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  • Covid Briefing #21

    Covid Briefing #21

    There is an old saying, “Ignorance is Bliss!”  My new saying during this Covid-19 era is “Ignorance is Super-Expensive!”  In my 30-year career, I have never seen more advisor ignorance and malpractice.  Keep this in consideration if this is the first you are hearing about this.

    There have been MAJOR CHANGES in tax deadlines and proposed changes in tax, gifting, and estate planning rules, proposed on March 29th by Bernie Sanders, which I will review below.  My “Elite 8” list of changes to be concerned about are:

    1. The Federal CARES Act One Year Hiatus on Required Withdrawals from IRA’s and Most 401k’s is Over in 2021:  This means the RMD (required minimum distribution) must be taken in 2021.  The amount is based on the age of the account holder.  For example, a 72-year-old with an $100,000 IRA must withdraw $3,906 this year.  A 75-year-old is required to withdraw $4,367 this year. 
    2. Obamacare Health Insurance Exchange Enrollment Date Extended Again: This means the health insurance open-enrollment period now is extended to Sunday, August 15th for those individuals who want to enroll.
    3. The Federal and New York State Income Tax Return Deadline was Extended: These 2 deadlines were extended from April 15th to Monday, May 17th. 
    4. Stimulus Payments Were Deemed Not Taxable: This is major news for Americans who have received one or more stimulus payments.  They are technically considered an advance on a tax credit known as The Recovery Rebate Credit.
    5. What Happens if You Missed a Stimulus Payment? You can recover it through the Recovery Rebate Credit when filing your 2020 tax return.  It can be found on line 30 of Form 1040 or 1040-SR.  Consult with your CPA or tax advisor on this.
    6. The PPP (Paycheck Protection Program) Application Deadline Extended: Eligible business owners may apply for needed funds through Memorial Day, Monday, May 31st.  For questions regarding the PPP, email me at Rob@InsuranceDoctor.us.  We can assist and connect you to banks who want to help at no cost for my Wave readers!
    7. The CDC (Centers for Disease Control) Extended the Eviction Moratorium Date: The nationwide ban on certain residential evictions was extended to at least Wednesday, June 30th!
    8. On March 25th, 2021, Senator Bernie Sanders Introduced the “For the 99.5 Percent Act”: These sweeping changes, if enacted into law, would change the way families pass money down to their children, and dramatically increase the taxes children must pay within 9 months from their parents’ death!  Proposed changes include but are not limited to: A. Reducing the current $15,000/ per person unlimited gift tax exclusion to a maximum of $20,000 per year in total.  B. Reducing the current $11,700,000 per person estate tax exclusion to $3,500,000 per person. C. Limiting lifetime gifts to $1,000,000 per person in total.

    Are you confused yet?  There has never been a more important time to rely on your advisors.  Reach out now to your CPA, Attorneys, Insurance Broker, Investment Advisor and Financial Planner to review these monumental changes.  This is what you pay them for, and your money-moves now will have an impact on your family for many years to come!  Feel free to reach out to me for guidance at Rob@InsuranceDoctor.us.

    Be Positive, Test Negative and Keep the Faith!

  • Start with Your Heart

    Start with Your Heart

    Never has your diet been more important than during what I call the current Covid-19 Era!  This is not the time to be going to the hospital or outpatient clinics for heart surgery.  One of the most dangerous aspects of Covid-19 is its unpredictability as to which body organs it chooses to attack!

    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 estimates he ate red meat 5-6x/week and had at least 2 alcoholic drinks every day except Sunday’s.  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, 5% of the total claim.

    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 it can cost significantly more money to eat healthy and organic; 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 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. Consume 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 and pinto), peanuts, lentils, green beans, 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 3’s 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 closer one will become to potentially preventing this disease from occurring!  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 food now to prevent paying a lot more later!

    Be Positive, Test Negative and Keep the Faith!

  • Better Than Pulling Teeth!

    Better Than Pulling Teeth!

                

    It is no secret that the United States of America spends the most money in the world per person on our health and well-being.  Our health systems are expensive and inefficient.  The pharmaceutical companies are getting richer by the day!

    Many Americans have been quarantining and have avoided regular medical, dental and vision annual exams and physicals, especially in 2020!  This means there will be some unpleasant surprises during 2021 regular checkups and exams.  Surprises are good on your birthday, not when it comes to your health.

    According to the CDC (Centers for Disease Control and Prevention), nationally, 50.2% of adults aged 18-64 with private health insurance, had dental care coverage throughout the past 12 months. 

