their families. As a matter of fact, a survey conducted in May and June 2020 by Life Happens, an industry funded education group, found that 67% of Americans say that the virus has been a wake-up call for them and 30% say that life insurance has been one of the topics for dinner table discussion. 

Luckily, there’s never a bad time to make a financial plan and lock in coverage. Life insurance companies and agencies, like Surf Financial, quickly implemented plans to work around the hurdles of the pandemic. For instance, many of our carriers already had systems in place for agents to use web based application systems, but with some extra enhancements we can now have policies delivered to the clients directly instead of coming to our offices. 

Now is a great time to buy life insurance because some companies have started raising prices.  Before those increases kick in across the board, you may want to lock in on a great rate. It’s also a prime time to make an application that won’t require a medical exam. In the past, buying a no-exam policy usually meant paying more because the insurer had less information on you to assess their “risk” in selling you a policy. But the pandemic has made in-person meetings impractical, as well as unwelcome, so having a nurse do a paramed exam may no longer be necessary.

Even before the pandemic, many insurers had been working on ways to use data (such as electronic health records and prescription databases) as a substitute for medical exams and to digitalize the life insurance buying experience. Many life insurers quickly adapted by offering no-exam policies at prices comparable to policies that required an exam. This is giving life insurance buyers more choices for coverage—without worrying about how to get an in-person exam done. 

Note: You may still run into a medical exam requirement if you’re looking for a large amount of coverage (in the millions) or you’re older or have health issues.

Some life insurance buyers will purchase the maximum coverage they can get without an exam, even if they need more. For whatever reasons, whether for convenience or because they have a fear of needles. 

Whether life insurers will continue to offer no-exam policies after the pandemic remains to be seen. Exams could make a comeback if insurers see higher claims than they expected on policies that didn’t require a medical exams. If that happens, you could either see rate increases or the companies will start requiring exams again. 

Another school of thought is that carriers won't go back to the old ways. Part of this is because of innovations that were already starting before Covid. 

The unexpected closing of one of the three primary providers of life insurance medical exams also caused disruption. In early July, EMSI suddenly shut down and insurers had to scramble to get their applicants rescheduled with other exam providers. (The other two large providers are ExamOne and APPS-Portamedic.)

A typical life insurance application includes dozens of questions about your health, prescriptions, family health history, driving record and dangerous activities such as sky-diving. Since the application process is all about the insurer “assessing risk,” questions concerning the virus have quickly became a standard part of applications.

If you answer "yes" to questions like "Have you been diagnosed with Covid?" or "Has someone in your household been diagnosed with Covid-19?" you may not have your policy issued or it may be postponed.  And if you have had the virus and have recovered, you may still have some difficulty getting a policy, mainly because not enough is known yet about the virus. 

Insurance companies have always been concerned when it came to international travel. When the pandemic started, traveling internationally was seen as especially risky from a life insurance buying perspective. Most life insurance companies instituted postponements for applications until after the travel. Once you were back and healthy, and after a certain period of time such as 30 days, the insurer would consider your application. If you have plans for international travel this year, expect a delay on a new life insurance policy for at least 30 days. And that’s assuming you don’t have additional international travel plans.

If you’re ready to buy coverage, life insurance companies are fully open for business, but be prepared for potential delays due to the pandemic: You may experience a delay in the application process if your insurer wants to request medical records, as many doctors’ offices have reduced staff for doing such tasks. If your application will require a medical exam, you might also experience a delay, especially if you’re avoiding in-person contact with strangers.

Take time to look at how much life insurance you need. Applying now is easier than ever. For instance, we have added our calendar to our website, so you can schedule a time for one of our agents to call you to find out which plan you need and how to fit it into your budget.

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!

Non Medical Life Insurance

For many people, finding a no exam life insurance policy can be a great way to purchase a policy conveniently and quickly. But convenience is just one reason why people like life insurance with no medical exams. In today's world of Covid-19, as we try to do social distancing, many just don't want a nurse, no matter how sterile, to come into their homes. And I'm sure there are some nurses who are concerned about their safety as well.

