The Insurance Doctor

Month: April 2022

  • 5 Tips for Filing a Life Insurance Claim

    5 Tips for Filing a Life Insurance Claim

    We are making history for the wrong reasons!   In 2020, because of the Covid-19 pandemic, American Life Expectancy declined by almost 2 years (1.87 years).  In 2021, it declined another 0.3 years. 

    To give you some perspective, as per the Washington Post, the largest total decline in U.S. life expectancy occurred in 1943 (2.9 years) when U.S. deaths peaked in WWII.

    The average American now lives to age 76.60.  This sharp decline places us last compared to the other 19 “wealthy nations” that were analyzed. 

    It is hard to find someone that has not been affected by this.  Personally, we lost my Uncle John Intelisano at age 65 due to Covid-19 in February of 2020, when nobody knew what was going on at that time.  In May of 2020, I had 7 clients pass away from Covid-19 in less than one month.  One client, between life insurance and annuities, owned 12 policies.  I spent the better part of June 2020 processing death claims and tracking my clients’ policies. 

    Following the death of an insured loved one, it is important to file a life insurance claim in a timely manner!  There is extensive paperwork involved and the process may seem burdensome while grieving!  Beneficiaries must file the necessary paperwork to receive their death benefits (usually tax-free with life insurance) and comply with the law and tax rules. 

    It is important to have a process and a checklist, see below:

    1. Contact Us: The first step to filing a claim is to contact your life insurance agent or broker.  Remember, an agent represents (works for) an insurance company.  A broker (like us) represents YOU the client.
    2. Find ALL Their Policies: When filing claims, some people might not know what types of insurance the deceased owned, and a search is in order.  There is an art to this search as there could be savings bank life insurance, credit card insurance, a military policy or perhaps an old employer policy.  It is important to search old files, safety deposit boxes, bank statements, home safes etc.
    3. Organize the Paperwork: Contact the funeral director handling the final arrangements to obtain a “certified copy” of the death certificate for a nominal fee.  We suggest ordering between 8-10 copies upfront even if there are only 3-4 known policies as you might find more using these tips.
    4. Choosing a Benefit Payout Plan: With most policies, there are options to choose how the death benefits are to be distributed.  Options include Lump Sum- the entire benefit is paid in a single payment.  Specified Income Provision- The insurer pays the beneficiary both the principal and interest using a set schedule of payments.  Interest Income Option- The life insurance carrier holds the proceeds and pays the beneficiary interest on the sum.  Life Income Option- The beneficiary receives a set income for life.  The payout amount on this option depends on the death benefit amount, the age of the beneficiary, the gender of the beneficiary, and interest rates at the time of death.
    5. Processing the Claim- After the claim has been submitted (assuming the paperwork was done properly) processing usually takes between 1-2 weeks.  Insurance companies must analyze the claim, confirm the policy is active, and review the paperwork. 

    When we are doing life insurance planning with clients, one of the best features of life insurance we emphasize is that it cannot be accessed by creditors or lawsuits.  To make it easier for family members, we suggest completing a simple “estate directory” which lists policies, policy numbers, beneficiaries, contact people in the event of an unexpected death, and a list of where to find their wills and where files are stored. 

    We have access to over 100 life insurance companies, and we regularly track over 2000 types of policies.  Since I am a broker, I represent YOU the client and shop the markets for the most suitable policy at the best price.

    We also provide a “Coaching Sheet” with tips on how to obtain the best results on an exam, which can include a blood and urine test.  In my 30 years of experience, I have never seen an insurance broker that provides this!  The less premium you pay, the less money we make!

    For more information or life insurance quotes, feel free to reach out to me at Rob@InsuranceDoctor.us!

  • Heart & Health are Number One!

    Heart & Health are Number One!

    Never has your diet been more important than during this current Covid-19 Era!  This is not the time to be going to the hospital for heart surgery.  As we now know, one of the most dangerous aspects of Covid-19 is its unpredictability as to which body organs it chooses to attack!

