There are two things that most people can agree on when it comes to Long Term Care services. The first is that people are living longer, and with that come more demand for these services. And the second thing is that people are geographically more spread out from their families, which means family can are less able to be "informal caregivers". In other words, as we age, we need to prepare for paying for long term care services.
However, there is a major obstacle - cost. Paying for long term care services can be expensive and there doesn't seem to be any relief in sight. For those who don't own many assets, Medicaid may be the answer. However, the best option for those who want to preserve their savings is to purchase Long Term Care insurance (LTCI).
LTCI comes in many forms and prices can vary. There are traditional LTCI policies which reimburse the insured for the cost of care, up to a monthly or aggregate limit. Also, at the time of the application, the client can choose how much and how long they want coverage for. For example, a policy may pay a maximum of $4000 each month for 3 years.
Another option is life insurance with "living benefits" that can cover chronic illnesses. These usually just pay a set amount each month as a percentage of the face amount of the life insurance. Keep in mind that when using these policies, the face amount decreases. On the other hand, if the client dies without using the LTCI portion, the policy still pays the face amount.
If you have questions about LTCI drop us a note or visit our site and reach out to us.
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. Please subscribe to this blog!
Long-term care insurance is a crucial financial tool that can protect you and your loved ones from the significant costs associated with long-term care services. Unfortunately, many people overlook the importance of this coverage, leading to potentially devastating financial consequences.
Understanding the Risks
Rising Costs: The cost of long-term care services has been steadily increasing over the years. Without insurance, you may be forced to deplete your savings or rely on family members to cover these expenses.
Medicaid Dependence: If you're unable to afford long-term care out-of-pocket, you may need to qualify for Medicaid. This can involve a significant asset depletion process, potentially jeopardizing your retirement savings.
Emotional Burden: The emotional stress of facing a long-term care need can be overwhelming. Having insurance can provide peace of mind and allow you to focus on your health and well-being.
Potential Consequences of Not Having Long-Term Care Insurance
Financial Ruin: The cost of long-term care can quickly drain your savings and retirement funds, leaving you financially vulnerable.
Family Strain: The burden of caring for a loved one can be physically, emotionally, and financially taxing on family members.
Loss of Independence: Without adequate care, you may be forced to give up your independence and move into a nursing home.
Why Long-Term Care Insurance is Important
Financial Protection: Long-term care insurance can help cover the costs of care, protecting your savings and assets.
Peace of Mind: Knowing that you have insurance can alleviate stress and anxiety about your future.
Flexibility: Many policies offer a variety of benefits, including coverage for in-home care, assisted living, and nursing home care.
If you're considering long-term care insurance, it's important to:
Start Early: The earlier you purchase a policy, the lower your premiums are likely to be. Be aware that some carriers have higher minimum ages than others.
Evaluate Your Needs: Consider your family history, health conditions, and desired level of coverage when choosing a policy.
Shop Around: Compare policies from different insurers to find the best deal for your needs. This includes "stand alone" polices as well as life insurance with living benefits, which can also help solve the problem of paying for these services.
By understanding the risks and benefits of long-term care insurance, you can make informed decisions about your financial future.
If you have questions about long term care, please drop us a note or schedule a short phone or Zoom appointment.
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. Please subscribe to this blog!
As we age, our chances of needing some form of long-term care increase. This could mean needing help with activities of daily living (ADLs) such as bathing, dressing, and eating, or needing more specialized care such as skilled nursing.
Long-term care can be expensive, and many people don't have the savings to cover the cost. This is where short-term home healthcare insurance can help.
Short-term home healthcare insurance* provides coverage for a limited period of time, typically up to one year. This type of insurance can help pay for in-home care, such as help with ADLs, as well as short stays in a nursing home.
There are many benefits to having short-term home healthcare insurance. Here are a few of the most important:
It can help you stay in your own home. Many people prefer to age in place, and short-term home healthcare insurance can help make this possible. With this type of insurance, you can get the help you need to stay safe and independent in your own home.
It can help you avoid out-of-pocket costs. Long-term care can be very expensive, and short-term home healthcare insurance can help you cover some of these costs. This can save you a significant amount of money, especially if you need care for a prolonged period of time.
It can give you peace of mind. Knowing that you have short-term home healthcare insurance in place can give you peace of mind. If you do need care, you'll have the financial resources to get the help you need.
