The Insurance Doctor

Category: Life insurance

6 Tips to find the RIGHT insurance broker

One thing this pandemic has done is flush out poor advisors, as there is no hiding during Covid-19. CPAs, Attorneys, Insurance Advisors, Stockbrokers and Financial Planners should be well-aware of the latest Covid-19 updates, income tax and estate tax rule changes to properly advise their clientele.

I have been on many Zoom Panels, Seminars, Workshops, and Podcasts over the last 14 months, and it is disturbing how clueless many advisors are! I feel bad for those that are taking their advice.

Insurance brokers and agents are trusted with matching their clients with the most suitable life, health, homeowners, auto and business insurance policies.

Every insurance company has a specialty niche product and pricing sweet points, they are not all the same! It is important that your broker of choice is well-versed in policy differences from one company to another, and is informed of the latest news, trends, and new advanced products coming to market. Your broker should understand your needs and concerns and be capable of explaining your options in a simple and understandable fashion.

Follow these tips on what to look for in finding the right insurance broker or agent:

TIP 1: Knowledge and Experience: There is no substitute for experience. Look for brokers that have been in their field for a minimum of 5 years. The better ones will also have advanced planning designations (higher education) next to their names. Look for at least one of the following 3 designations: CLU (Chartered Life Underwriter) CFP (Certified Financial Planner) or CSA (Certified Senior Advisor). The more designations, the more educated and well-rounded your broker will be.

TIP 2: Independent Agents: The following may be counter intuitive. Brokers are in a better position to help you than “captive agents” thatIndependent only represent one company. Independent brokers represent you client, and offer numerous insurance policy options. They must be well-versed on all policies to find the best fit for you. Captive agents (i.e. Allstate, New York Life etc.) are employees of their respective companies. They usually offer proprietary products first to qualify for their company-sponsored trips and subsidized health insurance. Make sure your agent places your needs before their own!

TIP 3 Fee Structure: Most of the established independent brokers do not charge a fee for time or services. They receive compensation from whichever insurance company you decide to do business with. Beware of agents, planners and advisors that charge steep upfront consultation fees!

TIP 4 Get a Second Opinion: Most people are already working with an agent or broker. Do yourself a favor and get a second opinion using the tips given in this article. You will be surprised at what you can learn from a free consultation with an independent broker.

TIP 5 Due Diligence: Invest the time to call several brokers. Start a list and seek advice from friends, family, or colleagues that are satisfied with their broker. Check reviews on google business, the internet and gather as much information as possible.

TIP 6 Quality Service: Part of quality service is timely service. When you call around, make a note of how long the advisor takes to get back to you. Usually, like a first date, that first communication sets the tone for the relationship.

President Biden has outlined his proposals for sweeping income and estate tax changes. These proposals, if passed, can and will affect multiple generations of Americans going forward. Not knowing about these rules while advising clients is a form of advisor malpractice.

If these 6 tips fail, reach out to me at Rob@InsuranceDoctor.us!

May 17, 2021
Thinking Clearly in the Middle of Chaos
You don’t need me to tell you that this country is upside down right now. There has never been a more important time to think clearly and adapt to the current situation. With 40 million unemployed and another 10 million not seeking work, many are in a “financial” survival mode. One in three Americans have yet to receive their unemployment checks! Most advisors suggest keeping an “emergency fund” of 6 months income. Even for those who have heeded the advice, the six-month fund is dwindling as New York City has been slow to reopen.

The way unemployment is structured, with the Federal Government adding $600/week in addition to the state unemployment benefits, can be a deterrent to employees returning to work. In New York State, the maximum is $504/week plus the $600= $1,104/week. This could represent a raise for many, so why go back to work when you can stay home and possibly earn more money? New Jersey caps out at $681/week, Connecticut at $649. Florida has the lowest cap at $275; however, they have no city or state income tax. The highest cap is Massachusetts, which has a range of $769-$1,220 depending upon the eligibility. These numbers don’t mesh well with the Paycheck Protection Program (The Triple P), because business owners have to spend the money now over the next 8 weeks when their employees refuse to return to work.

The public knows this “generosity” won’t last forever, so many are tightening up on their spending. If you’re on a salary, you can’t increase revenues, only decrease expenses. Here are a few tips to reduce expenses:
1. Whole Life Insurance: If you have a traditional dividend-paying life insurance policy (the older the better), consider changing your dividend option to “reduce premiums.” For example, you have an old $50,000 policy, the premium is $1,000/year and your dividend is currently $600. You can change the $600 dividend to “reduce the premium” and now you would only have to pay the $400 difference, saving you 60%.
2. Auto Insurance: Since many are self-quarantining, auto insurers are reducing prices. Some are giving credits. It’s a good time to shop the auto insurance market.
3. Life Insurance Settlements: During the Covid-19 pandemic, “Life Insurance Settlements” can be a lifeline for seniors who could be struggling financially, and who own a life insurance policy in danger of lapsing. These policies can hold significant re-sale value. We have been able to sell policies with zero cash value for 20%-30% of the death benefit. It’s important for seniors to realize they can sell their policy for a lump-sum of cash, instead of having to continue to pay premiums. We have 23 Funders who bid against each other in an auction, which ensures our clients will get the maximum lump-sum offer.
Feel free to reach out to me to continue these conversations at Rob@InsuranceDoctor.us or www.InsuranceDoctor.us and complete our simple contact e-form.

