How To Choose A Term Life Insurance Policy 2023

Have you thought about what would happen to your family if you were to die too soon or unexpectedly? Making sure that your family can stay in their home without the stress of paying outstanding debt is important. But you want to make sure that taking care of this is affordable as well.

This is where a term life insurance policy can fit the bill. Term life is great in that it can fit into almost any budget as it is pure death insurance. Most of the time there are no bells and whistles like cash value accumulation or extra benefits. 

Term life insurance is, as the name implies, covers you for a determined amount a time, such as 10 years, 20 years or 30 years. The rate is locked in for that term and won't increase. We at Surf Financial Brokers, have one insurance carrier that offers a 40-year term which is great for younger people who want a policy that will stay the same price into their 60's. 

Which term should pick? That depends on what your needs are. Take into consideration things like your mortgage. If you have just purchased a home and have a 30 year mortgage, a thirty year term policy will be appropriate. But if you have just a few years left on your mortgage, you can lower the term. 

On the other hand, if you have small children, you may want to consider how long it will be until they are out of the house and on their own. We all know that kids aren't cheap and even if the mortgage is paid off, raising the children will still take money that won't be there if you were to pass away.

How much coverage do you need? The simple way to figure this out is to add up the total amount of the following:

• The balance on your mortgage. 
• Credit card debt.
• Balances on car loans
• Final expenses. When doing this I like to add in what I call "costs associated with death", which could be your medical deductible if you are in the hospital for a few days before passing away. And even though many have decided they don't want a funeral, there are those who do. I had a client who wanted to cover the cost of catering and an open bar. He wanted his friends to have a good time.
• Replacement of income. Figure in your annual income and multiply by 5 to help your spouse or significant other pay the expenses that will need to be addressed like car repairs or other emergencies that can pop up.
• Educational costs. If you have kids you may want to help them pay for college when you aren't around. 

It may look like a lot of money, and it probably is. Most people underestimate the amount of coverage they need, which can come back to bite your loved ones. If you aren't sure how much life insurance to purchase, use the calculator provided on our life insurance quoting tool. It will give you a more accurate number as to how much your family will need.

Another factor that may determine your term life insurance purchase may be a convertibility option. This means that at some point in the term the insurance carrier may allow you to convert to a permanent policy. I discussed this in a previous post. 

If you have any questions about purchasing a term life policy, drop us a note on our website. In the meantime, please stay healthy!

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

Who Are The 3 People On A Life Insurance Policy?

For most of us, buying a life insurance policy is a simple concept. We decide how much coverage we need, apply for the policy and name a beneficiary, who will receive the face amount when we die. But what if you have strange or unusual circumstances as to who the insured person is but someone else is paying for the policy?

There are three "people" involved in the purchase, not counting the agent of course. They are as follows:

1. The insured. This is the person whose life is being insured. When they die the policy pays out. The insured is the one who may have to go through a paramed exam, along with their medical records being looked at by the insurance company's underwriter. 

2. The beneficiary. This is the person who, as mentioned previously, receives the money at the time of the insured's death. You can name more than one beneficiary and the money will be divided by percentages. For example, Bill may get 40%, Joe may get 20% and Mary, who is obviously the favorite, will get 60%. 

It's important to keep your beneficiaries up to date. If you need to change a beneficiary, it is usually a simple process of calling the insurance company and having them send you a form. It can be done at any time. 

3. The payor/owner. These payor and owner are usually the same person, and in the vast majority of cases, the payor is the insured as well. However, on certain occasions, the owner may be a third party, like an employer. In these cases, the employer may offer to buy a policy on an employee as a perk with the employee's family as the beneficiary. 

Another example is when a parent takes out a policy on a small child. The parent is the owner, but when the child grows up and is a responsible adult, the parent can transfer ownership of the policy to the adult child, who now can pay the bill each month and change the beneficiary to their spouse or children. 

As you can see, the owner of the policy is in control of the policy. This allows them to make decisions with the cash value if the life insurance is a permanent policy, like whole life or universal life.

A few years ago I was working with a client who wanted to take out a policy on himself and leave the money to his church. Knowing that this was a version of a charitable donation, he thought he could just write off the premiums, but after doing a bit of research, we found out that the IRS frowned on this practice. 