If you're considering short-term home healthcare insurance, there are a few things you should keep in mind. First, you'll need to make sure that you qualify for coverage. You'll typically need to be age 50 or older and have a good health history.
Second, you'll need to decide how much coverage you need. The amount of coverage you'll need will depend on your individual needs and circumstances.
Finally, you'll need to shop around for the best policy. There are many different short-term home healthcare insurance policies available, so it's important to compare rates and benefits before you buy.
If you're thinking about getting short-term home healthcare insurance, I encourage you to do your research and talk to an insurance agent. This type of insurance can provide peace of mind and financial security, and it could be the right choice for you.
Contact us about your options. If you have questions, you can schedule a short phone call with one of our agents.
*Plans are not available in all states.
Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!
When people are planning for retirement, one very important piece of the puzzle is often neglected. While thinking of once-in-a-lifetime trips and pickleball sound fun, long term care expenses have to be part of the equation.
As mentioned in a previous post, the "no go years" happen when one's health deteriorates into a chronic illness. Caregivers are expensive in a facility and can cost even more to be in a client's home. In a short amount of time an entire retirement savings can be gone.
I like to say that people who buy Long Term Care insurance (LTCi) are "forward thinkers". And for many younger "forward thinkers", say under 40 years of age, it can be cost effective to look into a life insurance policy with "living benefits", which can be used for long term care expenses, instead of a traditional LTCi policy. In other words, one could use their life insurance while they are still alive.
These types of policies come in different formats and pricing. Generally speaking, here are a few difference in these hybrid life/LTCi combo policies.
Underwriting: Since the policy is a life insurance policy, the underwriting guidelines may be different. I've seen LTCi policies be declined, yet the client is approved for a life insurance policy. However, if the LTCi portion is a separate rider, it can be underwritten apart from the life insurance.
Benefit payments: Many of the policies with Chronic Illness riders or equivalent Living Benefits pay the benefits directly to the insured, but some with true LTCi benefits may require receipts for reimbursement. Check with you agent to find out which is best for your needs.
Traditionally, these "living benefits" were found exclusively on permanent life insurance policies, like whole or universal life. Recently we found a carrier who also offers a term life policy with the living benefits included.
There is one important part of this combo life insurance/LTCi piece that needs to be covered. Generally speaking, if you decide to purchase one of these products, be aware that if you become chronically ill and need the benefits to cover the cost of your care, you may exhaust your life insurance benefits which could be of use to your survivors when you die.
This is where the buckets come in. Many of these policies have one bucket of money, and like stated above, can be used for either life insurance or long term care expenses, but not both. (I have seen a version that keeps a small amount of life insurance aside, say $10,000).
On the other hand, there are also policies with two buckets of money, with each being able to pay out. For example, let's say you have a $100,000 policy and have a stroke. You can use up to the $100,000 for your care until that bucket is empty. If you should die, the second bucket is still full for your life insurance needs.
The "two bucket" policy can cost more, and that is because of the potential for paying out twice (once for your chronic illness, again at your death).
Let's try another example of the same $100,000 policy, but change things up a bit. Again, you have a stroke, but after using half of the money, $50,000, you pass away. At that point the life insurance bucket pays out it's $100,000, so the total payout is $150,000.
When I talk to clients about LTCi one objection is raised far more than others. "What if I die before I need it?" It's a reasonable question, because LTCi can be expensive and if someone were to suddenly pass away, the premiums would be for nought. However, with a combo plan, it will still pay out the death amount, so nothing is "wasted".
Also, traditional LTCi policies have a claus that states that the insurance carrier has the right to raise the premiums of policies that are in force if they need to. This happened after the Great Recession of 2008. The insurance companies had invested heavily into the stock market, and when the market dropped so did the amount of money on hand needed to pay claims. Several companies raised premiums 15-20%, with at least one carrier going for a second premium rate hike not long after the first. With life insurance, your rate is locked in.
Combo products can be a useful part of an insurance plan for a lot of people but make sure you ask your agent or insurance broker about your options and how it will pay if you need it.
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!
Were you aware that this country has a looming retirement crisis? The truth is that far too many people are not contributing to any type of savings plan, including 401(k)s or SEP's. And far less have planned for long term care expenses, which could erode any savings that are in place.
