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Dear Everyone!
It's been over a month since my last installment but things have been somewhat hectic here with people losing jobs and needing individual coverage, people starting new ventures and looking for group coverage, and people looking to get the last of the low rates for life coverage while they last.
In addition, I've been on the East coast for training and my wife had a hip operation... her fourth replacement in 12 years, so I've not had the time to devote to this fish-wrap!
I get a ton of questions about what healthcare reform will finally look like... and I don't have the first clue. All I know is that nothing will go "live" for a couple of years, so when it happens... it happens. In the meantime I continue to do what I do... trying to mitigate a bad system for my clients so that they get the most coverage for the money they spend. (In other words, I won't let them buy a "crap plan"... and there are plenty of them out there these days.)
Outside of health insurance, there are lots of things happening in the life coverage world. What is important is that people understand that the low-rate life insurance train is leaving the station and that this is the time to get on board... or be left behind with much higher premiums!
Per usual, call if you have questions or comments.
-Al
PS: Welcome to a bunch of new folks I ran into during the past couple months at parties and seminars and chamber events who asked me about my newsletter.
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The LI Train Is Leaving
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I know, I know. You don't want to hear me talk about life insurance. But I'm going to because so many of you don't have it.
Oh yeah, I've called you about it and it's always the same thing: "Call me back next [week, month, year, century!]
Folks, rates are going up. Yes they are.
Most of you know that rates have dropped in the past ten years. People are living longer and are healthier. A good part of what you pay for insurance is risk-based.
However, another part is investment-based.
Since the market meltdown the carriers cannot get the returns on the premiums that you pay and they invest. They need those returns to pay claims, set aside for state-mandated reserves, and of course pay their salaries, overhead, and make a profit.
So, they have no choice but to raise rates. My guess is that you will see rates climb ON AVERAGE about 20% over the next six months. Note I said "average." So how will that average be arrived at? The older clients will get the brunt of the increase and the younger people... won't.
If you are in your early 30s, no problem. Yes the rates will be higher, but not that much. However if you are 35 or older, you will get socked.
Thus, if you don't have coverage... be it term or permanent, this is the time to apply and see what kind of an offer they make you.
(For those who don't know... you don't always get accepted for insurance at the rate your broker quotes you. After they look at your records and your lab results they make you an offer (that's the legal term) of what they will sell you the policy for. Often it is as quoted, sometimes less, sometimes more.)
You are not going to see rates for life insurance as low as they are now for a long, long, time... if ever again.
Not only that, but underwriting is getting stricter. A medical condition that would get you a "standard" rate now MAY end up being standard plus 20% to 50% later on.
Let me just ask this. If your spouse died today, how would you pay the bills tomorrow? Would you exhaust your savings? Would you have to pull from your 401 (if there is anything left!?) Would the kids stay in college or private school? Would you have to sell the house?
Folks, these are "real life" issues... and, sure, no one wants to discuss them. But I try to tell people that life insurance is not about death. It's about life. It's about being able to carry on after a tragic loss. Life insurance is for the living.
Believe me, life coverage is NEVER going to be cheaper for YOU than it is today. First you get older and the rate goes up... and as I said, rates are going up across the board. So now is the time to catch this train, because when it leaves the station, it's not coming back.
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| Agents Are In The Same Healthcare Boat
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There is lots of debate in the news about healthcare reform. I won't add to it. Many of you think that we agents get some kind of deal on the products we sell. Not true. Look at these stories below.
The insurance business was very good to Reynaldo Hernandez.
"I loved the business because it rewarded you for your effort. ... I liked the fact that selling insurance was helping people avoid financial loss," the California man says.
He sold insurance in the rural San Diego County town of Ramona for 35 years and retired eight years ago. Since then, he has grown increasingly angry at the business he represented.
And the industry he gave so much to is about to ruin him financially.
"Over the years of my career, I saw the coverage get more expensive, but you got less," says Hernandez.
In 2007, Hernandez, 65, and his wife Janet, 62, spent more than $15,000 on insurance premiums. Add a little more than $8,200 for co-payments and medicine, and Hernandez says they paid about $24, 000 in medical costs that year.
"It took a huge chunk of our income. ... over 25 percent that year."
So the man who sold insurance to so many people had to do without.
"I never thought, in my entire life, that I would ever get to the point that I, as an insurance agent, would ... have problems paying for medical insurance," he says.
"Health insurance for me has been so important. I would never dream of going without.
"Because we could no longer afford that kind of cost, we did the unthinkable. We dropped our insurance." says Hernandez.
"It's a little scary not to ... go to the doctor when you think 'I should have his checked,' " says Janet Hernandez, Reynaldo's wife of 43 years.
"I didn't have proper coverage to be able to go to the doctor and get checked. Knowing that you could lose everything if something happened, that was scary."
Janet Hernandez knows quite a bit about the insurance industry, too. She worked with her husband as an agent for 10 years.
The Hernandezes now have medical insurance. Reynaldo has Medicare, the federal insurance program for senior citizens. But Janet is three years from qualifying for that program.
Until then, they have purchased a private policy to cover medical expenses.
But that policy is expensive.
"We pay about ... $850 a month on my insurance and co-pays on prescriptions and doctor visits," says Janet. "And still today, with ... higher deductibles every year ... still the cost keeps going up, up, up."
"At the rate it is going up... I may not be able to keep her covered until she turns 65," adds Reynaldo.
Those added costs have put a pinch on their retirement.
Although retired, Reynaldo is still a licensed insurance agent. "I'm thinking about trying to go back to work full time so that I can maybe get a group plan to cover my wife," he says.
"We had planned so many years for our retirement and to be able to do things, and travel," says Janet. " We've cut way back on most of our expenses and we just don't do the things we used to do because of the costs."
"Every day I'm looking at our checking account and our saving account and I've become obsessed with it because I see that we don't seem to have it under control," says Reynaldo. "And it's very scary. I shouldn't have to live in fear about our medical expenses."
"I feel very nervous and uneasy about that, and I shouldn't be. I shouldn't have to feel that way in my senior years. I should be able to feel secure."
Folks these are agents... who KNOW the system and how to work it. For the record, I'm in favor of any kind of reform that will lower the cost of premiums and allow everyone to get some basic level of coverage... even if it puts me out of a "job." I don't know where you folks stand, but you should know where I stand. (I'd rather sell life and disability and LTC and annuity anyway!)
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Make A Choice
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Talking about disability I want to ask you folks, especially you small biz owners, a simple question:
Would you rather take a $100,000 a year job that gave you no protection if you could not work... or would you rather take a $98,000 a year job that would pay you about $65,000 a year if you were disabled?
The choice is yours.
It cost about 2% of your gross income to protect 65% of the rest.
So tell me. What choice would you make? Now you know why so many people are taking a second look at disability insurance. The cost is low, the rewards are high and the rates don't change often (if at all, should you get what is called a "non cancel" plan.)
Again... get this while you are healthy. You won't be approved for it when you are not.
And yes, you have a very good chance of being disabled for a some period during your working life (and if you aren't there are plans that will even return all of your premiums when you reach a certain age.)
This is a no-brainer... but again... no one wants to plan ahead. It's always "Call me next [week, month, century!]"
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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.
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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