4 Questions About Funeral Planning

Those of us who sell life insurance often talk about how a policy can benefit loved ones following the loss of a family member. If a policy is structured correctly to cover any outstanding debts, such as a mortgage or other loans, as well as replacing lost income and funding education needs if children are involved, that coverage should work well in the long run. 

However, the family will need those funds in the short run as well. First and foremost, funeral expenses will need to be taken care of as quick decisions are made by a grieving family. In a perfect world, we would all have pre-planned our funerals. Picking out a casket, having burial plots put aside and other decisions can best be figured out ahead of time when people are rational. 

This is why it's important to for your life insurance agent to include final expenses into the conversation. A traditional funeral can be expensive, averaging between $10,000 and $13,000, depending on where you are. To help you plan and save your family a lot of stress, I've come up with a few frequently asked questions about funerals and final expenses. 

1. How can my life insurance pay for the funeral?

If you have named a family member, let's assume a spouse, to be your beneficiary, they can "assign" a portion of the proceeds to pay for the funeral. The funeral home typically will have paperwork on hand for this so that the insurance carrier can pay them their fees directly. 

Keep in mind that the beneficiaries need to be up-to-date. In the case of my father, who had not updated his policies in years, all of his beneficiaries has pre-deceased him. As a result, my sister and I had to pay the funeral home and the policy paid the death benefit to his estate, which took months to settle. 

2. Does pre-planning a funeral save money?

Not necessarily. While choosing your items may help a bit, unless you pre-pay, the prices can go up. Using my father as an example again, he pre-planned his funeral but didn't pay for anything. When he died years later, inflation had an effect and the prices were a bit higher. 

I met a lady years ago who owned a local cemetery. I'm not sure if she was trying to get me to buy a plot but she said that inflation on burial plots were higher than regular inflation. If you are planning on being buried, you should probably choose the plot and pay for it ahead of time if you can.

3. Can I buy my casket online or do I have to get it from the funeral home?

You can purchase your casket and other supplies online. The funeral home can handle the embalming, host the viewing and coordinate other details. Be aware that they would prefer you buy from them as they have a lot of overhead and they markup their caskets and vaults accordingly. 

Under the FTC Rule, you are allowed to purchase supplies from a third-party vendor and the funeral home is required to accept them. 

4. What if I just want to be cremated?

That shouldn't be a problem. Many people have chosen this option as it is less expensive than purchasing a burial plot. Again, the best advice is to discuss this when pre-planning. 

The director of a cemetery told me once that the biggest issue he dealt with was that when people made plans for cremation, they often failed to inform their loved ones. Family members would expect to visit a plot that wasn't there. "They were expecting a place to stand together and grieve, but when they realized there wasn't one they would get very upset," he said. "I just wish they would tell their family ahead of time."

When discussing your life insurance with your agent, be sure to include your funeral and other plans into the talk. 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! 

Life Insurance and Long Term Care Combo Products

If you or a loved one ever need help with daily living activities, you will discover that custodial care can be expensive. That’s true whether the care is provided at home, in an assisted living facility, or in a nursing home, and it’s especially true if care is needed for many years.

Long-term care (LTC) insurance is available, but insurance companies have learned that these costs can be steep. Premium increases for LTC insurance are in the news (for example, some press reports tell of cases where premiums have tripled in the last three years), and some insurance companies have dropped out of this business. Consumers face the prospect of paying thousands of dollars a year, every year, and never getting any benefit at all if it turns out that custodial care is not needed.

Some people might prefer another path to LTC coverage, such as a hybrid or “combo” product. In a traditional life insurance policy a consumer buys a product that will deliver a death benefit, but with a combo product, the consumer can obtain a rider that will offer a payout if the covered individual needs LTC.

Let's assume that our new friend Bob has an insurance policy on his life, payable to his son James. Bob’s policy has an LTC rider. So, if Bob needs LTC, that insurance policy will provide a benefit to help pay those bills. Regardless if Bob needs care and collects an LTC benefit, his life insurance policy will pay a death benefit to James at the time of Bob’s death.

Generally, in this situation, Bob would receive an “accelerated death benefit” to pay for care.  When someone receives such a payout, the amount of the lifetime benefit is subtracted from the death benefit that eventually will be paid to beneficiaries. Typically, a combo life insurance product would be some form of whole life or universal life, rather than term life insurance, although of late we offer a term policy that includes "living benefits".

The common aspect of this tactic is the absence of a “use it or lose it” drawback. With standalone LTC insurance, the money spent could wind up generating no return. With life insurance there will be a payout to someone at some point. The extra LTC coverage is another benefit that possibly will come in handy.

Acquiring LTC coverage in this manner usually avoids the threat of future premium increases. As another attraction, existing life insurance policies might be exchanged, tax-free, for a new contract that includes an LTC rider.