On top of that, only about 40% of people have the amount of life insurance they actually need, with many people not owning any life insurance at all. That leaves a lot of families in a precarious predicament if the breadwinner should die too soon or unexpectedly.
What if there was a way to make sure your family was taken care of while accumulating cash for a retirement "supplement"? Or, if need be, that money can be used for long term care costs. Would you be interested in learning about such a plan? Let us know by replying in the comment section or directly to the video. We can book a short phone conversation to answer any questions you may have.
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!
When I originally got into the insurance business the internet didn't exist. Agents would carry rate books with incredibly small print and have to calculate the premiums and fees by hand. Needless to say mistakes were a common occurrence, and I was one of the biggest culprits of quoting someone an incorrect price.
At that time (back in the 1980's) we were taught a method of prospecting which involved networking and learning verbiage to ask for referrals. The networking part was not as bad as it would seem because I am comfortable talking to strangers. And I found out later that most of the people I was trying to connect with were not as comfortable as I was in that situation. On the other hand, though, the referral part was hard for me.
Let's face it, most people don't like to give referrals. When I have asked for referrals in the past I can sense the tension build and the wheels turn in my client's head. I understand the trepidation because I have been on that side of the situation as well. You give a friend's name and the next thing you know your friend calls you angrily. "Why did you give that insurance agent my name?"
Unfortunately, things haven't changed much since then. There are still companies out there trying to teach their new agents the old school ways. This is because they believe that insurance selling is built upon a relationship of trust. There's nothing wrong with that, but people in general, and younger people specifically, don't feel the need to have that relationship anymore.
From an insurance agency standpoint, we still do some of the same "old school" things, but with the internet available, we can now market to a wider geographical area without having to be physically able to see and talk to our clients. Zoom and other tools have given agents access to people who need our products and services from multiple states.
This is evident by the increasing numbers of people who are buying financial products on the internet. Things like auto insurance, life insurance, investments and banking were handled in person by an agent or advisor, and they still are. However many people feel they no longer need, or want, to deal with someone for these types of services.
Personally speaking, I began purchasing my car insurance online years ago, as well as my small investment portfolio. By doing this, it keeps more money in my pocket and I don't have to wait for someone to return a phone call or be in their office. Convenience is the name of the game.
With that in mind, we have done our best to make available more products on our website that clients can look at when it is convenient for them. And if someone wants to speak to a real person, we have made our calendar available for a phone appointment accessible too.
Check out our website and run a quote, and if you see a rate you like that fits into your budget, you can even start an application. We want to make things as convenient for our clients as possible. 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!
Two weeks ago I was asked to give a talk to a local networking group about long term care insurance, as well as other related subjects. Most of the material I discussed had to do with the products available to us, like long term care insurance, short term home healthcare insurance and life insurance with "living benefits" that can be used in the case of a chronic illness or cognitive impairment, like Alzheimer's or dementia.
As usual, I discussed the three stages of retirement which are the Go Go Years, the Slow Go Years and the No Go Years. Unfortunately, most people don't plan for the last part, which is what ultimately costs them the most money.
Take a couple of minutes and watch the video below which covers a short talk on the subject. If you have any questions or comments, please post them below and if you can, please subscribe to our channel on YouTube.
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!
When I first got into the insurance business I didn't have a mentor or anyone to "show me the ropes" per se. I learned quickly that my sales manager had a financial interest in me selling, and one would think that he would want me, as well as the rest of the agents on his team, to succeed. And while it was true to an extent, I also learned that I needed a mentor who did not have any skin in the game when it came to my success. Basically I needed someone who could be objective and give me sound advice who would be looking out for my interests.
Since no one was stepping up to the plate to help me, I started reading books about sales and any information I could find about successful insurance agents. There were many motivational books and most of them gave the same basic information. One day, I came across an article about an agent who was deemed "The Greatest Life Insurance Agent of All Time". His name was Ben Feldman and his story was quite remarkable.
I don't want to bore you with all of the details as you can look up the details on him with a simple Google search, but the simple fact is that he found a way to sell more life insurance as an agent than some entire companies at the time. When asked how he sold so many insurance policies he said, "I do not sell life insurance. I sell money."
You see, Mr. Feldman was able to clearly communicate what life insurance is. When a client buys a policy, they are actually buying a promise. That promise is that if the insured should die, the insurance company will pay a death claim which will exceed what the client has paid in.
