The Differing Types of Life Insurance Pt 3 (The Whole Life Talk)

Now that we understand from the last two posts that term life insurance is "temporary" and only covers us for the term of the policy, we should take a look at one of the permanent types of life insurance, whole life.

As the name implies, it covers you for your whole life, or better yet, the remainder of your life. In most cases, you can continue to keep your policy as long as you keep paying the premiums. On the other hand, there are policies out there that allow you to pay up early. For example, with a 10-pay policy you could make premium payments for 10 years and be done. At that point you no longer have to make payments. 

Unlike term life, whole life does build some cash value, which you can borrow against when needed or just cash out. I've actually heard agents to use a whole life plan as a savings or retirement plan, and it can be done, but be aware that most whole life plans' "growth engine" is merely the insurance carrier's investments. (In my opinion, this isn't the most efficient way to fund retirement or college planning, for that matter)

When you are in the process of purchasing a policy, the agent is required to show you an illustration with a ledger. This ledger shows, per insurance commissions, required numbers, such as guaranteed minimums, but will also show what the company's projections for your policy over 5, 10 or 20 years. 

Another thing to consider is the type of company you're buying from. Is it stock held or a mutual company? If it's a stock held company, which many are, the profits will go to the shareholders in the form of dividends. But if it's a true mutual company, then the profits will go back into the policy, either as dividends or to offset your premiums. With this in mind, your cash value accumulation can grow much faster with a mutual company. And just because a company has the word "mutual" in their name, it may not be. Several companies over the years have "de-mutualized". Do your homework or ask the agent.

Most final expense plans that you see advertised on TV are basically whole life plans and can be very expensive due to their "guaranteed issue" provisions, which means there are no health questions. There is typically a caveat for these policies. Some won't pay a death benefit in the first two years. Ask your agent if this is the case. 

I personally think that if you're in good health, a better option for final expenses is a Guaranteed Universal life policy, which we'll discuss in the next post. 

In the meantime, stay indoors, stay healthy and as usual, if you have questions or comments, please leave them in the comments section. And feel free to stop by our website, check out the product videos and set an appointment for a phone call 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!

The Differing Types of Life Insurance, Part 2 (The Term Life Talk)

In a previous post we discussed the reality that there are different types of life insurance and that all are good for some people, but not all are necessary for all people. As this series progresses, we'll take a look at each type of life insurance and discuss their pros and cons. For now let's look into term life coverage.

Term life is, as it's name states, good for the term of the policy. A 20-year term is good for 20 years, and in that 20 years, the price won't go up on you. At the end of the term, in this case 20 years after the purchase date, the policy will typically end. In some cases the insurance company will continue to policy as an annual renewable term (ART), which means each year the price will increase.

When is it a good idea to buy term coverage? Most people will purchase this during their working years, which is usually when they can quantify the time they need coverage. For instance, if you are pretty sure that your home will be paid off in 20 years and in that same amount of time your kids will be grown and on their own, a 20 year term policy is appropriate.

My favorite term life story is about a friend of mine who told me he borrowed money from a relative and needed to secure the loan with a life policy, in case he died before he was able to repay the loan. The insurance carrier required a paramed exam and my friend's wife was confused when the nurse showed up at their house. Apparently he did not tell his spouse about the loan and had to come clean.

Term life can be very affordable, as it is only coverage for death and builds no cash value. You can't borrow against it either. With this in mind, it's can still be a great value.

There's a school of thought that states that people shouldn't buy permanent coverage, which we'll discuss later, but instead should buy term and invest the difference in premium. My experience shows that people will purchase the term coverage and say that they'll do the investment part at a later date, which never comes.

A great feature of most term policies is a conversion feature. This allows you to convert all or part of the coverage to a permanent policy with no health questions or additional underwriting. Let's assume that in 10th year of a $500,000 policy you have a heart attack. Even though you've survived, the heart attack may prevent you from buying additional coverage. But you can convert, say $25,000, to a permanent policy. The remaining $475,000 will still be there, but now you have some coverage for final expenses that will always be there for you, as long as you pay the premium.

Note: When you convert a term policy, the premium is based on your age at the time of the conversion, not the age you originally purchased the policy.

Term life insurance can be a great fit for young families and people on a budget. If you aren't sure if term would work for you, drop us a note. Or you can book your own phone appointment from our website. We want to make buying insurance easy 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!

The Differing Types of Life Insurance Part 1

For years agents have debated the merits of different types of life insurance. Some prefer to sell term while others push for permanent types of insurance, such as whole life or universal life. And for the consumer, the differences can be confusing. At least once a month I'll have a client ask me to explain what sets one apart from the others.

