Would You Risk Your Retirement Savings Over A Steak?

I recently received a postcard invitation to a nice local restaurant as part of a "retirement seminar". You may have found one of these invitations in your mailbox as well. The enticement of a nice steak dinner is alluring, but you really aren't sure what topics the talk will cover and your curiosity is piqued, so you decide to go.

When you get to the restaurant you notice that most of the other invitees are older. Most are already retired, which is odd since this is supposed to be about planning a retirement. Something just doesn't seem right, but you're getting a free meal so it's okay.

As the speaker begins his talk you realize that this is a sales talk. A woman walks around the room with an appointment book and when she gets to your table she asks when you would like to meet with the "planner". "And don't forget to bring any paperwork from your current financial professional."

The speaker tells the room how risky investments are, how global turmoil is going to get worse and basically the world is going to hell in a handbasket. He or she may even have a "team" of professionals, like attorneys and accountants who back the claims of the pending financial apocalypse. 

So what is this whole steak dinner getting you?

In a nutshell, what the whole presentation will boil down to is that you need an indexed annuity.  Or do you? But first, what is an annuity?

Annuities are products offered by insurance carriers in which you give them a lump sum of money and they promise to give you a stream of income, which usually takes place 5, 7 or 10 years later. I have maintained that all insurance products have a need with some people, but not all people need every product. An annuity is great for a certain segment of the population, but in truth, not everyone needs one and in a low-interest environment like we have now, it may not be worth it.

In a previous post entitled "CD's vs Annuities In A Low-Interest Environment", we examined the mechanics of an annuity and who should (or shouldn't) purchase one.  Let's take a nice easy example of how this works.

Let's use the example of a 55 year old person with $100,000 to invest.  In our scenario we will assume that the cap on the annuity is 6%.  That means that's the most the contract will earn in a given period, typically annually.  Using a formula called the rule of 72 we can determine that it would take 11.9 years to double the money.  So we have $200,000 at the age of 67.  At that point, we annuitize the contract (get a payout) of 5% or $10,000 a year for a lifetime. 

To get the original $100,000 back we're waiting another 10 years, which means the client is now 77 years old. Our client, on the best day, waits 22 years to break even!  And we haven't figured in the rate of inflation either.  

Unfortunately, the annuity contract with a 6% cap doesn't guarantee you that rate.  That's just the most it will pay if everything went perfectly, which we know isn't the way the world works.  In this environment, it's safer and smarter to go with either a short-term annuity and wait for interest rates to rise, or to look into a variable annuity with a much better potential for growth. Or put the money somewhere else altogether. 

I recently showed a few friends of mine this example. More than a few were disappointed in the numbers. Some said they could put the money in other investments like real estate and get better, not to mention quicker, returns. The low interest rates which affect the caps were the main issue. My informal survey did yield a consensus that an annuity would be a good fit for a very conservative person. 

My advice to people is that if you are interested in an annuity, never put more than 50% of your assets into it, as they have serious liquidity issues as well as a lot of built in fees and charges. 

Go ahead and enjoy the free dinner, but of course, call us before you make any decisions.

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!

Insurance News You Can Use

Recently a few items of interest crossed my computer screen and I thought it would be good to share with you some news from the world of life and health insurance. As they say, knowledge is power, and being a knowledgeable consumer of insurance is always a good thing. So here are a few bits of news with a sprinkle of my comments mixed-in.

Let's begin with some troubling news from North Carolina. The insurance commissioner there, Mike Causey, has levied a penalty of $1.1 million on Gerber Life for claims processing violations and delays. The company is also paying $2.5 million in additional recoveries and interest to claimants. 

The insurance commissioner's office examined around 300 claims from over seven years, and they found a lot of violations with Gerber Life's accidental death and dismemberment policies. According to US News and World Report, "Biological parents were initially denied benefits for children and had to send in clothing receipts and other unnecessary documentation to prove a parent-child relationship." 

Also, the claimants had to sue to get their benefits and the company didn't pay for any of the attorneys' fees, nor did they pay interest on untimely paid claims. 

My thoughts on this are as follows: This is the kind of thing that makes my job harder than it already is. Mistrust grows from news of a company not wanting to or dragging their feet when it comes to paying claims. I'm glad that the insurance commissioner's office was able to find this problem and fix it, but that's just one insurance commission out of fifty. Are we to assume that Gerber Life only dragged their feet paying claims in North Carolina? 

