"Group Benefits" For The Self-Employed

I spend a portion of my time working in the "voluntary benefits" arena as an enroller, or "benefits counselor". In a nutshell, I enroll benefits for large groups, like schools, hospitals and municipalities, for example. Typically I sit with an employee in a one-on-one meeting and review their current benefits and check to see if they need any other insurance poducts. It's great to meet these folks and help them with insurance products like dental, vision, disability, accident and life insurance. 

The majority of my working time is spent working with individuals, however, many of which are self-employed. Realtors, sales professionals, small business owners and other "contract employees" or 1099's for instance, make up a lot of my clients. These great people are just as deserving of having decent insurance products, regardless of the size of their company. 

With this in mind, we invite all to visit our site and take a look at some of our voluntary products that can be purchased on an individual basis. There, one can get quotes for products such as life, cancer, hospital indemnity and accident insurance right from our site. And if you see coverage you like you can even start an application!

For some of our other products, like disability insurance and long term care insurance, one can book a short phone call to get a quote as accurate as possible.* We are independent agents and have access to many of the best policies. 

As independent insurance agents, we are also independent contractors, which means that we use our own products. Having a disability or cancer plan come out of our bank account instead of a paycheck doesn't change the fact that we need these important insurance plans. 

Please take the time to get a quote for yourself or your family. It probably won't cost as much as you think. 

*Quotes are not guarantees or offers of coverage and all policies are subject to underwriting. 

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

What Happens When You Can't Work?

We can presume that most of us enjoy earning a living, getting a paycheck (nowadays direct deposit is the norm) and having some discretionary, or "leftover" money to use after paying our bills. Those funds are what we use for the fun stuff, like eating a meal at a restaurant or seeing a movie or treating a friend to lunch. 

But what happens when those funds are no longer available? What if you aren't able to work due to sickness or injury? 

For many people (like me) who are small business owners, independent contractors or otherwise self-employed, a serious disability could not only be devastating to a family's finances, but could also damage the business providing the income. But there's a solution!

A Disability Income (DI) insurance policy can help you protect your paycheck, which in turn helps you pay your bills and maybe even have a little leftover for a movie. DI can help you and your business stay afloat when you are unable to work. 

There are a few things to consider when looking at DI. 

• Underwriting looks at your health, your income and the type of work you do. An office worker may have lower rates than a welder because welding is more dangerous. Some insurance companies will require to see your taxes for the last 2 years.
• Policies can also be purchased that are solely for keeping the business open. 
• Individual DI policies may not have all the benefits found in group plans, like maternity coverage. However, there are many more options that can be structured to work for your needs.

Premiums may not be as high as you think, and your coverage can be customized to fit your budget. Given that over 85% of claims are actually for illnesses, like cancer or strokes, that doesn't mean accidents can't happen. Either way, if you can't work, a DI plan will be a great way to avoid guilting your friends and family into contributing to your GoFundMe plan. 

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!

Wouldn't You Rather Spend Your Savings On Something Fun?

I recently had a conversation with a very nice couple from Greensboro, NC. They both worked as realtors, had three children and seemed like they were doing a good job executing their financial game plan. 

As the housing market has been doing well, they have managed to sell more in the last year. They both know that things won't stay this way forever, so they put aside a good amount of money each month for their "rainy day fund". Having the discipline to this and stick to it is rare to find these days, so I told them they were doing an awesome job. 

We continued to discuss their other financial issues. They had a decent amount of life insurance on themselves (they probably could have used a bit more) and had started a retirement account  as well. This was especially encouraging because it can be a difficult task when one, or in this case both, of the spouses are self-employed. Nobody is deducting money from their paycheck for them. 

I was starting to think they didn't need me at all. However, it didn't take long to discover there was one potential landmine that needed to be addressed. I asked them a basic question. "Do you have enough money put aside to help pay bills if you are sick or hurt and can't work?" 

They thought about it for a minute and said, "Well, we could dip into our savings." 

"You're right. You can do that. But is that what you are saving for? To cover bills?"

They hadn't considered this so I offered a better alternative. "If you couldn't work, you wouldn't have that income. Sure, one of you could pick up some of the slack, but do you want to go through that? Your savings should be for things you want down the road, like a vacation or to buy a nice car. No one saves to pay bills."

"Let's do this," I suggested. "Let's take a look at disability insurance. The premiums won't break your budget but it could keep you from having to go through your savings." 