We found a workaround, though, by changing the ownership of the policy to the church, with the client as the insured. The bill for the annual premium would go to the church, who would contact the client. The client would cut a check for the amount of the premium as a "donation" to the church, which the church would use to remit the premium payment. The insured could then deduct the donation as a gift. Everyone was happy.

Knowing who is the insured, owner and beneficiary of your life insurance policy is important and, as you can see, they can move around from time to time. If you have questions, drop us a note in the comments section. In the meantime, stay healthy!

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

3 Ways To Set A Good Financial Example For Your Family

One of the most intriguing things I have learned in my many years of being a life insurance agent is how values are handed down from one generation of a family to the next. This is almost always true for everything, from work ethics to religious beliefs. Most notably I see it with financial practices. For example, parents who have bad credit will also have adult children who tend to be late paying bills, creating bad credit for themselves as well. 

One of the other areas where this is true is when it comes to life insurance. There are parents who don't buy life insurance because of various reasons, like thinking it's some sort of scam (yes, I've heard this!) or "Why do I need something I can't use?" (it's not for you, but for your family!). On the flipside of this, I have clients who know the value of life insurance because their parents had policies which paid out nicely. 

Sometimes they insists on buying whole life insurance because "that's what my mother said to buy", which is fine, but maybe a term policy is a better fit for their needs and budget. At least they're considering the purchase for their families. That's the first step in making sure that if something should happen their surviving loved ones will be financially secure.

I often hear stories from clients about how life insurance helped them. My wife is a great example. Her father passed away very unexpectedly when she was still in high school. He had a large policy that helped her and her siblings pay for college and pay many of the outstanding bills. We even used some to the proceeds years later to put a down payment on our home. Now my wife tells people how that policy was helpful, even though she doesn't sell insurance.

Too often, however, I hear stories of families struggling to make ends meet when one of the breadwinners in the family dies too soon. You can easily avoid leaving your loved ones all kinds of bills, like outstanding debts like mortgages, credit cards, car payments and funeral expenses. Shifting the burden of covering all those bills to a life insurance policy will give you and your family the peace of mind that lets you sleep well at night.

I often hear stories from clients about how life insurance helped them. My wife is a great example. Her father passed away very unexpectedly when she was still in high school. He had a large policy that helped her and her siblings pay for college and pay many of the outstanding bills. We even used some to the proceeds years later to put a down payment on our home. Now my wife tells people how that policy was helpful, even though she doesn't sell insurance.

On the other hand I also hear nightmarish stories about families struggling to pay bills and wondering if they can afford to stay in their homes because one of the breadwinners failed to take care of something as simple as buying a life insurance policy. 

About a year ago I met a young widow whose husband died suddenly in a traffic accident. He left a ton of debt, including payments on a muscle car that she eventually sold at a loss because he was upside down on the payments. Her son, a bright kid who was about to graduate from high school, told me "I probably won't go to college because we just can't afford it." He is having to go with his "plan B" which is to enter the military and use the GI Bill down the road.

Making the purchase of a policy can be the deciding factor in whether or not your family can afford to stay in their home, go to college, or just pay off any debt you may have incurred. And life insurance is much less expensive than you may think. Here are a few steps you can take to make you a hero long after you are gone.

1. Go to our website and get a quote. Find a policy that fits in your budget.
2. Not sure how much life insurance to get? Use the "calculate" button to see how much coverage will be needed.
3. If you see a policy you like you can start the application immediately. 

By letting your family know they are taken care of if something should happen to you will send a great message to prepare for the unexpected. It's that easy. And if you have a question, you can just drop us a note. In the meantime, stay healthy!

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

What Keeps You Up At Night?

One of the hard parts of being an insurance agent is getting people to have an honest conversation when it comes to their finances and how their situation affects future decisions. Some clients either don't want to discuss their goals or simply have not taken the time to figure out what their goals are. 

There have been many times when I have sat down with someone and asked, "Where do you want to be three years from now?" The look on the client's face is priceless. They really don't know. I'm not trying to embarrass them or make them feel bad, but the point of the conversation is that many people are just meandering through their financial issues, paying bills as they come in and buying stuff when they have money put aside.

Just as you would think, most people don't have a clue what their goals are. They say that they haven't really considered it before. Here's an exercise you can do (it's the same one I use with my clients) and it will help you make a game plan.

Take a sheet of paper and put today's date at the top. Next to that, put the same date but three years from now. Underneath the dates make three columns, with headings "Personal, Professional, Financial". Under each heading just write what you want to happen within the next three years. 