I had a client from Florence, SC who was terrified of needles. It stressed her out to no end, but she needed some life insurance protection and reluctantly agreed to the paramed exam. The nurse told me later that the client nearly passed out and her blood pressure was very high, all as a result of her fear of needles. Again, convenience is not the only reason to purchase no exam life insurance.

These policies allow you to get term life coverage to financially protect your family in the event of your early death, without having to undergo a medical test. 

Whether you are looking at term life insurance or whole life insurance, it usually means passing medical underwriting — and that involves a medical exam in which a nurse meets you at your home or work. This exam can include the nurses getting your information, such as medications, but also having to measure your blood pressure, height and weight, and procure blood and urine samples.

Unfortunately, having to pass a medical test can be a roadblock for some people to getting this important coverage. Maybe they feel they can’t pass medical underwriting. Or, maybe, like the client I mentioned earlier, they just don’t like to be poked and prodded with needles. Either way, they put off buying the coverage they need to protect their family's financial needs.

Before we get started, let’s make sure you understand some basics about no exam life insurance. There are two types of these policies - simplified issue and guaranteed issue. 

When it comes to simplified issue no exam life insurance, you simply answer a series of questions about yourself and your general state of health to qualify. If your responses fall in the parameters of the insurance carriers underwriting limits, you are halfway there.  That’s different than the normal underwriting process where you have to undergo a medical exam. Be aware that the life insurance company can still request your medical records. Depending on the face amount, your age and whether or not you smoke, the carrier may forego asking for those records as well. However, there is a trade-off for these so-called “simplified issue policies.” They will usually be a little bit more expensive than their medically underwritten counterparts. 

For instance, I had a 30 year old woman, non-smoker and in overall good health, in Myrtle Beach, SC apply for $250,000 20-year term policy which required no medical exam. A comparable policy requiring the exam came in about $9/month cheaper. As you can see, the risk to the carrier was built into the premiums.

Guaranteed issue policies tend to come in the form of whole life policies and are usually taken by those who have health issues which would normally keep them from getting coverage. There is no medical exam, no health questions and the price can be higher. Typically these are bought for final expenses associated with funerals and some may have limited benefits for the first two years of the policy.

I advise my clients to be truthful in answering the survey questions. If the carrier finds that you may have "fudged" your information they can void your policy.

At Surf Financial Brokers we have several companies who offer non medical life insurance policies. Book an appointment to speak with us and go over your options. And 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!

4 Reasons To Buy Life Insurance?

When I give sales seminars I discuss how some things are easier to sell than others. For example, people want phones or cars or homes, but no one wants life insurance. One of the ways to test this out is by filling in the blank in the following sentence. "I am saving up for ______." A product that people will put in that blank are going to be markedly easier to sell because it is implied that someone is willing to put money aside for that item. 

Needless to say, I don't think I have ever met anyone who said they were saving up for a life, disability or long term care policy. The reasons for this could be that insurance is an intangible product. You can't touch it (you can touch a policy, but does it give you any satisfactions?), drive it or eat it. And most importantly, insurance is the one thing we purchase hoping to never use. 

Why do we buy insurance? Here are a few reasons.

1. It gives us peace of mind. As we tell our clients, you can lay your head on your pillow and sleep knowing that if something bad happens, you have mitigated the damage as much as you can. 
2. It provides security for you and your family. Life insurance means that you have loved ones that will still need financial help if you were to die suddenly. This is also true of a disability policy,which is just insurance on your paycheck to keep the family afloat if you are sick or hurt and unable to provide the income needed to pay the bills. Again, when I talk to groups I mention that those bills are going to keep coming.
3. Cash accumulations can provide down the road. Yes, life insurance can be a great way to take care of multiple concerns in the future. A permanent life insurance policy, if purchased early enough and structured properly by good agent, can also be used as a "retirement supplement" by providing a secondary income stream. 
4. You can fund a cause with someone else's money. One of the most interesting ways to give to a charity, non-profit or religious organization is to make them the beneficiary of a life insurance policy. Most people do not have $100,000 to give to their church or favorite charity, but they can afford the premiums for such a policy. And when they pass away and the organization receives the funds, it can be used for a variety of needs, from scholarship funds to building a much needed community center. (I know of one client who wanted a small plaque mentioning the donation was in the memory of his departed wife.)
   
