The Life Insurance Review

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!

We Get Referrals From Influencers

Last week I received one of the highest compliments an insurance agent can get. My client, whom I have worked with off and on for several years, handed me a sheet of paper with about a dozen names on it. "These are friends of mine. Some are family. I told them what a good job you do and how you don't pressure me into anything. They are expecting you to call them."

This was a big surprise because I mention referrals from time to time but don't push for them as much as I probably should. There have been times when I have been chastised by my sales manager for not using the litany of Jedi mind tricks we are taught. Having a nice list of names presented to me is a different matter altogether.

There are times when I will explain to a client how they can take "ownership" in my business by giving referrals. The reasoning is that if a client refers me to a friend or family member, I can spend more time working with that person instead of prospecting. One of the many dirty little secrets of the insurance business is that we spend a lot of time just trying to get clients, especially at the beginning of an agent's career. It can take time away from helping the clients we have so clients feel they are helping themselves when them give us someone to see.

A former coworker of mine used to say that the hardest part of the job was finding someone to talk to. It's true. It's a constant battle to find new clients when you sell something that people really don't want to think about. I've heard people say things like, "I'm saving up for a car" or "I'm saving up for a down payment on a house." Nobody says, "I'm saving my money for an insurance policy." 

One of the reasons a lot of agents don't like to ask for referrals is because many clients don't care to give them because they have gotten burned in the process. A typical example goes like this. Bob, the agent, meets his new prospect, Mary and asks her for a referral. She reluctantly gives Bob the name of a coworker, Jim. Bob calls Jim, who isn't interested and berates Mary. "Why did you give that guy my name? I thought we were friends!" Jim says to Mary. Mary is hurt and never gives another referral.

There are several problems here but the obvious one is that Bob hasn't proven himself to be a good agent. Mary just met the guy for goodness sake! How would she know if he is going to be a decent agent or if his insurance products are worthwhile?

This is why, on those occasions when I do get referrals, they come from clients I already work with, who have had time to see that I'm working for them. Those clients are "influencers" in a way because they hold sway with their friends and family members.

So when someone, like my client who gave me that list of names to call, takes the time to do something like that, I know I have earned it. It really is the best compliment someone can give me. That list will potentially make me some money, but what it really does is let me know that my client has taken ownership of my insurance practice. And she is trusting me to work with those people and with the same degree of professionalism I did with her. 

We appreciate all referrals and introductions at Surf Financial Brokers and look forward to helping you and your friends. In the meantime, please stay healthy!

 

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

4 Things To Consider When Choosing A Term Life Policy

Over the years I have noticed that many of my prospective clients don't really know about the different types of insurance, such as term insurance or whole life. As a matter of fact, I just met with a young couple who said they needed whole life because "that's what my mother said to buy". When they saw the price of the whole life policy compared to a term and a universal life they were surprised at the cost. "Maybe Mom didn't know what she was talking about after all," the young man said with a chuckle.

Don't get me wrong. There is nothing wrong with whole life or any other kind of life insurance, as long as it fits your needs and your budget. As I always say, each insurance product is good for something, but not all insurance products are good for everyone. In the case of this couple, the best fit for their needs and their budget was a term life policy.

Term life insurance is exactly as it sounds. It provides coverage and a guaranteed rate for a specific term, say 15 or 20 years. It does not build cash value and you can't borrow against it. Think of it as renting a home compared to buying a home. If you are buying a home you can build equity and borrow against the value. Renters can't do either of those. 

The advantage of term life insurance is that, because it only provides a death benefit, it can be much less expensive and one can purchase a lot of coverage. For example, a 40 year old man who does not use tobacco and is fairly good health can get a $100,000 20-year term policy for under $25/month. That same person applying for a whole life policy for the same face amount would pay at least $100/month. That's a big difference in price. 

So what do you need to look for when shopping for a term policy? Here are a few suggestions.