They agreed to look at a few options. As we move through the process I'm sure they will both complete applications. And since they are both fairly young and healthy, they should both have policies to protect their paychecks soon. 

Are you setting money aside each month for a rainy day or something fun like a vacation or a boat? Do you really want to have to dip into that money to cover your bills? What if you could shift that risk to an insurance company and let them cover your bills? 

If you are a business owner, a contract employee or otherwise self-employed, ask an agent to help you find a disability policy that fits your needs. 

Special Offer: If you aren't sure how much disability you need, we have a one-page PDF that can help. To get a FREE copy drop a note to chris@surffinancialbrokers.com and we'll send it to you ASAP. 

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!

Disability Insurance Awareness Month Part 1

May is once again Disability Insurance Awareness Month, when the insurance industry tries to let the public know the importance of having a disability insurance policy. As I say whenever I sit with a client or talk to a group, the Holy Trinity of insurance is your life insurance, your health insurance and your disability insurance (DI). That's how important it is!

Think about it. If you are sick or hurt and are not able to work, your bills just keep coming. No one is going to let you have a free pass on your car payment, mortgage or phone bill because you are a nice person. In essence, having a DI plan in place is paycheck insurance. That's why people call DI "paycheck protection".

How does it work? Depending on your employment and how you get paid there can be variations. The more common scenario is that you buy a group plan through work or your employer pays for it or both. I have seen instances the employer pays for Long Term Disability (LTD) but the employee pays for their own Short Term Disability (STD) policy.

These types of policies usually pay up to 60-70% of your gross income. Keep in mind that if your employer is paying for your policy and you should start receiving benefits, those benefits will be taxable. This is also true if you purchase your plan through a "worksite*" insurance company and they pre-tax your premiums. 

Short term DI usually pays for the first 3, 6 or 12 months of a disability, while long term DI will start paying after those dates. The key is to make sure you have coverage seamlessly throughout the time you are out of work, which is determined by your physician. 

Also, group plans will typically cover maternity for 6 weeks (8 weeks if a caesarean is called for). Too many people will drop their DI plan when they decide that they aren't having any more children. I always encourage people to keep their policy, as it is not "baby coverage" as many seem to feel.

On the other hand, if you are self-employed or a 1099 employee, like a realtor or insurance agent, you may need to look into an individual DI plan. These are structured a bit differently in that rates will be determined based on factors like:

• Your occupation. A welder or a roofer will pay more than a secretary because their job is more dangerous. 
• Your health, age and tobacco usage. Just like life insurance, the insurance company wants to know if you are a good risk or not. 
• Your income. Determining your benefit amount is dependent on how much money you earn, so the insurance carrier may ask for a copy of your tax returns. We have one company that ask for it when you file a claim. 

Another important factor is the "elimination period", which is like a deductible, but in time instead of money. If you have a 14 day elimination period, that means that the policy won't start paying out benefits until the 15th day of your illness or accident. Elimination periods can vary from 7 days to 6 months, and like the deductible on your car insurance, the higher you go, the less the policy will cost you.

Also, keep in mind that individual plans will not cover maternity.

In Part 2 of this topic we'll discuss how to determine how much coverage you need. In the meantime, please stay healthy!

*Companies that offer voluntary benefits like DI, dental, vision and other ancillary insurance products. 

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!

Do You Need Dental, Vision Or Hearing Insurance?

On occasion I work with enrollment companies helping people with their voluntary benefits. We have the usual line-up of products, with life insurance and disability plans available for the employees that we meet with. By far, the most requested products are the dental and vision plans. As a matter of fact, the employees will walk in to our one-on-one meetings and say something along the lines of "all I want is my dental and vision". 

There are those of us, myself included, who don't have access to group policies through an employer. For people who are small business owners, contract employees or otherwise self-employed, getting a good individual plan has been difficult. 

On an individual basis, dental plans are available but can be rather pricey. There are usually waiting periods as well, which can make the product unattractive to many people. With all of this in mind, I have been a bit resistant in including a dental plan in our line up of products. That is, until now. 

We have recently begun to offer a plan through one of our carriers, Manhattan Life, which solves many of the issues we have been concerned with. And even better, this plan not only covers dental, but vision and hearing too!

Another reason we have begun to offer these plans is because Medicare does not provide coverage for dental, hearing or vision and many of our clients have requested information for these services of late.  

