BBA Blog

5 More Reasons to Offer Life Insurance with Living Benefits

Posted by on Oct 24, 2017 in BBA Blog | 0 comments

Why more Americans are not purchasing life benefits with a chronic illness or long-term care rider is beyond me! It should be a no brainer, a slam dunk.  Where else can you create a pool of money so quickly, with the first payment, that will take care of you while you are living or take care of your loved ones when you die? Here are just a few stats that should make our hair stand up on end: Approximately every 40 seconds, an American will have a heart attack. 92% of older adults have at least one chronic disease; 77% have at least 2. Every 40 seconds someone in the US has a stroke. Every 66 seconds someone develops Alzheimer’s Disease – see resources The average couple retiring at age 65 can expect to pay $260,000 to cover their health care costs in retirement. This is for their health care costs only!  What about everything else?  It is estimated that 20 years from now the cost for assisted living in the state of Texas will go from $3,500 monthly to $6,321 based on 3% inflation.  Care in a nursing home semi-private room goes from $4,563 monthly to $10,932!  That is staggering!  How can anyone afford to pay for that?  Most Americans have little savings and no long-term care benefits!  (Check out this handy Cost of Care tool.) Enter life insurance with living benefits or as I like to say, “You have the opportunity to create a pool of money for life and your loved ones by discovering the power of living benefits.” Here are 5 great reasons to offer your clients the added benefit of life insurance with living benefits: Your clients understand they need to have something in place to help them take care of health care costs as they age. They just have not gotten down to doing it or think long-term care insurance is too expensive. Life insurance with living benefits may be a perfect fit. You just need to mention it to them. If your client is already considering life insurance, adding living benefits does not add that much to the cost. Let’s consider a 45-year-old male, preferred, non-nicotine user needing $500,000 of lifetime coverage. He can purchase a Guaranteed UL for $3,994 annually with no living benefit rider or $4,671 with a chronic illness rider, that is only $677.00 for the policy that pays out 2% of the death benefit or $10,000 monthly if he cannot perform 2 of the 6 activities of daily living until the pool of money (the life insurance benefit) runs out or he passes and the balance of the pool of money is paid to the beneficiary. All income tax free! You don’t lose it if you don’t use it. One of the arguments you may have heard about long-term care insurance is “What if I don’t use it?” This policy will pay your client while they are living or if they don’t need the living benefits, it will help support their loved ones when they pass. It is not that difficult to explain or understand. To me, a chronic illness rider in a life insurance policy is straight forward. If your client cannot perform 2 of the 6 activities of daily living and has a chronic diagnosis by a doctor (not all policies require the “chronic” diagnosis anymore) they will receive their monthly benefit amount based on the policy rider. I realize this is pretty basic and each policy has stipulations, but that really is it. You are offering something unique to your client that your competition is not. Although living benefits on life insurance policies is gaining traction, not that many clients are aware of them because not that many agents are offering them. Put it in your quiver of benefits to discuss with your clients every time you visit about life insurance.   The worst that can happen is they say no. The best that can happen is you will have given them a better retirement because they now have a pool of money to handle their...

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5 Things I Learned From Harvey