There are no wrong answers. I've had people give me all kinds of answers from saving $100,000 (financial) to owning a new boat (personal). One lady who was a cosmetologist put "open a cosmetology school" under the professional heading. Knowing what the goal is helps tremendously but that is just the first part of the conversation. 

Then I ask what would happen to that goal if the client were to die unexpectedly or to become chronically ill. Will they still be able to reach those goals if a potential landmine were to get in the way?

Every once in a while one question will get the client to open up and that question is "What keeps you up at night?" As a husband and father, there have been many times when I have lain in bed thinking about retirement, sick family members, paying for my child's education and a long list of other issues that can, and probably will, show up down the road. It can be overwhelming.

Another part of this is that people will hear advice, through friends or the media, which may sound good, but may not be applicable to their situation. One of my pet peeves is "financial gurus" giving generic advice. A single dad who makes under $50,000 a year and has a sick parent will have an entirely different situation than a married couple who have a six-figure income and no debt. Much like fingerprints, no two financial positions will be the same.

When I sit down with someone and they say they want a 20-year term life insurance policy for $100,000, I ask questions like:

• How did you decide that was the amount of insurance you needed?
• Will that cover any debt you have, including your mortgage?
• Will that amount replace your income?
• What do you want to accomplish with that amount of coverage?

Sure, this line of questioning can make someone feel uncomfortable, but my job is to make sure that the client gets what they need. Taking the time to get an accurate number for the face value of a life insurance policy will make sure that the client is getting what they actually need.

Don't let this stuff stress you out. Sit down with your agent or make a phone appointment to discuss how you can do what is best for you and your family. And in the meantime, please stay healthy!

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

How Does The Disability Waiver Of Premium Work?

For many people, buying life insurance is a chore. Having to research the different types of policies, from term to whole life, as well as dealing with an agent and maybe even scheduling a paramed exam, can make the whole experience is less than enjoyable. And don't even start with the litany of "optional riders" that can be tacked on to a policy, increasing the cost and leading to more confusion.

But before you decide you don't want any riders, let's take a look at a few of them over the next few posts. You might decide which ones will work well for you in the long run. 

In this post I want to discuss the Disability Waiver of Premium (WP), which is available on nearly all types of life insurance, as well as other insurance plans too. Generally speaking, this rider makes sure that if you (or the payor of the policy) become disabled and are unable to work, the premiums will continue to be paid so that your policy does not lapse. Think of it as insurance on the life of your policy.

One of my favorite clients and I were discussing this rider one afternoon and he said, "I never thought of this before, but the last thing you need if you can't work is for your life insurance to get pulled out from under you. That's when you need it most." He was correct.

This rider is usually so inexpensive that I will urge clients to take it, as the cost is inconsequential. For example, a policy that may cost around $30 each month will see a premium increase of less than a dollar. Seriously, this is never a deal breaker. I have even worked with agents who don't even discuss it with the client and tack it on anyway. 

I have a client who purchased a policy from me about 10 years ago. A few years ago she was in a very bad accident that has left her permanently (as far as I know) disabled. Since we had added her WP rider on at the time of the application, she does not have to make any premium payments until doctor says she can go back to work. Every six months or so she receives a form from the insurance company (I get copied on all of this) that she passes on to her physician. The doctor completes the form saying that she is still disabled and she continues to get her life insurance paid for. 

Here's where things get really interesting. After discussing this situation with the insurance company, I found out that if the term of the policy ends (in her case it was a 20 year term) and she is still disabled, they will convert the policy to a permanent whole life policy for her at no charge. Needless to say, she was very relieved to hear this when I passed the information along. 

I have worked with other carriers that will convert in the middle of the term if someone is permanently disabled. The most interesting case was a fellow agent who took out a policy on his son when the boy was very young. Around age 4 the boy was diagnosed with autism and the father was able to get the WP to kick in and convert at the same time. 

The point of all this is that I don't want you to dismiss the rider when it can offer great value in a time of need. Discuss all of this with your agent or drop us a note on our website. In the meantime, please stay healthy!

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

The Cost of Waiting

People generally don't want to have to take on a new monthly bill, especially if it is for something they do not plan on using, like life insurance. But putting off the purchase of a policy can cost you more money in the long run.