Here are a few of the basic features*:

• No networks. You can go to any provider.
• A $100 deductible per year per person.
• The plan is available to people from ages 18-85. 
• You can include up to 3 children.
• You can choose your annual maximum benefit of either $1000 or $1500
• Guaranteed Issue (No health questions)
• Guaranteed Renewable. You can keep it as long as your like as long as you pay the premiums.
• No waiting period for preventative and basic dental services.
• Benefits for hearing exams and hearing aids.

(For a more detailed list of services, click here.) 

As mentioned above, not having a network means you can go to any provider. One thing to keep in mind though is that your doctor may or may not file your claim for you. The patient may have to pay the bill in full and submit the claim on their own. Because of this we recommend asking your doctor before receiving services so there are no surprises.  

One of the nice parts of this plan is that if one does not use the full maximum benefit for dental, they can use the balance for vision or hearing services. One of our partner agents was telling me how he only used a small portion of his benefits on the dental plan one year, so he used the balance to get new eyeglasses. That's maximizing your plan!

We have added a quoting tool to our website, but for your convenience you can run your own quote here.  If you like your quote you can even begin the application, which is easy to complete and only takes a few minutes.

Not everyone wants or needs dental insurance. But for those who do, we hope you take a few minutes to look at the plan and run your own quote. In the meantime, please stay healthy!

*Plans vary from state to state. Be sure to ask for a brochure for your state.

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 Protecting Your Lifestyle?

Disability insurance is often misunderstood. While almost everyone gets the need for life insurance, not everyone understands the importance of having disability insurance. Insurance agents have the opportunity to help their clients understand this important coverage. 

Disability insurance protects your earning power should you become disabled and unable to work. It can help protect your lifestyle from a full or partial loss of income. As you well know, the probability of you becoming injured or disabled during your working career is much higher than your probability of dying.

The odds are about three to five times greater that you will become disabled for at least 90 days or longer than the odds are of of you dying. Disability insurance can help bridge this gap in income during a period of disability.

Disability insurance typically comes in two varieties, short-term and long-term.

Short-term disability coverage typically provides income replacement for an injury or disability that lasts anywhere from 30 days to one year. The time frame will vary based on the policy. Short-term disability coverage is a common employee benefit, some employers offer it at no charge. 

Long-term disability policies typically cover a disability that lasts three months or longer. This also includes a permanent disability that limits the covered individual’s ability to work on a permanent basis either in part or totally.

For those who are employed, many employers offer both short-term and long-term disability coverage as part of their employee benefits menu. It’s common for these policies to replace 50% to 60% of the employee’s compensation once the coverage kicks in.

This group coverage generally comes at a reasonable cost and will be sufficient for many of your client’s needs. However, some clients may have situations for which this type of coverage might not suffice. And of course, others who are small business owners, contract employees or otherwise self-employed might not have access to group coverage.

Group disability policies typically have a very broad definition of disability that often refers to the ability to do any sort of work. The policy might require you to work at any sort of job you might be able to do, and then pay you for the difference in your salary from your old job and the new one. In an extreme case this might require someone who is used to white collar employment to work in a fast food restaurant to receive policy benefits.

Disability coverage purchased privately will often have a narrower definition of disability. For example, an oncologist will be considered to be disabled if they can’t work in their field or something extremely close to it. Same with an attorney and many other professions.

Group coverage may not cover some forms of variable income such as commissions or incentives that many salespeople or high level executives might count on as a key portion of their overall compensation. The group policy might limit the covered compensation to the policyholder’s regular compensation.

We recommend that if you have a group plan to avoid having your premium payments deducted "pre-tax", as this can make your benefits taxable if you should become disabled and need to file a claim. Saving a few dollars in payroll tax could decrease your benefits considerably.

Along with that, note that your benefits can be taxable if your employer is paying for your coverage. 

You will need to shop around for a policy and insurance company offering the coverage that best fits your situation. In general, the narrower the definition of disability, the higher the premium. Privately issued policies will as a rule be more expensive than group coverage.

There are a number of factors that will impact the cost and even the availability of a disability policy for you. These include:

• The elimination period. This is the waiting period until coverage kicks in. The shorter the elimination period, the higher the premium. Think of it as a deductible in time.
• Definition of disability. As discussed above, a policy with a narrow definition of disability will cost more.
• Your occupation may factor into the equation, especially if you work in a field that is more likely than some others to result in a disabling injury.
• Your income. The higher the income the higher the premium as the insurance company would have to pay a higher benefit level for a disability claim.

