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September if Life Insurance Awareness Month, hosted by The Life Foundation and promoted by agents and carriers across the nation. It’s a great time to take advantage of many educational promotions geared towards learning more about how to get the right kind and right amount of life insurance.

Summer Caprese(s)
09Aug
2013

PeachCapreseA couple of weeks ago I spent the weekend at the Four Seasons Palo Alto for a couple of girlfriends’ birthdays. While it’s largely a business(y) hotel, it’s also a great weekend retreat. For a couple of reasons: 1) it’s not crowded on the weekends when the business types go back home, and 2) their food and bar program is amazeballs. Note: this is the first time I’ve used the term “amazeballs,” something I swore I’d never do, but whatever. I’m practicing flexibility.

So Saturday night at dinner at Quattro we had this grilled peach caprese that was perfect. And of course it became my new mission to replicate it. Can’t be so hard, right? Tomato, mozzarella, basil and some peaches. Balsamic and olive oil. Done and done. But, just in case you want to know how I did it…here you are:

I grilled the peaches using walnut oil and was very happy with the result. You’ll notice in the photo my slices are somewhat small and that’s probably the one thing I’d adjust…use two of same size or go for a larger slice. The peach flavor was slightly overpowered by the rest and should be beefed up. If you’re a basil hound, use two leaves instead of one.

But the coup de grace? This fantastic dressing recipe I found on Kitchen Konfidence. It definitely made the dish and my happy guests smile.

While we’re on the subject of caprese(s), I’ll give you one more. This one I threw together last summer when home visiting family. You’ve got your basil and tomatoes. I used red and yellow pear heirlooms for color and flavor. Burratta cheese. And added blueberries. Reduced balsamic and olive oil to dress it. I’ve found thinner, cheaper balsamics tend to reduce better than their more refined peers, in case you were wondering.

And I just looked in the fridge and noticed a bunch of figs. Which is great because I’ve still got a ton of basil, tomatoes and mozzarella. Yes, I’m a bit obsessive and yes, I’ll likely not want caprese for a couple of years by the time I’m done experimenting.  If it’s good, I’ll be back…

Moving HouseFUN FACT: Studies say that up to 40% of young, college graduates are re-nesting with Mama and Papa Bird.  If you’re one of these chicks, I want to tell you something…

Let me start by saying, oh, my sweet, precious newly degreed babies… Uncle Benny  knows your pain.  It is the first of life’s cruel tricks that after thousands of hours of binge drinking studious scholarship and self-growth, there is no Fortune 500 CEO position and penthouse apartment waiting for you.

I spent literally pairs of years suffering under the yoke of being a grown(ish) man dwelling in my Mama’s rec-room.  But here’s what I learned: being a barista builds character, chances are your parents hate the idea of you living at home just as much as you do, and, finally, it’s going to get worse before it gets better.

How much worse?  Let’s it this way: just when you manage to pull yourself up by your bootstraps, get your first big break and start thinking about moving out, the bills come calling.  Oh, the tales I could tell you about naive hillbilly-cum-organized crime boss, Sallie Mae!  But before I drive you into the depths of despair, I’d like to give you a silver lining: health insurance.

Thanks to healthcare reform, you don’t have to dwell in a netherworld of pseudo-homelessness and health liability.  Why?

1. You can now stay on your parents’ insurance policy until you’re 26. 

That’s right!  Two more years of sweet, free health insurance.  And now your insurance covers a lot more at no cost, including annual physicals.  (So gentlemen, work on your turn-and-cough face.)

2. If you have to buy your own insurance, chances are you qualify for a break on your premium.

Your premium is how much you pay for insurance, and many people qualify for help paying it.  Clerking the mail room or flipping burgers (like a boss)?  You might qualify for a $0 premium, which means your health insurance would be free as the wind.

When it’s time to buy, you’ve got one place to shop: www.thehealthinsurist.com.  Insurance is a necessary evil, but a pushy, annoying agent isn’t.  Mindy and her team will help you find the right coverage at the right cost.

My only other advice is to enjoy partying while you can.  Because one day, when you can afford fancy top-shelf alcohol, your body will betray you by denying you the pain-free buzz you’re enjoying now in the glory days of youth.

Finally, I’d like to say that you kids have it easy with your fancy new laws and your monster.com.  In my day, we were kicked off our parents’ insurance at 21, walked 10 miles in the snow for the privilege of putting our resumes in the mailbox.  With stamps.  Stamps!  Now it’s all done in electric mail.  What’s this world coming to?  Have you seen my teeth?