In other news, one of our carriers, Guaranteed Trust Life, is changing the age eligibility requirements for their Short Term Home Health Care plan. Beginning September 3, 2020, the minimum age will be raised to age 61. The rest of the policy will remain the same with benefits like a prescription card and access to their  "Ask Mayo Clinic" symptom assessment tool. 

From my perspective, I love this policy, but I wish they didn't raise the age. Statistically, about a third of people who are chronically ill are under the age of 65. As many people in their 40's and 50's see their parents need care and realize how expensive it can be, these people begin looking into their options for Long Term Care and Short Term Care products. I like to call these folks "forward looking" and hate seeing their choices for good plans decrease. 

My gut tells me that the Covid-19 pandemic has affected the number of claims filed, but I'm not completely sure.

The Guaranteed Trust Life product is priced so affordably that I had many people who were not yet 60 years old interested. The good news is that the carrier offers a full line of other ancillary products such as cancer and critical illness plans that are still available to many people of all ages. 

One other bit of related news is that Covid-19 is impacting pricing and benefit options for those considering long term care insurance, according to the American Association for Long Term Care Insurance (AALTCI).

According to AALTCI director Jesse Slome, "Insurance companies are raising rates for new applicants, they are changing benefit options and in certain states limiting the ages of applicants."

With over 40,000 deaths in nursing homes attributed to the virus, it's easy to see why the insurance carriers are concerned. These facilities are overwhelmed and, as a result of the virus, also understaffed. 

As you can see, we at Surf Financial Brokers try our best to stay on top of the news in our industry. Look us up on the web and feel free to comment below. 

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 Mortgage Protection Life Insurance?

As a general agent for a life insurance company, I work with and recruit, agents from all over the country. Some sell life and health insurance products exclusively, while others also work in the property and casualty market as well. Discussing their insurance practices and learning what they do for their clients is always interesting to me. So you will understand why I wanted to do some asking when I kept hearing about "mortgage protection life". 

The problem was that every time I asked an agent about it, I would get a different answer, mostly because there are a few different kinds of policies. Some were actually selling "mortgage protection" insurance, which compensates the lender if the loan defaults. Not life insurance, but confusing because of the name. 

Next is Private Mortgage Insurance (PMI) which is a type of life insurance for conventional loans and arranged with a private company. It can increase your loan and is typically included in your total monthly payment. Typically it is required when someone purchasing a home puts down less than 20% of the home's purchase price. This policy protects the lender but you pay for it. The only real advantage to it is that it will allow you to make that home purchase if you don't have the 20% down payment.

Before the great recession of 2008, I considered selling PMI as part of my portfolio of products and asked a few agents I knew if it was worth their time. The answer was a resounding "no". Apparently people didn't like having to pay the premiums on a policy that would not benefit them. As home values were steadily increasing, the new homeowners would wait six months and having a new appraisal done on their houses. The values had increased in that short time and all of a sudden they had enough equity to drop the PMI coverage. 

Then there is "mortgage protection life insurance", which is designed to pay off the remainder of your mortgage if you were to die. Now this one actually is life insurance. In a nutshell, this is a decreasing term policy, which means the face amount of the policy decreases as the principle of decreases. 

You would think that a policy with a decreasing face amount would be a bargain. Unfortunately it isn't always. One of the problems is that these policies are not usually fully underwritten. There may be a minimal amount of health questions but for the most part you can be fairly unhealthy and still have a policy. This puts additional risk on the insurance company and they put that risk in your higher premiums.

Yet another problem is that the face amount decreases. And it won't coincide with in sync with the principle owed. Who wants that? Also, what if you refinance your policy and have to start another 20 or 30 mortgage? What a mess!

If you are a healthy person who does not use tobacco you are more than likely to be better off by purchasing a traditional life insurance policy to cover your mortgage. Because it is fully underwritten, your rate can be much lower. Who doesn't like lower premiums?

But the better part is that the face amount is level, which means you don't have to worry about getting less coverage as your policy continues. So if you were to die in year 3 or year 18 of a 20-year term policy, your family would receive the same amount. That extra money (assuming your family uses the bulk of the proceeds to pay off the note) could go for education costs or just replacing your lost income.

It took me several months to get this through the head of a new agent I met from Nashville. He had been working getting referrals from a local mortgage brokerage company and was afraid he would upset them if he didn't sell the decreasing term. Eventually he came around and found out that most of his clients would get a better deal with a traditional term life insurance policy. 

In the next post I'll go over some of the non-traditional policy terms we now offer. 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 And Your Partners Need A Disability Buy-Out Plan?

