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!  

Do I Have The Right Life Insurance?

Each February the life insurance industry deems the month "Life Insurance Awareness Month" (DIAM). The Valentine's Day theme, "Insure Your Love", is used to get their message out: Life insurance really is not for the person who is insured, but instead, their loved ones.

Making sure that your are doing the best job possible in that respect means ensuring that you have the right coverage. As I stated in a previous post, after an insured dies, especially unexpectedly, their beneficiary and I will have a conversation. Usually this person is a grieving spouse and nearly all of the time they ask a simple question. "Will I be okay?"* How do want your agent to answer that?

Knowing how important life insurance is to making sure that your loved ones can stay in their home and maintain their lifestyle, you definitely want to make sure you have the right coverage. Here are a few items that you may need to consider. 

1. You only have insurance through your employer.  For the most part, life insurance through work can be incredibly cheap, especially if you work for a large company. I encourage people to get plenty of coverage. However, relying solely on group life insurance can be a huge mistake. This coverage is generally just term life and you may not be able to take it with you when you leave your job. If you develop any health conditions while you are working there you may not be able to get coverage later. Instead of thinking of your group life insurance plan as your only coverage, think of it as a supplemental policy. 
2. You don't have enough coverage. More often than you would think, people will have a specific amount of coverage in mind when I talk to them about their life insurance. "I only need $100,000 because that will pay off the house," for instance. By doing a quick analysis and asking some questions, I discover that they need much more coverage. Life insurance, when formulated correctly, should be able to pay off the mortgage and other debt, replace income for a few years, pay for funeral costs and other expenses related to death. Also, if there are small children in the picture, the proceeds can pay for future educational needs. Talk to your agent or use a handy life insurance calculator** to find the actual amount of coverage you need.
3. Your term life insurance policy is not covering your long enough. One of the crazy things about our lives is how much a situation can change in just a few years. In the span of a decade one can go from being single and renting an apartment to married with kids and a mortgage. In that time, financial needs vary drastically, meaning that your life insurance needs will too. This is why a life insurance "check up" may be a good idea every year or so. If you realize you need more coverage you can purchase more coverage, or you can convert some or all of your current term plan to something permanent. 

A few years back I worked with a rep who had a great way of helping people who already had coverage through another agent. "It won't hurt to have a second set of eyeballs look at your coverage," he would say, reinforcing the idea that having the most adequate plan was a priority. If you would like a second set of eyeballs, drop us a note. We'll be happy to help.  

*I will dig deeper into that topic in the next post.

**We have a calculator available on our life insurance quoting tool on the upper right side of this blog.

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 Before You Buy Cancer Insurance

If you currently do not have a cancer insurance policy, you may be wondering why anyone would need or want one. In my experience as an agent over the last 20+ years, I found that the people who purchase a cancer insurance plan do so because they either have concerns about cancer in their family history or they know of someone, a friend or co-worker, who has been diagnosed with cancer. In the case of the latter, there is a realization that their health insurance does not cover all of the costs associated with a cancer diagnosis. 

Many times I have sat down with an employee of a business where I am enrolling benefits and hear how one of the other employees has recently been diagnosed with an invasive cancer. This creates a type of "wake up call" for the other members of the staff because they just assumed that their major medical coverage would cover all of the bills. 

With all of this in mind, I thought it would be a good time to cover a few things to consider before you purchase a cancer plan. 

1. Cancer plans cover a lot of out-of-pocket expenses. Items like co-pays, deductibles, travel and lodging (if you need to go to a hospital that is not in your area) and experimental treatments not covered by your insurance are just a few of the items that can cost you thousands of dollars. 

2. Not all cancer plans work the same way. Some plans are considered to be "treatment plans", which means that they will reimburse you as you are receiving treatments. Keeping in mind that cancer treatments can go on for months, and in some cases years, these plans can be "richer" as they will continue to pay out as you continue to submit claims. 

On the other hand, some carriers will offer "lump sum" plans, which will pay you a one-time lump sum of money upon diagnosis of cancer. These plans vary in price as you choose the amount of money you will need at the time of the application, some going as high as $75,000. 

