Universal Life Anyone?

From time to time I will have a client tell me "I know nothing about life insurance, but my friend says I need whole life" or "The guy on TV says to buy term and invest the difference".  Oddly, no one suggest Universal Life (UL) to their friends.

UL's can be a great fit for a life insurance game plan if structured correctly.  Unfortunately, they can also be confusing to agents and clients alike.  Here are some things to consider before purchasing a UL.

1.  The growth in traditional UL's are based off of interest rates.  Back in the 1970's and 1980's, when interest rates were very high, UL's were sold as investment vehicles.  When interest rates dropped, so did the growth of the policies. 
2.  The cost of insurance increases as time passes.  Unlike a whole life policy, whose costs drops with time, UL's fees increase.  If the costs surpass the growth (see #1) the policy will "eat at itself". 
3.  UL's are considered "flexible premium" policies.  An agent can offer you a minimum, maximum and target premium.  We recommend not going with the minimum, as it looks attractive but can end up with no cash value at some point.
4.  Indexed UL's are based on an "index" which reflects the markets instead of interest rates.  These can be used for retirement supplements (again, if structured correctly) and can be more affordable than a whole life.  Indexed UL's are great for the conservative person who doesn't want to be directly in the market and still needs life insurance protection for their family.

I've seen people use UL's for all kinds of purposes, including final expense (if you're healthy it can be a lot less expensive than a whole life plan) and retirement supplements (the cash value can accumulate well if structured properly). 

In the current economic situation that many individuals and families are faced with, a good UL can protect your family and provide an extra income stream in your later years. 

Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient.

The Disability Waiver of Premium

You have decided to purchase that life insurance policy you have been thinking about. Now you have the peace of mind knowing that if you were to die unexpectedly your family could stay in there home, your kids will have the money to go to college if they wish, and your spouse will be able to handle everyday expenses. But there's one thing that is still nagging you. What if you get sick or hurt, and are unable to work? Will you be able to keep paying for that life insurance policy?

The last thing you need at that point is to have your life insurance pulled out from under you. But there is good news. Most life insurance policies have an optional Disability Waiver of Premium (WP) that you can add on when you purchase your policy. What the WP does is insure that if you are disabled and can't pay your premiums, the insurance company will pay the premium for you. Basically, it's insurance on your insurance. 

In a previous post, I told the story of my client who purchased life and disability policies at the urging of her husband. A few years later she was seriously injured in a house fire and her disability policy paid as it was supposed to. When she recovered she called me one day to ask about her life insurance policy. "They haven't drafted out of my bank account. Is my policy cancelled for non-payment?" she asked.

The answer was that the policy was still in force and that the WP of premium was triggered because we used the same insurance company for both policies. When she went on claim for her disability policy, the company cross-referenced her life policy and began paying her premiums for her. She didn't even realize she had the WP on her policy. 

When you take out a life insurance policy make sure to ask about the WP. It's usually very inexpensive and can give you the peace of mind that if you were to be sick or hurt and unable to work, your life insurance will still be in place, giving your loved ones the security you want.

Let us know if you have any questions and feel free to subscribe. And of course,stay healthy!

Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient.

My Belated Mother's Day Story

I hope everyone celebrated Mother's Day yesterday with mom, or in my case, remembering my mother and her legacy. Mother's Day conjures up all sorts of memories about my mom, grandmothers and other women who were surrogate "moms" from my childhood.

My mother was considered to be "everyone's mom" as she was accessible to most of my friends growing up. She would offer advice, encourage us and give us cooking tips. But in her later years, she slowed down a lot. In 2006, while having knee replacement surgery, she suffered a mild stroke that triggered dementia. My father insisted on taking care of her at home. 

Years earlier I had expressed concern that my parents needed Long Term Care (LTC) insurance, only to be rebuffed. As I lived two hours away and my only sibling was seven hours away, we struggled to make sure my dad, in his 80's at this point, could handle the stress of caring for his wife as well as maintaining his own health. He lost a lot of weight and would call often for assistance. It was difficult for everyone, especially when she was having "episodes" related to her dementia. 