    My Uncle, Gerard Meade, was one of those uninsured, when he found out last year that he was going to need over $10,000 of dental work and surgery.  This was not a surprise (maybe it was), as he had not gone for regular dental checkups in years.  It created a scramble to figure out how to reduce these expenditures, which led him to pursue “dental savings plans.” 

    The dentists gave Gerard a 2-phase treatment program.  Phase 1 was 9 surgical extractions and 2 bone replacement graphs.  As it takes time for these procedures to heal, it was then time for Phase 2, which included 2 implants. 

    The Phase 1 quote was $5,673.  Gerard used the Cigna Dental Savings Plan www.CignaDentalSavings.com which reduced his Phase 1 cost to $2,249.  At first, he thought it was a scam, that he could enroll into one of these plans for roughly $100/year as an individual (who does NOT own a business) and two days later save this kind of money with no waiting period or dental insurance policy.  That is the difference with savings or discount plans as they do NOT have the waiting periods or pre-existing condition exclusions that traditional dental insurance includes.  In Phase 2, he was quoted $4,466 for 2 implants.  He paid $3,300 after the dental savings plan applied discount. 

    His process was to first go to the dental savings plan company website to check if his dentist and surgeon accepted the plan.  Then, he double-checked by calling his dentist’s office to confirm they accepted it.  Gerard then got a quote from the surgeon which included the “dental code” and cost for each specific procedure.  He called Cigna to confirm and received the discounted pricing.  Most will agree his research time was well worth it!

    MY TOP 5 MYTHS ABOUT DENTAL INSURANCE AND SAVINGS PLANS:

    1. I own a Business and cannot get a Discounted Group Dental Insurance policy without including at least 1 employee:  FALSE!  If you are working and own a business, we have access to discounted stand-alone dental plans for yourself and your family without including any employees.
    2. I have upcoming dental work needed and there is NO way to get a discount on the procedure without a dental insurance policy: FALSE!  You can enroll in one of a variety of dental savings plans and download and use their discount card in as little as 2 days.
    3. It is almost impossible to find a dentist locally that accepts dental insurance or dental discount plans: FALSE!  Some of the insurance carriers like Cigna and Aetna also have dental savings plans.  They have “search for provider” website links, so you can find a dentist and/or surgeon in, or close to your zip code that accepts the plan. 
    4. These dental savings plan’s only cover major surgeries: FALSE!  The majority of these plans offer discounted annual checkups, x-rays, fillings, dentures and implants to name a few procedures.  Usual discounts range from 25%-60%. 
    5. I have never heard about dental savings plans before, it must be a gimmick: FALSE!  Dentists are “for profit companies,” and many dental offices are instructed to not mention these programs unless their patient brings it up first, as these discounts severely impact profitability.

    For my Wave readers who are interested in learning more, or a dental insurance quote, feel free to reach out to me at Rob@InsuranceDoctor.us.

    Be Positive, Test Negative and Keep the Faith!!

  • College Planning 4 Free Money

    College Planning 4 Free Money

    Springtime and “March Madness,” one of my favorite times of the year!  This is also the time when colleges and universities send out the majority of their “acceptance letters,” in late March and early April. 

    The pandemic has turned the college’s selection process upside down.  This has created a MAJOR OPPORTUNITY for informed parents and their students to get into a reach school and extract “FREE ENDOWMENT” money from the school of their dreams.

    It was recently announced that “Ivy League” schools and other “highly selective” institutions waived SAT and ACT requirements for the class of 2025.  According to the New York Times, “this has resulted in an unprecedented flood of applications and what may prove the most chaotic selection experiment in American higher education since the end of World War II.”  Harvard received over 57,000 freshmen applications for next fall’s incoming class, a 42% increase. 

     If the change in this process is permanent, and if your student has a special talent, the timing is perfect for positioning your student to get into an excellent school and get a huge chunk of merit-based endowment “FREE” money from that school’s endowment fund.  The best money to pay tuition is “other people’s money!”  This can be done using the “give-back theory”.

    I will explain, give you my top 5 TIPS, and an offer to get an e-book on “college scholarship negotiation strategies” FREE for my “WAVE Readers!”  My brother and I both went to Lehigh University.  Upon graduation, we started receiving donation calls from the University, asking us to, you guessed it, GIVE MONEY!  The checks we cut went right into the Lehigh University endowment fund.  Lehigh currently has $1.7 Billion in their fund. 