At the risk of telling you what you already know, there is a freaking lot to know about health care reform.  The law itself is some 900 pages long, and the regulations surrounding it run into the thousands of pages.

Why, if pages were crows, the Affordable Care Act would be a murder!  (Rimshot, weak laughter.  Don’t judge me — making health insurance funny is hard.)

So as much as I’d like to regale you with the finer points of transitional reinsurance fees and adjusted risk pools, I think it would literally bore us both to death.  So in the interest of staying alive and giving you something you can use, I herewith present The Simplest Guide to Health Care Reform You’ll Ever Read. Ever:

MahoneyGrid1

Here are some dates you need to know:

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**Here’s that link to the Kaiser Family Foundation subsidy calculator…http://kff.org/interactive/subsidy-calculator/…a great resource for all of your reform needs.

We love it when a good infographic comes along. This time it’s courtesy of the Life Foundation, and they bring up a thought provoking question: Do you have enough life insurance?

LIFE_life_insurance_infographic_letter

 

 

 

 

 

TermVWholeLifeBWI sigh just typing those words. Several times.

People get all sorts of riled up on this topic. Cue the likes of Suze Orman and Dave Ramsey. It’s like the Vegan argument. Full of passion, idealism, emotion, and half truths. And no, I’m not calling Vegans liars. My diet comes close, without all the emotion. Same with my views on term vs. whole life insurance.

I believe they’re both good. Depends on the client. Put into the wrong hands, a whole life policy can be like kryptonite for your finances. In the right hands, and much later down the road, a well designed whole life policy can be a diamond in the rough, just waiting to be harvested. This is where the confusion lies. The pundits like to portray this as an apples to apples comparison. It’s not. At all.

Let’s start with defining term coverage. Term is the most basic form of life insurance. At the time of underwriting your risk profile determines your premium. That premium is guaranteed for a certain number of years. 1, 5, 10, 15, 20, etc…usually in five year increments. At the end of the initial term, the premiums typically skyrocket. Why? Because term life insurance isn’t designed to go on forever.

Often times this increase in premium is described as a scam or another example of the insurance industry trying to take your money. It’s really not. It’s just that these products are not intended to go beyond their initial term. That is all. You might think someone who was uninsurable at the end of a term policy might have to continue and pay these enormous premiums. Likely not. Why? Because of something called a conversion privilege…one of the most important concepts when it comes to buying term life insurance.

What’s a conversion privilege you ask? The majority of term policies provide the ability to convert to another, usually permanent, product with no additional evidence of insurance. Huge, right? That means if during the duration of your term policy you decide you want life insurance for life you can get the same amount of coverage in a permanent product guaranteed. The devil’s in the fine print though, because some policies limit the number of years you can take advantage of this, so make sure you know what you’re getting into.

So the summary on term life: simple, affordable coverage that is intended to cover a temporary risk for a defined number of years.

Whole life isn’t so easy to explain. This is often part of the problem. Hard to explain and harder to understand if you’re not eating, drinking, and breathing life insurance every day. This is what leads to the product being SOLD instead of understood.

Whole life is best used as a savings product, not strictly for death benefit protection. And it’s a LONG TERM savings product when used this way. While there are many different uses for whole life products, I’m going to stick to its application as a safe money savings tool.

Treating it as an apples to apples comparison with term life products, the premium numbers immediately point out we’ve got big differences. For the healthiest 35 year old man, a $1 million 20 year term policy will run something in the neighborhood of $40 per month for 20 years. For the same guy, a $1 million dollar whole life policy will cost $820 per month through age 65. Say what?!? No that’s not a typo. $40 a month vs. $820 a month. Who in their right mind would pay $820 for something they can get for $40?

No one. Because it’s not the same policy.

The difference in this example is what happens INSIDE the policy and what you can do with it. Some call it a “living” benefit. If we look at the whole life policy at the end of twenty years (when the term policy expires), the whole life policy has a minimum guaranteed cash value of $231,360, where as the term policy has no cash value built up. If the client pays premium to age 65 and uses the cash value to supplement his retirement income, he has the potential of adding over $27,000 to his annual income from age 65 to 95. So for a total of $196,900 paid over 30 years, the client can potentially draw $834,600 (over the next 30 years) out of the policy on a tax free basis. Yep, you read that correctly. On a tax free basis.

