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  • 7 Mother’s Day Tips to Save Money!

    7 Mother’s Day Tips to Save Money!

    Mother’s Day has snuck up on us and is this weekend.  If you think about it, none of us would be here without our Mothers!  Surprisingly, few people ask their Mothers what they actually want for Mother’s Day!  This would be a good question for “The Family Feud Show!” 

    A recent survey was done by www.mommypoppins.com asking Mothers what they REALLY want for Mother’s Day:

    1. Alone Time
    2. A Clean House (without asking or nagging)
    3. Spa Time and Pampering
    4. Food
    5. Sleep

    This is the one day that the woman who often puts herself last is first on the list for millions this Sunday!  For those who are tight on funds this Mother’s Day, here are a few smart money moves to save a few dollars and still do great things for Mom:

    1. Search the Internet for a Less Expensive Deal: If flowers are her thing, almost every website that sells flowers are running coupon codes for saving money.  If you cannot shop locally, for example, www.ProFlowers.com is offering flowers on sale and 15 American Airline Miles for every $1 spent.
    2. Go For a Day at The Movies: It is still fun to go to see a show and matinees are usually half prices.  There are often restaurants, such as Cheeburger Cheeburger near movie theaters, that offer a dinner and movie ticket package at a discount. 
    3. Do ALL the Chores:  As you can see in the survey above, doing the chores ranks #2.  Although not so much fun for you, one way to save $$$ and have a happy Mother is to do ALL the chores to free her up to have fun on her special day!
    4. Do Something Creative and/or Artsy:  Most moms will appreciate something special created just for them.  Whether it is a creative and cool card, collage, or getting a special picture frame, it has a special meaning when coming from your heart 😊!
    5. Breakfast in Bed: If you have never done this, give it a try.  They say the most important meal of the day is breakfast.  Let Mom sleep in and serve her a fabulous breakfast in bed to start the day off right.
    6. Move the Day:  There are many people who work on weekends and cannot see Mom this Sunday.  Moving celebration dates have been the norm during Covid-19 and are much more acceptable.  Moving her special day to Tuesday or Wednesday can save you between 50%-70% on chocolates and 25%-50% on flowers.
    7. Hit the Clearance Section Button:  If clothes are her thing, try going to her favorite store’s online website and clicking on the clearance section, usually on the far-right hand side of the website.

    The most important thing is to do something to acknowledge your Mother, Wife or Grandmother on Mother’s Day!  It is about making this day different and special!  Let me know how it goes!

    I would like to wish my Mother, Sharon Rose Meade Intelisano, the happiest of Mother’s Days.  I Love You Very Much!

  • 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. 

  • 7 tips to battle Spring Allergies

    7 tips to battle Spring Allergies

    Spring arrived last Sunday, March 20th!  One of the best things about living in New York is the change of seasons.  With spring comes baseball, improving weather, and the fun outdoor season.  It is also the time for spring cleaning and unfortunately the onset of the high tree-pollen allergy season.

    Allergies, especially food, can be a serious issue.  Also, millions of dollars are lost from employees calling in sick because of allergies and allergic reactions.  The average worker with allergies misses about one hour per week over the course of a year.  That sick time is concentrated during the peak allergy periods.  If you have ever seen the dating movie “Hitch” starring Will Smith, you know what I mean.

    Allergies never bothered me as a youth; however, as an adult, it hit hard when I was living and working in midtown Manhattan.  I remember going to NYU Langone to take an in-depth and expensive allergy test where they taped about 30 small nodes to my upper back, and I couldn’t take a shower for two days until my follow-up checkup.  It turned out that I had adult-onset allergies and was allergic to 28 of the 30 types tested. 

    When my allergies hit, they hit hard and quick and I could barely breathe.  It felt like I was sick, sapped my energy, and overall, it was misery.  I knew I had to research this and make some drastic life changes.

    It turns out that I had serious allergic reactions to fragrances among many other things.  I started to read ingredients in every bottle in my house and fragrance was in almost everything.  I realized some of the allergy problems I was bringing on myself.  

