What Is The Current State Of Long Term Care? Part 2

In the previous post we looked at Long Term Care (LTC) services and when people need them. Included in that summary was how expensive LTC can be. As discussed, someone can work their whole life to build a nest egg of assets, only to have those assets depleted due to a chronic illness. The alternative is to shift that financial risk to an insurance company by taking out a policy while one is still insurable. 

We also covered one of the options which was a life insurance policy with "living benefits" or a LTC rider to help cover these expenses. One advantage of this is that if the insured should die unexpectedly, the policy will still pay a death benefit.

Another option is the traditional stand alone Long Term Care Insurance (LTCI) policy. These insurance policies have been around for a relatively short period of time and there have been a lot of changes over the years. And even though they are pretty comprehensive in that they can help pay for care in a facility or for "in home" care, they also can help pay for other expenses, like construction of a ramp or "informal caregiver" training, when a family member is involved. 

There are other issues that one needs to be aware of when it comes to LTCI. First, the underwriting process is different (as in stricter) when someone applies for coverage. The carrier may want to have a cognitive test done, for instance. I had a client get declined for coverage because he had a history of heart problems and smoked a few cigars each week. Separately they may not have been a problem but the underwriter put the two together and saw that as a potential risk. 

Also, most stand along LTCI policies usually have a provision that allows the carrier to raise the rates on the policy, unlike the previously mentioned life insurance which would "lock in" on a rate. After the financial crisis of 2008, several companies increased their rates on their in-force books of business, some doing it more than once. For those who are trying to do the right thing and plan ahead, this provision can come back to bite them.

Yet another thing to consider is that a lot of insurance carriers have gotten away from offering LTCI policies. These companies have either stopped selling new policies but still keep the old ones on their books, or they have sold the books of business to other carriers. This is due to the fact that when these policies were developed they did not have a lot of claims history to go on when setting the premium rates. As claims mushroomed, the number of carriers offering these policies shrunk. 

One more thing to be aware of is how these policies pay. Typically, LTCI pays claims as a reimbursement, which means the insured will need to send the bills for LTC expenses to the insurance company. Most nursing and assisted living facilities will take care of this matter for you, but remember that if you are a patient in one of these facilities you may need to rely on a family member to handle this. 

With all of that to consider, I still think that LTCI can be a great value as long as the client is aware of how they pay benefits and the multitude of features. A good agent will discuss all of this with a prospective client in detail and should also include other family members as well. These policies may seem expensive but can save you and your loved ones tens of thousands of dollars.

In the next post we'll look at one more option that is available. In the meantime, please stay healthy! 

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

What Is The Current State Of Long Term Care? Part 1

Over the past year nursing homes, assisted living facilities and other facilities that house the chronically ill, mostly the elderly*, have been ravaged by Covid. The numbers of infections and deaths are heartbreaking, especially since the vast majority of these people are isolated from their families. But why are all of these people in these facilities to begin with? Are there other options available and what do those options cost?

In general terms, most of the people who are in these types of facilities are deemed "chronically ill", which means that they will be ill for a long period of time and there is no cure. Some will receive some rehabilitation but getting them back to 100% is not possible. An example of this could be an older person who has broken a hip which will prevent them from walking again. 

Medically speaking, long term care (LTC) services are for those who are unable to perform or need help with Activities of Daily Living (ADL's). These are:

• Bathing
• Transferring (going from the bed to a chair, for example)
• Dressing
• Using the toilet
• Eating
• Incontinence

Paying for these services can be expensive. Many people find out too late that Medicare will not cover the costs of assisted living facilities and will only pay for skilled nursing care for up to 100 days, and that is only if you are released from a hospital. In other words, the smart move is to begin looking for LTC insurance early on when you are healthy and insurable.

Most LTC policy's benefits will be triggered if someone is unable to perform two of the six ADL's. Another way to trigger the benefits is to be cognitively impaired, i.e. Alzheimer's or dementia.

There are other types of facilities as well, which mostly are non-medical. Think of an apartment but has meals and someone checks in on you. LTC policies generally don't cover these types of facilities.

Let's assume that you are reading this and are healthy enough to go through the underwriting process with an insurance carrier. What are your options? My suggestion is to call a few facilities in your area** to find out what they are charging their patients. Most are pretty good at giving you rates, but be aware that some will give you a monthly rate and others a daily rate, which is an industry norm. 

With that valuable information at your disposal you can begin to look at ways of covering those costs. Needless to say, these services can be very expensive and it can easily take a few years to wipe out any assets one may have spent a lifetime working for.