1. Term length. How long of a term do you need? Be aware that the longer the term, the more the premium will go up, but it is better to be safe than sorry. If you have a 30 year mortgage maybe a 30 year term is a good fit. Also, you can consider how long it will take to pay off the house and to get the kids out of the house. For younger people, we offer term policies to age 65. 
2. Riders. Many term policies will offer optional riders you can add on to the policy. Most of my clients like the Waiver of Premium option because if they are disabled and unable to work, the insurance company will pay the premium for them. 
3. Other features. Some policies have riders that are built into the policy at no additional charge. We have one carrier that includes benefits for chronic illness and and critical illnesses in their term life policies. 
4. Convertibility. This is important for those people who may want a permanent policy at some point because they can "convert" part or all of the policy without any health questions. There may be limitations on when one can convert their policy so check with your agent.

If you are considering an affordable way to protect your family's finances in case something should happen to you, term life insurance coverage may be a good fit. Please feel free to leave questions or comments and let us know if we can help you. 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!

3 Frequently Asked Questions Life Insurance

Occasionally someone will ask me a question about insurance. More specifically, they ask about types of insurance and which is the "best" for them. After thinking about it, I have noticed that a lot of the same questions are asked, so I thought I would take the opportunity to help everyone with some broad stroke answers. Keep in mind that these are fairly generic answers and if you need a more specific answer to your situation, let me know. 

1. What is final expense insurance?

Final expense life insurance is exactly what is sounds like. It is designed to pay for expenses associated with dying, specifically funeral costs. A funeral can cost around $10,000, but that is just an average. Be aware that there are other costs associated with death, such as a hospital stay. I recommend to our clients that they insure themselves for maybe $15,000 instead, just to make sure their loved ones are not having to come up with those unexpected expenses out of their own pockets. 

Most final expense plans are comprised of whole life insurance, which can be expensive. Since whole life insurance typically builds cash value which is unnecessary for what the need is, you may be able to find another alternative. If you are healthy and can make it through a medical exam, you may want to consider a guaranteed universal life (GUL) policy. These policies don't build any cash value, but can be a lot less expensive. GUL's are guaranteed to be there for you as long as the premiums are paid.

2. Should I buy life insurance to cover my children? 

Yes! For some reason people think that putting life insurance on a child is a horrible thing. "I just don't want to think about my child dying" is the common refrain. Neither do we, but it does happen. As I mentioned in a recent post, it is sad enough watching parents suffer through the loss of a child, but it's just as bad attending a fund raiser to pay for the funeral.

A permanent policy that builds cash value is appropriate in this case. And it can be very affordable since the child is young and healthy (I assume most kids are "non smokers"). And when your child is older you can transfer the ownership of the policy to your now adult child, who can continue to pay the low premiums, or cash it out if they need to. 

A side note: Most insurance companies frown on large face amounts for children's life insurance. Generally speaking, $25,000 or $50,000 is more than enough and the underwriters will ask a LOT of questions if the policy is for more than that amount.

3. Do I have to keep my beneficiaries the same?

Absolutely not! As a matter of fact I recommend you review your life insurance every few years. Part of that review should be updating your beneficiaries. Changes in circumstances may lead you to decide to change your beneficiaries. Perhaps your current beneficiary has pre-deceased you, or your child isn't as responsible as you had hoped for. 

I had one client who was widowed and her only child was incarcerated. She felt as if she was paying for insurance that would benefit no one. I asked her if there was a charitable cause that she was interested in and she said her church was always in need. We managed to change the beneficiary to the church with enough put aside to cover her final expenses. 

Keep in mind that beneficiary changes can be made at any time, but some companies do require a "wet" signature, which means you may not be able to do it over the phone or online. 

If you have questions about life insurance, drop me a note in the comments section. And if you would like a quote you can click here and run your own. 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!

Does My Small Business Need Disability Buy Out Insurance?

Disability buy out insurance is something that small businesses need. Unlike a large business, small businesses can sometimes be crippled by the absence of a key person - someone who is so critical to the company that the business could fail if that person is unable to work. Depending on the job of that key person, their disability can leave work undone or have a financial gap in the business income that a business may not recover from without disability buy out insurance. Disability buy out insurance is designed to provide the funds necessary to purchase an owner or partner's interest in a small business if that person becomes disabled.