Life insurance, as well as disability and other types of insurance, are based on your age. As we get older the rate goes up until you "lock in" on a rate. Life insurance rates are based on risk, and the risk of you dying each year goes up as you age, thus making the premium increase. Buying life and disability insurance when you are younger can save you money in the long run while giving you the coverage you need in case something should happen to you.

This is the first reason why you should not put off buying insurance. As we age our health declines. Unless you are one of the few people who decide, in the midst of a mid-life crisis, to get back into shape, your health will more than likely get worse as you age. 

I currently have a client who is in desperate need of more life insurance, but her health issues have made it nearly impossible to find a policy for her that fits in her budget. Over the last 20 years that I have worked with her and her family, she has had tremendous weight gain which has brought on an onslaught of other issues, like diabetes, high blood pressure, cholesterol and joint pain. 

If she had taken a serious look at a policy when I first met her she would have had the coverage she needs now. Unfortunately, her best bet down the road will probably be for a "guaranteed issue" policy which will cost her a lot of money for just enough to bury her.

Leveraging your good health can be a great way to keep your insurance costs down. It also helps when overfunding a life insurance policy for accelerated growth inside a cash value policy. Permanent policies, like Indexed Universal Life (IUL) can be used for things other than the death benefit, like long term care expenses, chronic illness and a retirement supplement.

Another reason to buy early is to protect your loved ones. Just because you are young doesn't mean you don't have responsibilities. The sudden and unexpected death of a young parent can be even more catastrophic to a family's financial future because young children are involved, as well as the fact that the mortgage payment is mostly interest, leaving little to know equity in the home. That means the burden of making a mortgage as well as funding the educations of the kids could end up on the shoulders of a single parent.

Consider this for a moment. A permanent life insurance policy can be paid up early, so if a young person buys a policy that is paid up in 10 years (or at age 65), that piece of the financial puzzle is taken care of before old age and bad health sets in. And you won't have to deal with it later.

The same is true with most other kinds of insurance. Many cancer plans, for example are based on the age of the insured when the application is taken, thus locking in that rate for as long as one keeps the policy. Take advantage of your good health and young age. You'll be glad you did in the long run and so will your family. 

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

Can I Take Out A Life Insurance Policy On Someone Else?

Every once in a while I will be having a conversation with someone who wants to know if it is possible to insure someone else, like an acquaintance. When this happens I don't really know if they are kidding or not, but I ask if there is some sort of relationship there between the two of them. Usually the answer is "no, you can't" which seems simple enough but people ask why.

Can you imagine the madness that would ensue if people just went around insuring the lives of people they didn't know but "looked sick"? And if insurance companies had to pay those claims they would be out of business quickly. 

There are some guidelines (and reasons for them) when it comes to insuring other people. One of the basic rules for this is that there must be an insurance interest. In other words, before you take out a policy on someone else, you must have a relationship, either familial, personal or financial, with that person. Of course we can take out a policy on a spouse or child, as people do that all the time.

And if you borrow money from a financial institution or an individual, they may require a policy to secure the loan. That is considered acceptable as well. 

Another piece of this is that most states forbid insuring someone over the age of 16 without their knowledge.  But if the insured is over 16 they must sign a form acknowledging they are being covered. This rule applies even if the insured is your 18 year old child.

Back in the old days big companies would buy life insurance policies on all of the employees, with the company being the beneficiary. The thought process was that if the employee died there would be "transition costs" associated with finding a replacement. These Corporate Owned Life Insurance (COLI) policies became controversial when family's in need began learning that the death of their loved one was profitable to their deceased loved one's employer.

The issues arose (as well as lawsuits) when the insureds were no longer in the employ of the company. At that point, any insurable interest went out the window. In the early 2000's several of these types of legal issues got some news publicity which shined a light on how many large corporate companies were secretly adding to their bottom lines.

Nowadays, COLI's are still used, but not covering every employee, including the janitor. (They were actually called "janitor policies" because of this). More often than not, COLI's are used to cover the lives of the top brass, like the board of directors or top executives, who are supposedly fully aware of the policy. I have even heard that the beneficiaries of the policies are split among the company and family members. That sounds much fairer.