Social Security offers disability benefits, but they are very hard to qualify for. This is not something you should depend on to cover you in the event of a disabling condition.

Should you find yourself disabled and unable to work for a prolonged period of time, this could be financially devastating without the proper coverage in place. 

During these times of Covid, it's more important than ever to make sure you can cover bills like housing, utilities and groceries. In the upper right of this blog is a "Get A Quote" button. Run your own quote and see how much it would cost to insure your lifestyle. If you have questions, drop us a note. 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! 

Do I Need Business Overhead Expense Insurance?

 

When I speak to groups about their insurance, I often mention "Holy Trinity" of insurance, which is their medical insurance, life insurance and disability insurance. The last one, disability insurance, I tell them, is just is important as the other two, because if one were to get sick or hurt and couldn’t work, the bills don’t stop coming and will need to be paid. Disability is basically paycheck insurance.

But what if you are, like me, self-employed, a 1099 employee or a business owner and don't have access to a group plan? What would happen to your business if you were unable to work?

Which is why I like to bring up Business Overhead Expense  (BOE) coverage. It’s an insurance product most people probably haven’t heard of before even though it's been around for a long time. And it definitely one of the most undersold policies out there, probably because there are agents who don’t even know about it.

Business overhead expense insurance is designed to keep things going when a disability or illness requires you to be temporarily absent. This is different from personal disability insurance, which makes payments directly to you to replace lost income if you can’t work.

If you own a business, it’s important that you understand how BOE works so you can decide if it’s something you need.

BOE is a type of insurance that pays benefits to your business if you’re unable to work. For example, if you’re in a car accident and are seriously injured, or you’re diagnosed with a serious illness, your policy’s benefits could kick in to provide the business with cash flow while you recover.

This type of insurance is typically used to help manage your business’s day-to-day expenses. It helps your business continue as usual even when you can’t be there.

What BOE Insurance Covers

BOE is business-specific, meaning it applies to expenses related directly to running your business. The types of expenses you can use business overhead expense insurance to pay include:

• Rent or lease payments
• Loan payments
• Insurance premiums
• Utility bills
• Custodial services
• Payroll for employees
• Tax obligations
• Business credit card bills

There are, however, some things that overhead expense insurance is not designed to cover. For instance, these policies don’t extend to expenses related to improving or expanding your business, such as buying new equipment or opening a second location.

Overhead expense insurance also doesn’t cover your salary. That’s why you would need an individual policy on yourself.

It’s worth considering purchasing this type of insurance if you’re the person who’s primarily in charge of running your business. Having an overhead expense insurance policy in place means the bills continue to get paid for the business when a disability or illness puts you on the sidelines.

Depending on the terms of your policy, your insurance company could pay benefits for up to two years after you file an eligible claim. That can be helpful if you have a serious disability, illness or injury that requires extensive rehabilitation or physical therapy.

Keep in mind that not every business owner may qualify for this type of insurance. If you’re self-employed as a freelancer and run a business from home, for example, you may not be able to purchase a policy. You may have to stick with a regular personal disability insurance policy instead.

There are advantages associated with having this kind of insurance for your business.

Here are some of the key benefits of BOE insurance:

• Your business can remain open even when you can’t be there to run it
• Essential business expenses can be paid for using policy benefits, allowing you to preserve your business’s cash reserves
• Being able to meet payroll means you have a better chance of retaining key employees
• A BOE policy decreases the odds of having to dip into personal savings to cover business spending
• Premiums paid for coverage may be tax-deductible
• Business expenses paid with premiums may also be tax-deductible

In terms of the downsides, here are a few things to keep in mind:

• Policies don’t pay benefits to you directly so you’ll still need separate disability coverage for that
• Benefits typically have a time limit of 2 years and can’t be paid indefinitely
• Any benefits you receive may be considered taxable income for the business
• Policies may enforce a maximum monthly benefit limit, which may be less than what you need to continue operations

As you can see, the pros generally outweigh the cons but they still need to be factored in. And you also have to consider the potential return on investment for purchasing this kind of coverage. Having it can be a safety net if you get sick or become disabled but if you never end up using your coverage, you may feel as if you’ve paid premiums for nothing.

The key advantage to having a BOE is that it gives you time to make a decision if you are disabled. You probably won’t know when or if you’ll recover, or if you should shut down the business, sell it or keep it open. That 2 year benefit window gives you time to figure it all out.

If this is something you think you need, drop by our website and make an appointment to have an agent call you. Or you can leave a question on our contact form. 

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