Let me say right off the bat that there are a limited number of available "Medicaid beds" in each facility, but to be eligible for those one has to prove a level of indigence. In other words, you are limited in the assets you own and there is a "look back period", which at the time of this writing was 60 months. This is to avoid someone from transferring all of their assets to a family member so they can get free nursing care. 

Going back to our options, if you are young enough you may want to look into a life insurance policy with LTC or "living benefits" as part of the policy or even a rider. This locks in the rate for your coverage and if you should pass away before you use it the life insurance will pay a death benefit to your loved ones. 

The nice part about this option is that it pays you a percentage of the face amount of the policy once your doctor says that you can't perform 2 of the 6 ADL's or if you are cognitively impaired. Once the benefits are triggered they pay until they run out.

In the next post I will go over a couple more options. In the meantime, check us out on the web and please stay healthy!

*One of the myths of nursing facilities is that only the elderly are patients, when in fact nearly a third of the patients are under the age of 65.

**Costs vary dramatically depending on your geography.  

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

What Is Your Insurance Agent's Work Situation?

Have you ever wondered why some insurance agents like to suggest some insurance products or companies more than others? There are a lot of reasons why this happens.  Some reasons may be legitimate concerns while others may have to do with the agent and his relationship with the carriers. Let's take an objective look at why this happens. 

To begin with, there are generally two types of agents. "Captive" agents work for insurance companies with an exclusive agreement to only sell their products and products of other carriers that have some sort of pre-arranged contractual obligation.

An example of this is when briefly worked with a company who had a limited menu of policies. We had term and universal life, a horrible cancer plan and an accident policy. There were agreements in place with other companies to sell their health plans and long term care plans, but generally speaking those policies were not very good. 

In exchange for working with this company as a captive agent we were given weekly training, a cubicle with a land line telephone, and other office accoutrements, like a receptionist and access to a fax machine. Sometimes there are even some benefits included, like health coverage.

As a captive agent, one is generally required to hit sales numbers that are mandated by the carrier and the agent is actively overseen by a manager*. This is part of the answer to our original question.

On the other hand, an "independent" agent can offer a wide variety of products (not including the ones from the captive companies), but for the most part have to take care of covering the costs of overhead, like rents and phone bills. No benefits here though, as the agent must pay for these costs. There are no sales quotas or managers, just agents trying to find the best fit for the client. 

Years ago I worked with a company that had a blend of the two scenarios, where we had to hit the company's numbers to retain our contract and benefits, but were still free to offer products from other carriers. One agent sold the bare minimum of our employer's products but preferred other products because they were less expensive for the clients and paid her higher commissions.

The issue for consumers is that they don't know if their agent is always working in their best interest or not. As someone who has worked in both types of agencies I can say that for the most part agents are trying to do the best they can for a client. However, there are those who, because of the limited variety of products they have available to them, will try to sell something that may not be a great fit.

I have worked with both formats over the years. In my opinion, working with a captive company is especially good for newer agents who would like training on subjects from product knowledge to prospecting for clients. After a year or so of this, the agent may decide to move over to an independent status. My personal preference is to work independently. I still take advantage of training opportunities when they come along, but the less structured work environment means that I can be available for a client when they need me. 

An old veteran agent once told me that captive agents work for a company, while independent agents have companies who work for them. And if the companies don't do their job right, the agent can fire them. It's true to an extent, as I can stop placing business with an insurance carrier anytime. 

 *The sales manager is always looking over your shoulder, even when he's not there. 

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! 

How Can I Get Quotes For Life Insurance?

Over the last year or so, we at Surf Financial Brokers have made changes in our business model to make it a lot easier for our clients to purchase various types of insurance. Even before the Covid pandemic forced businesses to go virtual, we were thinking of ways to alter our business model. The events of 2020 just forced us to speed up the process. 

The most noticeable changes were on our website, which originally just had product information and some contact forms to let us know when someone had questions or needed a quote for life insurance, dental or cancer plans, hospital and accident coverage. 

Over the past 12 months we have added some buttons on our "Products and Quotes" page which allow people to get their own quotes and, in some cases, start an application. There was one area where we were lacking and that was the life insurance quoting tool, which only quoted one of our carriers. As of this week, that has changed. 

After some intense negotiations* we have entered into an agreement with a national brokerage firm to use a quoting tool that is consumer friendly and offers quotes from multiple insurance carriers. These are top tier companies who offer great life insurance products. The easy-to-use format helps get a more accurate quote**. 

One of the nice parts of this quoting tool is that it let's the client know if which policies require paramed exams. For some people, the thought of a nurse with a needle will deter them from getting the coverage they need. Besides telling you which policies won't require an exam, this tool also gives other information. Do you want to know which policies include living benefits, for instance? That will show up as well. 