The attractions of LTC combo products, however, come with negatives as well. The underlying problem here includes the potentially disastrous costs of LTC, and this problem can’t be escaped by switching from one type of insurance to another. There often is a cost to adding an LTC rider to an insurance policy. These combo products may require a substantial outlay, which must be paid upfront or within relatively few years.

In addition, tax advantages may be lost with combo products. With most standalone LTC insurance policies, certain amounts of your premium count as a medical expense, which can potentially be deducted. That’s not the case with a rider to a life insurance policy.

As of 2017, people age 40 and younger can include LTC premiums up to $410 as a medical expense; that amount scales up as premium payers age, maxing out at $5,110 for those 70 and older. Those outlays are added to other medical expenses, and the amount that exceeds 10% of adjusted gross income can be taken as an itemized deduction.

Combo products vary widely, and so do individuals’ concerns on this issue. However, generally, people who only want LTC insurance might be best-served with standalone coverage, working with an insurance professional to hold down premiums. That said, if you are interested in life insurance such as whole life or universal life, it may be worth exploring the idea of adding LTC coverage, perhaps for an added fee.

There are a few factors we take into account when discussing these options, notably the age of the insured at the time of the application and, of course, their budget. A younger person may find a combo policy more affordable than an older person.

If you have questions or concerns let us know. 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 You Need Dental, Vision Or Hearing Insurance?

On occasion I work with enrollment companies helping people with their voluntary benefits. We have the usual line-up of products, with life insurance and disability plans available for the employees that we meet with. By far, the most requested products are the dental and vision plans. As a matter of fact, the employees will walk in to our one-on-one meetings and say something along the lines of "all I want is my dental and vision". 

There are those of us, myself included, who don't have access to group policies through an employer. For people who are small business owners, contract employees or otherwise self-employed, getting a good individual plan has been difficult. 

On an individual basis, dental plans are available but can be rather pricey. There are usually waiting periods as well, which can make the product unattractive to many people. With all of this in mind, I have been a bit resistant in including a dental plan in our line up of products. That is, until now. 

We have recently begun to offer a plan through one of our carriers, Manhattan Life, which solves many of the issues we have been concerned with. And even better, this plan not only covers dental, but vision and hearing too!

Another reason we have begun to offer these plans is because Medicare does not provide coverage for dental, hearing or vision and many of our clients have requested information for these services of late.  

Here are a few of the basic features*:

• No networks. You can go to any provider.
• A $100 deductible per year per person.
• The plan is available to people from ages 18-85. 
• You can include up to 3 children.
• You can choose your annual maximum benefit of either $1000 or $1500
• Guaranteed Issue (No health questions)
• Guaranteed Renewable. You can keep it as long as your like as long as you pay the premiums.
• No waiting period for preventative and basic dental services.
• Benefits for hearing exams and hearing aids.

(For a more detailed list of services, click here.) 

As mentioned above, not having a network means you can go to any provider. One thing to keep in mind though is that your doctor may or may not file your claim for you. The patient may have to pay the bill in full and submit the claim on their own. Because of this we recommend asking your doctor before receiving services so there are no surprises.  

One of the nice parts of this plan is that if one does not use the full maximum benefit for dental, they can use the balance for vision or hearing services. One of our partner agents was telling me how he only used a small portion of his benefits on the dental plan one year, so he used the balance to get new eyeglasses. That's maximizing your plan!

We have added a quoting tool to our website, but for your convenience you can run your own quote here.  If you like your quote you can even begin the application, which is easy to complete and only takes a few minutes.

Not everyone wants or needs dental insurance. But for those who do, we hope you take a few minutes to look at the plan and run your own quote. In the meantime, please stay healthy!

*Plans vary from state to state. Be sure to ask for a brochure for your state.

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!

An Interview With Our Own Insurance Goddess

From time to time I like to talk with someone I know and admire, hoping that they will instill some wisdom that can help me succeed. So last week I talked with my good friend and colleague, Jeanne Doran aka The Insurance Goddess. We discussed how she and I met and I asked for her permission to use some of her sage advice in the blog. As a gracious lady, she said yes. 

I met Jeanne about 10 years ago when I was selling health insurance (pre-Obamacare). She was working for the Gilston Agency in Charleston, SC and I was contracted through them to sell a major medical coverage. I'm not sure if she was a CSR but she helped me over the phone and email with some issues occasionally. Always helpful and a bit sarcastic (like me!), I kept in contact with her, even after she had moved on from Gilston and had become an independent agent. I had a life insurance carrier that I liked to use and got Jeanne contracted with them. 

More importantly though, I would call Jeanne when I had questions about health insurance. She was, and still is, a great resource when an answer is needed quickly. Over the years we have remained friends and I was enthused when she finally accepted my offer to work with Surf Financial Brokers. She even let me put her picture on the website! 