I have found that some people who choose the lump sum plan do so for the convenience of only having to file a claim once and it is easier to understand. They also may want just enough to cover their deductibles. There are no wrong answers as it is a matter of preference.

3. You may not be able to get a cancer plan if you have been recently diagnosed with cancer. Unfortunately, we meet people who have just gotten a "clean bill of health" and want a policy. For those people we have to break the news that they may have to wait several years before being covered by a policy. 

4. If you have a policy already you may want to keep it. Most of the insurance companies that sell cancer insurance rarely increase the rates of their policies. Instead, they keep the old policies on the books and will develop or enhance "new policies". For example, one carrier has a policy with a "benefit builder", which means it pays more the longer you keep the policy. However, that policy is no longer being sold, but the company will let you keep it if you want it. 

As treatments evolve, so do the policies. A good example is one of the "lump sum" policies we offer that includes genomic testing. A tissue sample of the cancer is sent to a lab, which in turn will send treatment suggestions to the doctors, all at no extra charge. 

If you would like information about cancer coverage for you or your family, drop by our website or leave us a note. In the meantime, stay healthy!

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

Are You Going To Insure Your Love?

Valentine's Day is this month. You may be in the group of people who think that it is a holiday created by greeting card companies or you may be in the group that loves the holiday. Either way, it is not a bad time to remind the people you love how much you care. And you can do that by insuring your love. 

And yes, using the month of Valentine's Day for promotion may sound cheesy but doesn't this get to the matter of what life insurance is all about?

In the insurance world February has been deemed "Insure Your Love" month. It is a good time to explain to people that life insurance is not just another financial product, but instead it is love insurance. Life insurance is purchased to protect your loved ones from financial struggles if you died. 

For those people who have lost a loved one too soon, you know that along with the emotional and physical pain, there is financial loss as well. There is a funeral to pay for, time taken off from work and bills that need to be paid, including medical bills that somehow need to be taken care of. If there are children in the mix, this financial loss can quickly become a financial disaster. Making sure that your family can stay in the home that they know, that their standard of living will not change and that their college funds are still safe is essential. 

When you really get down to it, life insurance isn't for the person who is covered, but to pay a benefit to those loved ones. And if you love your family, you will make sure that after you are gone they can keep moving forward with their lives.

We know that people want to do the right thing by their family, but sometimes we put off things that are important. No one wants to add add another monthly bill, but when life insurance should be a priority. 

And it isn't just about buying a policy, but making sure you have enough coverage. When an insured person dies, his or her spouse, who is typically the beneficiary, will ask a very important question: Will we be okay? What do you want your agent to say? 

Remember that life insurance is customizable, meaning that it can be tailored to your needs and budget. Whether you are purchasing whole life, term life or universal life insurance, you are making sure that your family is taken care of. And it can be much cheaper than you think.

With all of that in mind we have made it as easy as possible. We have added a quoting tool to our website (which is conveniently located in the upper right corner of this blog). There you can find coverage that fits your budget and your family's needs. If you like what you see or have a question, drop us a note and we will assist you.

With the Covid pandemic going on, people are concerned more than ever about their future. And along with that means getting coverage in a safe and efficient manner. You can set a phone appointment with us and we offer non-medical policies. Let us help you "insure your love" safely and be sure to look us up on Facebook.

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! 

When Your Life Insurance Won't Pay

Life insurance, as well as disability insurance and any other type of insurance is a promise. It's a promise made on behalf of the insurance company to pay you for a loss, whether you lost your life, your ability to work or anything else stated in the policy. But more than just a promise, which can be broken, your life insurance policy is a contract. Legal and binding, it has plenty of legal jargon involved, which you, as a policy holder, should be fully aware of.

When you look at a brochure for an insurance policy there is usually a section in the back that describes "limitation and exclusions", or something to that effect. This list can be long or short, but either way you should take a few minutes to understand what is covered and what won't be covered if you suffer a loss.

A good agent will be happy to discuss this with you beforehand. At first glance, most of the items are common sense, but some can be confusing. And some will be altered or "re-interpreted" if need be. 