   

There will always be those people who say things like, "I don't need insurance because I won't be able to use it." I don't want to call these people selfish, but if they were to die too soon, someone else is going to be stuck with paying those bills. Do you really want your loved ones to have to pay for your funeral costs? From personal experience, it is bad enough when you're grieving for a loved one and then have to give a credit card to the funeral home. 

In these days of Covid-19 one should seriously consider purchasing a policy. If you would like, go to our website and book an appointment for a "no pressure" conversation. And 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!

6 Questions You Should Ask About Life Insurance Through Work

Quite often I will be discussing life insurance with someone and they will tell me that they don't need any because they have coverage through work. Given that everyone has a different situation, I ask some questions to find out how much they have and if it's enough to cover their needs.

The discussion usually turns to "Do I need to get life insurance through work?" or "Is it any good?" My general answer is that I don't know unless I take a look at it. DISCLOSURE: The information below is not specific to any industry or employer. There are too many plans out there to discuss each one in detail.

Here are some questions to ask your Human Resources person about your life insurance through work.

1. What's the face amount? It can vary,with the lower end being as small as $1000 to upwards of $20,000. Or the employer may just offer the equivalent of one year's salary.
2. Is it "basic" or "supplemental"? Most of the time, a "basic" policy is no charge or just very inexpensive. 
3. How much am I paying for it? If your policy is "supplemental", you may be paying more. One thing to be aware of is when the sales rep quotes you a price based on the frequency of your paycheck. $8 a week sounds good until you do the math and realize you are paying around $35 each month.  
4. Is my policy "guaranteed issue"? This means that there are no health questions. Most basic policies fall into this category.
5. Is my policy "simplified issue"? This means that your policy will ask a few health questions. These may be regarded as "knockout questions", which means if you answer "yes" to one, you will be disqualified from getting the coverage. 
6. Is it portable? What you are trying to find out is if you can take this with you if you leave your employer. And if you can, ask if the rate will go up.

Years ago I was selling "supplemental" life insurance on the coast of South Carolina. Our polices were simplified issue and I felt that they were a bit pricey. That higher price is reflected in the minimal amount of underwriting done, giving the company a higher risk. 

A young couple in Florence, SC asked me about life insurance on the husband. He was an exterminator for a local "bug company" and was being offered supplemental life insurance through his employer. The amount he wanted to purchase was going to cost him $75 each month, where I had a comparable plan for around $40. The difference in his head was that the premiums from my policy were going to be drafted from his bank account each month while the other was going to be deducted from his paycheck. He was willing to pay nearly double for the convenience of not having to worry about the money being in his account. His wife and I argued with him that he was wasting money. About a year later they split up, and she said it was because he was a "hard headed man". 

Most of the time I suggest that if you can get some "basic" coverage through work, go for it. It's cheap and your family can more than likely use it if you die. With that being said, I would treat it as a secondary policy and have a primary policy outside of work. As mentioned earlier, your policy through work may or may not be portable and if you're in poor health when you leave your job, you may not qualify for another plan.

If you have questions, feel free to leave a comment or drop by our website and book an appointment for a free consultation over the phone. 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!

How Do I Get A Life Insurance Quote?

Have you ever seen one of those commercials on television where the announcer says, "Bob got a half million dollars of life insurance for only $14 a month!"? Wow, that sounds fantastic.
Good for Bob. But hang on. You were so excited that you missed the fine print that flashed on the screen for two seconds. 