    Years later, I have made the necessary changes, and my allergies though not fully eliminated, have subsided tremendously.  Here are my lucky seven tips to help ease your symptoms so you can better enjoy the spring season:

    1. Be Selective When Outdoors: If outdoor exercise is your thing, remember that the pollen count is highest between 5a-10 am and on windy days.  If it just rained, you are in luck because the pollen count drops significantly on humid and rainy days.
    2. Protect Yourself When Outside: Consider wearing large sunglasses to protect your eyes and a hat to keep pollen from sticking to your hair.  Avoid hair gels that pollen can stick to. 
    3. Wash Up When You Return Home: Keeping pollen from following you inside your home can alleviate your allergy symptoms.  On high pollen days, consider showering at night and taking your clothes off before entering your bedroom so “Evil Uncle Pollen” isn’t tucked in with you every night.
    4. Avoid Certain Flowers: Many of our favorite flowers contribute to allergy symptoms.  No matter their beauty, don’t bring these florals home!  Flowers such as asters, daisies, chrysanthemums, sunflowers, lilacs, and a baby’s breath are prone to triggering allergic reactions.  Instead, try to substitute them with orchids, iris, begonias, and periwinkles.
    5. Try to Allergy-Proof Your Home: Try and keep home and car windows closed and avoid using electric fans which kick up and recirculates pollen into the air.  If possible, delegate cleaning, especially the carpet to non-allergic family members.  Examine ALL your cleaning products including dishwasher fluid, bathroom, floors, and showering products like shampoo and conditioner.  If possible, fragrance-free is the way to go!
    6. Weekly Cleaning: Try and mop floors and clean carpets weekly, especially if there are pets at home.  Clean window blinds and shades where allergens stick.  Turn on an exhaust fan after cooking to reduce moisture.  Consider using disinfecting wipes on items like gym bags and purses that can bring allergens into the home.  As frequently as possible, wash your bedding as well as your pets and their bedding.
    7. Consider Avoiding Sugar and Adjusting your Diet: Your daily diet can exacerbate your seasonal allergies.  Sugar disables the immunity system!  Certain foods and drinks such as peanuts, alcohol, processed foods, wheat, chocolate, and even your morning cup of coffee are known culprits that act as hay fever catalysts!

    If these lucky seven tips fail, see an allergist.  There is no reason to feel like you are sick when you don’t have to.  Do you have any other tips to help with allergies?  If yes, email me at Rob@InsuranceDoctor.us

  • 7 Money-Saving Tips at the Gas Pump!

    7 Money-Saving Tips at the Gas Pump!

    Due to a combination of events including Covid-19, the Suez Canal 2021 container ship backlog, and the current Russian invasion of Ukraine, there are gas supply-side issues that are driving up prices.  At one point, the U.S. was producing enough gas domestically to not have to import any gas from overseas. These are some reasons why we are in economic turmoil today! 

    During the past three months, we hit 40-year highs for inflation over a 12-month period.  From February of 2021 through February of 2022 the inflation rate was 7.9%. 

    What does this all mean?  To examine the rise in the annual inflation rate, we must first go back and examine the recent past.  Look at the annual inflation chart since 2017 below:

    Calendar Year                      Annual Inflation rate

    2017                                       2.1%

    2018                                       1.9%

    2019                                       2.3%

    2020                                       1.4%

    2021                                       4.7%

    2022                                       9.0?

    From February 2020 through February 2021, the overall inflation rate has been 7.9%.  Inflation is felt across our economy, starting at the supermarket as food prices have gone up by 8.6%.

    These days, pulling up to the gas pump is somewhat of an adventure and a major topic of conversation.  The cost of gasoline has gone up 38% since last February 2021.  There are significant ripple effects of these gas prices, as over 70% of our goods and services are trucked across the country. 

    Have you recently taken a cab ride from one of the airports?  Drivers from yellow cabs, Uber, and Lyft for the most part, use their own money to gas up their vehicles.  There are not enough vehicle charging stations (yet) available for cabs currently, so they must rely on gas-powered vehicles.  In order to earn a living, they must pass on the majority of their gas price increases to their ridership!

    As of this writing, California has the most expensive gas in the country.  Their average cost is $5.57 per gallon, the only state with an average cost of over $5.  More than one friend of mine texted me a photo of a Shell station in Los Angeles charging $6.99 per gallon of regular gas!  The states with the least expensive gas are Kansas and Oklahoma, both averaging $3.79 a gallon. 

    Unless the “Keystone Pipeline” project gets reawakened, I don’t see this issue subsiding anytime soon.  Windmill power is being developed and many years away, so me must reply on gas.  Gas prices can vary as much as 10-15 cents a gallon even a few blocks or miles away.  The savings add up over time!