Why would an agent push one type over another? Perhaps they were trained to believe that whole life, for instance, is the panacea that cures all financial ills. Or maybe they've bought in on the "buy term and invest the difference" mantra.

The other obvious reason is that they work for a company that wants to promote one type over others, and may not even offer the other types. I knew a husband and wife who ran an office for a carrier that didn't offer whole life, so they trashed the product. "We wouldn't do that (sell whole life) to our clients!" they would proclaim, as if it was unethical.

The truth is this:  All insurance products have a need somewhere, but not all insurance products work for everyone. For example, a universal life policy might be a great fit for one person, but not necessarily for everyone else.

 An agent worth his or her salt will have the product that fits for you, and won't try to make something else work when they don't have what you need. I use the analogy of the shoe store that only carries even numbered sizes. If you wear a size 5 shoe, will they send you to another shoe store? No, they try to make a size 4 or 6 "fit".

When you hear a life insurance agent say "I'd never sell that product" it's probably because they aren't educated enough on the product to understand when it is suitable or their company doesn't carry it. On the other hand, if all if they sell is one type of insurance, run as fast as you can. Imagine a doctor who only prescribes penicillin, and for everything from headaches to broken bones. That doctor would be run out of town on a rail for malpractice.

In my next posts, I'll discuss go over the various types of life insurances. Hopefully this will help you decide which products is best for you and your family's needs.

 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!

The Benefits of Life Insurance In a Down Market

When we think of life insurance, often the first thing that comes to mind is protection. That protection extends to both good and bad markets - and not just death benefits but living benefits as well.
Given the recent financial news, here are some things to consider.

• Tax free death benefits can protect an insured's income and assets from market volatility during their working years and beyond, and provide a legacy when markets recover. 
• Income tax-free withdrawals and loans may be used as potential sources of emergency funds, or to help meet liquidity needs.
• Life insurance cash values can be accessed during a down market to avoid selling other assets and "locking in" losses.

Different types of life policies offer other advantages. Give us a call and we'll discuss with you over the phone.

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

How To Be Socially Distant and Get the Life Insurance You Need

After 9/11, there was a huge increase in the amount of life insurance policies sold nationally. Seeing thousands of people dying on their televisions brought people to the reality of their own mortality. And they also saw the faces of the family members who were distraught and confused, not knowing what to do next. Empathizing with the images in front of them, many took a hard look at their own situations and asked what would happen to their own families if a sudden tragedy fell upon them. 

Now we have the deadly coronavirus at our doorstep and people are just as concerned. They realize that this is a serious health threat, and also want to make sure that their families are going to be able to continue to live in the same fashion as before if they should die suddenly, whether from a virus or another cause. Insuring that a family can stay in their home and that the kids can continue to plan for their college education is imperative. 

However, there's a new wrinkle to consider. Given that the virus is contagious, we as a country have adopted a new norm, "social distancing", or literally not going near each other. How can we take care of the things we need to tend to in our day-to-day lives if we can't conduct business face-to-face? Hopefully, we have found some solutions that may make life and business a bit more bearable. 

Luckily, we have web applications at our disposal. As a life and health agent, I've been using web apps for years, helping clients over the phone with their insurance needs. It helps tremendously when a client is out of town or even in another state. Through the web we can get all of a client's information and submit it directly, and securely, to the insurance carrier. Additionally, the advantage of the web based application system is the lack of mistakes and missing information that can happen with paper applications. 

Many of our clients have said that this is preferable because of the convenience to them and it speeds up the process by days when an application doesn't have to be mailed in. I had one client who was visiting her grandkids when I took her application over the phone. Her policy was issued in less than a week. It doesn't get much easier to buy insurance when you can see the ones you are protecting while getting coverage.

As we do our best during this epidemic to stay apart from each other, remember that applying for life, disability or long term care insurance can be easy and convenient. And we are just a phone call away. Visit our website at www.SurfFinancialBrokers.com and fill out the Contact Form. We'll set up a time to call and discuss your insurance needs. Or if you would prefer, you can now take a look at our appointment schedule and schedule a time yourself. 

During this pandemic we realize you have a lot on your mind. Work, school (or should we say homeschool), and caring for our loved ones can keep us all preoccupied. Making sure that your family is taken care of if something should happen to you can be affordable and painless. We are working hard to make the process for covering you and your family as easy as possible. Keep a smile on your face and 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!

The Life Insurance Check Up 2023

Hopefully, you go to your physician once a year for an annual checkup. The logic behind this is to make sure you are in good shape and if there is a problem it can be dealt with before it gets out of hand. The same is true of your "financial wellness". 

