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!

How To Choose A Term Life Insurance Policy 2023

Have you thought about what would happen to your family if you were to die too soon or unexpectedly? Making sure that your family can stay in their home without the stress of paying outstanding debt is important. But you want to make sure that taking care of this is affordable as well.

This is where a term life insurance policy can fit the bill. Term life is great in that it can fit into almost any budget as it is pure death insurance. Most of the time there are no bells and whistles like cash value accumulation or extra benefits. 

Term life insurance is, as the name implies, covers you for a determined amount a time, such as 10 years, 20 years or 30 years. The rate is locked in for that term and won't increase. We at Surf Financial Brokers, have one insurance carrier that offers a 40-year term which is great for younger people who want a policy that will stay the same price into their 60's. 

Which term should pick? That depends on what your needs are. Take into consideration things like your mortgage. If you have just purchased a home and have a 30 year mortgage, a thirty year term policy will be appropriate. But if you have just a few years left on your mortgage, you can lower the term. 

On the other hand, if you have small children, you may want to consider how long it will be until they are out of the house and on their own. We all know that kids aren't cheap and even if the mortgage is paid off, raising the children will still take money that won't be there if you were to pass away.

How much coverage do you need? The simple way to figure this out is to add up the total amount of the following:

• The balance on your mortgage. 
• Credit card debt.
• Balances on car loans
• Final expenses. When doing this I like to add in what I call "costs associated with death", which could be your medical deductible if you are in the hospital for a few days before passing away. And even though many have decided they don't want a funeral, there are those who do. I had a client who wanted to cover the cost of catering and an open bar. He wanted his friends to have a good time.
• Replacement of income. Figure in your annual income and multiply by 5 to help your spouse or significant other pay the expenses that will need to be addressed like car repairs or other emergencies that can pop up.
• Educational costs. If you have kids you may want to help them pay for college when you aren't around. 

It may look like a lot of money, and it probably is. Most people underestimate the amount of coverage they need, which can come back to bite your loved ones. If you aren't sure how much life insurance to purchase, use the calculator provided on our life insurance quoting tool. It will give you a more accurate number as to how much your family will need.

Another factor that may determine your term life insurance purchase may be a convertibility option. This means that at some point in the term the insurance carrier may allow you to convert to a permanent policy. I discussed this in a previous post. 

If you have any questions about purchasing a term life policy, drop us a note on our website. In the meantime, please stay healthy!

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!

Who Are The 3 People On A Life Insurance Policy?

For most of us, buying a life insurance policy is a simple concept. We decide how much coverage we need, apply for the policy and name a beneficiary, who will receive the face amount when we die. But what if you have strange or unusual circumstances as to who the insured person is but someone else is paying for the policy?

There are three "people" involved in the purchase, not counting the agent of course. They are as follows:

1. The insured. This is the person whose life is being insured. When they die the policy pays out. The insured is the one who may have to go through a paramed exam, along with their medical records being looked at by the insurance company's underwriter. 

2. The beneficiary. This is the person who, as mentioned previously, receives the money at the time of the insured's death. You can name more than one beneficiary and the money will be divided by percentages. For example, Bill may get 40%, Joe may get 20% and Mary, who is obviously the favorite, will get 60%. 

It's important to keep your beneficiaries up to date. If you need to change a beneficiary, it is usually a simple process of calling the insurance company and having them send you a form. It can be done at any time. 

3. The payor/owner. These payor and owner are usually the same person, and in the vast majority of cases, the payor is the insured as well. However, on certain occasions, the owner may be a third party, like an employer. In these cases, the employer may offer to buy a policy on an employee as a perk with the employee's family as the beneficiary. 

Another example is when a parent takes out a policy on a small child. The parent is the owner, but when the child grows up and is a responsible adult, the parent can transfer ownership of the policy to the adult child, who now can pay the bill each month and change the beneficiary to their spouse or children. 

As you can see, the owner of the policy is in control of the policy. This allows them to make decisions with the cash value if the life insurance is a permanent policy, like whole life or universal life.