Mr. Feldman also was noted as saying to his agents, "Don't sell life insurance. Sell what life insurance can do." In today's world of life insurance, a policy can do a lot for a family when the insured passes away, but with all of the living benefits available nowadays, people can use them while they are still living.
Let's face it, no one really wants to buy life insurance, or any other kind of insurance for that matter. It's not fun or something one can show off to their friends. But it is necessary, especially when others are dependent on us financially. Our children rely on us to provide housing and education, which costs money. Our parents, who always insists that they don't want to be a burden on anyone else, may ultimately rely on us to help with long term care costs if they haven't planned in advance.
And then there are others that may depend on us financially, like charities and churches. When a large donor passes away, that non-profit organization may need to find other donors to fill the missing gaps. And sometimes, those large donors will list the charity of their choice as a beneficiary on a policy.
Ben Feldman knew all of this and made sure he didn't sell just the steak, but the sizzle as well. Instead of saying he was selling life insurance, he would call it something like "a special educational package for your children's children."
So the next time you talk to a life insurance agent, remember, we don't just sell insurance, but we sell money, and a promise.
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!
A few weeks back I joined an online chat with some people I really didn't know but who had some valuable information to offer. Fortunately, these very nice people welcomed me to their group. One of them in particular, Adam Griggs who is the CEO of CLARAfi, dropped me a note a few days later, which began a conversation.
Adam took a look at some of my videos on YouTube, gave me a word of encouragement, and then suggested that I make a short video explaining my "how and why" I got into the insurance business. To be honest, I initially was thinking, "Yeah, no one really wants to hear that story." But since Adam took the time to watch a few videos, I thought the least I could do would be to consider his idea.
I thought back to my first venture into insurance back in 1985. Having graduated from college with no real job prospects, my father wanted me to work with him at his fledgling engineering firm. Keeping my eyes open for other opportunities, I begrudgingly went to work for him entering data into an MS-DOS program.
There were several issues with this situation, with a major problem being that I was not an engineer. My degree was in Business Management. Also, my old man, who was a micromanager to say the least, wanted me to live at home, work with him, and let him decide what I should eat for dinner. Also, that dinner would include discussions about work, which I had just suffered through a few hours earlier. I was quickly going crazy.
I needed to find a job where I could learn some real world business skills while getting out from under the old man's thumb. One morning I told my father I had a job interview in Raleigh, NC, about an hour away. I didn't really, but my plan was to go there and start looking for work. In the course of a few hours I had managed to find what I thought was a good opportunity with an insurance company.
The job wasn't exactly as presented by the recruiter, who had made it sound fairly easy work with banker's hours and great pay. Instead I found myself driving all hours of the day and night in rural areas doing what boiled down to door-to-door insurance sales. And the product was not something I would not purchase for myself. As a matter of fact, I met several people who were angry about their claims experiences. One even threatened to get his gun and shoot me.
After a few months of this, I realized that my coworkers were leaving and being replaced by a revolving door of new agents. It didn't take me long to jump ship as well, and being young and naĆÆve, I got out of the insurance business altogether for about 15 years.
In 2000, I decided to give insurance another go, but this time would be different. I wanted to learn the business from multiple perspectives, so I worked for various companies as an independent agent. Each company had its own way of doing things, from how they prospected for clients to the ways they collected premiums. I learned how some insurance carriers' products were better than others and when those products were suitable for clients.
About this same time, I had an aunt who had been in a nursing home for over 20 years. She had fallen and broken her hip when I was still in high school. My parents had been left with the responsibility of taking care of her bills and I watched them struggle. Even though my father's engineering firm was doing okay, his finances were stretched. A long term care policy would have been a great help, had one been available for her (and subsequently my parents) when she had gone into a facility.
That's when I realized that selling insurance was more than just a job, but a way to help people who were in bad situations by convincing them to mitigate their financial risks ahead of time. There were plenty of examples of insurance policies keeping people from financial ruin, from strangers to those close to me.
For example, my wife's father had died unexpectedly before I had met her, and his life insurance policy helped her graduate from college and take care of other necessities. We even used some of the proceeds years later to make a down payment on our home.