    Lehigh U. does NOT have to pay tax on donations as long as they distribute a percentage of the fund to incoming freshmen.  Schools give more money to students who fit a certain “give-back” profile, which is why extra-curricular and charity-based activities are so important for the college resume.  Colleges are responsible for over 90% of ALL the scholarship money that students receive, so why not go after the big money?  Colleges give money to students most likely to contribute to the school after graduation.  They are looking for “the give-back gene!”

    Other than buying a home, funding college can be the most expensive purchase parents will make in their lifetime!  The national student debt is over $1.6 Trillion, which is larger than the total of our nation’s credit card debt. 

    Heed the following tips to avoid the “cloud of debt” hanging over many of our recent graduates:

    1. Apply to a Minimum of 10+ schools: There are many reasons for this as schools compete for students.  If Michigan is your top choice, apply to Ohio State and Wisconsin (other BIG 10 schools) who are their “arch-rivals” in sports.  Using the “common application” is an easy way to do this.
    2. Consider a Personality Profile Test For Your Student: The most popular major for college freshmen is “undecided.”  If your student, like most do not know what they want to be when they grow up, try taking a personality profile quiz, which can help uncover interests.  Two tests to consider are www.myplan.com and The Big Five test.  You will be surprised with what you learn.
    3. Educate Yourself or Hire a Professional: College scholarship planning is a cottage industry and like anything else, there are excellent to poor advisors out there.  I recommend the book written by Elizabeth Wissner-Gross called “What High Schools Don’t Tell You” (and other parents don’t want you to know) or go to www.WhatHighSchoolsDontTellYou.com. The paperback book sells for less than $20 on Amazon.
    4. Considering Repositioning Parental Assets And Spending Down Your 529 Fund Now: Parents who have collegebound high school juniors or younger, should consider repositioning parental assets into “FAFSA Friendly” vehicles like annuities and cash value life insurance that DO NOT count towards the FAFSA.  Every $100,000 repositioned opens the possibility of over $20,000 of FREE Endowment Money!
    5. Visit Schools That Accept Your Student:  The visit AFTER you are accepted is totally different than before when you are “just looking.”  Often that 2nd visit results in more FREE Money being offered to incentivize your student to attend.

    This is the time when high school seniors (and some juniors) are receiving their acceptance letters which include “Endowment” offers.  These letters are confusing to students trying to decipher which monies are FREE “Grants,” and which are loans and work-study programs.  There are strategies on how to NEGOTIATE increases to these offers. 

    For my Wave Readers interested in a FREE E-BOOK on how to negotiate an increase in offers, email “Please send college EBOOK” to me at Rob@InsuranceDoctor.us. 

    Be Positive, Test Negative and Keep The Faith!

  • The American Rescue Plan

    The American Rescue Plan

    On Thursday, March 11th, President Joe Biden signed The American Rescue Plan into law almost a year to the day when it was acknowledged that Covid-19 had hit the USA, and it was deadly!

    This is the 3rd stimulus program since the pandemic has begun, and the question on most people’s minds is “Where is My $1,400 Check?” This third round of economic stimulus will be based on the taxpayer’s last processed tax return, from either 2020 or 2019.  That includes anyone that used the IRS’s non-filers tool last year or submitted a special simplified tax return.  The $1,400 is per adult.  The boost to the child tax credit will give eligible parents a total of $3,600 for each child under age 6 and $3,000 for each child under age 18 for 2021.  Until now, the credit was up to only $2,000 per child under age 17.  For large families who qualify, this can be a windfall!

    The US Treasury claims that almost 85% of Americans will qualify, based on income:

    1. $1,400 for a Single Filer: Individuals earning up to $75,000 AGI (adjusted gross income) would receive $1,400, which would be reduced by 20% for every $1,000 earned between $75,000-$80,000.  In other words, someone who earned $76,000 receives $1,120 ($1400-20% or $280) and one earning $77,000 receives $840 etc.
    2. $2,800 for a Married Couple Filing Jointly: Couples earning up to $150,000 would receive $1400 each but would lose 10% for every $1,000 up to $160,000.  Couples (filing jointly) would be ineligible if earning over $160,000. 
    3. $1,400 for Heads of Household: A head of household earning up to $112,500 would qualify for the full amount.

    There are different opinions on the new $1.9 Trillion American Rescue Plan as no Republicans voted “yes” in either The Senate or House of Representatives.  To give you a frame of reference, our current national debt is roughly $22 Trillion, meaning we are printing up to 9% of our national debt in new paper.  In 2020, we increased the money supply by 24% with the two 2020 stimulus payment packages. 

