Should I Buy Term Life Insurance?

When I talk with clients about the differences in term and permanent life insurance I get a wide array of opinions. While most prefer term coverage because it is much cheaper, others would rather "lock in" on a price with some sort of permanent coverage. 

Actually, they can both do well if structured properly, while at the same time, stay in a budget. The biggest problem is that many people don't see the value of their coverage and will drop the policy when financial strains appear. Ironically, this is the worst time to drop a life insurance policy that may only be costing less than $50 month. (Same folks who will insure their phone but not themselves.)

According to Term Life Online, only about 1% of term policies actually pay a death claim. They say that this is because most people outlive their policy or they let it lapse before the term has expired. And many are unaware that there is a provision in most term policies that will allow a conversion to a permanent plan, which is what they will need as they get older. 

 

I once worked with an agent who had been selling life insurance for much longer than I, and he loved to explain that a 10-year term life insurance policy was a "sucker bet". In his estimation, the odds of someone dying in the first 5 years of a policy after a paramed exam were astronomically low, so the person purchasing this policy was really insuring the second 5 years only. Sucker bet.

Of course, there are people who need a 10-year policy. I can say that almost all of these were because they needed to secure a loan of some sort. In that case, it's a great fit. A better strategy for most of us is to find a term that will carry us out as far as possible, or to "ladder" policies. I touched on this concept previously and highly recommend you consider it when structuring your life insurance needs. 

Remember that term can be great for your needs during your working years, as you can buy a lot of coverage for not much money, but you may want to look into permanent coverage for those later years, and the sooner you buy it, the less expensive it can be in the long run.

If you have questions or comments, let us know.  And in the meantime, please stay healthy and safe!

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!

5 Times Your Income

When considering purchasing a life insurance policy many people aren't sure how much to purchase. There are many factors to consider like paying off debt and final expenses, but one part of the puzzle that often gets overlooked. 

I often meet people who say they just need enough to cover the balance of their mortgage with the idea that when they pass away, their families can stay in the home. Unfortunately, they fail to consider that while their loved ones are in a house that is paid for, there will continue to be bills and other expenses that need to be taken care of. Roofs and refrigerators will need to be repaired or replaced, as well as other expenditures that were paid with the income of the family member who has now died.

Considering lost income will definitely add to the total amount of insurance coverage, and in some cases may actually double the original face amount, and in turn, make the premium go up. But that increase won't be as important as ensuring that the family can stay in their home and pay their bills as well. 

When figuring in "loss of income", a simple rule is to multiply your income by 5. Let's use an easy example with round numbers. Suppose your income is $50,000 each year. Simply add $250,000 to your other numbers (debt, including mortgage, final expenses, etc). That extra amount may look scary but a term policy can be an affordable way to get the correct amount insurance and keep it within your budget.

Don't let a few extra dollars in premium keep you from purchasing the insurance your family needs.

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 Is The Slayer Rule?

In a previous post from 2021 I discussed occasions when a life insurance policy wouldn't pay out. One example I briefly mentioned was the "slayer rule" or "slayer statutes", which prevents anyone from benefiting from murdering you, if they are suspected of murder or plotting to murder you. 

I had a few questions (off the record, nudge nudge, wink wink) and I thought it was an interesting topic, so here's a bit more information.

1. Each state has its own version of Slayer Statutes.
2. The rule applies even if there is no conviction.
3. Even the suspicion of murder can disqualify your beneficiary from receiving life insurance proceeds or any other part of your estate.
4. The disqualified beneficiary's proceeds can be distributed to other beneficiaries or the estate. 

The bottom line here is that you should trust your beneficiaries to care more about you than any monetary proceeds that would come at your passing.

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!

Are You Buying Insurance Or Peace Of Mind?

As I have mentioned previously, the Greek word for insurance is "asfalia", which literally translates to "security". The Greeks are not paying for someone to insure them, but instead are buying peace of mind, knowing that their families and loved ones are secure.

One of the recurring themes that insurance companies use when advertising, or even training their agents, is that their products give people the peace of mind. I worked with one company that had a brochure titled "What Keeps You Up At Night?", with the idea being that prospective clients would be so worried about what would happen to their families that they couldn't get to sleep. One can imagine that this may be the case for some people. 