Say someone is looking for a rate for coverage and they see several term policies pop up. That's great, but they want permanent coverage. This person can just click on the "Permanent" button and the quoting system finds those rates too. It is all very easy to use.

Another great piece of information is the estimated length of time it takes to actually get a policy issued. Listed as "Average Approval Time", this lets our client know how long, on average, it is taking for life insurance polices to get approved. These are estimates, but when one runs a few quotes they can see how each insurance carrier stacks up. 

But that is just part of this system. Let's assume that our client sees a quote they like. What do they do next? Our client can click on  the "Apply In Minutes"  button and begin completing an application. It really is a very easy process and only takes a few minutes. 

Looking for coverage never has been easier. Try our new quoting tool to find a policy that fits into your budget and make sure that your family will be financially secure if something should happen to you. Give it a try and let us know what you think. Your feedback is greatly appreciated!

Remember, life insurance is to give you peace of mind. If you have questions, let us know. And in the meantime, please stay healthy!

*Not really, but it sounds good.

**Rates are estimates 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! 

Is Your Agent Too Pushy?

Insurance agents have reputations as pushy salespeople similar to those who sell used cars. When I originally went into the business I was fully aware of this and was resistant to even get into the industry. To be honest, the first company I worked with was guilty of feeding into this stereotype. The reason for this was that instead of trying to be a consultant and helping the client structure a plan with a group of good policies we had to work with, we only had one product. And for the most part, we would only meet with the customer once.

We were trained to be aggressive and to get out of someone's home or business with a check in hand. As my coworker would say, "Your income is in their wallet and you need to do everything possible to get it out of there." We dubbed this "guerilla selling", since we would rush in, try to make a few bucks and get out. 

Unfortunately this left me with the impression that all insurance sales were like this. I was young and naïve. My 23 year old brain knew that I did not want to do this kind of sales for the rest of my career. So I got out of insurance and went into selling office supplies, then retail management. 

After a few years I decided to rejoin the insurance workforce, but this time things would be different. No high pressure selling for me. For the most part, things were much better than the first time around and I noticed that many of my coworkers were of the same mind as me. 

Sure, there were those agents here and there that insisted on being pushier than the rest of us. Those agents rarely stuck around for long because much of their sales did not stay on the books. One of the nice things about selling insurance is the residual commissions, but if someone cancels their policy too soon, those commissions go away. 

We had veteran agents who offered to mentor the newer reps. If we had a case we were working on, we could run it by them and get feedback. The most often asked question from them would be "Is this in the best interest of the client?" In other words, "Are you helping the client or yourself?" 

This gave me a much better perspective of what an insurance agent was supposed to be doing. That stereotype of a pushy insurance agent was fading from my mind. 

But why does that stereotype still persist? One answer may be the product itself. Let's face it, no one really wants to buy insurance. It is a product that we buy hoping to never use. Also, it's not tangible. You can hold your policy, but in essence, it's just a promise on a piece of paper. Unlike a car or a home or a video game, you can't enjoy it (unless you enjoy the peace of mind that comes with having it). 

I like to use the "saving up for" test when it comes to sales. Ask someone what the next big (or small) purchase is that they are saving up for. You will get answers like a down payment on a home or a new flat screen TV. No one saving up for Long Term Care insurance or a disability plan. 

And the fact that some insurance has to be mandated should tell you something. If a state government says you are required to have auto insurance, you can infer that if they didn't there would be a lot more uninsured motorists driving around. The same goes for mortgage companies requiring homeowners insurance.

Speaking for myself, I don't want to "high pressure" someone with something they obviously don't want but most like need. With that in mind I use what I call "good pressure" selling, which means that, like a family member who is looking out for their best interest, I'm going to do my best to help someone make the best decision, not just for my client, but for their family as well. 

If you think your agent is too pushy you don't have to do business with him or her. But be aware that most are looking out for you and your family. By asking questions and building a rapport we hope to earn your trust and dispel the idea of the pushy salesperson. 

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! 

5 Advantages of Life Insurance

Life insurance can be essential for protecting your family financially in case of a tragedy, but many people go without it. In fact, nearly half of American adults do not have life insurance at all. One reason is that people assume life insurance is too expensive. For example, when asked to estimate the cost of a $250,000 term life policy for a healthy 30-year-old, the majority of survey respondents guessed $500 per year or more. In actuality, the average cost is closer to $160 a year.