Posted by on Sep 7, 2017 in BBA Blog | 0 comments

August has been quite a month! Personally, I have now experienced two things that will change my life forever.  You may recall my last post, “Mom Would Have Liked it”, concerning the passing of my mom. The last weekend in August a big bully, Hurricane Harvey, blew through and devastated a good part of Texas leaving the gulf coast looking like a war zone.  The city of Corpus Christi fared well considering what happened 30 miles northeast of us in Port Aransas, Rockport and several other small coastal towns. Although most of our team here at BBA Life Brokerage had minimal damage, fences down, tree limbs broken and some roof damage, the condo I own in Port Aransas is totaled! Now I, as so many others, am going through the process of cleaning up and rebuilding, which I know is going to take months.  For me, this also includes a loss of revenue. For so many others the loss is much greater. So, what have I learned from all of this? Life changes in an instant and you are not in control of that change. That bully Harvey took several days to come across the gulf but he transformed our lives so quickly. You need to be fully prepared for what is coming. I happened to be in San Antonio on Thursday afternoon prior to Harvey’s arrival, still thinking in the back of my mind that it’s not really going to hit us. But trying to be prepared, I went into a grocery story on my way home to pick up some things. When I walked around the store I thought to myself, what do I really need? The aftermath can be even more difficult than the storm itself. There are so many questions that arise after a storm. Is everyone ok? Now what do we do? Who do we call? Where is all of my insurance paperwork? What is covered and what is not? You must be prepared to work through all of these questions. Keeping organized and having good records of your insurance and properties will help. When a catastrophe strikes, neighbors, friends and strangers come to your aid. My husband and I went to our condo the first day we were let back onto North Padre Island and in to Port Aransas. It was somewhat of a ghost town then; a few residents and business owners assessing the damage. The following Saturday, the small beach town was packed with volunteers and food vendors giving away free food and water. Others were giving away free cleaning supplies. Already many businesses and residents had pulled destroyed items outside and there were piles of debris along the road. They were getting on with life. And when you volunteer, strangers become friends. Although there was a minimal loss of life with Harvey, it could have been much worse. How utterly devastating it could have been to lose your home or business and the life of one you love at the same time. Help your clients make sure they have all their insurance in place for the “what if’s”. Homeowners, wind, flood, personal property, and life insurance among a few. A storm like Harvey may not happen here again for years, and your client may live to a ripe old age of 90 but….what if!?! Make certain your clients are well prepared for disasters.  They come on quickly and they can be...

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Mom Would Have Liked It.

Posted by on Aug 9, 2017 in BBA Blog | 0 comments

My mother passed away last week. I don’t tell you this for sympathy because my mother was 90 years old and had a wonderful, full life.  However, her quality of life had gone down quickly over the past year and she simply died of old age, just like we all hope to do. I am writing this because this is the first death I have experienced up close. I have been in the life insurance business over 30 years but have never had a family member close to me pass where I had to take care of the process that happens after death.  The process was relatively simple in this case because my parents had pre-paid their funeral arrangements at a local funeral home.  My dad and I, Dad is 94 by the way, went to the funeral home, made a few decisions, signed the paperwork and were out of the funeral home in about an hour.  My mom had also left an unexpected note telling us where she wanted her memorial service and what music she wanted.  It was a blessing. After visiting with the funeral home, we went to the church she had chosen and made the arrangements for a service the next Saturday. The service went very well, we had lots of friends and family, shed a few tears and had a few laughs.  Mom would have liked it. Had my parents pre-planning not been done, there would have been a lot of additional stress and confusion as to what to do. I can’t tell you how much I appreciated their forethought. What they didn’t have forethought about however was their longevity. Mom made it to 90 and didn’t incur a multitude of medical bills.  With some home care help, my dad could care for her up until shortly before she passed, although it was exhausting him.  It was not a good situation but putting her in a nursing facility was not what we wanted to do, plus my parents had no long-term care coverage.  At the end, we did have to put Mom in a nursing home.  Through hospice we received 5 days of care at no cost. It would then have gone to $168.00 per day, which my father could not have afforded.  You see at 94 he is just making ends meet in the retirement community he lives in, and is spry enough that he could have several more years in him.  Their nest egg and the results of inflation on social security and his pension would have been good up to age 85 or so; however, 94 plus becomes difficult financially.  (Another Reason to Own Life Insurance Over age 85).  Mom did have a small life insurance policy, $8500, which will be a great help to Dad, but things could have gone much worse.  More care and higher medical bills could have eaten through the little Dad has, and then his living expenses would be falling to me and my brother.  Now we have the concern over Dad’s finances and medical care. I hear people say regularly, “I won’t live past 85” or “I don’t want to live that long”. Well friends, we don’t have much choice.  We don’t choose when we are born and we don’t choose when we die.  What we can do however is plan properly.  Plan your funeral.  Plan your service.  Plan the songs you want people to remember you with.  Plan for living too long.  Plan to have life insurance in place for “when” you die to take care of those you leave behind.  Plan for the living. Have at least a will in place for the ease of distribution of what you have. Help make the process of your death, whenever it occurs, a bit easier. Yes, it takes time to plan. Yes, it’s not always easy, but it is smart.  Talk to your insurance agent or trusted advisors.  If you don’t have any, give me a call to help you find them.  It’s...