For example, almost every life or accident insurance policy I have seen has an exclusion for loss as a result of terrorism. This was widely seen and described by agents in the following scenario: You go to the Middle East and a bomb goes off. If you die, the company isn't paying. 

However, shortly after 9/11, with thousands dying as a result of a terrorist act, life insurance waived this exclusion. Their explanation was that the exclusion was for "foreign" acts of terrorism, in another country, even though that was not stated in the contract at all. Personally, I think they made the exception because they knew it would be a public relations nightmare if they enforced the terrorism exclusion when emotions were already incredibly high. 

If you take a look at the list of exclusions, some make sense. For example:

• Losses due to acts of war. Life insurance, as well as other types of insurance, rarely cover you if you are hurt or killed in a war. Some will even state that the war can be "undeclared", which is broad. The military does offer some small policies, but be aware of what you're buying.
• Losses due to self-inflicted injury. This makes sense. If you stab yourself, you should not expect the insurance company be on the hook for you. Accidental deaths will usually be covered.
• Suicide. Generally speaking, life insurance companies will pay, but after a "contestability period", which can be a few years, as stipulated in the policy. Things can get tricky if the insured dies of a drug overdose during that time and the insurance company would need to have proof that the overdose was intentional.
• Losses that occur while committing a crime. If you decide to rob a bank and the guard shoots you, don't expect the insurance carrier to pay your loved ones. 
• Murder. Believe it or not, there is a "slayer rule", which means that if your beneficiary kills you, the policy does not have to pay them. Go figure.

One of the other reasons why a policy won't pay is if you are not truthful on the application. The insurance company's underwriting department will try to find out as much about your medical history and lifestyle as possible during the application process, but they can't look under every stone. If you have misrepresented yourself (nice way of saying you lied) on the application, the insurance carrier may not pay the death benefit.

The best advice is to be honest with your agent and the underwriter (they may conduct a phone interview) when they ask about your medical history, alcohol and drug use, travel plans and risky activities. 

By spending a few minutes looking over your policy you can save you and your family a lot of confusion and heartbreak. If you have questions about any of this, feel free to look us up on the web and drop us a note. In the meantime, stay healthy!

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

4 Questions About Funeral Planning

Those of us who sell life insurance often talk about how a policy can benefit loved ones following the loss of a family member. If a policy is structured correctly to cover any outstanding debts, such as a mortgage or other loans, as well as replacing lost income and funding education needs if children are involved, that coverage should work well in the long run. 

However, the family will need those funds in the short run as well. First and foremost, funeral expenses will need to be taken care of as quick decisions are made by a grieving family. In a perfect world, we would all have pre-planned our funerals. Picking out a casket, having burial plots put aside and other decisions can best be figured out ahead of time when people are rational. 

This is why it's important to for your life insurance agent to include final expenses into the conversation. A traditional funeral can be expensive, averaging between $10,000 and $13,000, depending on where you are. To help you plan and save your family a lot of stress, I've come up with a few frequently asked questions about funerals and final expenses. 

1. How can my life insurance pay for the funeral?

If you have named a family member, let's assume a spouse, to be your beneficiary, they can "assign" a portion of the proceeds to pay for the funeral. The funeral home typically will have paperwork on hand for this so that the insurance carrier can pay them their fees directly. 

Keep in mind that the beneficiaries need to be up-to-date. In the case of my father, who had not updated his policies in years, all of his beneficiaries has pre-deceased him. As a result, my sister and I had to pay the funeral home and the policy paid the death benefit to his estate, which took months to settle. 

2. Does pre-planning a funeral save money?

Not necessarily. While choosing your items may help a bit, unless you pre-pay, the prices can go up. Using my father as an example again, he pre-planned his funeral but didn't pay for anything. When he died years later, inflation had an effect and the prices were a bit higher. 

I met a lady years ago who owned a local cemetery. I'm not sure if she was trying to get me to buy a plot but she said that inflation on burial plots were higher than regular inflation. If you are planning on being buried, you should probably choose the plot and pay for it ahead of time if you can.