Making sure that people have the right amount of insurance, their beneficiaries are up-to-date and keeping it all in a budget can be tough. Insurance is a product that most people don't want to buy, so the job is more about convincing them they need it. Because of this, the stereotypical insurance salesperson is high pressure. I prefer to say I use "good pressure", because my intention isn't to get the sale, but to make sure that when something bad happens, my clients won't have to move out of their homes or take a second job to pay the bills.
When someone goes to my website and books a phone appointment to discuss life, disability or long term care insurance with me, I may give them a bit of a nudge to make sure their needs are met. It's all done with their best interests in mind. And that is why I do what I do.
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!
A few months back I ran into a great lady who had purchased a life insurance policy from me many years ago. We had stayed in touch for a few years but I lost touch with her. Needless to say I was a bit surprised when she responded to one of my posts on Facebook regarding some new policies Surf Financial Brokers was offering.
After speaking to her for a while I realized that a lot of things in her life had changed since we had last spoken. She had made several career changes and was currently working for a non-profit organization. Her personal situation had changed as well, as she had a new beau who seemed to be a good guy. During our conversation she mentioned that the life insurance policy she had purchased from me years ago had lapsed and now she was in the market for a new policy.
Her concerns had also changed a bit over the years. Her parents were now deceased, but before they died she had been one of the principle caregivers in their later years. With that experience she had come to realize how expensive care in a facility was. Now she was in the market for some sort of life insurance, but she also wanted something to help offset the costs of long term care. The problem was that she had a limited budget to do all of the things she wanted to accomplish.
One of her main concerns at the time was that Covid was sweeping through nursing homes and assisted living facilities. With this in mind, she really wanted to know that if she needed care, she could stay in her own home. Luckily we had a great way of handling this part of the issue in a way that would be affordable for her.
Our Short Term Home Healthcare plan (STHHC) offers clients a way to offset the extremely high costs of having caregivers in the home. The policy helps with costs for up to 365 days, which do not all have to be consecutively, since many people have caregivers come to their homes only 3 or 4 times a week, usually when family is unavailable. This means that the policy can conceivably be stretched out over several years.
Even better, the application only has 3 questions, which means getting approved is very easy.
But the best part for her was that the policy is very affordable compared to a full-blown Long Term Care (LTC) policy. Saving her money was a priority for her, but this was only one part of the issue.
We still needed to resolve the life insurance part of the puzzle. This is where things got messy. She had gotten older (by about 15 years) since she had purchased the previous policy from me, so that made the rates go up of course. Even though the face amount of the policy she wanted was fairly low, we both agreed that a permanent policy would be a better fit than a term policy.
I took her application and submitted it to the insurance carrier, and soon after a paramed nurse met the client at her home. Everything was going smoothly until I got a call from the insurance company. Apparently when the underwriter pulled her medical records there were some underlying health issues that had not been disclosed previously.
The insurance carrier rated up the policy, meaning that her premium cost would go up. They gave me a new price, as well as different face amount for the premium she wanted. I knew in my gut that the client was not going to be pleased either way, but I picked up the phone and gave her a call.
When I gave her the new numbers she said she needed a few days to think it over. The following week I called her and left a voice message, followed up with a few more over the next week or so, along with emails. I got no response. This wasn't good.
After several weeks I got a letter in the mail from the insurance carrier. She had called in and requested that the company withdraw her application. Since she decided that she did not want to communicate this information through me I left her alone. I don't want to badger the lady and honestly I think she prefers I drop the matter.
The moral of this story is that if she had been upfront with me on her health issues, we could have gotten her a more accurate quote from the beginning of the process. Remember that life insurance quotes are merely estimates based on the information given. A final rate is not determined until the full underwriting process is completed. It may be uncomfortable, even embarrassing, to discuss these kinds of personal matters with your agent, but full disclosure is always the best option.
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!
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!
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!
In the previous posts we took a look at what Long Term Care (LTC) is as well as how those who suffer from chronic illnesses are cared for in various types of facilities. As explained, stays in nursing homes and assisted living facilities are not cheap. Statistically 2 out of every 5 people will need some sort of LTC services, and the cost of those services is steadily rising each year.
We also discussed a couple of ways to shift the burden of the expenses to an insurance carrier, through either a traditional stand alone Long Term Care insurance (LTCI) policy or a life insurance policy with living benefits. Depending on one's financial situation, age and health conditions, one option may be preferred over the other. However, there are still another way to help cover the costs of LTC services.