With all of that said, here is a short list of people you can insure:

• Family. When the life insurance agent asks what your relationship is to the insured, immediate family is a no-brainer. Be aware that there are limits on insuring children but otherwise you should be okay.
• Former family. As in ex-spouses. If there are children involved the court may order that you maintain a life insurance on your former spouse to help with expenses if the former spouse should die.
• Parents. Yes, they are family but they may have let their life insurance policy lapse or expire and a final expense plan may be the best answer.
• Business partner. Buy/sell agreements are usually written up between business partners to help ease with the transition of responsibilities when one of the partners dies. These agreements are usually funded by a life insurance policy so one partner can buy out the deceased partners ownership. 
• Key employees. Key employees are the ones who contribute significantly to the business or may have some highly specialized skill. These people are difficult to replace and if they die unexpectedly the company could take a financial hit.

If you have any questions about any of these scenarios, ask your agent or drop us a note in the comments. In the meantime, stay healthy!

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

How Can I Help My Kids Avoid College Debt?

The cost of going to college has soared in the last 25 years. For kids who who need financial help, loans are the first, and often last, resort to pay for an education. So if you have kids or grandkids or are the legal guardian of some college bound children, here are a few tips that may help ease the burden.

There are several things to consider when planning to fund your kids' education.

1. How much of the cost do you want? Some parents want to pay the full cost of tuition, while others say they want their children to at least pay some portion. I've had clients tell me they refuse to pay any of the costs. 

One of my clients used the last bit of logic with me one day, stating "I paid my way through college and she can do the same." I asked what the parent paid and found that father's tuition was never more than $500 a semester. Today, his child is looking at over $2000 each semester. When we added in books, room and board and other living expenses, that cost was closer to $5000. It was an eye opener to the parent who said, "I don't have that kind of money." Should we expect an 18 year old to have it?

2. No one has a crystal ball. I've heard parents say things like "My kid will get a football scholarship" or "She's going to Harvard". Mind you, the child is barely walking.  It's great to have hopes and dreams for your child, but be realistic.

Even though your child may still be in diapers you can still start a small savings account with some discipline. That means that you may have to treat it like a monthly bill and throw an extra $50 or $75 in each month. If, for some reason, you feel your child is not college material, you can use those funds for other expenses. On the other hand, if your child starts showing signs of brilliance in grade school you can move that money to a college savings plan gives tax breaks like a Coverdell IRA or a 529 plan.

3. 529 plans are great, but have drawbacks. For instance, when applying for financial aid or a scholarship, you have to disclose any and all college savings plans. If your 529 is loaded, it could keep you from getting that scholarship. Also, if your child doesn't go to school, you can transfer the funds to another child, but if used for something other than education expenses, expect a tax penalty on those monies.  Finally, remember that those funds are typically invested in the stock market. If your child is ready to go off to school and the market drops, that when you'll remember the...

4. Two-bucket approach. Some folks will partially fund a 529 plan and then have a second "bucket" of money, usually an overfunded cash value life insurance policy (see the next entry). If the market drops, you can use the life insurance cash value to pay for a year or so of college until the market rebounds. If you die, the death benefit can be used for college funding as well. Also, you don't have to disclose life insurance when applying for financial aid.

5. Life Insurance. Whole life has been sold for years as a "forced savings plan", which is a good concept but may be too conservative for the kind of growth you made need. If a parent is healthy and doesn't smoke (this is life insurance after all, so there is underwriting involved), we typically suggest a Indexed Universal Life (IUL) policy. With an IUL you can "over fund" it by paying additional premiums that are capped by the IRS. 

I recently had an appointment with a single father whose daughter was in the first grade. He truly wanted to help her fund her education (as much as possible) so we looked at an IUL on him. The cash value grew well up to age 18, when his daughter would be going to school, but the cash value grew even more between the ages of 18 and 22, when she would be (hopefully) graduating. Since repayment of college loans wouldn't start until she graduated, she could secure loans and repay them all at once when she left school by using her dad's policy.

6.  Roth IRA. Did you know that you can withdraw money from your Roth IRA for education costs without a tax penalty? And if your kids don't go to school, you can use that money for your retirement.

In this economic environment we are experiencing currently budgets are tight. For those who are fortunate enough to have a little bit extra each month it can be tough to decide where to allocate it. Most of us who are "forward thinkers" are trying to plan for several things at once, like our kids' educations, retirement planning and more enjoyable things too, like that once in a lifetime vacation.

I once had a conversation with a client who had enough in the budget to pay for either retirement or college funding.  She said, "My child can borrow for college, but no one is going to loan money for my retirement."  She had a point.

If you have questions about helping to fund your child's education, let us see if we can help out by booking an appointment 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!