If only there was a way to get to these people when they were worrying about this. How could I help people who were in their pajamas? 

That's why we have added several quoting tools onto our website. A concerned breadwinner can visit our site and run quotes for life, cancer, accident, and hospital indemnity insurance. We even have one for our combo dental, vision and hearing plan. And the best part is if someone sees a rate that fits into their budget they can start their application, all without a pushy salesman. (We aren't pushy.)

On the other hand, we make ourselves available if someone is looking for a little assistance, and we do have other insurance products, like disability and long term care, that we currently don't have the capability of quoting online. For those kinds of concerns, we ask that you book an appointment that is convenient for you from our site and we can help you out over the phone. 

If you are in Virginia, Tennessee, Georgia, North Carolina or South Carolina, and can't sleep, visit our site. In the meantime, please stay healthy!

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

Is Selling Insurance Hard? Part 1

Sometimes being a life insurance agent is difficult. It's hard to find prospects and talk them into meeting with us, much less presenting them with a plan they need but don't really want. Not many people want to acknowledge that they should buy a plan that, even though is in the best interest of their family, will add another monthly bill to their stretched out budget.

When I speak to people who sell other products or services I have to explain that insurance isn't like selling a car or a home. Those are things that people want and will actually save up for. No one saves up for life insurance or long term care insurance.  Let's face it, insurance is the one thing people buy hoping they never have to use it. 

With that in mind, you can understand why life insurance agents come and go. The person who sold you a policy ten years ago may not be with that company anymore. Heck, they may not be in the industry either. The persistency rate of agents after three years is about 10-12%, depending on whom you ask. That means that if a company hires 100 new agents today, three years from now maybe a dozen of those people will still be around. 

What makes it so difficult? There are several reasons, but it usually boils down to people who have their priorities out of whack. Not always, but often when I sit down and talk to a young couple with kids and a mortgage, it doesn't take long to realize that their "live in the moment" philosophy is great for some things, but not for insurance purposes. They want to have all of the new gadgets and devices, like phones and cars. I had one young man ask me, "What's the point of working to make money if I can't enjoy it?" 

Yes, selling insurance can be like pulling teeth.  So I have to paint a picture for them. First I have to dispel the myth that they will live forever. "Have you ever known anyone your age who has died?" I ask. It can be a dark subject but my goal is to let them know that things happen. A car can cross the center line at any time ending someone's life. A serious disease could suddenly arise. Things happen.

Typical questions I ask run like this:

• What would you do if your significant other should die suddenly?
• How would your family be able to pay the bills?
• Would your family be able to stay in their home?
• Would you be able to care for the kids and work at the same time?
• How much are you willing to pay to make sure your family will be okay?

Let's assume that I got through to this young couple. We all agree that they need some coverage and they have given me a budget to work within. A week later I return with a few options and present them. There is no "high pressure" selling here. Just a recap of what we have previously discussed and what I have to offer. Then it happens.

 

"I think we need time to think about it. Maybe a week or so." Punch in the gut. I'm pretty sure they didn't need a week to consider that nice phone in their pocket. But I have an answer for that one. 

 

Stay tuned and in the next installment I'll explain why it's okay to need a week or so to think about it. In the meantime, please stay healthy.  

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

Do People Have Enough Life Insurance?

Many Americans do not have nearly enough life insurance to support their families’ needs. In fact, about 44% of families say they would face financial hardship in six months if the primary wage earner were to die, noted David Levenson, president and CEO of LL Global, in a recent video presentation. Now, a group of life insurance organizations is aiming to change that.

LL Global, the parent organization of life insurance researcher LIMRA and LOMA, is helping lead an effort with industry trade associations and more than 60 of their largest member companies and distribution partners to close the life insurance coverage gap. One initiative is encouraging financial professionals to engage with their existing clients to look at the adequacy of their protection. 

"Most people think it’s just to pay for funeral expenses; but the word ‘life insurance’ is really a misnomer," Elsie Theodore, a Virginia-based regional vice president of Primerica, told Investopedia. "Can anyone really insure someone’s life? No, ‘life insurance’ is really income replacement. Its purpose is to replace the income of the breadwinners in the household."

As a general rule, she added, “When you are trying to determine how much coverage you should have, you must first look at your annual income then multiply by 10. You make $100,000 a year, your life insurance should be at least $1 million.”