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Is the Question “If” I Die or “When” I die?

Posted by on Jul 19, 2017 in BBA Blog | 0 comments

You know, we are not immortal. Many of us may think we are, but in the end, we are not. That is why, if we are smart, or for us that are in the life insurance business, we are smart enough to help our clients with their planning by explaining to them the difference between “If I Die” and “When I Die”, because there is a difference. By the way, this is not my idea, I heard Joe Ross, ChFC, CLU, CRC, VP Sales Productivity & Business Development with AIG speak at a recent meeting.  It just really got me thinking because so many of us think about “If” we die and not “When” we die.  It should all be about when we die. Some of us will die earlier in life and some of us later. That being said, the “When” is often turned into an “If”. If I die too soon will my family be taken care of?  If I die too soon, how will the mortgage get paid?  If I die too soon, will my kids be able to afford college? These are all legitimate questions no doubt, and it is smart to be prepared for the “ifs” particularly in the pre-retirement years.  But now let’s talk about “when” you die. When we die. It is a tough subject but so important to think and talk about.  I hear it a lot, “My kids are grown, the mortgage is paid off, why do I still need life insurance?”.  There are still risks of financial loss and some great reasons to have life insurance in place in the post retirement years.  We all plan to go into retirement with our spouse, do some traveling, enjoy the grandkids and have a peaceful, comfortable retirement for perhaps 20 years.  Here are some reasons why that may not be the case: When one spouse dies earlier in retirement and the other lives to a ripe old age of 95 or 100, which is happening more and more often, will there be enough income to sustain the one that is left living longer than expected? Health care costs can eat into retirement income like crazy! The lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68% for people age 65 and older. [ AARP. Beyond 50.2003: A Report to the Nation on Independent Living and Disability, 2003, (11 Jan 2005).] Most Americans do not have long term care insurance to help pay for this, so retirement income will be eaten away in health care costs. Even if you do have a nice nest egg put away, what about the financial risks? Interest rates, inflation, cost of living could all leave financial hardship. Then there is my story. Being blessed with parents who have both lived into their 90’s but they are outliving their retirement savings and I have been supplementing their income for several years. I am happy to do it but, that is money I could and should be saving for my own retirement. All of these issues could be resolved by having life insurance in place for ‘’When” you die. Which means not renting term insurance but owning permanent insurance that will be with you the rest of your life and take care of your loved ones “when” you die! Consider making permanent life insurance part of the plan going forward for you and your clients. There are many types available to make permanent planning affordable.  Give me a call if you want to...

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What is the big deal about “Lack of Candor”

Posted by on Jun 8, 2017 in BBA Blog | 0 comments

On occasion, individuals like to play “Truth or Dare” with life insurance companies. Sometimes it is deliberate and sometimes it’s not. Those doing it deliberately are basically not providing honest information to the carrier.  Can’t they just go back to the carrier and say “Oops, sorry, I forgot!”? Lack of candor or being dishonest to a life insurance company is a big deal. It involves both the omission and/or misrepresentation of information. The first issue is being dishonest in the application process. If your client would happen to get away with it and a policy goes inforce, they would be putting their loved ones at risk of not receiving benefits when an investigation is done at death. Secondarily, the fundamental hurdle with lack of candor is the question of what else they might be hiding. The carrier needs to trust the information that their mortality decision is based upon. Some carriers take a hard and fast line on lack of candor. You lie to the insurance carrier, you are declined.  Others take a broader view of the significance of the information – how relevant is the information that is missing?  Trying to hide things like heart issues, stroke, cancer, mental disorders, substance abuse, multiple DUIs and adverse financial history are a big deal in the underwriting process and will result in an immediate decline. In speaking with one of our carriers I found they are also having problems in this area with the language barrier and some clients that do not speak English as a first language. The carriers are concerned that the proposed insured may not have an understanding of the questions asked, the contract language and/or what they are attesting to with their signature. So can your client still get coverage if they omitted information on an application? The answer is maybe.  They can apply to a different carrier being fully truthful and disclosing all medical or financial information requested and depending upon if they are insurable, they can get coverage.  Unfortunately your client has now wasted their time, your time and the carrier’s time trying to get away with not admitting all of the relevant information when they first applied for life insurance. Bottom line, tell your client to be honest on their life insurance application so it won’t come back to bite them later! Let them know, with all of the big data out there today, the carriers will find...