Short Term Home Healthcare (STHHC) insurance is a great alternative for those who possibly can't afford the premiums of a LTCI policy. As most people would prefer to stay in their own homes instead of a facility, a STHHC is an obvious choice. Especially with Covid wreaking havoc in nursing and assisted living facilities. home healthcare is a better option. But there is a caveat.
The costs of home healthcare are much higher than staying in a facility. This makes sense if one considers that one-on-one care will cost more compared to a facility where several staff members watch over dozens of people at once.
As I mentioned in a previous post, my father suffered from Parkinson's Disease and insisted on being in his own home. His in-home care company was charging him in excess of $75,000 each year! He barely had the funds from his pension and some rental incomes and fell short each month. To subsidize the shortfall he was dipping into his home equity line, which our family was unaware of until he passed away.
A better way to pay for the cost of home healthcare is the purchase of a Short Term Home Healthcare insurance policy. The cost of one of these policies is not nearly as expensive as a traditional LTCI plan and the application process is very simple. However there are a few drawbacks.
The policy only covers in home care and for a total of 365 days. Given that some people only receive in-home care services a few days of the week, the 365 days don't have to be consecutive. In other words, the policy can be used over several years potentially.
The applicant for one of these policies must be 60 years old and the rates do go up every five years, so these are points that must be taken into consideration. However, I still recommend this coverage to our clients who are looking into LTCI.
For a good explanation of the policy and how it works, you can watch a short video by clicking here.
Trying to self-fund long term care expenses is difficult for the vast majority of Americans. There is a myth that the government will take care of us, but it's not true. With our life spans getting longer it doesn't mean that the quality of life is better as we age. Making sure that we don't burden our families as our health declines should be a priority for most people.
As we plan for our retirement years we need to seriously take into consideration that our health will decline and there will be expenses to deal with. Let us help you with planning and if you have any questions let us know. In the meantime, please stay healthy!
Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!
In the previous post we looked at Long Term Care (LTC) services and when people need them. Included in that summary was how expensive LTC can be. As discussed, someone can work their whole life to build a nest egg of assets, only to have those assets depleted due to a chronic illness. The alternative is to shift that financial risk to an insurance company by taking out a policy while one is still insurable.
We also covered one of the options which was a life insurance policy with "living benefits" or a LTC rider to help cover these expenses. One advantage of this is that if the insured should die unexpectedly, the policy will still pay a death benefit.
Another option is the traditional stand alone Long Term Care Insurance (LTCI) policy. These insurance policies have been around for a relatively short period of time and there have been a lot of changes over the years. And even though they are pretty comprehensive in that they can help pay for care in a facility or for "in home" care, they also can help pay for other expenses, like construction of a ramp or "informal caregiver" training, when a family member is involved.
There are other issues that one needs to be aware of when it comes to LTCI. First, the underwriting process is different (as in stricter) when someone applies for coverage. The carrier may want to have a cognitive test done, for instance. I had a client get declined for coverage because he had a history of heart problems and smoked a few cigars each week. Separately they may not have been a problem but the underwriter put the two together and saw that as a potential risk.
Also, most stand along LTCI policies usually have a provision that allows the carrier to raise the rates on the policy, unlike the previously mentioned life insurance which would "lock in" on a rate. After the financial crisis of 2008, several companies increased their rates on their in-force books of business, some doing it more than once. For those who are trying to do the right thing and plan ahead, this provision can come back to bite them.
Yet another thing to consider is that a lot of insurance carriers have gotten away from offering LTCI policies. These companies have either stopped selling new policies but still keep the old ones on their books, or they have sold the books of business to other carriers. This is due to the fact that when these policies were developed they did not have a lot of claims history to go on when setting the premium rates. As claims mushroomed, the number of carriers offering these policies shrunk.
One more thing to be aware of is how these policies pay. Typically, LTCI pays claims as a reimbursement, which means the insured will need to send the bills for LTC expenses to the insurance company. Most nursing and assisted living facilities will take care of this matter for you, but remember that if you are a patient in one of these facilities you may need to rely on a family member to handle this.
With all of that to consider, I still think that LTCI can be a great value as long as the client is aware of how they pay benefits and the multitude of features. A good agent will discuss all of this with a prospective client in detail and should also include other family members as well. These policies may seem expensive but can save you and your loved ones tens of thousands of dollars.