    The United States has one of the highest costs of healthcare in the world!  In 2020, U.S. healthcare spending reached $4.1 trillion, which averages to over $12,500 per person.  This was over $4,000 more expensive per person than any other high-income nation. 

    My friend Don recently had a heart attack at age 49 and had stents put in.  He had an artery blockage, and the doctor said a better diet could have avoided it.  Don’s medical and hospital bills exceeded $160,000 by a large margin.  Before his heart attack, he estimated that he ate red meat 5-6x/week and had at least 2 alcoholic drinks every day except Sundays.  He was lucky to survive!  He was also fortunate that we implemented a strong group health insurance policy for his 12-employee law firm.  Don paid less than $8,000, out of his pocket, less than 5% of the total cost.

    We can all significantly reduce the occurrence of heart disease (regardless of family history) by making modest lifestyle changes.  According to the CDC, (Centers for Disease Control and Prevention) more than 800,000 first heart attacks occur annually, with more than half followed by a 2nd heart attack.

    I have always maintained that your diet starts at the supermarket.  I understand, due to inflation it can cost significantly more money to eat healthy organic foods; however, the cost of not doing so can be much greater!

    My top 4 tips to improve your diet (in addition to reducing sugar and alcohol intake) and drastically reducing the odds of heart disease include but are not limited to:

    1. Eat a Minimum of 1 or 2 Squares of Dark Chocolate Several Times Weekly: Evidence in the British Medical Journal shows that 1-2 pieces of dark chocolate several times per week may decrease the risk of a heart attack by 37%, compared to those who consume less.  Who says prevention must be boring and painful?
    2. Include More Fiber in Your Diet: Fiber has what is called a “dose-response” to reducing risk.  In other words, the more fiber you ingest, the greater your reduction of risk.  The average American consumes roughly 15 grams of fiber per day.  The American Dietetic Association recommends 25-38 grams of fiber per day.  Studies show for every increase of 10 grams of fiber consumed per day, there was a corresponding 14% reduction in the risk of a cardiovascular event and a 27% reduction in the risk of heart disease.  Good fiber sources include whole grains, fruits, vegetables, cereals, and beans.
    3. Eat More Legumes: In a survey by (NHEFS) the National Health and Nutrition Examination Survey conducted using over 9500 men and women, found that those who consumed more than 4 servings of legumes per week (compared to those who ate less than 1 serving per week) reduced the risk of coronary heart disease by 22 percent!  Common sources of legumes are beans (great northern, kidney, lima, navy, green, and pinto), peanuts, lentils, chickpeas, and snow peas in their pods to name many.
    4. Eat More Omega 3 Fatty Acids: Eating both plant-based and seafood-based Omega 3s will reduce your risks and extend your life.  Good sources of plant-based Omega 3’s include nuts and ground flaxseed.

    The more significant the lifestyle modifications one makes, the odds are better to live a long and healthy lifestyle!  Even modest changes in your diet will result in significant reductions in risk!  The goal should be to become “heart-attack proof,” a term used by Dr. Sanjay Gupta!

    In a nutshell, you can pay a little more for healthy food now to prevent paying a lot more later! 

    To be added to our monthly e-newsletter, email Add-me to Rob@InsuranceDoctor.us

  • The Pros and Cons of Self Employment

    The Pros and Cons of Self Employment

    There is no doubt we are in unique times and uncharted territory!  To put this into context, over 47 million people voluntarily quit their jobs in 2021.  In total, 68.9 million either quit, were laid off, or were discharged.   According to the Bureau of Labor Statistics, in December 2021 alone, 4.3 million Americans quit their jobs, down slightly from the record 4.5 million quits in November 2021!

    While millions resigned for cash incentives, better pay or better benefits, many people also left the labor market to care for children or elderly relatives during the pandemic.  Many older workers either retired early or were forced out of the labor market because of age discrimination.

