How Do The Self-Employed Get Benefits?

I am very comfortable working in the group benefits market. Helping people who work for large companies, school systems and municipalities has been part of my world for nearly 20 years now, and making sure they have the right benefits is a task I welcome.

At the same time, I focus the majority of my efforts toward those people who don't have a large corporate employer. As a 1099 contract employee, I realize that it is up to me to find my own affordable benefits that will help me and my family in the event I should get sick or hurt, or worse, die. That is why I enjoy helping other business owners, entrepreneurs, sales professionals and the otherwise self-employed get the coverages they need.

There are a few differences in the types of products available. Those large group products have less underwriting, and in some cases no underwriting. "Guaranteed issue" means that the insurance will cover a person with no questions (except tobacco usage). "Simplified issue" is another option, which means there may be just a few health questions. Those "knockout questions" will decide whether or not a policy gets issued. One "yes" can do you in.

But policies that are issued on a guaranteed or simplified issue basis typically take on more risk, and that risk is passed on to the employee of the group in the form of higher premiums. One of the tricks agents us when selling in the group insurance field is to quote the premium based on pay frequency. If you are paid weekly, $10 each week sounds a lot better than $45 each month. 

For the rest of us, having to find coverages that aren't deducted from our checks can be overwhelming and daunting. It doesn't have to be that way though. Use a couple of our tools and watch our product videos to see what is available and how these products work. 

Let's look at a few of these insurance products.

• Life insurance. We suggest that you take a look at affordable term life insurance while you're working, but maybe also get a small permanent policy for final expenses. For our younger clients we offer a term life insurance policy that will carry them out to age 65! And there is no medical exam* for policies under $250,000. 
• Individual Disability insurance. This should be called "paycheck insurance", because that is the purpose of this policy. When trying to determine how much coverage you should apply for, I suggest the "H.U.G." method by figuring out much monthly expenditures are for housing, utilities and groceries. (Note: individual disability policies generally don't cover maternity unless the doctor deems it necessary during the pregnancy.)
• Business Overhead Expense insurance. This is another version of the previously mentioned Disability insurance, but the benefits cover the bills of your business, not your personal bills. If you rent an office, have utility and payroll expenses, this plan gives you the time to think your options over if you get sick or hurt and are not able to work. You may recover, retire or sell the business, but you won't be rushed into a decision.
• Cancer insurance. I have found that when working with large groups of employees, cancer plans are popular through word of mouth. If one employee is diagnosed the other staff members realize how expensive the out-of-pocket costs are. We have a couple of different options for cancer insurance, one being a traditional reimbursement plan, as well as a lump-sump plan. Both can cover deductibles and co-pays and offer a wellness benefit. (One of our plans also covers several other diseases as well, like meningitis and tuberculosis.)
• Cancer, heart attack and stroke insurance. These plans give you the option to choose if you want coverage for one, two or three types of illnesses.
• Accident insurance. Coverage for any type of accident, from cutting your hand and needing a few stitches to serious automobile wrecks. As long as you get some medical attention these plans pay a benefit. Great for active people or if you have kids who play sports.  

If you are interested in learning more about these products, visit our Products and Quotes page from our website. There you can run your own quote for life and disability insurance, as well as watch some short videos about some of our other products. If you have any other questions, leave us a note on our contact form or book an appointment for us to give you a no-pressure call.  In the meantime, stay healthy!

*Medical records will be requested and may result in some clients needing an exam. 

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

Do I Need An Out-Of-Pocket Protection Plan?

As we are in the middle of open enrollment for ACA (Obamacare) plans, we are seeing that many individuals are selecting higher deductibles, fewer copays and more out-of-pocket costs to make their health insurance premium more affordable. These out-of-pocket costs may still cause unnecessary burdens to many people. 

As a matter of fact, the number one reason for bankruptcies in the country is medical expenses, with the percentage being estimated at over 60%. In 2015 the Kaiser Family Foundation found that medical bills caused 1 million adults to declare bankruptcy. The same survey also found that 26% of Americans between the ages of 18 and 64 struggled to pay their medical bills. 

When a family member has a medical condition and has to go to the hospital, they don't need added financial burdens. Our new Out-Of-Pocket (OOP) Protection Plan* is designed to help pay some of the costs that most families will experience from higher deductible plans with fewer benefits. 