Be Safe and Wash those Hands!
June 3, 2020
Lost? 6 Steps for Finding a Lost Life Insurance Policy
When people die, it’s not uncommon for their life insurance benefits to remain unclaimed because their beneficiaries didn’t know about the policy. Life insurance companies try to contact beneficiaries however people often move, don’t check their emails and sometimes change their names. Fortunately there are solutions for tracking down policies by using these 6 tips!
1. Search for insurance documents: Look through paper files, financial folders, safe deposits boxes or home safes. Check for bills, the insurance broker’s business card, the cell phone or address book of the deceased for information.
2. Check financial records: Check bank statements, financial ledgers and copies of checks to see if payments were made to any insurance companies.
3. Contact the decedent’s employer: If the decedent was employed or recently left a job check with their employer. Many companies offer small group term policies that could cover funeral expenses. Also these group plans may have been continued or converted into a permanent policy when the job ended.
4. Contact the unclaimed property office: Every state has a department for unclaimed property. If a life insurance company is aware of the death of a policyholder and cannot locate the beneficiary, the policy is reported to the unclaimed property office in most cases. The funds are submitted to the unclaimed property office in the state where the policy was purchased. If the decedent moved several times it may be necessary to contact the offices of each state they resided in the past.
5. Check the MIB database: The MIB group is a not-for-profit company made up of life and health insurance affiliates. They keep a database of all policies written in 1996 or after by companies that are members of the group. Since the fee is about $75 save this as the last resort.
6. Tell family, beneficiaries and/or friends: Many people never tell their beneficiaries about their policy because of the grim nature of the subject. We suggest completing a simple “estate directory” which lists policies, beneficiaries and where the files are being kept. To learn more feel free to contact us at Rob@InsuranceDoctor.us.
October 2, 2019
The Magic of Premium Finance Life Insurance

By: Robert C. Intelisano CLU, CSA, LUTCF

How does it work?

Those who don’t understand the true benefits of life insurance premium financing worry this is a tool dependent on interest rates or policy performance. But even when interest rates have been high and markets have been shaky, financially savvy brokers have been closing deals by funding life insurance premiums.

Why? Because in order for high-net-worth individuals to continue to grow and protect their wealth, they need to take advantage of leverage and actively look for investment opportunities that yield returns greater than the cost of capital. In other words, many need life insurance to address inheritance, business and tax issues, but they’d prefer to keep the funds they would spend on life insurance premiums in investments that yield more profitable returns.

The economy, although sluggish, is moving again, and with rates hovering at all-time lows, premium financing life insurance makes more sense than ever.

The reason? Retained capital.

In this instance, retained capital is the amount of money a client can hold on to — and ultimately invest elsewhere — by paying interest on a loan that covers the cost of a premium versus paying the premium itself. Many high-net-worth clients report that they earn 10 percent to 15 percent or more on their money. If that’s the case, why take funds out of profitable investments in order to pay a premium?

But let’s be clear. Premium finance is not a gimmick. It is not free insurance. It never was and never will be. It is not a play on the potential arbitrage between policy crediting rates and interest rates. Your client will have to pay interest to a lender and will have to post collateral equal to the difference between the cash surrender value of the policy and the loan balance. It is simply a tool to help your client reduce the initial out-of-pocket expenses relating to the purchase of a life insurance policy and a way to keep their money working for them in their investments of choice.

To finance or not to finance?

To better understand what an asset premium financing can be, we have to look at the potential profit our clients would lose out on if they don’t use it. In other words, the lost opportunity cost. So, let’s take a look at the numbers and consider the lost opportunity cost of paying a $100,000 premium out of pocket.

If an individual truly earns 10 percent on the funds he would use for a premium payment, then he would lose the opportunity to grow his net worth by $10,000 if he were to pay the premium himself. Utilizing the benefits of premium financing, if the client finances the $100,000 premium at 5 percent interest, his out-of-pocket cost in year one is $5,000, and his retained capital is $95,000. That client could re-invest the $95,000 in a vehicle that returns 10 percent and end the year with $104,500 and a life insurance policy to protect those assets. Over time, this growth compounds. This is the power of premium finance!

June 9, 2016