    Keep in mind that we have roughly 330 million residents in the United States, which includes underaged non-working children, and retirees.  68.9 million people leaving their jobs has created a huge workforce void in the restaurant, hospitality, trucking, and many other fields.  This is known as “The Great Resignation!”

    According to the Census Bureau, a record 5.4 million new business applications were filed in 2021.  What does this mean?  This means that there are millions of people that have gone from working for small, medium, and large corporations to being self-employed. 

    Having done this myself, I know this can be a difficult transition.  I went from working as an Agent for The Prudential Insurance Company of America, (The Industry Leader at the time) who recruited me while at Lehigh University, to the President and Founder of Intelisano & Associates, Inc. back in 1999. 

    As an employee of The Prudential, the company took care of many things for me such as office expenses, supplies, advertising, back-office support staff management, and W-2 employee tax record keeping, just to name a few. 

    As a newly self-employed fully independent Broker and S-Corporation business owner in February of 1999, I was then left to fend for myself in those areas, as well as to rethink how to acquire new clients and run my insurance agency and back office.

    An insurance “Agent” works for and represents an insurance company where they must place ALL or a significant majority of the agent’s business.  An independent “Broker” represents you, the client, and shops the market for the most suitable product available. Because I left Prudential, I was forced to leave ALL my clients and renewals with Prudential Insurance and start from scratch.  Many of the 5.4 million new business owners will now be in a similar situation. 

    Like anything else, there are pluses and minuses to running your own business.  The Pros include but are not limited to:

    1. Qualifying For Tax Deductions Traditional Employees Do not: If working from home, you are able to deduct a portion of your rent or mortgage payments as well as home office expenses such as phone, office supplies, and utilities.  You can deduct car expenses such as gas, maintenance, parking fees, tolls, and depreciation. 
    2. Job Security: You have the coolest boss (yourself), so you never have to worry about getting fired or getting your pay docked.
    3. Time Freedom: No more checking with your boss or putting in for time off when you want to book a family or personal vacation.
    4. Family Time: You can schedule your work around special occasions, proms, birthdays, plays, anniversaries, and sporting events.

    The Cons of Running Your Own Business Include:

    1. Submitting Two Tax Returns: When you are self-employed, you must file both a personal tax return (usually due on April 15th annually) and a corporate/business return (usually due March 15th annually). 
    2. Quarterly Tax Payments and a Higher Rate: Two of the biggest cons are that you must make estimated quarterly tax payments for the estimated taxes you owe and pay a higher tax rate.  Consult with your CPA first!
    3. Social Security and Medicare 15.3% Tax on Income: All workers are required to pay a 15.3% tax (up to the first $142,800) of net income.  As a W-2 employee (you work for an employer) you are responsible for only half the tax as your employer pays the other half.
    4. Health Insurance Sticker Shock: A large group (50-100+ employees) health insurance policy can cost between 20%-30% less than an individual health insurance policy for the same person.  Also, many employers subsidize a portion (often between 25%-50%) of your monthly health insurance premiums.  This results in what I call “sticker shock” when people see the “Actual” cost (which can be double) of staying on your former company’s health plan by going onto Cobra. 

    In certain situations, my firm can help with Con #4!  If you own your own business with an active employee identification (EIN) number and are working full-time, we have access to large company plans where we can link a smaller company or “SOLO-PRENEUR” to a larger company plan therefore, you will benefit from economies of scale.

    If you are feeling health insurance “sticker shock,” feel free to reach out to me at Rob@InsuranceDoctor.us.  To be added to our monthly e-newsletter list, email “Add Me” to the same email above.

  • 12 Fixed Annuity Advantages

    12 Fixed Annuity Advantages

    The Federal Open Market Committee or FOMC is the Federal Reserve’s monetary policymaking body.  It is responsible for the formulation of a policy designed to promote stable prices and economic growth.  Simply put, the FOMC manages the nation’s money supply!