What Is Being Left Out Of The Holy Trinity Of Insurance?

One part of my insurance practice involves worksite supplemental benefits. (Think dental, vision, cancer plans, etc.) On occasion, I give talks to groups of employees on these benefits. And one of the things I cover is the "Holy Trinity of Insurance", which is comprised of their health coverage, their life insurance, and last but not least, their disability insurance (DI).

Over the next day or so I'll speak with these employees individually and sure enough, someone will come in and ask for that "Holy Trinity insurance". Pretty funny I think, but it lets me know that I'm getting through to them. 

The reason these people buy DI is because they see the value of insurance on their paycheck. And that sums up DI in a nutshell - income insurance. You insure your house and car, which is paid for by income, so it makes sense. And no matter if the client is a realtor, plumber, attorney or a doctor, if they can't work, they can't pay the bills. 

There are many self-employed folks who don't have access to these group plans, but still are interested. For them, we offer individual plans which differ slightly. For instance, not only is the client's health underwritten, but sometimes, the personal income will be underwritten as well.  I know of one carrier who underwrites income at the time of the claim. Depending on the disability insurance company, they may want copies of your tax returns for the last two years at the time of the application. I have one carrier, however, that asks for that information when a claim is filed.

And your job is part of the equation too. Generally, the less safe your job is, the higher your premium. Logic says that a welder would be at a greater risk of getting hurt than a retail worker. With this in mind, some occupations are harder to cover than others. I've had great DI clients over the years who were teachers, boat engine mechanics, firemen, attorneys, realtors and truck drivers. 

I have an agent who was concerned about this for their realtor clients. Because realtors incomes are rarely the same from year to year, how would the company know how much to pay out? When I had an opportunity to speak to an underwriter she eased my fears and said, "We are fully aware that incomes change and will pay out the amount the policy designates. Our concern is making sure that client has a job and that they can't work to do that job." That made me feel better.

Years ago I met a professional golfer who played on a "minor league" tour and was interested in DI. Unfortunately, I couldn't find a single carrier that would make her an offer. Her "professional" status was a quick application killer as the company wouldn't know how much to pay out if she were sick, or more likely, injured. 

The cost of disability insurance is less than you would expect, but by insuring your paycheck, it's worth every cent.

If you are looking for short term or long term disability insurance coverage, we are happy to help you out. You can even book your own appointments to fit your schedule.

If you would like a quote, feel free to try the link on our website and have a insurance quote emailed to you. (Remember that all quotes are estimates and rate may change in the underwriting process)

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 Should I Update My Beneficiaries?

As I mentioned a few weeks back, updating your beneficiaries on your policies is an important part of owning life insurance. How often you should do these updates is up to you, but in a perfect world we would have a reminder.

When we change our clocks those two nights of the year, we're also reminded to check the batteries in our smoke detectors. What a great way to take care of the important task that could save the lives of your loved ones. And doing the "maintenance" on your life insurance policy is just as important to your family.

I recommend you pick a day, say Independence Day for instance, to review your life policies. By taking a few minutes you may realize that your the person you originally chose to get your death benefit is no longer in the picture. As our lives change from marriage, divorce and death, so do the people and situations that can impact your family upon your death.

My father passed away last year and we eventually found a few life policies. Unfortunately, none of the beneficiaries were up to date, leaving us in a position where the insurance company had to  pay the benefits into my dad's estate, instead of paying directly to his heirs.

One of the advantages of life insurance over leaving directives in a will is that the policy is a contract in the eyes of the law, thus taking precedent over a will. However, if the beneficiaries have predeceased the insured, you may have to wait for those proceeds.

While checking your life insurance policies, you may as well check all of your other policies as well. Many non-life policies also have beneficiaries that you may have forgotten about. Have a cancer plan through work? It's probably got a beneficiary. These types of policies, called worksite, voluntary or ancillary products, pay you a benefit directly, but if you die in the middle of medical treatments, the policy will pay any leftover proceeds to whomever you name.

I had a client in North Carolina who was in an accident and was eligible for benefits as he was in the hospital. Unfortunately he died a few days later and his family didn't realize there was an accidental death benefit until I mentioned it to them. The policy also paid his beneficiary for the other benefits while he was receiving treatment.

Just like you do maintenance on your car or home, take the time to do a quick check up on your policies, or ask us to take a look at them for you with no obligation. 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!