At one point in the beginning my father told my sister, "Maybe I need to look into that Long Term Care insurance for your mother." My sister replied that it was too late, since no company would issue a policy at that point, and he should have taken my advice earlier. Frustration boiled over as we knew this was no time for "I told you so."

Watching this play out over the course of five years took it's toll on me and my sister. Our mother was there physically, and did her best to keep her dignity as she forgot who we were, including my father. She'd say things like, "This man (my dad) won't help me." Sometimes I'd visit and she recognized my face but couldn't remember my name. She would often insist her brothers, who had passed away year earlier, were in the house visiting her. 

When my mom passed away in 2011 my father was a shell of his former self. He looked old and frail, and walked with a shuffle. I never brought up the Long Term Care issue again, which would have come in handy for him as well, because shortly after my mother's passing he was diagnosed with Parkinson's Disease. 

The fact is that most Long Term Care policies include home health benefits, which would have helped greatly for both of my parents. And now there are Short Term Home healthcare (STHHC) policies, which help with the costs associated with being at home only and not a facility. Again, both of my parents would have benefited. 

Enjoy your mother if you can, and one of the best things you can do for her and your family is to prepare for the future with LTC or STHHC coverage. And as always, stay healthy. 

Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient.

Life Insurance or Flat Screen TV?

Part of my job is helping people get their priorities straight.  For instance, I met with a client this past December who was married and had two small kids.  He had no life insurance.  He agreed that it was important but added, "I can't afford it right now, the kids want a flatscreen TV."

My response was "If another car crosses the center line and kills you, that flatscreen television won't be able to put your kids through college, help your wife pay off the mortgage, replace your income, erase your credit card debt or pay for your funeral."

The client said, "I just can't do it right now."

I could have continued to extol the virtues of purchasing a life insurance policy, not for himself, but for his family.  It wouldn't have made a difference.  His priorities were out of whack.  It was Christmas and he wanted to make the family happy for the short term.

I came to two conclusions after this meeting.  1. For some reason, this generation fails to think in the long term.  We don't plan for others that will come behind us, only for what gives us gratification now.  And 2, people can "afford" what they want to buy.

I'm not saying that this young man was a bad person. He obviously loved his family by wanting to make them happy at Christmas. My job is to try to convince this person that an extra $40-50 each month was going to keep his family, that he loved so much, in their home if he was to die unexpectedly. In a case like this, he wasn't going to budge and really didn't want to pressure him.

He really wanted to buy that TV. But why didn't he want to buy life insurance? Maybe he thought he wasn't going to die anytime soon. Or maybe because it's an intangible product, whereas a TV has lots of buttons and can offer some instant entertainment gratification. A life insurance policy will only satisfy others.

When we buy life, disability or long term care insurance, we get the satisfaction of knowing that if something should happen to us, the others around us aren't burdened with bills or taking care of us. In other words, can you sleep comfortably knowing that your family will be okay if something bad happens to you?

As an insurance agent, I have to help my clients find the right path to financial security. Sometimes the client doesn't want to be helped. I hope this gentleman's wife and kids can help him learn what his priorities are before it's too late.

Stay healthy and let us know if we can help you with your insurance needs.

Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient.

Avoiding Long Term Care Facilities During the Virus Crisis

During the Coronavirus crisis in our country there have been countless stories in the news about infections running rampant in nursing homes and assisted living facilities. Our seniors are in the cross hairs of the virus as it works its way through these facilities, not just making the residents ill, but also the nurses and other staff members. As this happens, the family members of the residents are not able to visit their loved ones. It's a terribly tragic situation all around.

Is there a way to avoid this scenario? Not always, as some residents may need to be in a facility for various reasons. Their families may not live in the area, or they may have no family at all. Of course, nearly every person who lives in a facility would rather live in their own home, or with their adult children. For some, the adult children are working and unable to take care of their parents (or grandparents) and it can be cost prohibitive.