That fine print was letting you know that "Bob" was rated as "super special preferred" which means that he is 4% body fat, doesn't smoke, runs marathons weekly, is on no medications and only eats salads Of course, I'm kidding about Bob, but the truth is that very few of us qualify for those rates. A lot of Americans are healthy, workout and eat right. On the other hand, there are a whole lot of Americans who eat too much, drink too much, are overweight and think that bacon and/or ranch dressing goes on everything we eat. Again, I'm exaggerating just a bit. 

Those same television commercials instruct us to call or go to a website to find out how much a life insurance policy would cost for us. There you'll need to enter some information like your date of birth, the amount of life insurance you want, etc, and the quoting engine spits out a price. Most of these rates are merely estimates, as all of this is subject to an underwriter investigating your medical records and family history. 

Commercials like this are pretty common these days. They can get you a great rate on a life insurance policy and the quoting engine will include some top carriers. But here's the rub. If you buy a policy and die, will your beneficiaries know who to contact for their benefits? How will they know where to click to get the money they need to pay their bills and stay in their home. And most importantly, will they know if you purchased enough life insurance?

At Surf Financial Brokers, we also solicit on the internet, but with a difference - our personal touch. You actually get an agent who will help you with your choice. Yes, we have the same group of companies and rates, but we will ask you questions that are important. Are you getting enough insurance to pay off debt, like credit cards or car payments? Are you wanting to make sure your family can stay in their home? Would you like to make sure your kids can go to college if you die too soon? And most importantly, do you have a budget? 

Most of the time the rates you see on TV should be treated as ballpark estimates. There is nothing wrong with that as long as you are aware of that ahead of time. I've had more than a few instances when someone was given a rate that increased later. The underwriter discovered that the "Bob" wasn't 4% body fat, but in fact was morbidly obese and smoked two packs of cigarettes a day. Not to mention that he failed to disclose the medications he was prescribed but failed to take.

We offer a very easy-to-use quoting tool in the top right of this blog. It's only with one of our carriers but the prices are in the general ballpark to give you an idea. While you're there you can also get a rate for disability insurance to insure your income. 

More conveniently we offer our calendar to you. You can find out when we are available and set your own appointment to have someone give you a call and spend a few minutes to discuss how much coverage you actually need and how to fit it into your budget. Book a consultation with us to work around your schedule. And 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.

Should I Buy Life Insurance For My Child?

Many times when I speak to parents of young kids I ask if they have life insurance in place for the children. While there are a few who do or are willing to consider it, the majority of these parents look at me as if I'm the most morbid person they have ever met. The thought of their child dying is something most won't even consider. 

As a parent I don't want to think about my child dying either. I have seen the pain on a parent's face that never seems to go away and as much as I grieve for their loss, I can not imagine how painful it is. With that said, however, I also know that things can happen. Children are prone to accidents and illness just like the rest of us and we should still prepare for the worst. 

As an insurance agent I have seen too many parents spend thousands of dollars on funerals for their kids, then have to hold a fish fry fundraiser to cover the costs. Or they resort to having to ask their friends and family to donate to their GoFundMe page. As if the pain of losing a child wasn't enough, now they have to solicit donations.

This can be avoided, of course, by making sure you have a life insurance policy in place for your child. Most of the objections from parents consists of statements like, "I could never profit off the death of my child" or "That's just morbid". When I mention that the average cost of a funeral is in the $8000 to $9000 range, they look at me like I'm insane. 