Is Selling Insurance Hard? Pt 2

In the previous post I went over a few facets of what makes selling insurance, life insurance in particular, a difficult job. There is a hesitancy from people to purchase something they know they need, but generally speaking, do not want to purchase. In essence, asking someone to add to their monthly bills to protect their family from financial ruin is a hard job.

One of the many objections agents get when selling life insurance goes something like this. "I want to talk to the wife (or my husband, partner, significant other) before making a decision. I may need a few weeks." Where do I begin?

First, I have rarely met a spouse who did not want to be named a beneficiary on a life insurance policy. And by "rarely", I mean never. As a smart agent once proclaimed, "Wives hate life insurance but widows love it." 

A few years ago I met a woman who was in dire financial straits. Her husband had left his well paying job to start his own business. In doing so, he borrowed some money to get his business off the ground. The wife was fully aware of the situation and insisted he purchase a life insurance policy to cover the debts he had incurred if he were to die unexpectedly. He told he would "get around to it." 

After a few months went by, he told his wife that he had bought a policy. She never saw the paperwork or a policy but assumed that he was telling the truth. Not long after, the husband was clearing out some trees near their home when a log fell on him, crushing him to death. 

You can figure the rest out. There was no policy. She couldn't afford to repay the debt and lost her home. She was forced to take a small apartment and, even though she had been out of the job market for a long time, had to take a job as a teacher's aide in a high school. When I spoke with her she broke down in tears several times from the stress that could have been avoided if her husband had just purchased that policy.

When someone says they'll get around to it later, I share that story with them. And I make sure that their spouse or significant other is present to hear it as well. 

The other objection I deal with is "I need a few weeks to think it over". The logic is that if I have a few weeks to think rationally I will decide if I need a policy. This is one of the most ridiculous things I have ever heard. Did they need a few weeks to decide on the purchase of a TV, cell phone or clothing? Or how much time did it take to decide to drop $7 on coffee, which they do often? 

Imagine someone dropping $50 each month on coffee but not wanting to spend $35 to protect their family. As stated previously, the priorities are all out of whack.

So when the prospect claims they need a few weeks, I let them know that the insurance company will also need a few weeks to decide if they will approve them and what the rate will be. I will encourage them to start an application which can be submitted with no money. "That way the underwriting process can begin and a paramed exam can be completed in the meantime. And by the way, we pay for the exam as well, so you won't have to pay anything until the insurance company has done their due diligence. And that process could take a few weeks," I say. "So while you're thinking it over, so is the company."

People think of insurance agents as being high pressure sometimes. Personally, I feel that the vast majority of agents are trying to do the best thing for their clients and sometimes that requires "good pressure". And in the end, the beneficiaries of that policy are thankful for the agent's work. 

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 Selling Insurance Hard? Part 1

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

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

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

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

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

Typical questions I ask run like this:

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

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

 

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

 

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

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

4 Things People Should Know About Insurance

One of the reasons for starting this blog was to help educate the public in the many facets of insurance. The business can be confusing for most people (including some agents). There are many kinds of insurance from the property and casualty side which included auto, homeowners and business policies, to the life and health side of the business. Even though I have licenses that allow me to sell both kinds, I prefer to concentrate on the life and health part. Here again, there are a lot of different products in that category alone. 

Here are just a few life and health insurance products:

• Major Medical
• Term Life insurance
• Whole Life insurance
• Universal Life insurance (traditional and indexed)
• Long Term Care 
  
• Annuities (Fixed, indexed and variable)
• Disability Insurance
• Critical illness
  
• Cancer plans
• Accident plans
• Hospital Indemnity
• Dental
• Vision

And that is not a complete list. Each of the ones listed above can be broken into a few more subtopics. The average consumer is not expected to know all of the nuances of each product. But for those of us in the industry, we need to be aware how each product works and when it is appropriate to suggest it for each client.

However, there are times when a client knows nothing about insurance. For instance, someone may tell me that they absolutely have to have a whole life insurance policy. When I ask why they feel they need a whole life policy they may say something like "My father said he always had it so I need it." Obviously that is not a valid reason as a term life policy may be more appropriate and could save the person a lot of money.

With this in mind, I wanted to make a short list of things everyone should know about insurance, especially life and health products.

1. Life insurance can change as your life changes. A young couple with small children may need term life early on, but as the kids move out of the house and the mortgage gets paid off, their life insurance needs change.  