Home health care can be very expensive. Using the example of my father, the price of his home health care was nearly double that of a facility. The reason is simple, in that a small staff can keep an eye on dozens of people at once, whereas he had one caregiver staying with him. And home healthcare workers generally cook and do some "light housekeeping".

As I mentioned several weeks ago, my father was dipping into his home equity line to pay for his caregivers, which were in excess of $70,000 a year. He obviously didn't have that kind of money but was determined not to go to a nursing facility. When he passed away he was indebted to the tune of over $100,000.

I can only imagine how horrible it must feel to know that a loved one is in a facility during these times. But if you could keep your mother, father or grandparent at home with a caregiver, would you do it? What if you could find a way to afford it? What if the shoe were on the other foot and your family was having to decide what to do as you became chronically ill or mentally incapacitated?

Luckily, we now have something called Short Term Home Health Care (STHHC) policies that can alleviate the cost issues related to home care. Typically they cover the insured for 365 days for in-home care only. And the 365 days don't have to be consecutive, as some people receive care 3 or 4 days of the week.

It may not be the fully encompassing solution to keeping a loved one from a facility, but STHHC can save a family tens of thousands of dollars while preventing your older family members from getting sick and stuck in a nursing home or assisted living facility, which can be fatal during this pandemic.

And while a large majority of people who show an interest in the program are Medicare aged, we are also seeing interest from their adult children who have seen the costs associated with being ill or cognitively impaired.

To see a short video of how STHHC works, click here. This plan isn't available in all states, so let us know where you live and we'll check. In the meantime, stay healthy and check out our website below.


Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient. 

How Your Disability Insurance Can Help You Now Part 1

As we are in the midst of the Coronavirus pandemic I thought now was a good time to post a bit on Disability Income insurance (DI). As the name implies, DI insures your income. And that income pays your bills.

Ask yourself what your biggest asset is. Is it your home, your car or the money in your bank account? Actually, none of those is correct for the vast number of Americans. Your number one asset is your ability to earn a living. And if you are sick or hurt and can't work, what happens to the bills? They just keep coming.

If you have a group DI plan through work, that's fantastic! Most of these are voluntary, so if you enrolled in a plan, you may be paying for it through deductions from your paycheck. Sometimes, the employer pays for it. And sometimes, there's a mix of the two. For example, you may be paying for a short term policy that covers you for 3 or 6 months, and the employer pays for the long term plan that begins after the short term plan stops paying benefits.

Be aware that your benefits are typically tax free with two exceptions. If your company is paying for the coverage or if you've decided to pre-tax your premium. A good insurance agent will discourage the latter. If you're out of work due to a sickness or injury, and you go on claim, you'll be getting about 65% of your salary, only to have it taxed. Ouch!

Many business owners, self-employed and contract employees aren't eligible for a DI plan through work. For those people, individual DI plans are available. They may be structured differently but generally do the same thing, which is protect your income. However, you may be subject to underwriting.

And speaking of underwriting, know that your health AND your income are going to be looked at. Smoking, your age and other factors, including pre-existing conditions will be considered. Many times the insurance carrier will ask for your medical records. And they may want to take a look at your recent tax returns. Since the benefit is based off of your income, they want to make sure you earn what you say you earn. Makes sense.

Another factor is your occupation. The safer your job is the less expensive the rate. A welder or a roofer will be charged more than the person who sits in a cubicle. And some occupations are difficult to insure (or aren't considered). Take professional athletes, for example. I tried to insure a young lady a few years ago who was a professional golfer on a smaller circuit. No company would even consider her.

In the next post, we'll discuss elimination periods other items to consider when purchasing a DI plan. In the meantime, stay healthy and of course let us know if we can help answer your questions.

Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient. 

The 3 Stages of Retirement

When we think of retirement planning, we usually think of traveling, visiting the grandchildren or working in our garden.  Looking forward to age 65 is a milestone for a large number of us, but the reality can be quite different.

Did you know that only about 15% of Americans fully retire at 65? Most will just continue working or cut back on the hours they work. And self-employed people, such as business owners or 1099 employees just keep working as well because they know the boredom will set in and want to stay active.