A few years ago I was working with a client who wanted to take out a policy on himself and leave the money to his church. Knowing that this was a version of a charitable donation, he thought he could just write off the premiums, but after doing a bit of research, we found out that the IRS frowned on this practice. 

We found a workaround, though, by changing the ownership of the policy to the church, with the client as the insured. The bill for the annual premium would go to the church, who would contact the client. The client would cut a check for the amount of the premium as a "donation" to the church, which the church would use to remit the premium payment. The insured could then deduct the donation as a gift. Everyone was happy.

Knowing who is the insured, owner and beneficiary of your life insurance policy is important and, as you can see, they can move around from time to time. If you have questions, drop us a note in the comments section. In the meantime, stay healthy!

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!

3 Ways To Set A Good Financial Example For Your Family

One of the most intriguing things I have learned in my many years of being a life insurance agent is how values are handed down from one generation of a family to the next. This is almost always true for everything, from work ethics to religious beliefs. Most notably I see it with financial practices. For example, parents who have bad credit will also have adult children who tend to be late paying bills, creating bad credit for themselves as well. 

One of the other areas where this is true is when it comes to life insurance. There are parents who don't buy life insurance because of various reasons, like thinking it's some sort of scam (yes, I've heard this!) or "Why do I need something I can't use?" (it's not for you, but for your family!). On the flipside of this, I have clients who know the value of life insurance because their parents had policies which paid out nicely. 

Sometimes they insists on buying whole life insurance because "that's what my mother said to buy", which is fine, but maybe a term policy is a better fit for their needs and budget. At least they're considering the purchase for their families. That's the first step in making sure that if something should happen their surviving loved ones will be financially secure.

I often hear stories from clients about how life insurance helped them. My wife is a great example. Her father passed away very unexpectedly when she was still in high school. He had a large policy that helped her and her siblings pay for college and pay many of the outstanding bills. We even used some to the proceeds years later to put a down payment on our home. Now my wife tells people how that policy was helpful, even though she doesn't sell insurance.

Too often, however, I hear stories of families struggling to make ends meet when one of the breadwinners in the family dies too soon. You can easily avoid leaving your loved ones all kinds of bills, like outstanding debts like mortgages, credit cards, car payments and funeral expenses. Shifting the burden of covering all those bills to a life insurance policy will give you and your family the peace of mind that lets you sleep well at night.

I often hear stories from clients about how life insurance helped them. My wife is a great example. Her father passed away very unexpectedly when she was still in high school. He had a large policy that helped her and her siblings pay for college and pay many of the outstanding bills. We even used some to the proceeds years later to put a down payment on our home. Now my wife tells people how that policy was helpful, even though she doesn't sell insurance.

On the other hand I also hear nightmarish stories about families struggling to pay bills and wondering if they can afford to stay in their homes because one of the breadwinners failed to take care of something as simple as buying a life insurance policy. 

About a year ago I met a young widow whose husband died suddenly in a traffic accident. He left a ton of debt, including payments on a muscle car that she eventually sold at a loss because he was upside down on the payments. Her son, a bright kid who was about to graduate from high school, told me "I probably won't go to college because we just can't afford it." He is having to go with his "plan B" which is to enter the military and use the GI Bill down the road.

Making the purchase of a policy can be the deciding factor in whether or not your family can afford to stay in their home, go to college, or just pay off any debt you may have incurred. And life insurance is much less expensive than you may think. Here are a few steps you can take to make you a hero long after you are gone.

1. Go to our website and get a quote. Find a policy that fits in your budget.
2. Not sure how much life insurance to get? Use the "calculate" button to see how much coverage will be needed.
3. If you see a policy you like you can start the application immediately. 

By letting your family know they are taken care of if something should happen to you will send a great message to prepare for the unexpected. It's that easy. And if you have a question, you can just drop us a note. In the meantime, stay healthy!

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!

7 Times When You May Need Life Insurance

There are times in our lives when we need to start looking at purchasing a life insurance policy. These are events that can make a difference in our lifestyles, spending habits and social habits as well. And many times these changes do not only affect us, but our loved ones and business associates as well. 