Having a policy that covers out-of-pocket expenses for hospital stays could not come at a better time. The news is filled with statistics of Covid cases on the rise, and hospitals filling their rooms. Because of this, we have had an increase in interest for plans like this. 

  This plan pays directly to the policyholder. There are no networks nor deductibles. Even filing a claim is simple. And the benefits are paid directly to you in one lump sum, not the hospital or the doctor. Plus the plan pays in addition to any other insurance and workers compensation.

The best part is that you can choose the benefit and premium. For example, you can decide what amount of benefit you would like for your daily inpatient hospital confinement benefit. Next, you decide on how much you would like for your first hospital admission benefit. Included in this is a $50 benefit for doctor office visits (2 each year). 

There are also optional benefits, like an outpatient surgery benefit (limited to 2 a year) and an emergency accident benefit (limited to 4 per year).  It even covers maternity as any other illness. Not many plans do that!

You probably would like to know how much a plan like this costs. The best way to find out is to run a  your own quote which you can do by clicking here. You can cover yourself, you and a spouse, you and your children or the entire family. 

If you are trying to save money by choosing a high deductible health insurance plan, be aware that one hospital stay can burden your family's finances. By having a policy to cover those deductibles, copays and coinsurance costs can keep you afloat when you need it most.

People don't plan on being admitted to the hospital, much less having to be confined for a week or more. Those out-of-pocket costs will definitely be there when you are released from the hospital, but what about your other bills? For those of us who are self-employed, spending days in the hospital means not working, and not working means not making money that pay our usual bills. Housing, utilities, groceries and car payments can add up quickly if you don't have the money. As I mentioned earlier, this plan pays you so you can take care of those monthly obligations. 

If you have questions about this plan or any of our other insurance plans, please leave us a note in the comments section below, or go to our website at www.SurfFinancialBrokers.com and book a phone appointment. In the meantime, please stay healthy! 

*Not available in Virginia

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

Long Term Care and Covid_19 Options

Earlier this year when the Covid_19 epidemic began to invade the country we learned that long term care facilities were being hit hardest by the virus. With the elderly residents already sick, the disease infected not just the patients, but the caregivers and other staff members as well. 

Keeping this in mind, people still need to plan for their care when they will eventually become chronically ill. We all want the pandemic to come to an end as soon as possible. But if it doesn't, do you have a plan in place?

As I have mentioned in previous posts, there are three stages of retirement for most people. I like to call them the "go go" years, the "slow go" years and the "no go" years. Unfortunately, when we think of our retirement, we have images of travel, visiting grandchildren and relaxing on a cruise ship. That would be the "go go" years. They don't always consider the other two stages.

As we age and our health begins to fail, we slow down. We stay closer to home and travel less. Sometimes, those years can even include being a caretaker for a sick family member. If you have never had to take care of someone else who is chronically ill, believe me when I say it can be one of the most difficult and stressful jobs ever.

Finally, there are the "no go" years, in which we are the ones receiving care of some kind, be it in a skilled nursing facility, assisted living facility or even a non-medical "senior community".  None of these options are anyone's first choice and all can be very expensive. And all are currently under scrutiny due to the virus.

Of course, the option every person would love to choose would to be at home. I have discussed my own father's refusal to go into a facility, even though he needed care around the clock. His Parkinson's was causing him to fall often and eventually led to us having to hire a home healthcare agency.

And as facilities are expensive, so is home healthcare. Having a couple of caregivers live in the home with my father was approximately double the cost of a nursing home or assisted living facility. He assured us that he could cover the cost with his pension and some rental income, but he fell short each month. When he passed away, we learned he had been dipping into his home equity line each month. 

What does someone do who wants to plan for the "slow go" years in this situation? Given that we can now acknowledge that facilities may not be a first choice, we think more people will choose to stay at home with a family member, a hired caregiver, or a combination of the two. 

This is why our Short Term Home Healthcare (STHHC) plan has become so popular in recent months. These plans*, which are available to those over 61 years old, are affordable and easy apply for. There are only three questions on the application and it can all be handled over the phone. To see a short video describing the STHHC plan, click here. 

Let us help you navigate the waters of your long term care planning. Visit our website to book an appointment and in the meantime, please stay healthy!

*Plans are not available in all states. Contact us to see if STHHC is available where you live.  

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!