    Heed My 7 Tips to Save Money at the Gas Pump:

    1. Wholesale Clubs: Members of wholesale clubs such as Costco, Sam’s Club and Krogers receive member discounts on gas!
    2. Pay with Cash:  There is a saying, “Cash is King!”  You can usually save between 5-10 cents a gallon when you pay in cash.  If you have a big truck or SUV, this adds up quickly.
    3. Loyalty Programs and Gas Cards: Nearly all gas stations have some type of loyalty program.  Most of us are creatures of habit and fill up at the same station or two.  Sign up at the stations you most often frequent or consider changing stations.
    4. Investigate Your Credit Card Rewards: Check to see if your credit card company has any deals on gas purchases, even if only in the short term.
    5. Time it Just Right: According to GasBuddy, the best day to save at the pump is Monday, the day that has the lowest gas prices in most of the country.  Do NOT fill up if you see the gas delivery truck leaving the station!  There are air bubbles that can temporarily negatively affect the gas quality until they have time to settle.
    6. Smart Phone Apps:  Downloading apps, such as GasBuddy, Gas Guru and the AAA mobile app, can be helpful, especially when traveling.  Also consider downloading CityMapper (a fluorescent green icon) which gives you the time it takes to get to your desired location by train, bus, citi bike or walking and it shows the estimated calories you will burn by doing so.
    7. Check the Internet:  Before embarking on a road trip, you can check in advance online where the cheapest gas is.  For example, www.NY1.com/gas is one site you can check in advance of road travel.

    Spring is officially here this Sunday and there will be more cars on the road.  The bottom line is, a little bit of reconnaissance can save lots of $$$$!  Let me know how it goes at Rob@InsuranceDoctor.us.

  • Russia NOT Swiftly Removed from SWIFT!

    Russia NOT Swiftly Removed from SWIFT!

    Last week, the White House announced that the United States and Allies agreed to block select Russian banks from SWIFT, the Global Financial Messaging System. 

    Some of the initial reactions are:

    1. Why didn’t they just remove ALL Russian banks the first day of the war?
    2. How is this going to be a deterrent from Russia continuing their attack on Ukraine?

    To answer those questions, we must first define how SWIFT works, and then go back in history to see the ramifications of this strategy.  SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication.  It is a global messaging system connecting thousands of financial institutions around the world.

    SWIFT was formed in 1973, and it is headquartered in Belgium, in addition to the U.S. Federal Reserve System, the European Central Bank and others.  It started with 239 banks in 15 countries.  By 1977, it expanded to 518 institutions in 22 countries.  Currently, SWIFT connects more than 11,000 financial institutions in more than 200 countries around the world!

    Back in 2012, Iran lost access to SWIFT as part of economic sanctions over its nuclear program, though many of the banks were reconnected to the system in 2016.  When Iran was booted, it lost half of its oil export revenues and 30% of its foreign trade. 

    Using an example is the best way to understand how SWIFT works.  SWIFT assigns each financial organization a unique code that has either eight or eleven characters.  The code is interchangeably called the bank identifier code (BIC). 

    To understand how the code is assigned, let’s look at the Italian bank UniCredit Banca, headquartered in Milan.  Their code is UNCRITMM, which breaks down as follows:

    1. The first four characters: the institution code UNCR (for UniCredit Banca)
    2. The next two characters: the county code IT (for Italy)
    3. The next two characters: the location/city code MM (for Milan)
    4. The last three characters: are optional; however, some banks use them to identify their individual branches

    This is why you can easily go to your bank and wire money to another country using a different bank than yours! 

    Barring Russian banks from SWIFT will damage the country’s economy immediately and cut them off from international financial transactions.  This includes Russia’s profits from exporting oil and gas, which makes up 40% of Russia’s current revenue.

    Some of my takeaways from SWIFT:

    1. SWIFT is not a bank and does not hold money or securities
    2. SWIFT is a “messaging system” that institutions use to securely transmit information and instructions through a standardized system of codes
    3. SWIFT protects banks and financial institutions from money laundering
    4. SWIFT is a cooperative organization owned by its members
    5. Members pay a one-time fee, annual support charges and are charged for each message based on the message type and length
    6. SWIFT reports it recorded 42 million message per day on average in 2021
    7. Over $5 trillion passes through the SWIFT system daily

    The internet has connected the world unlike any other time in history.  This has positives and negatives.  If the U.S. and the European Union (EU) made a knee-jerk reaction and removed ALL Russian bank access to SWIFT, it would also hurt European and American companies that do business with Russia.  This is why they needed a few days to analyze which Russian banks to remove from the system. 