With that in mind, here is a list of times when you should start to seriously look at life insurance.

1. Married or getting married. This is a no-brainer for most people. Becoming a spouse means that, for most people, purchases and financial decisions will be made jointly. Homes, cars, and other large purchases will typically be in both names, as well as credit cards, bank accounts and various other items. Should one spouse die too soon or unexpectedly, the surviving spouse will be obligated to pay off any debts.

A friend of mine was widowed several years ago only to find out that his deceased wife still had a balance on a credit card he was unaware of. In his state, he was legally obligated to pay off her debt. Luckily for him, it was not a lot of money, but if it had been it could have affected his credit poorly.

2. Parent or about to become one. A comedian once said that kids are like really expensive pets. Nothing could be truer. The estimated amount of money to raise a child in this county varies from around $175,000 to $250,000, depending on which study you read.  No matter which source you choose to use, the numbers are high. And if you are planning to pay for education costs, the numbers can be increased from 50-100%, depending on the school your child attends.

When I sit with a parent and discuss their life insurance needs we take into consideration the costs of raising a child as part of the overall plan. A single parent could be burdened with a huge financial issue which can be easily avoided with a life insurance policy. 

3. Purchasing a home. While most people think of buying a home as a good thing, it can be a huge expense. Maintenance, repairs, taxes, insurance and other expenditures will sneak up on many new homeowners. Again, why leave your significant other with shouldering all of those expenses when it can clearly be avoided. 

4. Changing jobs. Depending if you are getting a raise or taking a pay cut, you may have to adjust your financial plan, including your life and disability insurance. If you are getting a pay increase, you may start spending more money, which incurs more debt. Taking a pay cut may mean you still have debt to pay but on less money coming in. Either way, making sure your loved ones don't get stuck with those bills is what life insurance is for.

5. Retired or planning for retirement. Many times I see people who have outlived their term life insurance policy, which is a good thing, but they still need some insurance for their final expenses and maybe some money for estate taxes. In these cases, people usually look into Final Expense insurance, but that can be pricey. If you are still healthy, a Guaranteed Universal Life policy can save a lot of money and accomplish the same goal. 

6. Newly single. If you are getting divorced and are obligated to pay child support, the court may want you to buy a life insurance policy with your ex as the beneficiary. 

7. Starting a business. Opening a business can be an expensive endeavor, and whether or not you have partners, you still may want to look into a life policy. 

I met a nice lady a few years ago who was up to her ears in debt because her husband decided to open his own medical practice. She begged him to buy a policy to cover the debt he incurred with rent, equipment and payroll. He kept putting it off and a few months later, while cutting down some trees in their yard, a log fell on him. She was stuck owing money that could have been paid out.

The same can be true of business partners. If one dies, the other partner(s) may want to buy out the deceased partner's interest. Otherwise, they may end up with the widow as a partner, which may or may not be desired by either party. A buy/sell agreement funded with a life insurance policy can fix that problem.

As you can see, a life insurance policy can help you and your loved ones avoid many problems down the road. And it can be less expensive than you think. If you want to see how much a policy can cost head over to our site and run a quote. In the meantime, please stay healthy!

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!

What Is Telemedicine?

Have you been in a situation where you are miles from home, perhaps on vacation, and a family member gets ill in the middle of the night? You don't have a family doctor nearby and you don't know if you should go to the local emergency room or not. Wouldn't it be nice if you could pick up the phone for some advice?

Telemedicine is a virtual platform that allows you access to healthcare professionals from any location. Whether at home, work, vacation or elsewhere, help is available 24-hours a day.

In many cases, it's unnecessary to wait in an emergency room or urgent care for diagnosis of minor ailments. With telemedicine you can consult a medical professional online or over the phone and receive personalized treatment. And if needed, the provider can call in a prescription* that can be picked up at your local pharmacy.