Keeping Those Supplemental Benefits

I have spent a good portion of my insurance career working in the worksite benefits arena, helping people choose which insurance plans are best for them and their families. The employers decide which plans they want to offer and then we, as benefits counselors, sit down with the employees individually to discuss the different types of coverage. These ancillary or "voluntary" insurance products are deducted from their paycheck and the employees appreciate the convenience of it, but also are aware that their take home pay will be lower.

Many times the menu of coverages includes insurance policies for disability, cancer, hospital indemnity, accidents, critical illness, heart and stroke, and of course, life insurance. The employees can opt to cover themselves, a spouse, children or the entire family.

One of the many factors that the employees like is the "portability" of the policies, which means that if they leave their job they can take the coverage with them. And herein lies the rub. 

Not everyone leaves their job for greener pastures. Some may decide to move on to open their own business or to retire with a pension. For those people portability is a good thing because they probably can afford to continue paying those premiums on their own.

As we have seen with the Covid_19 epidemic, others may be laid off, fired, furloughed or just quit. For these folks, losing a paycheck may be the end of their coverage, as they probably will not have the funds to keep paying for those extra coverages. 

One of the issues here is that when these people originally purchased these plans, they were quoted premiums based on their pay frequency. In other words, if someone is paid weekly, the agent would say that a cancer plan is $6 each pay, because that is how much is coming out of their check. That doesn't sound as bad as $25 each month and most people don't do the math. 

A few weeks after the employee loses his or her job, they will get a notice in the mail asking them if they want to continue the coverage with a couple of options. One option is to have the premiums drafted out of their bank account or paid quarterly. Using our example above, the person who is now unemployed is being asked to write a check for $75. If they have not yet found another job, that money probably won't be in there budget either.

Another issue here is that many people simply do not have jobs that offer these benefits. For those individuals, who like us, are self-employed, small business owners or contract employees, voluntary benefits are not available. 

With this in mind, we have decided to begin offering our menu of supplemental policies on an individual basis. It doesn't matter if you run a business from home or out of your car. Everyone can now apply for coverages they want or need. A few examples are:

• Disability insurance - Business owners are usually working longer hours, no matter what the profession. If you are out of work and can't work, those bills don't stop coming in.
• Hospital Indemnity - These plans cover you for being in the hospital. With Covid_19 in the news lately people have started to express more interest in this plan.
• Cancer - We all know someone who has been affected by cancer and for many people a good cancer plan gives them peace of mind. 
• Accident insurance - If you are active, work a physically demanding job or have kids who play sports a good accident plan can help you with sudden out-of-pocket expenses.

When it comes to price, none of these insurance plans are going to break the bank. Head over to the Surf Financial Brokers website and check out our list of products. A few even have short videos explaining how they work. In the meantime, if you have questions about them, let us know. 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!

Pre-Exisiting Conditions

Pre-existing conditions have been mentioned in the news of late, mostly because of the debate surrounding the Affordable Care Act (ACA), otherwise known as Obamacare. In regards to major medical insurance coverage, people can currently still be covered for illnesses that they may have had recently or, in many cases, still have. 

When it comes to life insurance, disability and other related types of insurance, pre-existing conditions are still considered by the insurance carrier's underwriters. This doesn't mean that someone will be refused a policy, but depending on the situation, it can be difficult to get and/or more expensive.

Different kinds of coverage will have varying types of underwriting restrictions. For example:

Life Insurance - Underwriters consider a large swath of items when looking at covering your life. Things like smoking, obesity, previous illnesses, current illnesses, dangerous hobbies, DUI's and family history all get looked at. A few years ago I had a client who was morbidly obese but wanted some life insurance. We found her a plan, but it was "rated up", which means that the company increased her premiums to reflect the risk they would be taking on by insuring her. 

There are companies who offer "guarantee issue" plans, but they are expensive and will sometimes limit the death benefit in the first two years. Obviously, the people who apply for these policies know that their health is not good and are rarely surprised by the rate jumps. 

Disability Income Insurance - As with life insurance, many of the same factors apply. I had a client who flew a small airplane once a week for work. I thought it would be an issue until the underwriter told me that "if he crashes that plane, he won't be disabled, he'll be dead." She issued the policy.

When I work with people who are looking at company sponsored group benefits, pregnancy often comes up in the disability conversation. Most of the carriers will cover the time after delivery for a few weeks, but with limits, and the applicant may have to wait up to 10 months for coverage to be effective.