In that vein of thought we at Surf Financial Brokers ask, "Have you had an annual life insurance check up?"  It only takes a few minutes and could save your loved one a lot of pain down the road.

First, make sure you have enough life coverage.  Many people think they can get away with a small policy through work, but it's probably not enough to keep your family in their home and retain their lifestyle if something were to happen to you. And if you in a two-income family like many other Americans, your income definitely helps pay the bills. A quick and easy way to determine the amount of life insurance you need is with our calculator.  It only takes a few minutes to plug in some numbers and get a pretty accurate amount of coverage.  Make sure you have enough coverage to pay off debt, cover education costs for your kids, replace income and costs associated with death, such as an extended hospital stay.  Don't forget to include final expenses, like burial or cremation fees, funeral expenses etc.

Second, make sure your beneficiaries are who you want.  When you took out your policy years ago, you picked out who you thought were the right people to be your beneficiaries. We recommend that you take another look at whom you have chosen and make any adjustments that may be needed. An irresponsible adult child or a deceased loved one may not be as suitable as you thought originally.  Have your agent get you the correct forms for beneficiary changes. Keeping your beneficiaries up to date will save your loved ones a lot of time and expense. 

This was the case when my father passed away this year. He had three life policies that had not been looked at in years, even though I asked. One policy had his father and mother listed as the beneficiaries.They had died in 1970 and 1992 respectively. Another had my mother listed as the primary beneficiary, but she had died in 2011. The third policy was the really confusing one, as he had listed his business as the beneficiary. Again, the business had been shut down years earlier. 

Which leads us to the last part of the check up.  Let your family know who to contact if they need help at your death.  Unfortunately, life insurance agents come and go.  The trusted agent you purchased your plan from may or may not still be in the business, or they may have gone to work for another carrier.  If your original agent is no longer available to help you, contact the company and request a new agent of record to assist you.  Leave this information available for your loved ones so they don't have to waste time and money trying to file your claim. And be sure to keep documents like life insurance policies where your family can find it, like a safe or lockbox. My sister has a file that her adult children are aware of that has all of her insurance information in one place. 

If you need help or have questions, please let us know.

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

What Coverage For the Coronavirus?

A few days ago I met with some other insurance agents for a nice lunch in Charlotte, NC. Quickly the conversation turned to current events and, of course, the Coronavirus came up. Then one colleague from the Richmond, VA area, asked the group what policy would best cover the Covid-19 bug. This is when our conversations get pretty interesting.

Insurance agents can be a weird lot sometimes. In a nutshell, we sell policies to cover loss of life, income, or other tragedies. When you deal with such morbid topics all day it affects your sense of humor. Not everyone is appreciative of dark humor as many agents are. Heck, there are a quite a few agents who would rather discuss something a bit lighter. 

This was not the "light conversation" group. Quickly and without hesitation someone blurted out, "A Hospital Indemnity plan!" with great enthusiasm. Maybe a bit too much enthusiasm. The rest of the table nodded in agreement to this idea. I like to think of us as "insurance geniuses" and that birds of a feather flock together. 

At this point you're probably asking yourself what a Hospital Indemnity (HI) plan is and what does it do. In a nutshell the typical HI* helps cover expenses associated with:

• short hospital stays
• ambulance trips
• outpatient surgery
• critical accidents
• emergency room visits

For the most part HI plans are sold through companies through work via payroll deduction, however there are a few companies that offer these plans on an individual basis. Our clients like them because they are easy to understand and very affordable. 

Hopefully, your major medical insurance will cover most of the hospital and/or doctors bills if you're stricken by the Coronavirus. And if you think you may need an extra layer of protection to cover the out of pocket expenses that can go with any illness, perhaps a Hospital Indemnity policy is for you. Luckily, we at Surf Financial Brokers may be able to help.

The Covid-19 pandemic is a serious matter and is affecting people differently. I have personally spoken to people who have tested positive but with no symptoms and those that have said it was just a case of the "sniffles". I've also spoken to people who said they were seriously sick and in the hospital and people who have had family members pass away. As a matter of fact, my neighbor's parents both died from the illness within eight days of each other. With an illness like this that we are still learning about, the concern for a supplemental plan to offset medical bills is increasing everyday. 

To see a short and informative video on how this plan works click here. 

Buying any kind of insurance can be a bit stressful, and we all have too much stress in our lives right now. So let us help you. You can pick the time you want us to call you and we will have a short discussion on the merits of how HI works and do our best to make it work on your budget. We can even take your application right over the phone. With the Coronavirus around no one wants an agent to call on them. 

*Please note that not all plans cover all of the above, but you get the idea. Also, not all plans are 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!