There are products out there that provide telemedicine services for about $10/month for individuals and $15/month for a family. My experience with these products has been in worksite settings, where an employer will offer it as a "benefit" and have the premiums deducted each pay period. Typically, after having a year or two the employees would cancel it because it, with most saying that the plan wasn't what they thought it was. I think they thought it was a substitute for a family physician or  even health insurance.

The interesting part of this is that most health insurance plans offer some sort of telemedicine as part of their coverage. Other outlets also have a telemedicine option available, like some pharmacies. With that in mind, most people who have health insurance may not need a stand alone plan. 

Recently, I had an interesting experience that I would like to share. I had gone to my physician for a routine visit, but it just so happened I was sick with cold and sinus infection. My doctor prescribed several drugs that I had never taken before to help with the cough and an ear infection that I didn't even know was there.

A day or two after taking these meds I developed a nose bleed. It was quite a mess and a surprise. I wasn't sure what was causing the nose bleed and thought that it may have something to do with the medications. I called my doctor's office and was told that the doctor would call me back later that afternoon. The lady on the phone was very formal and said something like, "I have you down for 5pm for a telemedicine appointment." To be honest, I thought nothing of it.

At 5pm my phone rang and I spoke to the doctor who assured me the medications were not the cause of the nose bleed and that I more than likely had burst a blood vessel by blowing my nose and coughing so much. The call lasted all of about five minutes.

A couple of weeks went by and I got a bill in the mail for $74. Confused, I called to ask why I had a bill when my doctor office copay was $20 which I had paid that after my appointment. "No, that bill is for the telemedicine call," I was told. Apparently, that call was billed differently and my insurance only covered about $30 of the $104.

I learned a valuable lesson. Make sure that you know what you are being charged when you pick up that phone to talk to your doctor. 

*Providers can not prescribe narcotics and some other medicines that are restricted by law.

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!

What the Big Deal With Replacing My Policy?

A few weeks ago I was with a client who needed some extra life insurance. Actually, she needed quite a bit more, and we found a very suitable policy that fit right into her budget. She was happy with it and decided to proceed with the application. I began asking all the questions and everything was going well until we came to the question about replacements. Why was the insurance company so interested in her current coverage and whether or not she was going to replace it with the new policy? 

You see, when you apply for a life insurance policy, the company wants to know if you already have coverage, and if so, which company is it with and are you going to keep it and just get additional coverage, or will you be replacing it all with the new policy? The insurance company isn't being nosy, but actually they are looking out for your best interest. 

The reason for this is that life insurance typically pays a large commission to the agent, around 70-80% for the first year, depending on the policy. After that first year, the agent's commission drops dramatically to around 5%. With this in mind, an unethical agent may try to replace your current policy to sell you something that will pay another large first-year commission.

This practice is known as "churning" as in "churning up fresh commissions" and is frowned upon by the industry, and in some states is illegal. 

The issue is that the replacement may not be in the best interest of the client. Replacing the policy with another may result in higher premiums, but that unscrupulous agent doesn't care. But the insurance carrier does, which is why they have added additional forms to the application packet asking all of those questions about your current policies. In essence, the insurance company wants to make sure that the agent is doing the right thing by you.

It's not just life insurance where this occurs either. Several years ago I was introduced to a very nice lady who had an issue with an annuity. She started out with about $250,000 that she had put into an annuity. The agent would call her every couple of years and tell her that he had something better, and would move her money to another annuity. Each time he did this he made a nice fat commission. 

But something else was happening as well. The move would cost her thousands in surrender charges and early withdrawal penalties. She showed me a folder with all of the paperwork and the agent must have moved her money at least three times. 

We called the current company where her money was housed and I asked what amount of money was there. She was down to about $85,000 and if I were to move it she was going to lose an additional $10,000. I recommended that she stay put and to stop answering calls from that other agent. 

When I let her know what that the agent's commission was (My estimate was around 7% each time he moved her money) she said, "Every time he talked me into changing companies I probably bought him a new car." She was right.

As you can see, those crazy questions are on the application because the company is looking out for you best interest. If you have any other insurance questions you would like answered, leave us a note in the comments section. And in the meantime, please stay healthy!

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!