    This recovery package is designed for our country to bounce back with money set aside for the child tax credit, small businesses, restaurants, closed venues, extended unemployment, and state and local governments, to name a few. Only 9% of the $1.9T is going directly to Covid-19 relief. 

    HERE ARE MY 4 TIPS ON HOW TO MONITOR RECEIVING YOUR PAYMENT AND IN WHAT FASHION IT WILL BE RECEIVED:

    1. Complete Your 2020 Tax Return As SOON As Possible: If you earned more money in 2019 than 2020, the $1,400 check qualification is based on your 2019 return unless you get your 2020 tax return processed as soon as possible.
    2. Consult Your CPA or Enrolled Agent: If you did not receive the last stimulus check and should have qualified, you can pick it up as a discount on your 2020 tax return.
    3. Get Familiar with the IRS Website www.IRS.gov:  The IRS has updated their website with their “GET MY PAYMENT TOOL.”  You can go to www.IRS.gov/coronavirus/get-my-payment.  The “get my payment” button requires you to input your full social security number/tax ID, date of birth, street address and zip code.  This tool will be updated only once/day, usually overnight.
    4. Be Patient and on the Lookout: For those that received the first 2 stimulus checks and did NOT receive the checks by direct deposit, The Treasury will be mailing you a check or debit card.  Both Chase Bank and Wells Fargo are already having delays.  These types of payments are sent out in groups called “Tranches.”  If your address has changed, the easiest way to update it is to file your 2020 tax return with your new address.  Stimulus payments will be sent out through the mail as a check, debit card or via direct deposit, if you are already set up.

    In the coming weeks, more “Tranches” (batches) of payments will be sent via direct deposit, or through the mail as a check or debit card.  Some people have cut their stimulus debit cards thinking it was a sales promotion.

    Stay Positive, Test Negative and Keep the Faith!

  • The Game is Changing!

    The Game is Changing!

    The media coverage of the GameStop Corp (GME) stock trading fiasco grabbed the attention of Wall Street, the public, regulators, and politicians alike!  GameStop is a video game retailer whose stores can be seen in shopping and strip malls.  What happened to GME may morph into new investor strategies, a new way of uniting litigants, new regulations and increased executive risks for companies and their leaders!

    For those that missed it, some are calling it “Wall Street vs Main Street!”  There are a dozen pending lawsuits filed against Robinhood Markets, Inc., an online brokerage firm, by investors (i.e. customers) who were denied the ability to trade certain stocks.  Individual investors teamed up on Robinhood and other investment websites to push up the GameStop stock price to negatively affect hedge funds who were betting on the stock price to go down i.e. “shorting” the stock!

    Small business owners (and their employees) form the backbone of this country.  The pandemic has been tough on small businesses and now there are a host of other risks that small businesses should be concerned about and strongly consider transferring these risks to an insurance company.

    Recently a client of mine (he is retired and the former CEO of a major company that makes toothpaste and other household goods) told me that he turned down a lucrative offer of $250,000/year to sit on the board of another large and well-known firm.  He said, “There is no way I can take that risk for a company that does not have Board of Directors’ insurance” (AKA Directors) and Officers liability insurance.  This was an eye opener for me as I was just asked to sit on the board of a local Chamber of Commerce. 

    Let’s face it, times are tough, and we are in a litigious society where people are suing companies and individuals for a variety of reasons.  Whether or not the allegations are true, defending lawsuits take time and money.  Your business reputation can take a hit, win, or lose. 

    The bottom line is, a Board Member can be personally sued for a company’s mistake if that company does NOT have an employee handbook or Directors and Officers (D&O) insurance! 

    I reached out to our D&O expert, Ken Jones, from Coastal Risk Management on this matter, and he said, “This is happening more and more.  The Cyber Security and D&O markets are very tough right now as there have been a tremendous amount of losses, and the payouts are nuclear in size!  Expect the markets to tighten.”

    I took it a step further and looked at the Chubb Insurance company’s current D&O application for companies with up to 250 employees.  Their Directors and Officers policy lists the following coverage options:

    The application asks specifically, does the applicant (business owner) have written procedures in place regarding:

    What does this all mean to me, you might be asking?

    As an employee, you should be asking for either an employee hardcopy handbook or PDF file to review your rights, coverages, protections, and company procedures in place “just in case” something happens.

    As a business owner whether small or large, you should be checking to see if you have policies such as “errors and omissions,” “directors and officers,” and cyber security policies.  For companies with less than 25 employees, these policies can be inexpensive.  The real question is, can you afford NOT to have policies for these risks in place?