When I talk to groups about retirement years, I go over the three stages of retirement:

• The Go Go Years - This is when we think of retirement as traveling and having a good time.Visiting the grandchildren, going on cruises and days full of pickleball sound great, and if you have some money saved up you can move to a great retirement community. 
  
• The Slow Go Years - As the name implies, maybe we need to take it a bit easier. "Piddling" in the garden and staying closer to home. Sometimes a health related issue or an accident begin this part of the process.
  
• The No Go Years - Serious health problems and aging keeps us in home or a facility. This can also be the time when you can go through most of your savings due to healthcare costs, even if you are not in a facility. As a matter of fact, home healthcare services can cost up to twice as much as a nursing or assisted living facility.
  

Unfortunately, when planning for those retirement years, we fail to plan for the No Go years. Some have their heads in the sand, not thinking it will happen to them. According to the Motley Fool, 69% of people will need long term care insurance. And you're likely to need it from 1 to 3 years. Given that care in a facility isn't cheap, and in-home care is even more expensive, why not shift the burden of the costs to an insurance carrier instead of wiping out everything you've worked your whole life for?

There's a myth that the government will take care of you. Signals from politicians show differently and we don't recommend you rely on it.

Fortunately, there are options and depending on your age and health, you can find something in your budget. The long term care insurance landscape has changed over the last few years. Many insurance are acting as if they no longer want to be in that part of the business by selling off those books of clients to other carriers, while others have changed their policies by decreasing the rich benefits they previously offered for years.

However, there are still a handful of carriers still offering long term care policies. And now we even offer a short term home healthcare policy which is a great way to stay in your own home affordably. In addition to these options, many life insurance policies now offer "living benefits" in their coverage which can help with the dilemma of being chronically ill.

If you would like more information about planning for your future healthcare costs, contact us or use our "Books a Free Consultation" tool. We'll be happy to have a phone conversation with you. And as always, 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!

Are You Playing Checkers or Chess?

Many people don't have a complete financial gameplan in place.  They buy life insurance, have a 401k through their employer and only insure their paychecks through a work sponsored program.  In other words, they are only thinking of one move at a time. This can be a fatal mistake when it comes to planning for you and your family.

On the other hand, forward thinking folks look at the big picture. They aren't just thinking of their needs for the present, but down the road. They know that their needs will change with time because their situations will change. Kids will be born and need to be raised.  Illness or unemployment can affect a families finances.  When making a financial plan, there can be a lot of landmines.  Just like a good chess player, these people are thinking several moves ahead.

In any game, whether it's chess or football or Monopoly, you have to play offense and defense. Think of offense and making money and defense as protecting what you have worked for. Insurance is playing defense in that sense and can be important in the case of an illness or accident. 

Take life insurance for instance. There are many types of coverage and depending on what your own situation is, you may need to buy several policies over your lifetime. Term is great during your working years, when you are still paying off a mortgage and want to make sure your kids have funds to go to college if they want to. And term life coverage is very affordable. 

As you get older and the house is paid off, you may want to look at coverage that is permanent, like a whole or universal life policy. You probably won't be looking for cash accumulation in that scenario, but instead something to relieve the burden of burial costs from your family. 

Of course, your income (or the incomes nowadays) is how you provide for you family and pay the bills. If you were to unexpectedly get sick or hurt and became unable to work, your family's financial situation could become a nightmare. And unlike the possibility of your death, you may still need care, which could involve paying someone or having a family member take time from their job. Either way, a disability policy could provide insurance for your paycheck. 

Finally there are the costs of aging. We all want to think of retirement as a time to kick back, travel and spoil the grandkids,but we rarely think ahead of a time when our health is failing and we can no longer be independent. The only time we consider it is when we see our parents or grandparents in that predicament. In the case of my father, who refused to go to a nursing home but could no longer care for himself, we had to bring in a private caregiver company. He pension and other small income streams were eaten up quickly each month. Desperate, he began dipping into his home's equity. 