The next argument against whole life typically comes in the form of “buy term and invest the difference.” Often times they’re right, particularly when the client doesn’t have 30 years to let their money accumulate. But rather than lose your attention completely, I’ll stop here and take a break. In a follow up post we’ll tackle that one, with numerical examples so you can see where this does and doesn’t make sense.

One thing to point out here is while we are using the same theoretical client for this example, in real life, the two product examples I’ve used would be applied to two COMPLETLEY different clients. One with a need for basic life insurance protection (i.e. the term product) and one with a decent amount of discretionary cash available to contribute to a long term savings plan. The need for term insurance can be easily identified and solved. The suitability of a whole life policy should only be determined after a thorough discovery process. If someone’s trying to shove it down your throat, run fast.

Thanks for listening. I’m happy to take any questions, and I’ll be back with more on this topic in a future post. Until then…

 

**Please note: there are all sorts of disclosures about theoretical explanations of insurance products. Things like “this example is only for a 35 year old healthy male in California who’s never been skydiving, didn’t party like a rockstar, and doesn’t play with tigers.” You get the picture. The figures here are for explanation purposes only and represent no guarantees related to any specific person reading this. Play nice kids.

This article was previously published on Daily Money Shot.

Scheduling in a little down time, both on your calendar and in your budget, will help too.

Scheduling in a little down time, both on your calendar and in your budget, will help too.

Everyone wants to be their own boss, make the rules, stop living under the proverbial “man,” but it can be a scary plunge to take and, quite honestly, not for the weak of heart. Owning your own business requires financial responsibility and risk that many people aren’t willing to take on, but if you are up for the challenge and are going to chase down that elusive American dream then there are a few ways to keep things from coming to a screeching halt before they even start. The transition into the life of owning your own business can be an expensively slow and rocky road, but there are some things you can do put yourself on the right path from the start. Before you venture on this journey, here’s what you need to do prepare for the ride.

1. Payoff all your credit cards. If you can’t pay off the balances on your credit cards now, you certainly won’t be able to once you start your business. You will also find yourself tempted to use those cards to cover the expenses of your business. Use these as your last resort. Paying off those cards now will give you some room to use them later, but relying on them for too many things in the startup process can quickly shut everything down.

2. Find your monthly budget, and then reduce it. You need to keep track of your basic expenses for the month: rent/mortgage, food, insurance, gas and so on. When you do this think about how this will change when you start your small business. Will you save money on gas with a shorter commute? Will you eat out more when you have less time? Once you have a number in front of you that highlights your current expenses, try to make that number smaller. This isn’t anyone’s favorite part, but you will appreciate the savings later. Do you need to run the air conditioning at home, or can you open the windows? Do you need the super fancy touch screen phone? Do “Fruity O’s” really taste that different from the real thing? It’s cutting back on little things that can send money your way from places you never thought about before. Also, it’s smart to make the transition to these saving habits months before you make your move into entrepreneurship to reduce the shock you may experience when you lose those extra 30 channels during hockey season.

3. Fill up that piggy bank. Before you take a single step towards your new business, you need to have a stock pile of money saved up. You should take the cost of your monthly expenses determined earlier, multiply that by six months, and set the bar there. You should have at least six months of your expenses saved up before you begin. With this, you need to make sure that you are realistic about how often you will be cracking into that piggy bank. A lot of people get the “do-it-yourself-bug” when they start their own projects. They think that they will do it all by themselves to save money. Know what you can do, and what you will need others to do. Will you hire an accountant? Will you need a handyman for small changes to your business space? Think about these future expenses when you are saving for your plunge.

4. Understand the benefits that you will lose. One of the biggest changes that small business owners incur is the cost of individual health insurance. Think about how to reduce this cost, for example switching your insurance plan before your next birthday before they can increase the premiums based on age. Look at your retirement plans and understand how your investments will change when you don’t have a 401(k) matching plan to double your contributions. These changes don’t have to be life altering, but they are simple things that, if planned for in advance will remain simple.

5. Don’t get hasty and quit your job. You need to give yourself time to startup your small business, and keeping your source of income can be a huge help during this time. There is a long list of expenses you need to pay before you can even think of opening up your doors, and it’s smart to keep your current job until you have those taken care of.