In a previous post I discussed buy-sell agreements between business partners and why they were necessary. To recap, in the case that a business partner dies, the surviving partner will more than likely want to buy out the deceased partner's interest, and to do that they may need money. With a life insurance policy in place for that purpose, the surviving partner will have the funds needed, thus avoiding a scenario where they are in business with their partner's spouse or other family members.

With that in mind, let's take a look at a similar scenario. For this example, we will name our business partners Bob and Neil. Both are married and have their own families, live in nice middle class neighborhoods and are making enough money to pay their bills while stowing a bit into a retirement account. 

One evening, Bob in on his way home and a car crosses the center line, hitting Bob's vehicle. Fortunately, Bob survives the crash, but unfortunately, he is severely injured. Bob is more than likely going to be permanently disabled and will not be returning to work. 

Luckily for Bob and his family, he had purchased a Disability Insurance (DI) policy early on and will have some income to help pay his personal bills. But what about the business? And what happens to Neil in this situation? Will Neil have to do the work for two people and split the profits with his now disabled partner? 

Here again, a good buy-sell agreement needs to be in place beforehand. This legally binding agreements sets the terms and conditions of the sale and the subsequent purchase of the disabled partner's ownership of the business. Having an insurance policy in place helps fund the buy-out, and can also help pay the disabled partner's bills. 

The payout can be distributed in a lump sum, monthly disbursements or a combination of both. This can be decided at the time of purchase.

In some instances the company pays the premiums for the policy. However some smaller businesses will do a "criss-cross" agreement, in which each partner pays the premiums and receives benefits from the disability policy covering the affected partner. 

After an illness or injury occurs, an elimination period, has to be met before benefits are paid. This elimination period is a waiting period that can be a few months or as long as a couple of years. Think of an elimination period as your deductible, but in time rather than money. And just like your car insurance, the higher the deductible, the cheaper the premiums will be. 

Having a buy-sell agreement avoids a lot of potential issues that can occur if a partner is sick or hurt and unable to work. This plan can prevent a financial loss or even bankruptcy by keeping the business afloat. In turn, this helps keeps those on the staff of the business employed as well. And the owners can be assured control of their business decisions, with the freedom to replace the injured owner with a person of their own choosing. Not to mention that they will not be forced into business with any family members of the disabled partner.

Since the purchase price of the business was stipulated in the original buy-sell agreement, the disabled partner should feel he or she was given a fair market price for their share in the business. I usually suggest that the numbers be updated every few years to keep up with the growth of the business.

If you have business partners and would like more information on how to fund a buy-sell in case your partner dies or becomes disabled, let us know. 

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!

How Can Disability Insurance Help Me?

Let's assume you get sick or hurt and are unable to work. You may be in the hospital racking up bills, or worse, in a rehab facility. If you are lucky, you may be recuperating in your home, resting comfortably. Some people can actually function and carry on with most of their day-to-day tasks, they just can't perform the duties of their job. And this is where the real problem is.

As I have mentioned in the past, your number one asset is not your home, business or fancy car. Your biggest and best asset is your ability to earn a living. And if you are not able to work due to a disabling illness or accident, you more than likely are not going to be bringing home a paycheck. 

When I speak to groups about disability insurance I ask them the same question every time: If you are out of work, what happens to your bills? "They keep coming!" I hear from the crowd. 

You see, disability insurance (DI) is insurance for your paycheck. Insuring your income is how you can make sure that you can pay the utility bill, the rent or mortgage, and of course, keep food on the table. As a matter of fact, nearly half (46%) of all foreclosures on conventional mortgages are due to a disability. (Only 2% are due to death)

Won't the government take care of us if we can't work? Sure, the Social Security Disability Insurance program is there for you, but only if you have put in 10 years of work ahead of time. And it pays a whopping $722 each month on average. Plus, the criteria is so strict that only about 35% of those who apply actually qualify. There has to be a better option.

Of course that option is a DI plan. You can purchase one through work or on your own and neither is exorbitantly expensive when compared to the benefits offered. 

Generally speaking, you can insure up to 60-70% of your gross income (close to your "take home pay") and benefits are tax-free with a couple of exceptions. If your employer is paying for your premiums or if you have decided to have the premiums deducted on a pre-tax basis, you could be liable for income tax on your benefits. That's not a great scenario but it is still better than having nothing. 