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Why Does That Attending Physician’s Statement Take So Darn Long!?!

Posted by on May 18, 2017 in BBA Blog | 0 comments

You would think that in this age of technology and the fact that laptops are used in MOST doctors’ offices today, the retrieval of an Attending Physicians Statement (APS) would be lickety-split. The truth is, this process is still antiquated and if we (the Brokerage General Agency (BGA)) do not know the medical history from the inception of the application process, the ordering of an APS can be delayed as well. Case in point; today we have both express apps and drop ticket applications. Neither requires the agent to get any medical information in advance. The application and medical information is done via phone interview.  Once that is completed, the carrier may take 3 to 5 working days to review and then make a request for an APS.  The APS is ordered by the BGA, through that carrier’s approved service provider, typically that same day. This is where the fun starts! 4/19 – Request for an APS is made 4/19 – Service provider faxes request to the doctor’s office 4/20 – Call made to see if the request was received; had to leave message requesting callback to confirm receipt. Refaxed request to ensure receipt 4/25 – Medical Records clerk for the doctor’s office verified that the request was not yet received and that they had a preferred fax number. Refaxed request 4/26 – Called medical records area of doctor’s office to verify receipt of faxed request. Voicemail states to allow 2-3 days to verify request was received. Left message and requested callback to confirm receipt 4/28 – Receipt of request confirmed!!! Doctor’s medical records clerk advised that the turnaround time for an APS is 15 days to be copied.  Once copied they will fax an invoice for payment, once paid they will release the records 5/2 – Follow up on invoice. Not released yet 5/4 – Follow up on invoice. No invoice generated yet 5/5 – Follow up on invoice. No invoice yet 5/8 – No invoice as of today. Called doctor’s office medical records area and was advised that they process APS copies in order of receipt and have not gotten to this APS yet 5/10 – Follow up on invoice. No invoice yet I could go on but I think you see my point. Making matters even worse, many medical facilities including hospitals and doctors’ offices now utilize copy services for getting medical records sent out.  These copy services are merely processors and have not a care about getting the records out in a timely manner. They simply put the request in a queue.  There is no sense of urgency no matter how hard we push! HIPPA is also making the process harder. Some facilities do not accept the HIPPA forms provided by the insurance companies as part of their application packets, causing delays, and/or do not accept electronic signatures, causing delays. There are actually state laws under HIPAA directing how long a medical facility or doctor’s office has in release of medical records. In the state of Texas a hospital must make a patient’s recorded health care information available to the patient no later than 15 business days after receiving a written authorization.  This may sound good; however, there is no recourse if they go beyond the 15 days leaving a state law that is violated.  Even with this, as in our example above, the copy service gives themselves 3 days just to verify the authorization was received!! This is still an antiquated process. As a BGA we have tried several methods of speeding this process along including: Picking up the APS if the facility is in our vicinity Asking the client to push their doctor in getting the records sent out Asking the client to retrieve their records Sending a letter to the doctor’s office letting them know they will be liable if they delay the process of our mutual client getting life insurance and the client passes away As a producer you can help too. If your client is a woman, make sure you have her correct name and madden name, records may be...

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