Entrepreneurs are some of the hardest working, committed individuals in the workforce. It can be the most frustrating and rewarding experience at the same time, but taking the time to plan before you plunge can save you some of that frustration and bring forth more of the rewards. Above all, remember that launching a business is a lot like starting a family. You’re never quite ready and can’t be prepared for absolutely everything that’s about to come your way.

Destruction Derby insurance? Probably a good idea. If you're into that sort of thing, of course.

Destruction Derby insurance? Probably a good idea. If you’re into that sort of thing, of course.

In Part I of this article, we covered flight insurance, rental care insurance, extended warranties and even life insurance for children, establishing that none of these insurance policies were typically worth your while. In this final portion of this article, we’ll look at six more types of insurance coverage you can feel confident about skipping.

Mortgage Life Insurance

As the name suggests, this type of policy pays off your mortgage in the event of your death, ostensibly so your loved ones needn’t be burdened by a looming mortgage. The reason not to buy mortgage life insurance is really quite simple: if you spent that money on term life insurance, your life policy, if an adequate amount, will cover much more than just the mortgage, taking care of other bills and expenses to ease your survivors’ financial strain.

Credit Card Insurance

Just about every credit card offer these days comes with a pitch for inexpensive credit card insurance, a policy that would pay off your bill should you be unable to do so. While it may seem like a good idea at first blush, if you have several credit cards, those policy payments can really add up. The better idea is simply to avoid running up credit cards entirely and to use them carefully and sparingly. Paying off your balance monthly will not only negate the need for credit card insurance, but you’ll also save a boatload on interest payments.

Disease-Specific Insurance

There are innumerable policies available to cover just about every major illness one could ever suffer, including everything from cancer insurance to diabetes coverage to heard disease insurance. Rather than assembling your health coverage piece mail, all you need to do is purchase one good medical coverage policy. Even a bare-bones major medical policy will cover everything an individual policy would—and having coverage for everything is always better than having coverage just for certain things.

Unemployment Insurance

Most experts agree that it’s far better to put aside regular savings for an emergency fund than it is to shell out premiums for unemployment insurance. While it’s easy to see why this might be an appealing option, relying on your own savings is a far better plan. After all, should you lose your job, odds are that in addition to your savings, you’ll be able to draw unemployment while looking for a new employer. Of course, a great deal of people never find themselves in this position, which means wasted money that could have been saved for something more productive.

Flood Insurance

Despite the terrifying commercials, if your home isn’t in a flood plain or located in an area that’s ever experienced excessive flooding, this is a policy you need not own. Do just a bit of research on your area’s history with water, and you’ll know whether you need to shell out the cash for this rarely necessary coverage.

Accidental Death Insurance

The odds of you dying in an accident are extraordinarily low, especially since most major tragedies that could befall you such as a fire or car accident are covered by other policies. Even if you work a hazardous job, you’re absolutely protected while on the job as well. The lack of real necessity coupled with exorbitant waiting periods and fine print make accidental death insurance a policy you can skip and still sleep well at night.

There are so many policies to chose from, and they all cost money. While a certain amount of insurance coverage is necessary and prudent, you need to choose carefully. In general, broad policies that offer coverage for a multitude of potential events are a better choice than limited-scope policies that focus on specific diseases or potential incidents. Before you buy any policy, read it carefully to make sure that you understand the terms, coverage and costs. Don’t sign on the dotted line until you are comfortable with the coverage and are sure that you need it.

Might of needed bad music insurance for this one.

Might of needed bad music insurance for this one.

Without the ability to see into the future, we often turn to insurance to protect ourselves from the unforeseen. Since we can’t predict our own mortality, we buy life insurance to protect our families’ financial wellbeing. We can never know if the person ahead of us on the road is going to slam on their breaks suddenly, so we purchase auto insurance to cover repairs, and own health insurance to help pay the costs of treating any injuries. Who knows why a burglar would break into your home and not the 24 others that look exactly like it along your street, but thank goodness you have homeowner’s insurance… you get the idea. There are certain kinds of insurance almost everyone should have, such as those listed above, while other types of policies tend to be specific to certain regions or circumstances, and still other kinds of insurance really aren’t worth it for anyone — period. Here’s a list of 10 insurance policies you can feel OK about not buying, as they’re just not worth the money for what these policies ostensibly cover.