There are certain factors that go into the underwriting of a DI policy. A few are:

• Your income. A policy based on your income will need verification of your income, so the insurance company may ask for recent tax returns at the time of application. Or they may request your tax returns when you file a claim. Either way, they do not want to pay you more when you are out of work than what you were making when you were healthy. 
• Your occupation. Some jobs are more dangerous than others and that will be reflected in the amount you pay for your policy. A roofer has a riskier job than an accountant. And some occupations are difficult to cover at all, like professional athletes. Fortunately, we have carriers who can insure a variety of jobs, and we even have one who will insure a stay-at-home spouse!
• Your health. A person who is unhealthy will have a harder time finding a policy than the one who is 4% body fat and runs five miles a day. And pre-existing conditions are a factor, but in many instances they may just be excluded from coverage. I had a gentleman client in the Charlotte, NC area years ago with an issue stemming from a previous accident that was excluded. He took the coverage anyway because he it would cover anything else that could happen to him.

How much coverage should you apply for if you are on a budget? I recommend the HUG plan. Coverage for housing, utilities and groceries should be the bare minimum and are essential. As I tell my clients, "Just because you are receiving a check doesn't mean you'll be eating at Outback every night."

If you would like more information on DI, drop us a comment or book a time to speak with us from our website. 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!

Thoughts On Supplemental Insurance

Part of my work is helping people with supplemental insurance benefits. A large percentage of this work is done in a worksite setting, which means that I help people at their place of work and the premiums are deducted from their paychecks. There are several carriers out there offering insurance products like disability, cancer, accident and critical illness plans, along with other insurance products. 

When I speak to other insurance agents who sell these products there is always a debate about which company has the best products. "Our cancer plan pays more than their cancer plan" or something along those lines is usually the way the conversation goes. Some of these agents work exclusively with one carrier so they can get a bit tribal when it comes to who has the superior products.

The truth is that the client really doesn't seem to get to concerned over these details. They basically just want to know if they have a disability plan if they get sick or hurt and can't work, or if the Hospital Indemnity plan will work if they are confined to a hospital. 

But many people do not have access to these plans because they are not part of a group that offers worksite benefits. With that in mind we have looked for some of the best carriers that take those of us who are self-employed or business owners into consideration. If you are a contract employee or just work from home, you can purchase a great cancer plan, disability insurance or other plan. 

I really appreciate hearing people tell me how these supplemental insurance products helped out when the client was in a time of need. One story involved a young boy, around 10 years old, who had cancer and was receiving treatments at a hospital about two hours away from his home. His father was having to take time off from work to travel back and forth and it was severely impacting his paycheck in a negative way. They were literally days away from having the power cut off at their home. 

The father's employer, who for some reason had no clue what was situation was, quickly realized that there was a cancer plan in place that the covered the child as well. They contacted the agent who sent in paperwork on a Thursday afternoon. By Monday, the family received a check for over $15,000. As the boy went on to continue treatments, the family continued to receive benefits from their policy. 

The best part of all this was that the boy's cancer went into remission and he is healthy. And so are the family's finances.   

One of my favorite stories involved a special education teacher at a middle school in North Carolina. She had taken some kids out to the schoolyard for some exercise and one child, who apparently was just a big as her, decided to make a dash for the exit and ran toward the adjoining property off of the campus grounds. This teacher, who I would guess was in her mid to late 50's, tried to get in front of the student, blocking his way. He ran her over like a football player would run into a linebacker, knocking her to the ground and breaking her arm. 

It was all the talk that afternoon among the rest of the staff. I mentioned that she had an accident plan that covered her, even while at work, and that she would likely receive a nice payout from the insurance carrier. The other teachers began asking for an accident plan for themselves. They realized that they could also be hurt at work and began to see the value of such a policy. 

If you are interested in our supplemental plans, please check out our products page on our website. 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!

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!

What About Medicare Supplements?

Are you one of the millions of Americans in need of information about Medicare supplements? Each day, thousands of people who are on the cusp of turning 65 years old are getting bombarded by phone calls and brochures about the varying array of products. It can be confusing but luckily it's not as bad as one would think. However there are some basics that can help you understand the ins and outs of Medicare.

First off, the Medicare program was never designed to cover all the costs associated with health care, and it doesn't. This in turn has created a multi-billion dollar commoditized supplemental market. Today, 90% of Medicare beneficiaries have some form of supplemental coverage. 

Medicare supplement plans were standardized so that plans can be easily compared between carriers. For example, all plan A's are the same, and all of the plan B's are the same. The insurance companies are not allowed to add or subtract to them as this would make it even more confusing to those purchasing these plans.  This has made the market more about premium rates than anything else. 

So what does Medicare cover? There are two parts:

Medicare Part A - Hospital Insurance, covers hospital inpatient care and recovery care in a skilled nursing facility, hospice and home health services.

Medicare Part B - Medical Insurance, helps cover some medically necessary services from doctors and other health care providers plus preventative services. 