2. Disability insurance is just as important as life insurance. If you die, your life insurance will pay a lump sum of money to your loved ones, who will be sad but will continue to move forward with their lives. However, if should unexpected get seriously ill or have a accident, your family will need to replace your income as well as taking care of you. Disability insurance is really paycheck insurance and it allows your family to continue paying the bills while you recover. 

3. Being chronically ill is a very expensive proposition and Long Term Care insurance (LTCI) can help cover those costs. We all know someone who is in a nursing home, assisted living or other type of senior care facility. Depending on the location the annual costs of these facilities can easily be from $30-50k each year. With the pandemic ravaging facilities, most people would prefer to stay in their own homes, but that can be even more expensive. Round the clock care can run twice the price of a facility.

4. Don't pay attention to "financial gurus" who give generic advice on TV or the radio. The truth is that everyone has a different financial situation and each needs to be treated uniquely. For example, I cringe when I hear someone say "Buy term and invest the difference. That may be a good strategy for some people but others may be better off with permanent life insurance.

Another one of these geniuses says buying LTCI is a bad idea before the age of 50. He fails to mention that about a third of those receiving long term care services are under 60. Again, everyone has a different situation.

I hope this helps you with some basic information you need when it comes to your family's financial security. As I always say, insurance is the one product we buy hoping to never have to use it. If you are interested in seeing what some coverages cost, feel free to run a few quotes on our website. In the meantime, please stay healthy.

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

 

 

Do People Have Enough Life Insurance?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

5 Advantages of Life Insurance

Life insurance can be essential for protecting your family financially in case of a tragedy, but many people go without it. In fact, nearly half of American adults do not have life insurance at all. One reason is that people assume life insurance is too expensive. For example, when asked to estimate the cost of a $250,000 term life policy for a healthy 30-year-old, the majority of survey respondents guessed $500 per year or more. In actuality, the average cost is closer to $160 a year.

Despite all of the fallacies about life insurance it provides a number of useful benefits. Among them:

1. Life Insurance Payouts Are Tax-Free

If you have a life insurance policy and die while your coverage is in effect, your beneficiaries will receive a lump sum death benefit. Life insurance payouts aren’t considered income for tax purposes, and your beneficiaries don’t have to report the money when they file their tax returns.

2. Your Dependents Won’t Have to Worry About Living Costs

Many experts recommend having life insurance that's equal to seven to 10 times your annual income. If you have a policy (or policies) of that size, the people who depend on your income shouldn't have to worry about their living expenses or other major costs. For example, your insurance policy could cover the cost of your children's college education, and they won’t need to take out student loans. 

3. Life Insurance Can Cover Final Expenses

The national median cost of a funeral that included a viewing and a burial was $7,640 as of 2019. Since many Americans do not have enough savings to cover even a $400 emergency expense, having to pay for a funeral can be a substantial financial burden. If you have a life insurance policy, your beneficiaries can use the money to pay for your burial expenses without having to dip into their own savings or use credit. 

Some insurers offer final expense policies. These policies have low coverage amounts and relatively inexpensive monthly premiums. However, if you are healthy you can find other coverage for less money. 

4. You Can Get Coverage for Chronic and Terminal Illnesses

Many life insurance companies offer endorsements, also known as riders, that you can add to your policy to enhance or adjust your coverage. An accelerated benefits rider allows you to access some or all of your death benefit in certain circumstances. Under some policies, for example, if you are diagnosed with a terminal illness and are expected to live less than 12 months, you can use your death benefit while you’re still living to pay for your care or other expenses. Be aware that in some cases those proceeds can be deducted from the death benefit though.

5. Policies Can Supplement Your Retirement Savings

If you purchase a whole, universal, or variable life insurance policy, it can accumulate cash value in addition to providing death benefits. As the cash value builds up over time, you can use it to pay expenses, such as buying a car or making a down payment on a home. You can also tap into it if you need to during your retirement years.

However, a life insurance policy should not replace traditional retirement accounts like a 401(k) or an IRA. What's more, cash value life insurance is considerably more expensive than term life insurance, which has no savings component but simply a death benefit. 

Life insurance isn’t just for the wealthy. No matter your income level, life insurance can ensure that your loved ones could make ends meet if you were to pass away. And life insurance might be more affordable than you think. 

If you need help or have questions about life insurance 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!