Extended Warranties

It seems that whether you’re buying a dishwasher or a BluRay player, the salesperson pushes you to purchase an extended warranty. The fact is, most consumers never end up using these warranties. This is especially true if you make a big-ticket purchase from a reputable brand with a solid history of longevity. Don’t these people have any faith in what they’re selling?

Rental Car Insurance

Almost everyone pays a little more for an auto insurance policy that covers the cost of car rentals (usually limited by a certain dollar amount per day and a maximum amount of days they’ll cover). Many insurers promote this as a sound benefit, just in case your car requires some repair work after an accident. Granted, the price of  having rental care insurance on your auto policy is relatively low, but given how seldom you’re likely to rent a car, you’d save more money over the years to forego this policy and simply pay the low rental car rate yourself should you find yourself in need of a quick replacement.

Children’s Life Insurance 

You most likely own life insurance to provide for your children, heirs or other dependents in the event of your untimely death. Children, however, have no familes they must protect financially, so it makes little sense to purchase this coverage for your kids. Some insurers will argue that by starting a life policy for your children now, they can’t be denied coverage in the future if, for example, it was discovered they had a chronic illness. This is largely a waste of money, since statistically, most children will reach adulthood in good health. A more productive investment in your childrens’ future would be to use that money to fund an individual retirement account (IRA) or an education savings vehicles, such as a 529 college savings plan.

Flight Insurance

There is absolutely no need for you to purchase a flight insurance policy. No matter how much terrifying footage of airplane accidents you may have seen in your lifetime, your chances of being killed in a flight accident is statistically infamentesimal. Even beyond the rarity of these events, however, is that should the worst happen, your life insurance policy will cover this type of tragedy. Furthermore, it’s not uncommon for survivors of airline accidents to receive either settlement or court-ordered recompense through class-action litigation.

That concludes Part I of this article series on kinds of insurance you don’t need. Check back next week for the conclusion of the article, when we’ll look into the merit (or lack therof, as is the case) of six more insurance policies that aren’t worth your time or money.

bigstock-Cognac_and_Cigar_with_Smoke_on_black_background-34830566 (1)Quite simply…premium. Like, a lot of it.  Like the difference between, say, $70 a month and $240 a month. I know, painful right?

It’s a quick story, but one worth repeating.

Recently I was underwriting a guy who was an occasional cigar smoker. Only he answered no to the smoking questions when I asked them. You know, questions like “Do you smoke? Have you ever? Cigars? Anything else?”

It’s not that us insurance agents are out to learn every detail of your existence, but we need to have honest answers to these questions in order to get you the best underwriting results possible. Answers like, “I tried it in college” are appropriate to share (and not just for smoking!) because it allows us to determine what you’ll need to disclose.

It’ll also help us in coaching you for the exam. Because if you’re an occasional cigar smoker we can still get you non smoker rates. BUT, we need to know about it so we can say things like, “WHATEVER YOU DO DON’T SMOKE A CIGAR THE WEEKEND BEFORE YOUR MONDAY MORNING EXAM!!”

My guess is I don’t need to explain to most why that might be a bad idea, but in case you’re still wondering…YOU DON’T WANT TO HAVE NICOTINE SHOW UP IN YOUR LABS. It limits your options for carrier selection and may get you stuck with a smoker rating.

Plus, that result sticks with you for 12 months. Your results go to something called the Medical Information Bureau or MIB and anything that lands there is accessible to ALL of the insurance carriers. Which means that “I’ll just go to another carrier and say I don’t smoke” thought won’t really work. To get back to a non smoker rate you’ll have to be smoke free for 12 months (by most carriers standards) and go through underwriting again. So if we pretend that one cigar was indeed your first it’s going to be a) a very expensive cigar in terms of insurance premium and b) one that maybe should have been delayed another week.

All this said, we’ve got a few ideas on how to avoid this surprise nicotine in your blood because you smoked your very first cigar right before your life insurance exam problem. Nope, that wasn’t even close to a run on sentence…

1) Don’t ever smoke a cigar.

2) Definitely don’t attend any bachelor parties in the month before your life insurance exam.

3) Don’t hang out in cigar clubs.

4) By all means stay out of Vegas!!

5) Lock up any and all cigars within a 10 mile radius.

6) Just admit you smoke them from the start and find an insurance agent knowledgeable in underwriting cigar smokers (we’re one of them in case you were looking).

That last one is likely your best method. Message us for help. Before you smoke the cigar.

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