What does Medicare not cover? Again, it wasn't designed to cover all of your doctor and hospital bills. You are required to pay for a portion of those bills in which Medicare does not pay, including:

• Medicare Part A hospital benefit-period deductible and coinsurance
• Medicare Part B medical annual deductible, generally 20% coinsurance and those charges exceeding the Medicare eligible expense
• Skilled nursing facility coinsurance

These bills can be paid for by yourself or through the Medicare supplement policy that you purchase.

Medicare supplements do offer a great value. They include:

• No provider restrictions. You are not restricted to use a network of healthcare providers. Any healthcare provider who accepts Medicare patients accepts Medicare supplement insurance. If you move, your coverage goes with you.
• Instant coverage. There is no waiting period for preexisting conditions and benefits are paid from the time your policy is in force.
• Low out of pocket costs. Your Medicare supplement and Medicare Parts A and B work together to minimize your share of healthcare costs. With this additional insurance coverage, even unexpected medical events aren't likely to impact your financial health.
• Guaranteed renewable. Your Medicare supplement insurance policy renews as long as you pay the premiums on time and make no material misrepresentations (that means you are honest on your application).

There is some interesting information about Medicare that most people aren't aware of. Did you know that Medicare was started in the 1960's? Back then people paid about 19% of their income for their care. Since then, healthcare costs have skyrocketed but the income levels of older Americans haven't kept pace. And now Medicare constitutes about 14% of the federal budget.

Also, because of the aging Baby Boomer generation, the number of people on Medicare is expected to rise from 47 million to 78 million between 2010 and 2030. 

Obviously there is a lot of information here which makes it more important that you let an insurance professional help you choose which Medicare supplement is right for you.

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!

Advancements In Cancer Treatments and Cancer Policies

As new advancements in cancer treatments develop, many of these innovations are not covered by traditional health insurance or even Medicare, or they can require strict adherence to Medicare guidelines. Additionally, increasing out-of-pocket medical expenses such as health insurance co-payments and deductibles can leave many unprepared for the high costs associated with a cancer diagnosis.

One of our carriers, GTL, has formed a partnership with TGen, one of the leading nonprofit medical research institutes in the world. The result is a policy* that gives you and your family access to revolutionary genome sequencing technology and consultative services from TGen's expert cancer ace of mind in knowing you have access to one of the most advanced medical technologies which may give you your best shot to beat cancer.

• Confidence that his insurance coverage can help give access to a highly precise and individualized plan of care based upon ground-breaking research.
• Consultations for you and your doctor with a TGen oncology expert to explain your sequencing results and treatment recommendation. 
• Cash to cover the high out-of -pocket costs associated with cancer and comfort knowing your bills can be paid. 

Your uniqueness plays an integral role in how you develop and react to cancer and even how you react to treatments. So if cancer is as unique to a person as their DNA, why would cancer treatments be the same for everyone?

Your genome is the complete set of your DNA. It is your blueprint. It's your personal set of instructions for what makes you unique. Genomic sequencing provides TGen's experts your complete genetic code which is sorted and studied. Sequencing can be used as a medical tool that unlocks the power of your genome to help create treatment plans that are more precise and individualized.

Genomic sequencing:

• Analyzes a patient's tumor "fingerprint" to see if there are therapies that have worked well before.
• Allows the oncologist to match each patient with the best treatment based upon the underlying biology of your specific cancer. 
• Makes medicine more rational, personal and precise by identifying molecular targets before treating the cancer
• Identifies whether targeted drugs that support your own immune system's ability to fight cancer could be beneficial to you. 

So how does all this work? When a patient is diagnosed with cancer and files a claim with GTL, the patient informs the doctor that they have access to genome sequencing through TGen. The biopsy is taken and sent to TGen. GTL then pays the benefits for the testing and any consultative services. The patient and doctor get one-on-one consultations with a TGen oncology expert to explain sequencing results and treatment options. 

All of this sounds very technical, but the bottom line is that cancer research has advanced tremendously over the last few years and cancer policies have had to keep up. This policy will not only pay benefits for those very high out-of-pocket expenses that can be incurred when one has cancer, but can also give you a better shot at recovery. 

And we make it easy to apply for coverage, as it can be done completely over the phone. During these days of Covid-19 most people don't want an agent visiting them in person. You can even set your own appointment with us and let us know when to call. Our goal is to make the whole process of getting a cancer plan as easy and convenient as possible. 

For a short video on this awesome plan, click here. And please stay safe and healthy!

*This policy is not available in all states. 

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!