Disability buy out insurance should be an integral part to any business continuation or succession plan. Small business owners need to agree to buy any disabled owner's interest in the business at a pre-arranged, agreed upon price, and fund the purchase with disability buy out insurance. The buy out will allow the remaining owners to continue operations by financially replacing the key person whos disability prevents them from returning to the business.

The first step in purchasing disability buy out insurance is to have a thorough and accurate valuation of the business. Once a fair market value has been established for the business upon which the parties agree, the owners must then into a buy-sell agreement setting conditions that will automatically generate a sale of a disabled owner's interest. Finally, a disability buy out insurance policy is purchased on each owner or partner to provide the funds needed to buy out that share in the business in the event of a disability. 

When a disability occurs, an elimination or waiting period, must be satisfied before any benefits are paid. The length of this period is decided upon at the time of the disability buy out insurance application. the elimination period begins at the date of the initial disability and can extend for 12, 18 or 24 months, depending on the terms of the buy sell agreement. Choosing the length of the elimination period is determined by the needs of the business. The longer the elimination period, the less expensive the premium will be. However, the longer a business would have to sustain itself before the benefit or buyout occurs.

Under this type of small business insurance, benefits are paid once the elimination period has been satisfied with no need to confirm continued disability. In other words, once the payment of benefits begins, the terms of the buy-sell agreement will be fulfilled and the policy will pay benefits accordingly. A disability buy out insurance policy can be custom designed to meet the specific needs of each company, but lump sum or scheduled payments over a two, three or five year period are the most common benefit payment options.

Small businesses may not have the resources that a large business has. With that in mind, they should have contingency plans including small business disability insurance, business overhead expense policies, disaster recovery plans and other risk transfer components. The total disability of an owner active in the day-to-day operations of any business could present serious financial problems. To determine your small business disability insurance needs, ask yourself the following:

• What impact would the disability have on the company's income?
• Where will the money come from to an income to the disabled (non-contributing) owner?
• Does the business have adequate funds to buy out the disabled owner?
• Will the company need to borrow money to do this?
• What defines a disability from the business' perspective?
• How long must an owner be disabled (the elimination period of the policy) before the policy is executed and the share is sold to the remaining partners?
• Will the benefits to fund the buy out be paid as a lump sum or over time?
• What if the disabled individual recovers after the buy out is triggered under the terms of the buy-sell agreement and, as a result, the policy stops paying benefits? 

A small business disability insurance policy can be useful and a key element of a buy-sell agreement, but a small business must be sure to ask the right questions as it plans for the future. Doing so will enable the remaining owners to purchase or buy out key persons without having to seek outside investors. A disability buy out policy will allow a business to continue in its normal operations without having to financially drain the company to keep control. 

If you would like your small business disability insurance plan to include disability buy out insurance, ask us about it. We'll be happy to put together a quote for you. 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! Thanks!

4 Advantages of Using Our Quoting Tool

People have asked me when I was going to get the quoting buttons for cancer insurance, accident insurance and hospital indemnity plan* on the Surf Financial Brokers website. Well, after some technical glitches they are finally there. And the best part is that they work! 

One of the running myths in the insurance business is that people want personalized service. That is true for some of the public, but let's face it, a vast number of people have been purchasing homeowners and car insurance online for years. They are comfortable with the DIY approach and not having an agent, but rather filing claims and handling other service issues through a call center. That's perfectly acceptable for these folks, while others do want someone nearby to answer their questions. 

Running your own quote on our site is awesome for several reasons. 

1. You can cover whomever you want. Whether you need coverage for yourself, you and a spouse, you and your kids or the whole family, you decide who is covered. 
2. You can customize it to fit your needs. There are plenty of riders that you may or may not be interested in. 
3. You can fit it in your budget. While deciding who to cover and what optional riders you like you can see the premium as you go. 
4. You don't need an appointment. We know you are busy so you can use our quoting tools when it is convenient to you. And if you have questions, drop us a note or book an appointment using our online calendar. 