Without further ado, here is a snippet of our conversation.

Me: I know you told me this before, but it wasn't your idea to go into the insurance business, was it?

Jeanne: Honesty, my husband recommended I work in the insurance business. He thinks I'm good with people.

Me: Well, you are. How do you find your prospective clients?

Jeanne: My business primarily referral based. Once I have assisted a client with their insurance needs we look at other options to round them out.

Me: That makes sense. How do you prepare for a client meeting?

Jeanne: Typically I cross evaluate types of plans within the product line they are looking for.   For instance, if it's a health case I look at BCBSSC (Blue Cross), United, and Aetna, then look at the costs versus the benefits and share those details at the "meeting". And I always keep in mind there may be something more for them to round them out.

Me: Do you attend any kinds of networking groups?

Jeanne: I only am in one networking group at this time and it's industry based.

Me: Not counting my book, do you recommend any good books on sales? 

Jeanne: The Tipping Point. Seven Habits of Highly Effective People. The Power of Positive Thinking

Me: Malcolm Gladwell is a favorite of mine too.  Do you have a mentor?  

Jeanne: My first Mentor was David Gilston.  He is a broker who has stood the test of time. He'd say, "when the rules change, teach me the rules, and I will win every time."

Me: How have you become a mentor for others?

Jeanne: I have a circle of fellow agents who are part of my "team" and we bounce ideas off each other!  I like to think I am their mentor!!

Me: Well, you are the Insurance Goddess! On a different note, has Covid affected your practice?  

Jeanne: Yes, I rarely meet prospects in person any more.  I am learning to be effective with Zoom and am always looking for the best ways to connect.

Me: What did you do with your first commission check?  

Jeanne: Now that was a long time ago, so I must have used it to pay household bills!!!

Me: We have all dealt with strange people from time to time. Have you ever had a strange or unusual encounter with a client?

Jeanne: Have I EVER! I was assisting one lady with her health benefits and her husband, who had a type of early onset Alzheimer's, strode by the table several times, pacing back and forth. Finally he went upstairs and when he came back down, he did not have anything on but his shirt. 

Me: I hope you got them both "covered". 

I hope you learned a little about Jeanne as we pull back the curtain to take a peek at a day in the life of an insurance agent.  And 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!

The Life Insurance Review

Life insurance is like your car, your home and a lot of other things you own in that one has to do "maintenance" on it from time to time. By that, I mean that one shouldn't buy a policy, throw it in a drawer or safe deposit box and forget about it. An owner of a life insurance policy should take a good look at it at least every other year to make sure it is doing what is needed.

One of the many mantras that life insurance agents love to repeat is the word "review', as is "We need to review your policy." In sales classes, agents are taught to contact their clients twice a year - on the birthday of the client and on the anniversary date of their policy. The former is mostly to check in and hope the client will have some referrals. The latter is to set an appointment with the client to go over their policy, thus the "review". 

As an agent who has been in the business for a while, I can attest that a vast majority of clients say something like "I'm good for now" when I mention taking a look at their coverage. Maybe I should press harder for that appointment, but it's obvious the client isn't interested.

Unfortunately, this goes on every year and on occasion something will go sideways when the insured dies. Whether the client doesn't have enough coverage or just failed to keep the beneficiaries up to date, I know there are adjustments that can be made.

A good example is when a beneficiary change is in order. In that instance, either the named beneficiary has passed away unexpectedly or should be replaced for other reasons. A few years back I found out that my client's daughter, who was in her 20's and had a history of drug issues, was living on the streets. My client was taking care of her grandchildren with the help of another adult child. 

It was an awkward subject to broach with my client as I had heard about her predicament through the grapevine, but she was gracious as I let her know that she was doing the best she could with a bad situation. She acknowledged that her daughter probably was not a good candidate to receive a large death benefit and we changed everything over to the other adult child, who ultimately got legal custody of the kids.

In another instance, I met with a client who had taken out a policy for $250,000 a few years earlier. At the time, the face amount made sense because it covered the balance of his mortgage and could help pay off some items like final expenses and some credit card debt. He had some money put away and his wife also had a good job. However, he had some unexpected expenses that required he borrow some funds, and the lender was insisting he purchase a life insurance policy to cover the debt.

By checking in with him and learning about his new situation, I was able to help him secure the note with a 10-year term life insurance policy which made the lender very happy. (Sidenote: My client paid off the debt earlier than expected and was able to cancel the policy.)

If your life insurance agent calls you for an annual policy check up, take advantage of it. And if your agent doesn't call to check in with you, give us a call and we'll be happy to put a second set of eyes on your policy to see if you have what is appropriate for you. In the meantime, stay healthy!