    To get a quote or policy review from our expert, reply “quote D&O” to Rob@InsuranceDoctor.us and we will get right on it!

    Be Positive, Test Negative and KEEP THE FAITH!

  • Protect YOUR Castle!

    Protect YOUR Castle!

    Protecting The House!

    There is a saying, “Water is Life!”  We cannot survive without water after a few days.  Look at the situation in Texas right now.  Too much water leads to death and destruction.  Rockaway learned that from Super Storm Sandy and to a lesser extent Hurricane Irene.

    On August 29th, 2005, Hurricane Katrina ravaged the gulf coast near New Orleans, in Louisiana, Mississippi, and Alabama.  There were 1836 fatalities as 175 mile-per-hour winds brought widespread destruction, flooding and left millions homeless.   The damage was estimated at $125 Billion, which has made it the costliest storm in U.S. History!  There were many complaints about how the Federal Emergency Management Agency (FEMA) responded.

    Hurricanes Katrina, Harvey, and Irma wiped out FEMA’s coffers!  In 2017, Congress bailed out the NFIP (National Flood Insurance Program) with $16 Billion in debt relief!  

    Scientists say these natural disasters and flooding will get worse because of:

    1. Climate Change
    2. Rising Sea Levels
    3. Rapid Development in Coastal Regions

    Part of the current problem is that the premiums are determined by the amount of insurance purchased for the home, instead of the replacement cost. An example best clarifies this.  The owner of a $2.5 million mansion with the same risk as a $250,000 home pays the same premium even though repairing the mansion would cost significantly more.  In other words, expensive homes are paying too little and inexpensive homes are paying too much.  There are also disparities at the edges of the flood map zones. 

    According to USA Today, on October 1st, 2021, thousands of homeowners in the riskiest of locations across America will be facing massive rate hikes when The NFIP (National Flood Insurance Program) releases its “Risk Rating 2.0” program!  For the first time, individual premiums will be tied to each property’s actual flood risk.  This will level the playing surface so that properties with the biggest risk will pay the most.

    The National Flood Insurance Program, implemented in 1968, provides approximately 95% of the country’s flood insurance, which includes about 5.1 million policies. The old system fails to accurately assess the “true risk” of flooding.  Because of this, NFIP only takes in approximately $4.6 billion in annual revenue.  While this sounds like a huge number, they provide over $1.3 trillion in coverage, which leaves them with excessive exposure.  The new model should rectify some of this.

    Currently, the National Flood Insurance Program Policy maxes out payouts at $250,000 (called dwelling coverage) for structural damage regardless of the value of the home.  The limit on contents is $100,000, meaning the maximum you can collect is $350,000 regardless of the replacement value of your house and contents. Nobody knows this better than I since we lost our Belle Harbor beach house due to Super Storm Sandy!  We had a positive claims experience with FEMA by following these 3 crucial claim tips:

    My Top 3 Claim Tips Are:

    1. Call FEMA and Ask for a Copy of the Policy: When most people call, they are upset and not thinking clearly.  The insurance companies are sneaky and will start typing up the claim on the spot.
    2. Regurgitate Policy Wording on the Claim Form: This is why it is critical to have a copy of the policy.  By using their coverage language verbatim on the claim form, they cannot reject it!  That was the key for us to maximize our family’s claim!
    3. Be Specific Listing Your Contents: It is not easy to remember each lost item in your home when you are emotionally involved.  We used the website www.KnowYourStuff.org. These types of sites give you trigger lists of what are typically in each room, such as your kitchen, living room, dining room etc.

    FEMA’s existing flood zones will not be a factor in rates so those homes outside the flood zones could see a rate reduction.  The new policies will calculate premiums based on each home’s replacement value and specific features.  The claim triggers will also include a broader range of flooding events, such as tsunamis, heavy rainfall, and coastal erosion. 

    You may be asking yourself, what does this all mean? 

    1. The most expensive coastal homes will have the largest price increases.
    2. New policy buyers after 10/1/2021 will bear the brunt of the premium increases.
    3. If you are thinking about buying a flood policy, I suggest purchasing BEFORE October 1st to lock in your premium because:
    4. Expected rate increases for existing policyholders after October 1st will gradually increase with an 18% per year cap.
    5. High-risk states that will be MOST affected are Florida, South Carolina, and New Jersey.  Broward County, Fla. is the highest flood risk area in the country!