Despite all of the fallacies about life insurance it provides a number of useful benefits. Among them:

1. Life Insurance Payouts Are Tax-Free

If you have a life insurance policy and die while your coverage is in effect, your beneficiaries will receive a lump sum death benefit. Life insurance payouts aren’t considered income for tax purposes, and your beneficiaries don’t have to report the money when they file their tax returns.

2. Your Dependents Won’t Have to Worry About Living Costs

Many experts recommend having life insurance that's equal to seven to 10 times your annual income. If you have a policy (or policies) of that size, the people who depend on your income shouldn't have to worry about their living expenses or other major costs. For example, your insurance policy could cover the cost of your children's college education, and they won’t need to take out student loans. 

3. Life Insurance Can Cover Final Expenses

The national median cost of a funeral that included a viewing and a burial was $7,640 as of 2019. Since many Americans do not have enough savings to cover even a $400 emergency expense, having to pay for a funeral can be a substantial financial burden. If you have a life insurance policy, your beneficiaries can use the money to pay for your burial expenses without having to dip into their own savings or use credit. 

Some insurers offer final expense policies. These policies have low coverage amounts and relatively inexpensive monthly premiums. However, if you are healthy you can find other coverage for less money. 

4. You Can Get Coverage for Chronic and Terminal Illnesses

Many life insurance companies offer endorsements, also known as riders, that you can add to your policy to enhance or adjust your coverage. An accelerated benefits rider allows you to access some or all of your death benefit in certain circumstances. Under some policies, for example, if you are diagnosed with a terminal illness and are expected to live less than 12 months, you can use your death benefit while you’re still living to pay for your care or other expenses. Be aware that in some cases those proceeds can be deducted from the death benefit though.

5. Policies Can Supplement Your Retirement Savings

If you purchase a whole, universal, or variable life insurance policy, it can accumulate cash value in addition to providing death benefits. As the cash value builds up over time, you can use it to pay expenses, such as buying a car or making a down payment on a home. You can also tap into it if you need to during your retirement years.

However, a life insurance policy should not replace traditional retirement accounts like a 401(k) or an IRA. What's more, cash value life insurance is considerably more expensive than term life insurance, which has no savings component but simply a death benefit. 

Life insurance isn’t just for the wealthy. No matter your income level, life insurance can ensure that your loved ones could make ends meet if you were to pass away. And life insurance might be more affordable than you think. 

If you need help or have questions about life insurance 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! 

The 2 Questions Newly Widowed People Ask

There are times when I meet with a couple and have a discussion about their life insurance needs. Usually one of them is concerned about having enough insurance while the other is typically looking at the cost. This talk can be contentious, especially if young children are part of the equation as well. Here is a hypothetical I would like to run by you.

Let's assume that you are considering the purchase of a life insurance policy from me. You have entrusted me to help you, even though you were not really looking for coverage. Your significant other was the one who made you keep our appointment. We looked at several types of policies with a varying array of premium costs and you made your decision. A few months go by, maybe even a few years, and then the unthinkable happens. 

Suddenly you are dead. Maybe it was a car accident or a short hospitalization. Either way, I read about your untimely demise in the obituaries and, knowing that I sold you a policy, I attend your funeral or memorial service. While I am paying my respects to your grieving family I mention that your spouse should get in touch me with as soon as they can.

A few days later I meet with your spouse and we talk. He or she knows that there is a life insurance policy out there ready to pay out but there are questions. Typically, I will be asked one of two questions:

• How much will I get?
• Will I be okay?

These two questions are intertwined, as the amount of money the policy pays out will determine the answer to the second question. Will there be enough to pay off the house so the family can stay in their home? Will there be enough to replace your lost income? Will there be peace of mind or will your family struggle to pay bills? Will your kids be able to go to college without having to take out loans or seek financial aid?

What do you want me to say?

Would you prefer that I let your loved ones know that there is adequate coverage and everything should be fine? Or would you want me to say that, despite my concerns, you did not want to spend the money needed to take care of your family? 

Being a life insurance agent is a difficult job. Constantly looking for prospects is tough, especially for those who are trying to get started in the business. But having to take a claim check to a grieving person is challenging in its own right. And depending on the size of the check, it can be sad or bittersweet. 

Nowadays, nearly all life insurance proceeds are either mailed or electronically transferred to the beneficiaries. The insurance companies don't want to burden an agent with the responsibility of carrying around a check for hundreds of thousands of dollars, so the only time an agent actually delivers a claim check is for smaller policies. Still, I have had some heartwarming moments taking these "small" policies to people.  

At the end of the day, what we in the insurance business do is sell money. Our clients give us money to insure that if something bad happens, we will be able to give them (or their loved ones) the money they need. If you aren't sure how much you need, let us walk you through one of our life insurance needs calculators. 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!