  • Disability Insurance, Rolling the Dice

    Disability Insurance, Rolling the Dice

    I just returned from an extended Las Vegas Super Bowl Weekend and was thinking about what to write this week while on the plane back to JFK airport.  In many ways, insurance is gambling! 

    There is a high probability of a disability occurrence happening, such as someone becoming disabled either mentally or physically.  As an Independent Insurance Advisor, also known as a “Field Underwriter,” my job is to ask questions then listen.  This is why we have 2 ears and 1 mouth as we are supposed to listen twice as much as we speak.  Nearly 50% of ALL individuals ages 34 or younger will be disabled for 90 days or longer prior to age 65. 

    As per the Commissioners Individual Disability Tables, CSO/Society of Actuaries, see the chart below:

    Age     Odds of Long-Term Disability     Average disability length

    30                   51%                                                    4.7 years

    35                   48%                                                    5.1 years

    45                   40%                                                    5.8 years

    50                   34%                                                    6.2 year        

    There are generally 2 types of disability income insurance:

    1. Group Disability Income Insurance: Group disability insurance is usually offered by an employer at no cost or for a nominal fee taken out monthly directly from your paycheck.
    2. Individual Disability Income Insurance: Individual disability income insurance (DI) is usually purchased from an agent or broker, similar to life insurance.  There are significant advantages to doing business with an independent insurance broker!

    Advantages of Group Disability Insurance:

    1. Premiums are Affordable
    2. Some policies are portable meaning you can keep it if/when you leave the company
    3. The Business Owner can protect key personnel in the event of disability

    Disadvantages of Group Disability Insurance:

    1. Most policies have a monthly disability income “BENEFIT CAP” which is far less than the employee would need to provide for one’s family
    2. Few policies have an “Own Occupation” definition of disability, meaning it is much harder to trigger a claim versus individual policies.

    Our first task is to assess the risk probability based on the clients’ age, medical history, income level, occupation, amount of coverage, and details of the policy.  We come up with a monthly income need (usually between 40%-65% of income) then shop the policy to different insurance companies.  We then present between 1-3 company options to the client for review.  An Agent can ONLY present 1 company option!  My job is to find a comfortable premium to transfer the majority of the disability risk to the insurance company.

    Regardless of a person’s age, the ability to earn an income is usually their most valuable resource.  Disability income insurance is the one type of insurance that workers cannot do without!  If this is the case, why do less than 50% of adult Americans own a personal disability income insurance policy?  The answer is based on cost, as a typical individual disability income policy will cost between 2%-4% of a person’s salary, depending mostly on age.  This is why it makes sense to apply for an individual disability income policy as young as possible.

    Accidents are what most people think are the main cause of disability. This is incorrect!  Depression and back pain are the most likely to trigger a disability claim.  This has been exacerbated by Covid-19.  Disabilities can be triggered mentally or physically.  As an example, my friend is on disability from post-traumatic stress disorder (PTSD) from Hurricane Sandy. 

    It is critical to consider how your bills would be paid in the event of a disability lasting more than 3 months.  Workers should consider how long they would be able to cover their expenses.  Couples should also consider whether they can survive on one partner’s paycheck if the other were to become ill or injured.  In most cases, an individual private disability income policy is the best way to handle this risk!

    My top 3 tips to consider when buying an individual disability income insurance policy to protect you and your family:

    1. Get Disability Insurance Quotes from an Independent Broker:  An independent insurance broker has a macro view of the marketplace and multiple insurance companies to shop rates and benefits for you.  For example, we have one insurance company that will cover a disability due to a botched elective plastic surgery procedure. 
    2. Buy the “Own Occupation” definition of disability: Not all companies have this definition and some charge extra for it as a rider.  For example, a right-handed surgeon gets his or her right hand mangled when closing the car door.  With an “Own Occupation” policy, said surgeon goes on claim and can collect benefits and still work supervising others.  A policy without “Own Occupation” would have an “any occupation in their field” definition and would NOT be on claim in the previous example.
    3. Do NOT Take a Tax Deduction for insurance premiums paid: This is where your CPA can make a big mistake getting “greedy” for deductions.  If you pay your premiums with “after tax” dollars, 100% of your monthly benefits are TAX FREE!  If you take the small annual premium tax deduction, 100% of your monthly benefits are taxable!