   

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

We Get Referrals From Influencers

Last week I received one of the highest compliments an insurance agent can get. My client, whom I have worked with off and on for several years, handed me a sheet of paper with about a dozen names on it. "These are friends of mine. Some are family. I told them what a good job you do and how you don't pressure me into anything. They are expecting you to call them."

This was a big surprise because I mention referrals from time to time but don't push for them as much as I probably should. There have been times when I have been chastised by my sales manager for not using the litany of Jedi mind tricks we are taught. Having a nice list of names presented to me is a different matter altogether.

There are times when I will explain to a client how they can take "ownership" in my business by giving referrals. The reasoning is that if a client refers me to a friend or family member, I can spend more time working with that person instead of prospecting. One of the many dirty little secrets of the insurance business is that we spend a lot of time just trying to get clients, especially at the beginning of an agent's career. It can take time away from helping the clients we have so clients feel they are helping themselves when them give us someone to see.

A former coworker of mine used to say that the hardest part of the job was finding someone to talk to. It's true. It's a constant battle to find new clients when you sell something that people really don't want to think about. I've heard people say things like, "I'm saving up for a car" or "I'm saving up for a down payment on a house." Nobody says, "I'm saving my money for an insurance policy." 

One of the reasons a lot of agents don't like to ask for referrals is because many clients don't care to give them because they have gotten burned in the process. A typical example goes like this. Bob, the agent, meets his new prospect, Mary and asks her for a referral. She reluctantly gives Bob the name of a coworker, Jim. Bob calls Jim, who isn't interested and berates Mary. "Why did you give that guy my name? I thought we were friends!" Jim says to Mary. Mary is hurt and never gives another referral.

There are several problems here but the obvious one is that Bob hasn't proven himself to be a good agent. Mary just met the guy for goodness sake! How would she know if he is going to be a decent agent or if his insurance products are worthwhile?

This is why, on those occasions when I do get referrals, they come from clients I already work with, who have had time to see that I'm working for them. Those clients are "influencers" in a way because they hold sway with their friends and family members.

So when someone, like my client who gave me that list of names to call, takes the time to do something like that, I know I have earned it. It really is the best compliment someone can give me. That list will potentially make me some money, but what it really does is let me know that my client has taken ownership of my insurance practice. And she is trusting me to work with those people and with the same degree of professionalism I did with her. 

We appreciate all referrals and introductions at Surf Financial Brokers and look forward to helping you and your friends. 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 Things To Consider When Choosing A Term Life Policy

Over the years I have noticed that many of my prospective clients don't really know about the different types of insurance, such as term insurance or whole life. As a matter of fact, I just met with a young couple who said they needed whole life because "that's what my mother said to buy". When they saw the price of the whole life policy compared to a term and a universal life they were surprised at the cost. "Maybe Mom didn't know what she was talking about after all," the young man said with a chuckle.

Don't get me wrong. There is nothing wrong with whole life or any other kind of life insurance, as long as it fits your needs and your budget. As I always say, each insurance product is good for something, but not all insurance products are good for everyone. In the case of this couple, the best fit for their needs and their budget was a term life policy.

Term life insurance is exactly as it sounds. It provides coverage and a guaranteed rate for a specific term, say 15 or 20 years. It does not build cash value and you can't borrow against it. Think of it as renting a home compared to buying a home. If you are buying a home you can build equity and borrow against the value. Renters can't do either of those. 

The advantage of term life insurance is that, because it only provides a death benefit, it can be much less expensive and one can purchase a lot of coverage. For example, a 40 year old man who does not use tobacco and is fairly good health can get a $100,000 20-year term policy for under $25/month. That same person applying for a whole life policy for the same face amount would pay at least $100/month. That's a big difference in price. 

So what do you need to look for when shopping for a term policy? Here are a few suggestions.

1. Term length. How long of a term do you need? Be aware that the longer the term, the more the premium will go up, but it is better to be safe than sorry. If you have a 30 year mortgage maybe a 30 year term is a good fit. Also, you can consider how long it will take to pay off the house and to get the kids out of the house. For younger people, we offer term policies to age 65. 
2. Riders. Many term policies will offer optional riders you can add on to the policy. Most of my clients like the Waiver of Premium option because if they are disabled and unable to work, the insurance company will pay the premium for them. 
3. Other features. Some policies have riders that are built into the policy at no additional charge. We have one carrier that includes benefits for chronic illness and and critical illnesses in their term life policies. 
4. Convertibility. This is important for those people who may want a permanent policy at some point because they can "convert" part or all of the policy without any health questions. There may be limitations on when one can convert their policy so check with your agent.

If you are considering an affordable way to protect your family's finances in case something should happen to you, term life insurance coverage may be a good fit. Please feel free to leave questions or comments and let us know if we can help you. 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!