In the next post we'll look at one more option that is available. 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!
Over the past year nursing homes, assisted living facilities and other facilities that house the chronically ill, mostly the elderly*, have been ravaged by Covid. The numbers of infections and deaths are heartbreaking, especially since the vast majority of these people are isolated from their families. But why are all of these people in these facilities to begin with? Are there other options available and what do those options cost?
In general terms, most of the people who are in these types of facilities are deemed "chronically ill", which means that they will be ill for a long period of time and there is no cure. Some will receive some rehabilitation but getting them back to 100% is not possible. An example of this could be an older person who has broken a hip which will prevent them from walking again.
Medically speaking, long term care (LTC) services are for those who are unable to perform or need help with Activities of Daily Living (ADL's). These are:
Bathing
Transferring (going from the bed to a chair, for example)
Dressing
Using the toilet
Eating
Incontinence
Paying for these services can be expensive. Many people find out too late that Medicare will not cover the costs of assisted living facilities and will only pay for skilled nursing care for up to 100 days, and that is only if you are released from a hospital. In other words, the smart move is to begin looking for LTC insurance early on when you are healthy and insurable.
Most LTC policy's benefits will be triggered if someone is unable to perform two of the six ADL's. Another way to trigger the benefits is to be cognitively impaired, i.e. Alzheimer's or dementia.
There are other types of facilities as well, which mostly are non-medical. Think of an apartment but has meals and someone checks in on you. LTC policies generally don't cover these types of facilities.
Let's assume that you are reading this and are healthy enough to go through the underwriting process with an insurance carrier. What are your options? My suggestion is to call a few facilities in your area** to find out what they are charging their patients. Most are pretty good at giving you rates, but be aware that some will give you a monthly rate and others a daily rate, which is an industry norm.
With that valuable information at your disposal you can begin to look at ways of covering those costs. Needless to say, these services can be very expensive and it can easily take a few years to wipe out any assets one may have spent a lifetime working for.
Let me say right off the bat that there are a limited number of available "Medicaid beds" in each facility, but to be eligible for those one has to prove a level of indigence. In other words, you are limited in the assets you own and there is a "look back period", which at the time of this writing was 60 months. This is to avoid someone from transferring all of their assets to a family member so they can get free nursing care.
Going back to our options, if you are young enough you may want to look into a life insurance policy with LTC or "living benefits" as part of the policy or even a rider. This locks in the rate for your coverage and if you should pass away before you use it the life insurance will pay a death benefit to your loved ones.
The nice part about this option is that it pays you a percentage of the face amount of the policy once your doctor says that you can't perform 2 of the 6 ADL's or if you are cognitively impaired. Once the benefits are triggered they pay until they run out.
In the next post I will go over a couple more options. In the meantime, check us out on the web and please stay healthy!
*One of the myths of nursing facilities is that only the elderly are patients, when in fact nearly a third of the patients are under the age of 65.
**Costs vary dramatically depending on your geography.
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!
If you or a loved one ever need help with daily living activities, you will discover that custodial care can be expensive. That’s true whether the care is provided at home, in an assisted living facility, or in a nursing home, and it’s especially true if care is needed for many years.
Long-term care (LTC) insurance is available, but insurance companies have learned that these costs can be steep. Premium increases for LTC insurance are in the news (for example, some press reports tell of cases where premiums have tripled in the last three years), and some insurance companies have dropped out of this business. Consumers face the prospect of paying thousands of dollars a year, every year, and never getting any benefit at all if it turns out that custodial care is not needed.
Some people might prefer another path to LTC coverage, such as a hybrid or “combo” product. In a traditional life insurance policy a consumer buys a product that will deliver a death benefit, but with a combo product, the consumer can obtain a rider that will offer a payout if the covered individual needs LTC.
Let's assume that our new friend Bob has an insurance policy on his life, payable to his son James. Bob’s policy has an LTC rider. So, if Bob needs LTC, that insurance policy will provide a benefit to help pay those bills. Regardless if Bob needs care and collects an LTC benefit, his life insurance policy will pay a death benefit to James at the time of Bob’s death.
Generally, in this situation, Bob would receive an “accelerated death beneļ¬t” to pay for care. When someone receives such a payout, the amount of the lifetime benefit is subtracted from the death benefit that eventually will be paid to beneficiaries. Typically, a combo life insurance product would be some form of whole life or universal life, rather than term life insurance, although of late we offer a term policy that includes "living benefits".