There are some very legitimate reasons why parents should consider life insurance for their kids and some are:

• It's affordable. Kid's are typically healthy and their young age makes coverage pretty cheap. 
• You don't have to "profit" off the death of your child. Parents can pay off funeral expenses and any other related expenses (like if the child was in the hospital prior to dying), and donate the remainder of the life insurance proceeds to a charity. Or they can start a scholarship fund. Nothing says they have to keep the money.
• Buying life insurance at an early age helps if the child is diagnosed with something later. I know parents who bought life insurance when the child was a toddler, only to have the child diagnosed as autistic a few years later, thus making the child uninsurable. 
• The child may need you to co-sign a loan. Whether buying a car or getting student loans for college, you may be on the hook for those loans if your child dies unexpectedly. 
• The child can keep the policy. When your child grows up and becomes responsible, you can transfer ownership of the policy. The rate stays the same if the child decides to keep it and they will think you were a smart parent.

Now that we have determined that you should purchase life insurance for your child, we should consider what type of policy you may need. The most common scenario is the purchase of a whole life policy. This is because the rate is guaranteed to lock in for the life of the child, or in some cases, to a certain age. For example, I purchased a plan for my daughter which is paid up when she is 65 years old. After that she will have no more payments. And being a whole life plan, it will have some cash accumulation that she can borrow against or cash out if she needs to.

I am not a proponent of term life coverage on children for the most part. The coverage is only for a specified "term", usually 10 or 20 years. One exception is if your employer is offering a very inexpensive term policy through work. I've seen $10,000 policies that cost less than a dollar per paycheck, but be aware that if you leave that job, you probably will lose that coverage too. In these cases many parents will have both a whole life policy outside of work as well as the cheap one through work. "A couple of dollars won't break me," is a common refrain. 

Some people have begun using Indexed Universal Life (IUL) policies for their kids coverage. These are usually less expensive than whole life but offer cash value accumulation not available in a term policy. As long as it's structured properly from the beginning, an IUL can be a great alternative and have some money to use later on down the road. 

One last thing to be aware of is that most insurance carriers have limits on how much coverage you can put on a child. In many instances, a child can not have more than half of the coverage that a parent has. For example, if a parent only has $100,000 of life insurance, the child could only have $50,000. This rarely is an issue but does send up red flags when the parents want more. 

If you would like more information on insuring your kids, set up a time to discuss with us over the phone. And 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.

Do I Need Life Insurance? 4 Reasons You Do

When speaking to prospective clients I hear the same set of objections. Most fall into the group of "I can't afford it" or "the price is too high". As an insurance agent who got into the business in 1985 I've heard this more than I should. And the most aggravating part about it is after they tell me they "can't afford it" I see pictures on social media of the family at Disneyworld or a vacation in the islands. 

Of course they can afford it, but they just don't see the value of life insurance. That is where I have not done my job right. I have to do better at convincing the prospect that if the bread earner dies suddenly, there are no more family vacations. 

Another objection I get, especially from younger people, is "I don't need life insurance". These people are falsely under the impression that they won't die, or at least not very soon. Odds are they won't, but accidents happen all the time. 

And these same people, mostly single and unattached, feel that they don't need life insurance because they don't have families of their own. When I ask, "Are you planning on getting married and/or having kids some day?" the answer is yes. If you can start a plan while you are younger and it costs less than waiting five years, why not go for it? 

Life insurance premiums are based on a variety of factors, including your age, your health status, if you use tobacco or not, etc. Men have higher rates than women because statistically, they die sooner. (Speaking on behalf of men, we tend to not go to the doctor as much and we are more prone to do dumb stuff like stand a ladder on the back of another ladder, etc.) But putting off the purchase of life insurance will end up costing more in the long run.