    For those of you who want more information or quotes, feel free to reach out to me at Rob@InsuranceDoctor.us  Be Positive, Test Negative, and Keep the Faith!

  • Marijuana, the Lesser of Two Evils?

    Marijuana, the Lesser of Two Evils?

    As of the writing of this week’s column, New Jersey Governor Phil Murphy was granted an extension to negotiate with lawmakers on two bills to legalize and decriminalize marijuana in New Jersey.  This is after the measures passed both houses of Legislature on 12/17/2020. 

    “Voters overwhelmingly support the legalization of cannabis and we are taking every step necessary to assure legalization and decriminalization become law,” said Assembly Speaker, Craig Coughlin!

    Looking at this issue financially, it’s a no-brainer.  In 16 states, marijuana is fully legalized for both recreational and medicinal purposes.  13 other states (including New York) have decriminalized and legalized medicinal marijuana use.  There are now only 6 states where marijuana is fully illegal.  Legalizing the drug would be a tax revenue boon for a broke New York State, which Governor Andrew Cuomo has already admitted. 

    I have concerns with this as there will be ripple effects far and wide from legalizing recreational pot in New York State.  Medicinal marijuana has been legal in New York State since 2014.  My first concern is underage children and this easy access to pot potentially getting kids hooked on the drug.  Other issues are regulation, law enforcement and DUI (driving under the influence) of drugs.  People are preoccupied enough on the roads with Covid-19.  It stands to reason if pot is fully legalized then New York State would consider releasing prisoners with non-violent, marijuana possession only records.  New York State spends over $70,000 per year per inmate, the most in the country.

    Conditions we know medicinal marijuana can help:

    1. Chronic Pain:  According to the CDC, (Center for Disease Control) 20.4% of Americans are suffering chronic pain issues.  A developing field in medicine is the application of MM (medical marijuana) to alleviate chronic pain as al alternative to opiates.  This field has gained popularity due to the lack of addictive qualities of MM compared to opiates.
    2. Lack of Appetite: Conditions like cancer can sap a person appetite which is dangerous as the body needs the proper food and nutrients daily.
    3. IBS (Irritable Bowel Syndrome): Medicinal Marijuana eases nausea and pain which makes it a viable option to treat IBS.
    4. Lou Gehrig’s Disease AKA ALS: ALS (Amyotrophic Lateral Sclerosis) is a debilitating neuro degenerative disease that progresses in patients over time.  It affects neuro cells in the brain and spinal cord slowly reducing neuro and motor functions over time.  MM has been proven to slow down the degeneration. 
    5. PTSD AKA (Post Traumatic Stress Syndrome):  PTSD is running rampant in America, especially over the last year during Covid.  Medicinal Marijuana (CBD AKA Cannabidiol) seems to breakdown a chemical in the brain that affects pain, mood, and anxiety.

    There are a variety of conditions or diseases one can be suffering from to obtain a Medicinal Marijuana ID Card which can differ slightly by state.  In general, see symptoms and the process below:

    1. Conditions Most States Include Chronic pain, cancer, HIV/Aids, PTSD, IBS, neuropathy, epilepsy, ALS, spinal cord injury, Parkinson’s, and Hepatitis C to name a few.
    2. Doctor Sign Off Form:  One needs to find a doctor to sign off on the medical marijuana form.  This can be difficult as some doctors are hesitant to prescribe it!  Some reasons are moral, and others are a lack of belief insufficient scientific evidence proving its effectiveness.
    3. Proof of Residence: After proving one is suffering from a condition on their state’s acceptable list by getting a physician sign off, one shows proof of residence like a driver’s license or passport.
    4. Interview with Physician: In areas where MM is legal, patients are approved through a MM recommendation and evaluation conducted by a physician with a medical cannabis license.  Once approved, a patient can legally purchase, possess, and in certain states cultivate their own plants.  For more information go to www.MarijuanaDoctors.com.

    Be Positive, Test Negative and Keep the Faith!!

  • Disability Income Insurance. Can you afford NOT to have it?

    Disability Income Insurance. Can you afford NOT to have it?

    Imagine that you own a “SPECIAL MACHINE” that you keep in your basement.  This machine is programmed and able to PRINT MONEY!  How would you treat it?  More than likely, you would baby it and keep it well-oiled, perhaps put a cover on it to prevent it from getting dusty.  You would do everything in your power to PROTECT AND INSURE IT! 

    You would call the insurance company (or your agent/broker) to get a quote for “CASH MACHINE INSURANCE” and they said it would cost between 2%-4% of the amount of money it prints out per year.  This would not be so bad, right?   Think of YOURSELF as the CASH MACHINE, and the cost to replace a portion of your annual income is that 2%-4% insurance premium. 