The common aspect of this tactic is the absence of a “use it or lose it” drawback. With standalone LTC insurance, the money spent could wind up generating no return. With life insurance there will be a payout to someone at some point. The extra LTC coverage is another benefit that possibly will come in handy.
Acquiring LTC coverage in this manner usually avoids the threat of future premium increases. As another attraction, existing life insurance policies might be exchanged, tax-free, for a new contract that includes an LTC rider.
The attractions of LTC combo products, however, come with negatives as well. The underlying problem here includes the potentially disastrous costs of LTC, and this problem can’t be escaped by switching from one type of insurance to another. There often is a cost to adding an LTC rider to an insurance policy. These combo products may require a substantial outlay, which must be paid upfront or within relatively few years.
In addition, tax advantages may be lost with combo products. With most standalone LTC insurance policies, certain amounts of your premium count as a medical expense, which can potentially be deducted. That’s not the case with a rider to a life insurance policy.
As of 2017, people age 40 and younger can include LTC premiums up to $410 as a medical expense; that amount scales up as premium payers age, maxing out at $5,110 for those 70 and older. Those outlays are added to other medical expenses, and the amount that exceeds 10% of adjusted gross income can be taken as an itemized deduction.
Combo products vary widely, and so do individuals’ concerns on this issue. However, generally, people who only want LTC insurance might be best-served with standalone coverage, working with an insurance professional to hold down premiums. That said, if you are interested in life insurance such as whole life or universal life, it may be worth exploring the idea of adding LTC coverage, perhaps for an added fee.
There are a few factors we take into account when discussing these options, notably the age of the insured at the time of the application and, of course, their budget. A younger person may find a combo policy more affordable than an older person.
If you have questions or concerns let us know. In the meantime, please stay healthy!
Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!
Life insurance is like your car, your home and a lot of other things you own in that one has to do "maintenance" on it from time to time. By that, I mean that one shouldn't buy a policy, throw it in a drawer or safe deposit box and forget about it. An owner of a life insurance policy should take a good look at it at least every other year to make sure it is doing what is needed.
One of the many mantras that life insurance agents love to repeat is the word "review', as is "We need to review your policy." In sales classes, agents are taught to contact their clients twice a year - on the birthday of the client and on the anniversary date of their policy. The former is mostly to check in and hope the client will have some referrals. The latter is to set an appointment with the client to go over their policy, thus the "review".
As an agent who has been in the business for a while, I can attest that a vast majority of clients say something like "I'm good for now" when I mention taking a look at their coverage. Maybe I should press harder for that appointment, but it's obvious the client isn't interested.
Unfortunately, this goes on every year and on occasion something will go sideways when the insured dies. Whether the client doesn't have enough coverage or just failed to keep the beneficiaries up to date, I know there are adjustments that can be made.
A good example is when a beneficiary change is in order. In that instance, either the named beneficiary has passed away unexpectedly or should be replaced for other reasons. A few years back I found out that my client's daughter, who was in her 20's and had a history of drug issues, was living on the streets. My client was taking care of her grandchildren with the help of another adult child.
It was an awkward subject to broach with my client as I had heard about her predicament through the grapevine, but she was gracious as I let her know that she was doing the best she could with a bad situation. She acknowledged that her daughter probably was not a good candidate to receive a large death benefit and we changed everything over to the other adult child, who ultimately got legal custody of the kids.
In another instance, I met with a client who had taken out a policy for $250,000 a few years earlier. At the time, the face amount made sense because it covered the balance of his mortgage and could help pay off some items like final expenses and some credit card debt. He had some money put away and his wife also had a good job. However, he had some unexpected expenses that required he borrow some funds, and the lender was insisting he purchase a life insurance policy to cover the debt.
By checking in with him and learning about his new situation, I was able to help him secure the note with a 10-year term life insurance policy which made the lender very happy. (Sidenote: My client paid off the debt earlier than expected and was able to cancel the policy.)
If your life insurance agent calls you for an annual policy check up, take advantage of it. And if your agent doesn't call to check in with you, give us a call and we'll be happy to put a second set of eyes on your policy to see if you have what is appropriate for you. In the meantime, stay healthy!
Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!