    The Federal Open Market Committee (FOMC) holds eight regularly scheduled meetings (usually every six weeks) during the year.  Last month, during their March 15th-16th meetings, the FOMC approved its first interest rate increase for the “Federal Funds Rate” in three years.  The reason for the rate increase is to address spiraling inflation without torpedoing economic growth.

    This brings the “Federal Funds Rate” (the bank lending rate banks charge each other for interbank overnight lending) from zero to between 0.25%-0.5%.  They had kept the rate near zero since the beginning of the Covid-19 pandemic.  The FOMC has all but committed to small increases for each of their next six meetings, which could bring that rate up to 1.9% by year’s end! 

    You might be asking yourself “what does this all mean and how do these interest rate changes impact me and my family?”  The move in the “Federal Funds Rate” corresponds to an increase in the “Prime Rate,” which immediately pushes lending rates higher for most forms of consumer borrowing and credit.  This means mortgage rates, car loans, and some variable student loan interest rates will be increasing. 

    The good news is this also means that bank account and CD (Certificates of Deposit) rates will increase as will fixed annuity rates!  When fixed interest rates go up, it can have a negative effect on the stock market, as conservative investors often reposition funds from the “choppy” stock market in favor of the fixed, predictable, and guaranteed interest rate returns of fixed annuities, CDs and bank accounts. 

    Fixed annuities are written primarily by insurance companies offering safe alternatives that provide fixed, guaranteed, and predictable returns.  They are also one of the more flexible financial products.  Fixed annuities can be converted into a guaranteed income for life, similar to a pension with a guaranteed monthly income.  They make an excellent pension supplement or primary pension if you do not have one.  Fixed (no fee) annuities are often confused with variable annuities which can have high fees. 

    See My Top 12 Advantages of Fixed Annuities below:

    1. Guaranteed Interest Rates: You can choose how long to guarantee your interest rate, usually between 3-7 years.

    2.  Guaranteed Principal: The principal is protected regardless of market conditions, company performance, or the economy.

    3.  Interest Rates: Insurance companies offer higher interest rates usually by 0.25%-0.50% than bank CDs, bonds, or Treasury Bills!

    4.  Tax-Deferred:  You do not pay income taxes until you start withdrawing funds, which allows for faster accumulation providing greater income.

    5.  No Fees:  You pay NO annual management fees while funds accumulate and NO fees on death benefits to heirs!

    6.  Protected From Creditors: If you get sued, creditors cannot go after/attach fixed annuity funds.

    7. Bypasses Probate: Fixed annuity death benefit proceeds bypass probate. They save on estate fees, and court costs and go directly to named beneficiaries outside the will. They are private and therefore cannot be contested.  Usually, the beneficiaries receive the lump sum funds in 1-2 weeks.     

    8. Lifetime Income Options Available:  At any time, your annuity may be converted into a guaranteed lifetime income stream you cannot outlive.  This product works very well for seniors looking for a steady income.  The biggest fear of seniors is the fear of “running out of money!”

    9. Annual Withdrawal Options Available:  Most fixed annuities allow for withdrawals between 10%-20% of the account balance annually.

    10. Annuitization: This unique annuity feature allows the policyholder to take a guaranteed income for life or a shorter-term (such as 10 years) and have a portion of the income excluded from taxation.  There are a variety of guaranteed income combinations to choose from.

    11. State Protection: Should the annuity insurance company become insolvent, there are state protections (depending on which state you reside) with limits between $100,000-$500,000 in most states.

    12. Piece Of Mind:  Fixed Annuities are secure and offer peace of mind to account holders knowing they are guaranteed to not lose money regardless of economic uncertainties.

    In conclusion, Fixed Annuities should have a place in everyone’s portfolio!  

    For more information and a no-fee consultation to discuss your specific needs, feel free to reach out to me at Rob@InsuranceDoctor.us.