3. Can I buy my casket online or do I have to get it from the funeral home?

You can purchase your casket and other supplies online. The funeral home can handle the embalming, host the viewing and coordinate other details. Be aware that they would prefer you buy from them as they have a lot of overhead and they markup their caskets and vaults accordingly. 

Under the FTC Rule, you are allowed to purchase supplies from a third-party vendor and the funeral home is required to accept them. 

4. What if I just want to be cremated?

That shouldn't be a problem. Many people have chosen this option as it is less expensive than purchasing a burial plot. Again, the best advice is to discuss this when pre-planning. 

The director of a cemetery told me once that the biggest issue he dealt with was that when people made plans for cremation, they often failed to inform their loved ones. Family members would expect to visit a plot that wasn't there. "They were expecting a place to stand together and grieve, but when they realized there wasn't one they would get very upset," he said. "I just wish they would tell their family ahead of time."

When discussing your life insurance with your agent, be sure to include your funeral and other plans into the talk. 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! 

Life Insurance and Long Term Care Combo Products

If you or a loved one ever need help with daily living activities, you will discover that custodial care can be expensive. That’s true whether the care is provided at home, in an assisted living facility, or in a nursing home, and it’s especially true if care is needed for many years.

Long-term care (LTC) insurance is available, but insurance companies have learned that these costs can be steep. Premium increases for LTC insurance are in the news (for example, some press reports tell of cases where premiums have tripled in the last three years), and some insurance companies have dropped out of this business. Consumers face the prospect of paying thousands of dollars a year, every year, and never getting any benefit at all if it turns out that custodial care is not needed.

Some people might prefer another path to LTC coverage, such as a hybrid or “combo” product. In a traditional life insurance policy a consumer buys a product that will deliver a death benefit, but with a combo product, the consumer can obtain a rider that will offer a payout if the covered individual needs LTC.

Let's assume that our new friend Bob has an insurance policy on his life, payable to his son James. Bob’s policy has an LTC rider. So, if Bob needs LTC, that insurance policy will provide a benefit to help pay those bills. Regardless if Bob needs care and collects an LTC benefit, his life insurance policy will pay a death benefit to James at the time of Bob’s death.

Generally, in this situation, Bob would receive an “accelerated death benefit” to pay for care.  When someone receives such a payout, the amount of the lifetime benefit is subtracted from the death benefit that eventually will be paid to beneficiaries. Typically, a combo life insurance product would be some form of whole life or universal life, rather than term life insurance, although of late we offer a term policy that includes "living benefits".

The common aspect of this tactic is the absence of a “use it or lose it” drawback. With standalone LTC insurance, the money spent could wind up generating no return. With life insurance there will be a payout to someone at some point. The extra LTC coverage is another benefit that possibly will come in handy.

Acquiring LTC coverage in this manner usually avoids the threat of future premium increases. As another attraction, existing life insurance policies might be exchanged, tax-free, for a new contract that includes an LTC rider.

The attractions of LTC combo products, however, come with negatives as well. The underlying problem here includes the potentially disastrous costs of LTC, and this problem can’t be escaped by switching from one type of insurance to another. There often is a cost to adding an LTC rider to an insurance policy. These combo products may require a substantial outlay, which must be paid upfront or within relatively few years.

In addition, tax advantages may be lost with combo products. With most standalone LTC insurance policies, certain amounts of your premium count as a medical expense, which can potentially be deducted. That’s not the case with a rider to a life insurance policy.

As of 2017, people age 40 and younger can include LTC premiums up to $410 as a medical expense; that amount scales up as premium payers age, maxing out at $5,110 for those 70 and older. Those outlays are added to other medical expenses, and the amount that exceeds 10% of adjusted gross income can be taken as an itemized deduction.

Combo products vary widely, and so do individuals’ concerns on this issue. However, generally, people who only want LTC insurance might be best-served with standalone coverage, working with an insurance professional to hold down premiums. That said, if you are interested in life insurance such as whole life or universal life, it may be worth exploring the idea of adding LTC coverage, perhaps for an added fee.

There are a few factors we take into account when discussing these options, notably the age of the insured at the time of the application and, of course, their budget. A younger person may find a combo policy more affordable than an older person.

If you have questions or concerns let us know. 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!