And it is extremely easy to run a quote. When visiting our Products and Quotes page you will see buttons for Hospital Insurance, Accident Insurance and Cancer Insurance. Simply click on the one you are interested in. A page will appear with some information on the product along with a "Get Quote" button. From there it is just a matter of entering your information and getting an insurance quote.

Along with these products, there is also a "Get A Quote" button for life insurance and disability insurance**. The life insurance button let's you choose from term or whole life with options such as Return of Premium term life. There is even a tool to help you determine how much coverage you need.

For disability insurance, you let the calculator know what kind of work you do and your annual income. Disability insurance helps you to insure your paycheck in case you become sick or hurt and are unable to work, you can still pay the bills. 

We ask that you give it a try. If you have questions or concerns, let us know. And if you like it, we would appreciate referrals. Referring us helps us to grow our agency by spending more time with our clients and less time prospecting.  

We have attempted to create a virtual agency that can take care of people either way. If someone prefers to run a quote and apply for coverage without the help of one of our agents, that is absolutely fine. But there are those times when one wants a real person to answer their questions, and we can do that for them as well. 

Run a quote and give us some feedback. And in the meantime, please stay healthy!

*Not all insurance products are available in all states. 

**Rates are estimates based on your information and 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!

Do I Have To Be In A Nursing Home Or Assisted Living?

In the last few weeks I have had some conversations with people who were considering Long Term Care (LTC) insurance. I always appreciate folks who are looking into this coverage because I consider them to be forward thinkers. In our current environment of YOLO (you only live once), the "live for today" mantra can make it hard for those of us who help plan for future issues. Those who think that "we can go at any minute so we should enjoy today" aren't looking at the future and tend to miss the forest for the trees.

People who usually take on the YOLO mantel seem to be those who have either suffered an unexpected loss or those who have seen or heard about such a loss. "I could drop dead like my mother at any minute," is their refrain. The fact that the rest of the family has survived to their 90's is irrelevant to them.  

The paradox happens when I say, "You are correct. You could die in the next week." Then I ask, "If you knew you were going to die tomorrow how much life insurance would you buy today?" You see, the "future is unknown" argument can go both ways to a decent insurance agent.

As for the forward thinkers, they seem to get the bigger picture. These people are aware of their surroundings from a 80,000 foot view. An anecdotal story about a life cut short doesn't keep them from understanding that statistically they will live to old age, and sickness and poor health may be a factor. That's when those people plan for LTC.

But the forward thinkers are asking a question now that I haven't heard as much before. "How do I stay out of a facility?" Previously, when I spoke to LTC prospects, we discussed home health care as part of the picture. Everyone wants to stay in their home but many understand that as a chronic illness progresses, the chances of ending up in an assisted living or skilled nursing facility increases. 

Covid has changed that discussion. The images on the news of elderly patients sequestered in facilities and waving to their families through the windows are heartbreaking. Worse are the exorbitant numbers of infections and deaths at these facilities as the virus spreads through the community. The staff and care givers are getting the virus too.

This is why clients are so much more interested in staying in their homes now. Yes, many LTC policies include coverage for home health care, but the premiums on those policies can be very high. Plus the underwriting may keep some of these prospects from getting coverage at all, regardless if they stay at home or a facility. 

With all of this in mind, we have been fortunate to find a suitable Short Term Home Healthcare (STHHC) policy from one of our carriers. This policy is a great addition to any LTC planning in that it's both affordable and easy to understand. 

A client can receive benefits as they stay at home for up to 365 days, and those do not have to be consecutive days. Some people may have a caregiver in their home only 2 or 3 days a week. They can also choose from three levels for their benefits along with some additional riders. 

The policy is not available in all states and the minimum application age is 61 years old. Given that 24 hour/round the clock home healthcare can cost over $70,000 annually, taking a look at STHHC is a smart move that can save you tens of thousands of dollars in the long run, as well as keeping one out of facility. 

If you are interested in learning more, check out our website or drop us a note and we can schedule a phone appointment. In the meantime, stay healthy and forward thinking.  

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!