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Dear Everyone!
Change is good.
I've made a change. Not a huge one, but an important one.
For a long time I've wanted to increase my life, annuity, and LTC practice. I've been looking for the right company to align myself with, one that had solid financials, one that had a long history of performance, one that had great products, one that had a great service culture, and one that was well-known and well-liked.
For me it all came together when Mutual of Omaha (MoO) asked me to partner with them at their new district office in Gold River. I'm still independent, but I have a solid "home base." It's a good deal for me... and my clients.
I will still write group and individual healthcare for Blue Cross and Blue Shield and Choice Administrators, but I will now have access to the vast knowledge-base of MoO in order to do more complex estate planning, retirement or college funding, business buy/sell or key-person plans... and of course just "simple and safe" life insurance, disability protection, annuity investments, and long term care plans.
There are zillions of boomers who now need or who are going to need strong, solid, non-nonsense financial advice and I feel that the resources of MoO will enable me to serve that client-base well; after all I'm a boomer too!
I'll have more to say on all of this in a few weeks. For now, let's start off with a story that makes me so mad I could scream.
-Al
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I Hate Wal-Mart
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You really must click this link and see the NBC News story about this woman.
If you have not heard of Deborah Shank you must live under a rock because the story has been all over the news.
As chronicled in the Wall Street Journal, Shank, a former shelf-stocker for Wal-Mart in southeastern Missouri, was driving her minivan when she was broadsided by a semi and suffered permanent brain damage. Unable to walk without help, she lost the ability to care for herself or interact meaningfully with her family. Now 52, she lives in a nursing home.
Wal-Mart started out as one of the good guys in this story, paying almost $470,000 of her initial medical bills. But three years after Shank's husband sued and settled with the semi driver's employer, the retail giant changed its course. It demanded every penny back, plus interest and legal fees -- more, in fact, than the $417,477 the settlement had placed in a special-needs Medicaid trust fund for Shank's future healthcare expenses.
The company persuaded a federal district court judge and the U.S. 8th Circuit Court of Appeals to award it the full amount, even though Shank's family had paid for the lawsuit. Nor did it matter that the settlement covered a fraction of her expenses and losses. Wal-Mart's healthcare plan clearly states that it gets first crack at any money recovered by injured employees. Such provisions aren't uncommon in health plans, and Wal-Mart isn't the first to enforce one.
I could rant and rave until the cows come home and the moon turns blue about torts and healthcare and greed and how this system sucks, but all I'll say is this. If there was ever a case for universal healthcare, this is it.
And if there was ever a reason to not shop at Wal-Mart or Sam's Club, this is it.
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Filling the Healthcare Gap Between Retirement and Medicare
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How do you pay for healthcare from the time you retire from your job until the time you qualify for Medicare? This is a question that about 2.8 million boomers are starting to ask themselves.
In the good old days, retirees often enjoyed employer-provided health insurance until they qualified for Medicare at age 65. That boat has sailed, especially if you work for a small company. Last year the number of companies that offered this benefit was down to 5% among employers with less than 200 employees.
And it's not just small firms that have given up this ghost. The number of companies that provided post-retirement/pre-Medicare health insurance is down almost 33% from a decade ago. And the employers who continue to provide retiree health insurance are cutting back on the benefits or increasing retirees' shares in the cost of their coverage.
What is the answer? Keep working! But this may not be applicable to every employee,
particularly those who will be forced out of their jobs by younger
workers or just laid-off because of business conditions (And who is gong to get the ax first... the 27 year old or the 59 year old at the higher salary?)
Even if you are 63 or 64 a one-year unprotected period can potentially be financially devastating because there are so many things that can go wrong from stroke to heart attack to complications from diabetes. The possibility of accidents and injuries should not be discounted either. Each incident can be a major financial drain without health insurance. You want to lose whatever home equity you still have? Get sick without insurance and have the hospital put a lien on it
So what are the alternatives?
For early retirees without company-provided health insurance, purchasing a health care policy until Medicare kicks in is one alternative. Unfortunately, individual policies can be prohibitive for people in their 60s even if they are healthy... and that's assuming you can even get one.
Retirees who have pre-existing health conditions face a double whammy because medical history can dramatically increase the price of premiums. Or it may not be available at any price at all. Some sources say as many as 30% of early retirees are denied private health plans. I'd put it closer to 50% judging from my experience in the past six months.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 mandates that an insurance program provide employees with continued health insurance coverage for up to 18 months (sometimes extended to 36 months) after leaving employment.
However, the law only applies to employers with at least 20 employees. It also exempts companies that have shut down and ended their health plan. COBRA can be very, very expensive.