Long Term Care - In my experiences, this has always been one of the insurance products that have the toughest underwriting guidelines. The underwriters like to "connect the dots" with the information they have. For instance, I had a lady who, years before her application, had fallen off the bottom rung of a ladder, resulting in a hairline fracture of her kneecap. Now she had been diagnosed with osteoarthritis, so the underwriter decided that she had brittle bones. It took a candid conversation with the underwriter to explain that the two were not related and the policy was issued. 

In another case, I had a gentleman who had some heart issues and smoked a few cigars each week. The underwriter declined his application citing that the cigars could contribute to a cardiac event. Not long after the gentleman died of a heart attack. 

As you can see, there are a lot of issues and concerns that go into issuing these insurance policies. As an agent, we have to be fairly good at knowing about our carriers and their underwriting guidelines. I had a conversation last week with one of our partners who markets long term care insurance. We were discussing a company that I had not been aware of previously. When I asked about them he said," They are great if you are healthy." That's all he had to say. 

We do our best to help you find the best policy for your needs and in your budget. Check out our website and book a phone consultation. 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 There A Covid_19 Insurance Package? (Pt. 2)

In the last post told you about a couple of insurance products, namely life insurance and disability income insurance, that are a great fit if you are concerned about catching the Covid_19 virus. In my opinion they are two insurance coverages that everyone probably needs. As a matter of fact, when I speak to groups about their insurance products I discuss the "Holy Trinity of Insurance", consisting of life and disability insurance, as well as the major medical portion. 

Just because other products are not in the Holy Trinity doesn't mean they can't be good products and act as the "saints"(as you can tell my mother sent me to Sunday school). I have a couple of  options for you if Covid_19 is in the back of your mind.

The first policy I would like you to consider is a Hospital Indemnity (HI)* plan. Generally speaking, HI plans cover you for being admitted and confined to the hospital. There are a few other benefits that we see from time to time, including anesthesia and outpatient surgery, but not all policies have those or they may be additional riders. These policies can vary dramatically from different companies and also state regulations, so check into what is available in your state. 

One of the things I like about most HI plans is the simplicity. Generally speaking, an HI plan will offer a daily confinement benefit that you decide on. For instance, you can choose $100 or $200 a day benefit. Some policies will offer an additional benefit for being admitted to the hospital like $2500 or $5000. These plans offer riders for critical accidents, skilled nursing facility, outpatient surgery, as well as dental and vision. With all of these riders available one can "customize" their policy for their own needs and budget. 

You can get a great description of the policy and run your own quote by clicking here. 

One other policy I want to mention may sound out of place in a discussion about Covid_19, I think it deserves a listen. Given that nursing facilities are suffering greatly from the virus, which apparently is very contagious amongst the residents and caregivers in these facilities, the option of staying in your own home is much better. Of course, there is one obstacle in that strategy, and that's price. 

In my hometown, a good skilled nursing facility would have cost my father around $35,000 a year. He was adamant that he wanted to be in his home and hired a home healthcare company. The cost of this was over $75,000 each year. Even though he really couldn't afford it, my father used the equity in his home to pay for the caregivers to stay with him around the clock. 

With all of this in mind, we offer a Short Term Home Healthcare plan, which helps pay for those expenses related to staying in your own home. Unlike a Long Term Care plan, this plan helps you pay for care only in your own home for up to 365 days (not necessarily in a row). Even though the carrier recently changed the minimum age of this coverage to 61, it is still very affordable and you only have to answer a few simple health questions. To see a short video on this product click here. 

So if you are concerned about how Covid_19 could affect you or your family's finances, look us up on the web and book an appointment to speak with us. In the meantime, please stay healthy. 

*Not all policies are available in all states and rates are subject to underwriting. 

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

Great Cycle Challenge - Cancer Bike Ride

As September was Life Insurance Awareness Month, we failed to mention one of the other interesting items that took place involving a couple of our associates. 

The Great Cycle Challenge began in 2015 and has quickly become one of the biggest cycling events in the country. People of all ages, abilities and from every state across the country set themselves a personal riding goal and challenge themselves to pedal to fight kids' cancer. For 2020 the challenge took place in September. 

In the previous 5 years, the riders from all 50 states across the country had ridden a total of 18,831,130 miles and raised a total of $24,615,507! That money goes to support research to develop better treatments and find a cure for childhood cancer.