    Are you confused?  These are critical individual and family planning decisions that should not be taken lightly.  For a better understanding of these policies and rates, feel free to reach out to me at Rob@InsuranceDoctor.us.

  • America the Beautiful… and Fat!

    America the Beautiful… and Fat!

    As per the Global Obesity Observatory, America has rated the 14th highest adult obesity rate in the world with 36.47% of all adult Americans being considered obese!  The first 13 countries are ALL islands.  According to the Organization for Economic Cooperation and Development (OECD), The U.S. adult obesity rate will reach 50% by 2030. 

    The Wikipedia definition of obesity is a condition in which excess body fat has accumulated to such an extent that it may have a negative effect on health! 

    The island of Nauru (formerly known as Pleasant Island) leads the world with a 59.85% adult obesity rate.  Japan has the lowest adult obesity rate of first world countries at 4.97%, formerly at 3%.   Perhaps too much fast food has found its way to Japan.  Currently, the lowest adult obesity rate in the world is Vietnam at 1.67%.

    Our addiction to sugar is the primary reason behind the obesity problem.  This starts at a young age eating sugar-laced baby food.  As per the Center for Disease Control (CDC), the U.S. child obesity rate among children ages 2 to 19 increased to 22.4% in 2020, up from 19.3% in 2019.  Unhealthy eating and low levels of physical activity during this pandemic will only make matters worse.

    Unhealthy supermarket shopping habits, fast food, lack of portion control, and lax food labeling laws have contributed to us trending in the wrong direction for many years.  To give you an idea of how bad this is, the average American adult consumes about 19.5 teaspoons of “added sugar” per day.  One teaspoon = 4 grams of sugar.  Take 19.5 X 4 grams = 78 grams of sugar per adult per day. 

    The food industry has 61 names to disguise sugar such as high-fructose corn syrup, caramel, maltose, barley malt, cane juice and dextrin.  Fructose is highly linked to insulin resistance and diabetes.  Creating 61 names for sugar confuses consumers and lowers the odds of recognition!

    See my top 7 tips on how to reduce your sugar intake:

    1. Be aware of boxed foods labeled as “fat free”: Fat free foods are usually loaded with sugar to compensate for a lack of fat, especially in baked goods.  Almost all “boxed” foods will have a high sugar gram content.
    2. Choose fresh fruit over dried fruit: Dehydrated fruits and sauces contain concentrated sugar and are not filling, causing one to eat more.   In many cases dehydrated fruits have three to five times the sugar than natural fruit.
    3. Buy plain over flavored yogurt: Add your own fresh fruit or honey for sweetness, which will have much less sugar.  A 1 cup serving of fruit-flavored yogurt may contain almost 31 grams of sugar.
    4. Avoid feeding infants juice or sweetened foods in their first year: Feed babies more veggies and less fruit to train their taste buds to crave less sweet foods from the beginning.
    5. Cut down weekly dessert intake: If you have dessert every night, start with cutting back to 5 nights per week.  It is easier on the body and mind to wean off the excess added sugar cravings.
    6. Leave sugar out of recipes if possible: Try to either eliminate, reduce, or substitute honey or agave instead of processed sugars.
    7. Drink water instead of sweetened beverages: Nearly two-thirds of children in the USA ages 2-19 consume at least 1 sugar sweetened beverage per day, which includes soda, fruit drinks and energy drinks.  The average 12-ounce cola contains 38.5 grams of sugar, almost as much as the average 12-ounce sweetened iced tea or lemonade as each contain almost 45 grams of sugar.

    What many people do not understand is the ripple effect these poor food habits are having on future generations.  Adult Americans have passed these habits onto our children, which is why juvenile diabetes is at an all-time high.  This causes weight gain, which leads to health problems.  These health issues can lead to popping pills, which is one reason why our health insurance costs and claims have skyrocketed to the highest in the world. 

    According to the Milken Institute, as of September 2020, the total cost of chronic diseases due to American obesity and overweight was $1.72 Trillion, which is equivalent to 9.3% of U.S. gross domestic product!

    Everybody has a unique body and frame.  Our bodies get used to the amount of sugar and calories we feed it on average every day.  By heeding my 7 tips, you should gradually lose weight, which should improve your health and energy!