Forgoing life insurance purchases at a young age can be costly. As an example, the average cost of a 20-year level term policy with a $250,000 face amount is about $214 per year for a healthy 30-year-old male. In contrast, the annual premium for a 40-year-old male is about $486. The overall cost of delaying the purchase for 10 years is $2,720 over the life of the policy, according to Policygenius "Life Insurance Statistics in 2020"

But the real question is do you need life insurance? More than likely the answer is "of course you do". Whether or not you have a family of your own, there are still reasons why you should look into some coverage that fits into your budget. Here are a few:

1. Funerals aren't cheap. You can save money by pre-planning, but that includes pre-paying. The average funeral costs is between $7000 and $9000. My father, whom I have mentioned in previous posts, pre-planned but didn't put any money down. Between the time he picked out his casket and other accouterments and the time he passed away, the prices of the item went up a bit, forcing my sister and I to pony up around $13,000. 
2. There are costs associated with dying. When I mention this to a client they look at me like I am speaking a foreign language. For the majority of us who will die, we may be sick or in the hospital for a few days prior. And you can linger in the a medical facility after an accident. Yes, there are exceptions, but death is not always quick or cheap.
3. You may have debt. Being young doesn't mean you don't (or won't) have debt. Student loans, credit cards, and car payments may not be forgiven if you die. And older people have plenty of debts, like mortgages. Paying off the house means your family can still live there, instead of having to move to another home or town or school district.
4. Replacing your income. I like to share the story of the couple who had no kids but loved to go on cruises and buy cars. When I spoke to the husband about life insurance and the loss of income if he was to die too soon, he said his wife could "cut back on that stuff". But when I mentioned everyday expenses like car repairs or having to get a new refrigerator suddenly he said, "She can find a new husband. She's hot." (Sidenote: She didn't like this plan and insisted he purchase a policy)

Given that we are in the midst of a pandemic, I highly suggest giving us a call and finding out what we can do that fits into your budget. If you want, you can schedule your own appointment. 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.

Insurance News and Updates

With Covid looming over us, there have been a spate of changes in the life insurance business. Some companies are suspending sales of certain products while others are thriving. We recently got word of two changes that probably won't affect a lot of consumers but from an agency point of view, we hope it's not a trend.

First, we learned last week that Prudential has decided to suspend the sales of their PruLife UL Protector product. This was a universal life policy with growth based on interest rates, and with rates so low the company states that "we have decided that we can no longer offer UL Protector in a way that provides strong consumer value and prudently supports our business objectives." 

Translated to English, that means that the low interest rates were not sustaining the policy enough, which would have probably led to premium increases that would have made the policy less competitive price wise. Given that there are still potential claims to be paid on "in force" policies, Prudential decided to cut their losses. 

Another recent victim in the insurance industry isn't an insurance carrier, but an ancillary paramed exam business, EMSI. One of the major players in home health exams for insurance companies, the downturn in volume has forced them to shutter their doors, and their website. 

According to a press release, they ceased operations on July 3, 2020 and stated that "COVID-19 has disrupted families, communities, and businesses in our country and around the world. EMSI has become a casualty of these unprecedented times, as the pandemic has severely depressed service volumes. As a result, all company operations ceased on Friday July 3, 2020. We are thankful for all our customers and to EMSI staff and partners for their service to EMSI and its clients."

In recent years, several insurance companies have used less paramed exams due to the cost and have made changes in their underwriting requirements. One of our carriers doesn't require an exam for any of their policies with a face value of under $250,000 for younger applicants. They have also put in a limit for their disability plans. This eliminates a lot of exams, and in turn, overhead. The nurses who work for these companies are usually freelancers and get paid only when they do the tests. Luckily for a few of them, they can contract with various companies at once.

Like I mentioned earlier, in the short term neither of these changes will have an impact on you as a potential buyer. You can still apply great life insurance plans and go through the normal underwriting processes. However, if the current situation with Covid-19 persists, and if economic conditions continue as they are, we will see more changes like these in the insurance business, as well as in the other businesses that are connected. 

One of our jobs at Surf Financial Brokers is to stay on top of these changes so you don't have to. Just as you would want your doctor to stay up-to-date on medical issues, you would want us to be informed as much as possible when it comes to your "financial wellness". We do our homework and know that you want to deal with a professional organization.

If you find this blog helpful, please subscribe and send the link to a friend. And as always, 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.