Two of our very good friends participated this year and both did fantastic. Donna Cash, a retired school administrator in North Carolina, set a goal of 300 miles and to raise $500. Donna, who is a colleague of ours and an all-around awesome person, rode 303 miles and shattered her goal with $668. Good job!

Jeanne Doran, one of our Surf Financial partners in crime, also rode in the event. Going above and beyond the call of duty, Jeanne rode a total of 455 miles and raised $2615. Congratulations to both of these amazing people and a hearty thanks for helping a good cause.

I spoke to Jeanne last week and let her know what a great job she did. As cancer has touched all of in some form or fashion, we discussed what a great way the bike ride was for getting the message out about kids' cancer, as well as other cancers too. 

That's when Jeanne and I realized that we offer cancer insurance plans and those plans should be part of our messaging also. 

I've related the story in the past of the gentleman whose son was receiving cancer treatments in a town nearly two hours away. Since the father was having to take time from work to travel with his son, their financial situation was dire. At the last minute the father's employer remembered that there was a cancer plan in place and it literally saved the day. 

Most people purchase their cancer plans through work, which is fine and convenient. However, if you are self-employed, a small business owner or, like us, an independent contract employee, you may not be eligible for a group cancer plan. Not to worry, because we offer an excellent plan that is available on an individual basis, and is still quite affordable. 

Through the years we have heard stories from clients who will tell us how much their cancer plan came in handy when they were receiving treatments. Yes, their medical coverage picked up the bulk of the hospital and doctors' bills, but there were still a lot of out-of-pocket costs associated with cancer. Co-pays and coinsurance are just the beginning. Travel and lodging expenses if treatments are out of town can add up, and not everyone is eligible for the Ronald McDonald House. Of course, the loss of income can be detrimental to the financial stability of the patient's family. 

If you would like some information about our cancer plan, check out this video. And if you would just like to contact us for rates or other information, feel free to schedule a phone appointment. In the meantime, stay safe and 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!

Insurance News This Week

Again, I wanted to share some news items with you from the world of insurance, with a wee bit of comment added. Feel free to tag someone who would find this interesting. 

We just learned this week that life insurance companies are paying out far fewer life insurance claims due to Covid-19 than they initially expected. The reason for this is that the disease is killing a disproportionately large number of people who don't have life insurance. 

Even though anyone can apparently contract the virus, it is mostly striking older Americans and minorities. Older Americans typically carry smaller policies than those who are still in the workplace. As a group, seniors don't have to worry about paying off a mortgage or making sure their kids can pay for college, because the kids are grown and have their own children. 

According to an article posted on the Wall Street journal website, " In a pattern dating back decades, Black Americans typically have bought modest policies aimed at paying burial and related costs, rather than bigger face-value policies, according to life-insurance agents and historians. Detailed data on policy ownership by race is hard to come by. Since the 1960s, U.S. life insurers quit using race as a factor in underwriting and pricing policies, so they quit collecting race information, executives say."

The two demographics have been hit hard by the virus and sometimes something like this acts like a wake-up call. Now is a great time to consider purchasing additional life insurance.

In another piece of news, the Tennessee Department of Commerce and Insurance (TDCI) and the National Association of Insurance Commissioners have created an online tool to help people find life insurance and annuity benefits. Thus far in 2020, over $7.4 million have been located. 

“I am pleased to see that Tennesseans are using the Life Insurance Locator Service to find their loved ones’ benefits during this year which has brought unprecedented hardships to Tennesseans,” said TDCI Commissioner Hodgen Mainda. “As part of Life Insurance Awareness Month, I remind Tennesseans to educate themselves about the importance of life insurance today so they might be better prepared to be a beneficiary in the future.”

This is the kind of story we at Surf Financial Brokers enjoy to see. At the essence of our business is a promise made by the carrier. That promise, that if you die they will help your loved ones by giving them money when they need it most, is important to all in the insurance industry. However, when people move or don't update their beneficiaries often, it can be difficult for an life insurance company to pay the claims. 

With that said, apparently many people who are beneficiaries of policies either don't know they are, or have no idea where the policies are located. We ran into this scenario with my own father's passing. His beneficiaries had predeceased him. Obviously he had not updated his beneficiaries in years. And we found one policy by accident when I called to update someone that he had passed away.