That number may seem high but the priority is making sure that loved ones can stay in their home, take care of the everyday bills and even provide for education costs if children are still in the picture.

A major problem today, Theodore noted, is that many people rely solely on the group life insurance provided by their employer, which is often inadequate. Typically those policies only provide coverage for one or two years salary replacement. Also, they may or may not be portable, which means if the the employee changes jobs the policy might not be there when their family needs it most. 

According LIMRA’s research, about 60 million American households don’t have the proper protection for their families, with an average deficiency of $200,000.2

What's more, the problem is worse than it was in the past. While 63% of Americans had life insurance coverage a decade ago, that number had dropped to 54% by 2020, LIMRA says.

There are a lot of contributing factors to the incomplete coverage, including changes in individual life
distribution, employment-based benefits, worker participation rates, family and household make-up, and population demographics. People also have competing financial priorities.

In addition, there are misconceptions about price point, need, and ease of purchasing, particularly among Millennials. This is ironic when you realize that most of them grew up with phones and most agencies are trying their best to make insurance coverage accessible on mobile devices.

As LIMRA points out, the COVID-19 pandemic has highlighted the fragility of life and focused more Americans on the role of life insurance.

Theodore recounted one particularly sad situation: "After a few attempts to get this one client to sit with me and get her plan started, she called me because she had 13 members of her family die from COVID-19 and not a single one had insurance. That was an unfortunate wake-up call.”

The life insurance industry has also responded to the pandemic by adapting its sales practices. Companies have made significant advancements in the ability to deliver a fully digital purchase experience so consumers can choose to buy a policy when, how, and where they want. Understandably, insurance carriers are increasing the availability of web based applications and decreasing the requirements for in person medical exams. 

If you aren't sure if you have enough coverage, let us help. In the meantime, please stay healthy!

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

4 Advantages of Using Our Quoting Tool

People have asked me when I was going to get the quoting buttons for cancer insurance, accident insurance and hospital indemnity plan* on the Surf Financial Brokers website. Well, after some technical glitches they are finally there. And the best part is that they work! 

One of the running myths in the insurance business is that people want personalized service. That is true for some of the public, but let's face it, a vast number of people have been purchasing homeowners and car insurance online for years. They are comfortable with the DIY approach and not having an agent, but rather filing claims and handling other service issues through a call center. That's perfectly acceptable for these folks, while others do want someone nearby to answer their questions. 

Running your own quote on our site is awesome for several reasons. 

1. You can cover whomever you want. Whether you need coverage for yourself, you and a spouse, you and your kids or the whole family, you decide who is covered. 
2. You can customize it to fit your needs. There are plenty of riders that you may or may not be interested in. 
3. You can fit it in your budget. While deciding who to cover and what optional riders you like you can see the premium as you go. 
4. You don't need an appointment. We know you are busy so you can use our quoting tools when it is convenient to you. And if you have questions, drop us a note or book an appointment using our online calendar. 

And it is extremely easy to run a quote. When visiting our Products and Quotes page you will see buttons for Hospital Insurance, Accident Insurance and Cancer Insurance. Simply click on the one you are interested in. A page will appear with some information on the product along with a "Get Quote" button. From there it is just a matter of entering your information and getting an insurance quote.

Along with these products, there is also a "Get A Quote" button for life insurance and disability insurance**. The life insurance button let's you choose from term or whole life with options such as Return of Premium term life. There is even a tool to help you determine how much coverage you need.

For disability insurance, you let the calculator know what kind of work you do and your annual income. Disability insurance helps you to insure your paycheck in case you become sick or hurt and are unable to work, you can still pay the bills. 

We ask that you give it a try. If you have questions or concerns, let us know. And if you like it, we would appreciate referrals. Referring us helps us to grow our agency by spending more time with our clients and less time prospecting.  

We have attempted to create a virtual agency that can take care of people either way. If someone prefers to run a quote and apply for coverage without the help of one of our agents, that is absolutely fine. But there are those times when one wants a real person to answer their questions, and we can do that for them as well. 

Run a quote and give us some feedback. And in the meantime, please stay healthy!

*Not all insurance products are available in all states. 

**Rates are estimates based on your information and 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!