Life happens and bad things can occur at any point of our lives. Planning ahead and making sure you have your bases covered is a sign of "financial wellness". Shifting risk from your own wallet to that of an insurance company (life, disability or long term care) is a smart move.

So the question to ask yourself is, "Am I playing checkers or chess when it comes to my finances?"

At Surf Financial Brokers, we know which plan is more successful.  Let us help you become a chess player.

If you have any questions or comments, please let us know and stay healthy!

Chris Castanes is the president of Surf Financial Brokers, located in North Myrtle Beach, SC, as well as a professional speaker helping sales people be more productive and efficient. 

The Doctor Who Won't Listen

Have you ever seen those so-called "financial experts" on television. They have books and infomercials all about changing your financial situation by following their plan. Heck, one isn't a financial expert at all, but a travel agent. But the best part is that no matter what your situation is, their generic advice is going to set you on a path of financial success!

The truth is that people are not in the same situation. A wealthy couple with a large estate to leave their heirs has a different set of problems than the single mother struggling to pay her bills. And just telling them both to "buy term life insurance and invest the difference" makes no sense.

Imagine for a minute if you went to the doctor and all he talked about was a new wonder drug that was awesome and could treat a serious condition.  The only problem is that you don't have that condition.  At first you are polite because the doctor is very enthused about this new drug, but soon you become irritated because you need help with something else. The doctor won't have any of it and insists that you follow his orders. 

If this happened in real life that doctor would be run out of town on a rail and deservedly so. If an insurance agent were to sell their clients the same policy, despite whether they were young or old, employed or laid off, healthy or sick, they would be guilty of  "financial malpractice".

We in the insurance industry can become guilty of the same thing as this doctor.  We find a product, for instance a disability policy, and start investing our time (as well as the client's) into that product, instead of listening to the client and finding out what they really need.  In the end, the client isn't happy and the agent doesn't make the sale.

There's a better way, but the client has to meet the agent halfway. Many people don't want to discuss their personal situations with someone they barely know. And there are those who only want to talk to strangers. They feel as if they'll get a more objective opinion. Either option is good, but let your prospective insurance agent know what's going on. Issues like business succession, special needs children and budgets can help your agent get a better feel of the situation and help you remove potential landmines in your financial gameplan.

In our agency we take the approach that we have to ask questions. Sometimes it's like pulling teeth, but in the end, we do what is right by the client. And one way is by having a full suite of products that can help. Some people may not need long term care, but they may have a need for a Short Term Home Health Care plan. Or a cancer plan. Or disability insurance. 

We have helped clients from Charlotte to Charleston to Richmond and even in the state of Maine. They know that we are not going to prescribe a generic solution for all of their pain points, but will take the time to learn what their needs are and how to address them. And all of this is done without pressure. 

One way we make it easy is by making our calendar accessible. Set your own appointment and we'll give you a call to get you started. This is another reason we have been called the "coastal Carolina insurance experts". 

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.

Do You Have the Old Kind of Life Insurance or the New Kind? Part 2

In the last post, I discussed how life insurance carriers were struggling with the long term care market. Check out the post if you want to catch up.

As the stock market dropped in 2008, claims reserves (where your insurance company keeps your premiums) dried up like a raisin. And claims were higher than expected. To offset this, almost all of these policies had a provision that allowed for a rate increase if need be. After 2008, several companies put in requests with state insurance commissions for rate increases, from 17-20% on policies that were in effect. Some companies did this multiple times.

I've always considered people who buy long term care coverage, to be "forward thinking". Unfortunately that forward thinking wasn't paying off for many as they saw their rates increase.

Also, at the end of the last post I mentioned the number one objection when people discuss LTC with an agent. The conversation usually goes like this.

Client: How much is this going to cost?
Agent: $120 a month.
Client: That's a lot of money. What if I drop dead and don't need long term care? What happens to my premium?

And that was the deal killer for many. Of course you could purchase a "return of premium" rider, but that would nearly double your premium. There had to be a better answer.



Now we have life insurance with long term care riders which are handled differently by different companies. Some underwrite the rider separately, others just underwrite the life insurance part. Some just called them "living benefits" to work around certain requirements by state commissioners. On the whole, it's just life insurance that you can use while your living.