As agents selling life insurance, as well as disability, cancer, accident and long term care plans, a paid claim let's the client know that we stand behind our promise. That translates to how valuable our work really is to us. 

Let us help you find a policy that is in your budget. And for your convenience, you can even schedule your own appointment here. 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!

Do I Need An Accident Insurance Plan?

Everyday thousands of people seek medical attention for accidents large and small. From getting cut while making dinner and needing a few stitches, to serious automobile accidents, urgent care centers and emergency rooms are filled with people needing medical attention. 

I first got into the insurance business selling accident plans door-to-door in rural areas. And even though I didn't care for the policy at the time, I did see the value as our customers in the farming community would get hurt doing day-to-day chores. When I went to work for a large worksite benefits company I heard stories from people everyday about how they used their policies often, not just for themselves, but for their families. 

These stories were interesting and sharing them helped me to get more people to understand why they needed a good accident plan. For example, one nice lady was married to a firefighter and had purchased a plan that covered the entire family. Her husband was constantly getting hurt on the job, which was understandable. Burns, lacerations and other perils were a given in his line of work.

But when he was off the clock, he was just as vulnerable. He loved to hunt deer, and apparently had an issue with falling out of the deer stand on occasion. His wooden boat, which he used for fishing when the weather was good, had some rusty nails that he sat on several times. It got to the point where the wife felt bad for contacting me every time he needed to file a claim and made copies of her own claim forms. 

If you are active or have kids who play sports, an accident plan may be the right fit for you. Unfortunately, people sometimes forget they even have an accident plan. During a chance meeting with a client of mine he mentioned that his daughter had been playing basketball at the local rec center a month earlier. She went in for a layup and her legs were cut out from under her by another player. At the hospital she was treated for a small cut but had to have some minor surgery to repair a muscle tear. 

My client lamented that his medical insurance payed the majority of the expenses, but only after the deductibles and co-insurance minimums were met. When I reminded him that he actually had a policy in place to help offset those out-of-pocket expenses he lit up. We filed a claim and he was very happy with the results. 

Your occupation usually isn't going to be a factor and since there are no pre-existing conditions for accidents, people are covered right away. My clients come from all kinds of backgrounds, such as realtors, mechanics, artisans and business professionals. And you can choose coverage for off-the-job or 24 hour on or off-the job. 

Most of these policies even cover dismemberment and cover loss of sight, limbs (such as arms, legs, fingers and toes). There are even benefits for accidental death, which doubles if you were to die in a "common carrier", like a bus or plane. 

There is also an optional rider for disability income, which can help replace lost wages due to an accident. That can be important since for most of us, our most valuable asset is our ability to earn a living.

And just to add a little more value, there's also a wellness benefit. You're going to get a check up once a year anyway, so go ahead and get a few more dollars sent to you for that. 

Recently I met a woman whose husband had died while cutting down some trees in his yard. A large log rolled onto to him and he passed away in the ambulance on the way to the hospital. She told me that he had just turned down an opportunity to purchase an accident plan a few weeks before he died. Even though it was too late for him, she made a decision to purchase a plan for herself. 

I hope you seriously consider an accident plan. Especially since all the benefits go directly to you to spend how you need to, and not to the doctor or hospital. For a quick recap of some of the coverages from one of our carriers, click here. And if you have any questions please 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!

Do I Need A Cancer, Heart Attack and Stroke Plan?

We all know someone who has had cancer, heart attack or stroke. And we all are aware that with any of these significant and serious health issues there can be a lot of bills that your major medical insurance  will not pay. Deductibles and other out-of-pocket expenses will deplete your savings and can devastate your family financially.

Medical issues are one of the main reasons for bankruptcies in this country. Not only will cancer or a heart attack run up medical bills, but it also can keep you from work. As I have stated on many occasions, your number one asset isn't your home, car or investments, but your ability to earn a living. With a major loss of income comes more stress on you and your family. 

I shared the story in a recent post of a single father who had to take time off from work when his son was receiving cancer treatments. They were literally days away from having the power cut off from their home when they remembered they had a cancer plan, which helped out tremendously. 

Take a look at this short video and see how it works. 

Many companies offer good cancer plans, and many companies offer good plans that help for heart attacks and strokes, but not many let you combine them both. With our plan, you can choose either a plan for cancer or heart and stroke, or you can have both at once. That's flexibility that helps you.