    The purpose of disability income insurance is to replace the income when one is left unable to work.  Most working Americans need their income to survive!  Because wage earners almost always depend on an income stream, protecting this income is CRITICAL towards financial security!  Yet, well over 100 million working Americans have no private disability income insurance. 

    Many people have a misconception that accidents are the #1 cause of disabilities.  This is incorrect, as the number 1 CAUSE for disability is DEPRESSION/MENTAL NERVOUS.   These cases are now way up due to Covid-19.  Back pain is the number 2 cause.

                There are 2 types of disability income insurance:

    1. Group Disability Income Insurance: Group disability income insurance is usually offered by an employer at no cost or for a nominal fee/premium taken out of your paycheck.
    2. Individual Disability Insurance: Individual disability income insurance (DI) is usually purchased from an agent or broker, somewhat akin to life insurance. 

    Disability income (DI) is a unique type of insurance.  It is CRUCIAL insurance that protects against the loss of income when the policyholder is unable to work for months or years following an injury or illness.

    This is one area of insurance where “broker error” and “CPA error” can really hurt you.  These are THE BIGGEST MISTAKES your broker and/or CPA can make:

    1. Selling Based on Price: This is a common mistake agents and brokers make to “just make a sale.”  There are 5 or 6 companies in New York State that offer strong plans; however, there are differences between policies that must be pointed out.
    2. Using the Disability Insurance Annual Premium to Take a Tax Deduction:  Many accountants and agents make mistakes by getting greedy and suggesting taking the small tax deduction which can have enormous lifetime repercussions.  If DI policies are paid with “after-tax” dollars, then ALL the monthly benefits are received INCOME TAX-FREE!  If disability policies are paid with “pre-tax premiums,” then ALL the benefits received are 100% taxable!  For example, a 40-year- old that gets permanently disabled would receive 25 years of monthly income benefit to age 65 that would ALL be taxable because of “bad advice” from their insurance broker and/or CPA. 
    3. Incorrectly Completing the Disability Insurance Application:  Completing these disability insurance applications can be an arduous process.  Many insurance agents cut corners and rush this critical part of the process. 
    4. NOT Selling a Disability Policy with “OWN OCCUPATION” as the Definition of Disability:  It irks me to review the policies that others have sold without this critical definition.  See the example below.

    To best explain errors 3 and 4, an example should make it clear.  If a right-handed surgeon gets his or her right hand mangled in a car accident and they have “OWN OCCUPATION” as their definition of disability, they can go on a claim and (while getting paid on a claim) supervise others.  The “OTHER DEFINITION” would be something akin to “they cannot work in ANY AREA of their chosen field.”  In this scenario, the surgeon would NOT be on claim and forced to take a MAJOR PAY CUT!  The problem with group disability is that very few of those group policies have the “OWN OCCUPATION DEFINITION OF DISABILITY,” which can make the difference between going on claim or being ineligible.  If you own individual disability income insurance, I suggest going to your policy’s declaration page 1 and reading your definition of disability! 

    Back in 2009 my friend, John, called me and asked for help.  (John and his Mother were existing life insurance clients).  John had applied and been rated double the standard premium rate for disability insurance and asked for my help after apologizing that he did not know I handle this type of insurance.  He is a physical therapist who was employed at the Rikers Island outpatient facility and he had a side gig supervising exercise programs for seniors at their homes after their hospital discharge.  His previous broker did NOT ask him the proper questions and incorrectly completed the DI application listing 100% of his time spent at Rikers.  John earns about $100,000 annually, was 38 at the time, and in excellent health as a non-smoker.   

    After further discussions, I discovered John was splitting his hours equally between the 2 jobs.   Thus, I crafted his application showing the split to a different insurance company.  In conclusion, I was able to reduce his premium in half to $250/month for a $5500/month income benefit to age 65.  John called me 3 years ago as he was unfortunately beaten up at Rikers Island in an unprovoked vicious attack and is now on permanent disability collecting TAX-FREE monthly checks for another 16 years until he turns 65!

    For individuals and families, this is must-have insurance!  A good profile candidate is age 25-50 and earning a minimum of $75,000/year.  White-collar jobs are usually less expensive than blue-collar due to injury risk. 

    For a FREE policy review or to discuss disability income insurance quotes for you or your business email “contact me re disability” to Rob@InsuranceDoctor.us.  Stay Safe and Keep the Faith!