It's life insurance that you can use for long term care if you need it. And some now have other benefits. We offer one with a critical illness component in the event of a heart attack or stroke. And the cash value can also be used as a retirement supplement. And being life insurance the rates are locked in. No rate increases!

So there's the old kind of life insurance and the new kind that you can use before you die. If you have questions or want to drop us a comment below or go to our website and request information.

Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient. 

Do You Have the Old Kind of Life Insurance or the New Kind? Part 1

For many years we have had a few types of insurance. There's term life, universal life, whole life and indexed universal life, among others. They generally did the same thing, which was paying if you died and maybe building some cash value. Other than that, the differences were in rates and performance.

And then 2008 came around and the industry had a bit of a shake up. Companies offering life insurance as well as long term care began to change benefits of the latter. And as the years went by, the bond rates stayed very low, affecting dividends and profits. These carriers had to make changes.

Stand alone long term care (LTC) policies were stripped of certain benefits like lifetime payouts. Some companies got out of the LTC business altogether. Some maintain their business on the books but not writing new business, while others just sold their books to other companies.

Demand for the product, along with a slow but increasing awareness, was still there. Around this time, a few hybrid products began to get marketed. I was working at a very large life insurer at the time and we were told to poo poo any hybrid products if a prospect asked. For example, we were to compare a life/LTC product to those TV/VCR's that never quite worked as good as a separate system.

But it did address the number one objection to buying long term care coverage. And I'll cover that in part 2, so be sure to subscribe.

Chris Castanes is the president of Surf Financial Brokers, as well as a professional speaker helping sales people be more productive and efficient. 

Would You Trust This Doctor?

Imagine you live in a town, and it that town there is a physician who treats every ailment the same. "I only prescribe penicillin,"  says the doctor.  Everyone through the door, whether suffering from an infection, a cold, broken bones, mosquito bites or just a headache gets the same medication to cure them. 

In reality, if this doctor existed, he or she would be run out of town on a rail, or at the very least, have their license to practice medicine revoked.

However, there are financial advisors and insurance agents who do the same thing.  Have you ever heard the agent that says "I tell all of my clients to buy term and invest the difference"?  One cure for a variety of financial ailments. 

People have different situations, and like snowflakes, no two are exactly the same. Consider factors like marital status, elderly parents, kids who are at home, kids who are out of the house and those who have returned back home. There are other variables as well, like debt, employment status, benefits through work and many others. I can go on listing all the things that make your financial situation different from others. The gist is that one insurance product may be good, but not great.

At Surf Financial our philosophy is this:  There are a wide variety of insurance and investment products out there and they all serve a purpose somewhere, but not every product is for everybody.  Does a 25 year old need an annuity?  Probably not, but some universal life or a savings plan might be a good start.  Does a 75 year old need a term life policy?  Not unless they need it to secure a loan or have another specific need in mind. 

The truth of the matter is that if an insurance agents says to you "I don't sell that product because I don't believe in it" the odds are good that either they don't understand how that insurance products works and who it works for, or it simply is not available to them. 

In the first case, I remember working with agents who just could not wrap their heads around universal life insurance. Their excuse was that if they couldn't understand it, then how could they explain it to their clients. Going back to our doctor, can you imagine hearing "I don't understand how a virus works so I only treat fractures"? 

And there are those agents who do not have access to certain insurance products. I knew a couple of agents who were "captive", which meant that they had contracted with a company who only allowed them to sell approved products within their portfolio. Newer agents like working for these kinds of carriers because they only need to learn a handful of products. In the long run, it put them and their clients at a disadvantage. 

In other words, without asking questions, a true "advisor" isn't any better than the doctor with one prescription.  Let us help you by having an honest conversation. Yes, we will ask you some questions to find out what your situation is, but it only takes a few minutes. And if you are looking for the best disability insurance quotes, life insurance or a cancer plan, give us a call. You can even book your own appointment to make it even more convenient. 

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!