And these plans don't pay the doctor or the hospital, but instead pay you directly. You can choose a lump sum benefit up to $75,000 that you can use at your discretion, whether to pay for your out-of-pocket bills or just your regular monthly bills due to your loss of income. 

These plans also come with a wide variety of optional riders as well. The cancer recurrence rider and building benefit riders are a valuable tool in making sure that your plan keeps up to date with the unknown down the road. You can even add a cancer rider for your children.

All of these features are available for heart attacks and strokes too. You can add these riders if you are concerned about recurring heart attacks and strokes, as well as coverage for your kids. 

But these plans also have some additional features that you probably wouldn't expect, like additional benefits for intensive care, and critical accidents. There is even an optional rider for dental and vision benefits. That's a lot for one affordable plan!

But what if you never use the plan after paying into for years? There's even an option for a return of premium rider which will refund your premiums, minus any claims paid. 

And we make it very easy for you to apply for this great coverage. You can pick out a time from our calendar to have us call you on the telephone. No need to worry about a salesperson coming to your home.  The application process is easy and with just a few questions. 

Don't become a statistic by letting a major illness ruin your family's finances. By making sure you have the right kind of coverage for serious health events like cancer, heart attacks and stroke, you will have the peace of mind knowing that your loved ones can feel secure while you (or another family member) is receiving treatments. And that is what insurance is all about. 

Not all plans are available in all states. We can let you know what is available in your area.

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

Why I Really Need Life Insurance (Powerful Video)

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

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

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

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

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

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

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

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

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

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

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

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

September Is Life Insurance Awareness Month

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

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

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

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

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

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

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

The perception: They think life insurance is expensive.

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

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

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

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

Do I Need A Short Term Health Insurance Plan?

Everyday people all over the country start new jobs and are told they will have to wait 30, 60 or 90 days before their health insurance kicks in. Many of these people may have had to pay for their health insurance through COBRA, which carried their coverage over from their previous job. COBRA is not cheap and the employee may not be able to afford to keep it. On the other hand, the employee may not have any coverage at all and will have to wait, hoping not to get sick or hurt, for their new benefits to start.

Either way, there has to be a solution. Back in the pre-Obamacare days, we had a temporary solution called Short Term Health Insurance. It was designed specifically for those people who had lost coverage through work and had a gap in coverage until their new benefits could start. Unfortunately, when the new ACA rules became effective, short term plans did not qualify under the rules, which meant that tax penalties from the federal level could be levied. The Obama administration also put shorter limits on how long a temporary plan could cover people. 

In 2018, the Trump administration announced its intention to reinstate the previous time limits for temporary health plans. By making some changes in the mandate and tax penalties, short term plans became popular again. 

With all of this in mind, the question you may ask is if short term health insurance is for you. It may be if you are:

• Not able to apply for the ACA plan during open enrollment or you did not qualify for a special enrollment period
• Waiting for your ACA coverage to start
• Looking for coverage to bridge you to Medicare
• Turning 26 and coming off of your parents' insurance
• Between jobs and waiting for your benefits to start at your new job
• Are healthy and under 65 years old

Note that last bullet point. Unlike ACA plans, there is no coverage for pre-existing conditions. These plans are fully underwritten, so if you already have health problems these plans may not be a good fit for you. Also, they are limited in their coverage. You aren't going to find maternity coverage or a lot of prescription benefits here. Consider these plans to be a Band-Aid to help with major expenses while you are waiting to get on a employer sponsored plan or an ACA plan.

There are some benefits to these plans though. With short term health insurance you can:

• Get covered fast, as soon as the day after application
• Pick your deductible amount from several options
• Pick your length of coverage, from 1 to 12 months, depending on your state
• Drop your coverage with no penalty if permanent coverage becomes available
• Apply for another short term plan when the first one ends if you need to
• Have generally lower premiums

NOTE: Even though these plans are permissible from a "federal" level, state requirements may still vary, so check with your local agent. 

It is true that you may be able to save money with a short term health insurance plan. Just be sure to know what you are buying and that it is a good choice for you. For the right situation, short term health coverage can definitely provide fast, flexible, temporary health insurance coverage that fits your needs. 

If you have questions, drop us a note. We aren't licensed in each state but we hope we can point you in the right direction. 

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!

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!

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!

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!