  • Bidenomics- Part 2

    Bidenomics- Part 2

    Since Joe Biden was inaugurated on the 20th of January, it is a good time to address some changes he might make based on his platform. The question is, what does “BIDENOMICS” mean to your wallet or purse?

    Over the years, I have found that politicians’ actions are often incongruent with their words. Here are some of his proposed tax changes:

    1.   Those Making Under $400,000 Will Be Unaffected: His proposal is to leave those earners alone and add a “Social Security Increase Tax” of 6.2% on ALL income earned over $400,000. Social security is in jeopardy as baby boomers (10,000 people turn 65 every day) born from 1946-1964, are withdrawing social security benefits faster than working Americans are contributing; hence, the affluent would be bridging the social security gap. 

    2.   Income Earners Over $1,000,000 Would Incur Higher Capital Gains Taxes: Americans with over $1 million in total income would see income received from dividends, as well as capital gains, taxed like their wages. In this scenario, if you had a stock or business sale, your capital gains tax doubles from 20% to roughly 40%. This would change many business and investment decisions. You should consider making those sales now, as usually these changes are “Grandfathered.”

    3.   Corporate Tax Rates Would Be Increased: His proposal would increase corporate tax rates from 21% to 28%, a 33% increase. This is a big change that could have corporations reevaluate moving or setting up subsidiaries overseas. 

    In essence, his proposals would be taxing the rich and protecting the middle class. Based on our current national and state budget deficits, I do see the middle class paying more taxes eventually.

    President Biden has vastly different viewpoints on many issues than former President Trump, especially on energy, climate change, health care, and infrastructure. The “Green New Deal” was a centerpiece in Biden’s campaign.

    Some areas where President Biden said he would concentrate on include:

    –      Traditional Infrastructure

    –      Digital Infrastructure

    –      Electric Cars

    –      Cannabis

    –      Telemedicine

    –      Green and Clean Energy

    There has been much unhappiness and angst over the fact that Congress had taken so long to pass an additional stimulus package, since the one that ended on July 31, 2020.

    Some highlights of Biden’s $1.9 Trillion stimulus relief plan called The American Rescue Plan include:

    –      Extended Unemployment Benefits ($120B)

    Jobless workers will get $300-$400/week through September 2021.

    –      Schools and Colleges ($170B)

    –      The Federal minimum wage increases to $15/hour.

    –      COVID-19 ($100B) includes $70B to expand testing and immunization centers and $30B for PPE.

    –      A 2nd Stimulus Check ($166B)

    Individuals making less than $75,000/year receive $600, couples making up to $150,000/year receive their target $1,400 and $600/child.

    –      State and Local Governments (350B)

    –      Small Business Boost ($325B) Including

    Triple P (Paycheck Protection Program) Funding ($284B) plus $20B for businesses in low-income communities, and $15B for struggling live venues, movie theatres and museums to name a few venues.

    What we do NOT know:

    1.   How much money the government will continue to print?

    2.   When or if the Covid-19 virus will end?

    3.   When will companies bring people back to work or IF they will bring employees back?

     What we DO know:

    1.   Income taxes will go up on the wealthy!

    2.   Estate taxes will go up on the wealthy!

    Biden’s Taxes on Wealthy Estates: example of a $100M estate (#’s are in Millions)

    Value of the Original Asset  ($100M)                                      $100

    Cap gains taxed as ordinary income 39.6% + 3.8% NIIT*=  43.4%

    Capital gains tax owed:                                                              $43.40

    Value of the Remaining Estate:                                               $56.60

    Biden’s estate tax exemption ($3.5 million)                             $3.50

    Taxable estate                                                                               $53.10

    Biden’s estate tax rate (45%)                                                        45%

    Taxes owed on the estate                                 $43.40+         $23.90

    Total taxes paid on a $100 million asset                   =          $67.30

    Effective tax rate                                                                          67.3%

    *Note: NIIT (Net Investment Income Tax) is an Obama care tax.

    This may or may not happen; however, if everything Biden proposed becomes law, there will be a renewed interest in ILIT (Irrevocable Life Insurance Trust) owned life insurance to leverage off life insurance companies (instead of paying dollar for dollar) to pay these estate taxes (due 9 months from death in cash) with pennies on the dollar, which my firm we can assist with.

    Feel Free to reach out to Robert Intelisano CLU, CSA, LUTCF who is a CSA (Certified Senior Advisor) and owner of Intelisano & Associates, Inc. since 1999 at Rob@InsuranceDoctor.us.