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You hear a lot in the media debating the merits of term life insurance versus the merits of permanent life insurance policies, including whole life and universal life insurance.

Anyone who advocates 100% for or against any kind of life insurance structure is missing the point: The best type of insurance to own is the type that is in place when the insured dies!

And here is the addendum to that rule: The best amount of life insurance to purchase is the amount you can easily afford.There is a place for term life insurance, and a place for permanent life insurance. The most important principles to bear in mind are these: Purchase the policy that:

1.) You can afford, 

2.) Best fits your need, and

3.) Is most likely to be in force when you pass.

Focus on these three things!

Term Life Insurance

Term insurance is designed to be affordable, with a large death benefit.  The trade-off is that term insurance, as the name implies, is temporary. It is valid for a set number of years, typically 10, 15, 20 or 30 years during the set time-period, if you have kept current on your premiums. 

There are new term policies that can run up to 40 years just approved in New York State, so a 45-year-old non-smoker can purchase an inexpensive term policy up to his/her age 85.  This can be a game-changer!

The younger you are when you purchase term life insurance the better, because your rates are locked in. Conversely, the older you are when you first buy the policy, the more expensive the premiums will be. Your health condition will be considered when premiums are set.

Term life insurance can be a good fit for younger families who need a large death benefit at an affordable cost, to protect them against the potentially catastrophic loss of a breadwinner.

Permanent Life Insurance

Permanent insurance is designed to pay a death benefit even if you live to a ripe old age, and it does not expire if you keep paying the premiums. There are two basic varieties: whole life and universal life.

Whole life policies feature a guaranteed death benefit for life, guaranteed-level premiums for life, and guaranteed growth in cash value. In other words, it has a death benefit, and the savings component has a fixed interest rate that builds cash value over time.  Usually, life insurance companies will pay a higher interest rate than banks, sometimes as much a 1-1.5% higher.

Universal life policies feature a guaranteed death benefit, along with a cash-value component as well. They offer more flexibility than a whole life policy. For example, universal life policies allow you to increase or decrease your death benefit and the policy’s cash value can eventually grow and result in a zero-cost policy, in which all premiums are paid from the cash value you have amassed. 

Also, the interest rate on the cash value component is not fixed. Instead, it has a guaranteed minimum interest rate, but the rate can change over time based on market conditions.

Upon Review:

Term life insurance is the most affordable protection for young people; however, term policies are actuarially designed to lapse. Only 2% to 5% ever pay a claim.

Therefore, while term provides the most protection for new policy purchasers per dollar of premium, if it is secured later in life, it can be cost prohibitive.

With permanent policies, it is quite the opposite. Whole life policies require a larger premium commitment for the same amount of death benefit. It is like owning vs renting a house.  Owning costs more/month; however, you are building equity and can turn a profit later. 

A universal life policy costs less (it can be 20-40% less) out of pocket than whole life. If the policy owner contributes enough premiums into the policy, they can build cash value very quickly. In the long run, if you live to your actuarial life expectancy, you will receive more benefits from a whole life policy than you put into it, either via cash value or via the death benefit.

In addition, the newer policies have living benefits (long-term care like riders) that you can access to pay for some health care needs later in life while you are still living.

Are you confused yet?  We have access to more than 100 A-rated life insurance companies.  Newer policies have living benefits that older policies do not.  Do yourself a favor and review your life insurance.  Feel free to reach out to me for a free review at Rob@InsuranceDoctor.us!

Americans love their pets! Almost 7 of 10 households in America have a pet, many treat their pet like a family member.

The number of pets has increased in the past year due to the pandemic.  There are health benefits (mostly with dogs) to owning a pet, such as more exercise and lower stress and depression levels.  Dogs have 60 times more sense of smell than humans.  This allows them to detect illnesses, such as epileptic seizures and the presence of some types of cancers. 

It can be heartbreaking when a pet becomes ill or passes away.  Pet illnesses can also break your bank account!  I have seen Veterinarian bills in the thousands!  Just like shopping for your own health insurance, pet health insurance (PHI) can be complicated and expensive.  “Lassie,” America’s favorite canine TV star, was issued the nation’s first pet insurance policy in 1982.

Pros to buying a pet policy include, but are not limited to:

1. Eligibility: Cats and dogs are eligible for pet health insurance (PHI) as young as 8 weeks, up to 12 years old.
2. Premiums: Premiums are lower when your pet is healthy (no pre-existing conditions) and the younger, the less expensive.
3. Networks: Most policies (mainly reimbursement types) do NOT have networks, so you can choose your own Veterinarian.
4. Coverages: Some policies cover up to about 90% of the cost of emergency care and unexpected illnesses. 
5. Stop Loss: Having a (PHI) policy gives you piece of mind and caps the amount you would have to pay out of pocket when the unexpected happens to your beloved pet!  The worst scenario is called “economic euthanasia.”  This is when you must euthanize your pet because you cannot afford Veterinarian care.

Cons to buying a PHI (pet health insurance policy) include:

1. Pre-Existing Conditions: Your pet’s existing illnesses/issues will typically not be covered. 
2. Coverages: Not all policies cover preventative care, such as routine visits and vaccinations, or they assess and charge extra.
3. Costs: Older pets cost more as do purebred dogs and cats to insure.
4. Dealing with Insurance Companies: Many policies are reimbursement so policyholders pay Veterinary costs upfront, then file a reimbursement claim with the insurer.

Like any type of insurance, it is important to do your due diligence.  A great mentor of mine used to say, “the situation is the boss.”  One size does NOT fit all with pet health insurance, so doing the proper research is critical!

Money magazine’s top picks for Best Pet Insurance by Category for 2021 include:

• Healthy Paws– Best Overall Value
• ASPCA– Best Budget Coverage
• Figo– Best 100% coverage
• Trupanion– Best for Hereditary Conditions
• Embrace– Best for Dental Illnesses
• Nationwide- Best for Exotic Animals
• PetFirst- Best Preventative Care

Things to look for when comparing policies are deductibles, annual benefit caps, coverages, waiting periods, and premiums per month.  PHI premiums can range from $25-$150 per month based on your pet’s age, size, breed, and pre-existing conditions.  Cats can cost up to 60% less to insure than dogs.

For those people that do not want to buy a policy but would be interested in paying less for services, there are pet care monthly membership discount programs.  One interesting program (that we have access to) is the Pinnacle Pet Care Prime Membership Plan.  This “discount plan” offers unique discounted services with no forms, deductibles, or dealing with insurance companies.  Coverages include a discounted drug card, 24/7 telehealth, cashback shopping (with Target, Walmart, and Petco), dog sitters, special pet pharmacies, and lost pet recovery services.  The discount membership programs usually range from $25-$50/month.

Pet health insurance (PHI) and discount membership plans are not for everybody; however, they can really come in handy when you and your pet need it most.  My suggestion is to contact your Vet and ask if they take pet insurance and/or participate in pet discount programs.  For those interested in the discount program, feel free to reach out to me at Rob@Insurancedoctor.us.

            

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!!

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 2^nd 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!