If the early retiree's spouse continues working, the retiree may be eligible for coverage in the spouse's employer-sponsored policy. If you are going to do this, plan ahead as your spouse often has to put things in motion 30 or 60 days in advance. And don't expect the coverage to be cheap! Group is always expensive.
You might be able to take a less demanding job at a company that provides health insurance. Can you say "Welcome to Wal-Mart" or "What do you want in your coffee-latte?"
Another strategy is to stay with the current company to work for less money and for fewer hours in exchange for full medical insurance benefits until reaching the ideal age for retiring. Good luck making the case for this one with your boss... when he or she can replace you with someone whose group coverage will cost less (assuming the boss is paying 100%) No one wants age 60+ employees on the job. No one. It's a fact of life. Get used to it.
How about your own business. I love this option. Retirees may form a small business that will entitle them for group coverage. In CA a group of 2 is legal... and there are ways to get a group of 1! The business must conduct legitimate activities and have all the necessary papers. It is a paper-chase nightmare to qualify for group, but sometimes it is the only choice available. And while group is automatic issue, it is (can be) very expensive.
Another option, is to get a limited-benefit medical plan. These are way better than nothing, but if you have a stroke or heart attack, they won't do much for you and you will kiss your savings good-bye.
Finally downgrading to a more affordable high-deductible individual policy with a health savings account might save some money... assuming you are healthy enough to get it. Some carriers would rather you be forced to drop your plan because of high price than to keep you on the books with less coverage. At your age you are a risk, no matter what plan you have. It's all about the money.
The system is broken, and it's broken even "worser" for boomers too old or too sick to get individual coverage and too young for Medicare.
And you wonder why I support some kind of universal health plan?
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| Premium Financing of Life Insurance. Scam or Plan? |
So what do you think? Scam or Plan?
Premium financing has become a very important topic in the insurance industry. Clients and investors love it... carriers hate it. No one knows what will become of it.
Premium financing of life insurance is a way for high-net-worth individuals, over the age of 55, to obtain the life insurance coverage they need without having to divest high yielding assets.
If you are 60 years old and want to get a life policy to leave a legacy you can borrow the money for the premiums, just as you would borrow money for a house or a college education.
Life insurance premium financing is a tool, offered from a premium finance company, that an individual with substantial assets uses to cover the upfront costs and premium payments on a life insurance policy. Individuals often choose this course if they require a large amount of life insurance and do not want to pay the out-of-pocket costs. Premium financing makes the most sense when an individual wishes not to liquidate high yielding assets to cover the costs of a life insurance plan.
The person insured under the life insurance policy has the option after 24 months to pay off the loan and maintain the insurance policy or they can retire the policy in a life insurance settlement.
So here is one way the deal goes down. You take a loan to buy a million dollar policy. Let's use round numbers and say the premium is $15,000 a year. You borrow $30,000 to pay for two years of coverage and you pay the interest (usually fairly high, but so what.) After two years you can sell the policy through a "settlement house" who finds a buyer who might give you $100,000 cash (using round numbers) and he takes over the payments on the loan, or you pay off the loan and he gets a new one. He gets the $1M death benefit. (You hope it is not Tony Soprano who buys your policy!)
This is a huge topic of controversy these days. The carriers count on a large percent of policies lapsing... meaning they got premiums (payments) and never had to pay a cent in claims. (Do you know that carriers only pay off about 5% of all term policies... 95% lapse. It's a license to print money!) They can keep their premiums low because they know they won't be paying a lot of death claims on term insurance. (People love to buy term insurance but I hate to sell a wasting asset when universal life (which can be "permanent term" is such a better alternative.)
But add premium financing to the mix and all of a sudden a whole hell of a lot more policies do NOT lapse... and eventually WILL have to be paid on. The companies don't much like that. They want you to either lapse your policy... or never die (until they've been able to invest the money and get good returns.)
Where am I on the issue? There is something that does not pass the smell test with me. My mind is open, but there is something about this that reeks "scam." I'm fine with most life settlements on policies held for a long time, but these deals which are set up solely to end in settlement are different... and I think there needs to be some more study on them by the various state insurance departments.
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Well, that's a wrap for this issue. I hope you've found some of the info above useful and interesting. If you have questions about life or health coverage, safe-money annuities, or employer group benefits just give me a call or send email.
Sincerely,
Alan N Canton
InsuranceSolutions123 Agency
InsuranceSolutions123.com
916-962-9296
CA License # 0F31110
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Al Canton, Owner
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I'm Al Canton, owner of the Insurance Solutions Agency.
Everyone promises the best service, etc. So I won't bore you with that message.
Bottom line, I know health insurance, work-supplements, medicare, life, and annuities.
Most importantly, I'm honest. I will not put you in a product just for the money. I've been here 25 years and I've built my business reputation on integrity and honor.
It's that simple.
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