Firefighters put their lives on the line every day; when they go to work, it’s no surprise they risk more than an average employee. Disability income insurance for firefighters is hard to come by, but Ash Brokerage works with carriers that will insurance this occupation. Due to the nature of the job and hazardous activities associated with fighting fires, however, the products available offer limited benefit amounts and restricted periods.
Typically, the policy will cover only total disability, and the benefit period will be a maximum of two years. Some carriers may offer a limited partial disability benefit, which means the policy holder would be limited from doing some of his/her daily activities, but not totally disabled. In this case, the insured would receive a reduced benefit.
It’s also important to note most firefighters are considered government employees. All disability carriers, no matter your occupation, consider government employees different from private business employees because government employees typically have part of their pension “pushed out” to them if they become disabled. Usually, there’s no way to stop this from happening, so carriers view this payment as a form of disability benefit. This limits the amount of coverage government employees can purchase, as compared to a privately employed person who doesn’t have any disability coverage.
If you have any clients who are firefighters, the least you can do is look into the possibility of obtaining disability income insurance to protect their paycheck. After all, they protect your home, business and family every day.
Most people know they need to save for retirement … that’s why most of us are saving. According to an article published in the Principal Financial Well-Being Index, 61 percent of workers are very concerned about their long-term financial future.
In the disability income world, we all know how important it is to cover our most valuable asset: our ability to earn a paycheck. But what about covering our retirement contributions? According to the Employee Benefit Research Institute, health problems are No. 1 reason workers take an unexpected early retirement. If your clients were to become disabled, would they be able to continue to contribute to their 401(k) or other retirement plans? The answer, most likely, is no.
A disability plan that covers retirement contributions can help protect your clients’ retirement in the event that they become too sick or hurt to work. I know adding another expense could make for a difficult sale. But, can your clients afford to NOT purchase this type of coverage?
Ask your clients how they plan to live in retirement. Maybe they want to spend their days volunteering. Or maybe they want to travel in their non-working years.
If they experience a health problem during their earning years, not only could their dreams of how they want to spend their retirement be crushed, but they could also have the burden of figuring out how they will save for an early retirement, or a retirement that includes unexpected medical expenses.
Put it in Practice: Talk to your clients who are contributing to their 401(k)s. Those who are at their maximum issue limits for DI insurance are great prospects as well. A policy that covers retirement savings allows them to purchase additional coverage on top of their personal coverage.
What do you think of when I say "long-term care?" When I first started at Ash Brokerage, I thought of an 80-year-old Alzheimer's patient wandering around a nursing home with no hope of leaving. The most positive image I had was of Allie and Noah in “The Notebook,” sharing a room together in a facility where they would eventually pass away. It’s a great sappy love story, but it’s still not very positive, right?
Well after two years of designing care plans for families, my view has taken a 180-degree turn for the better. The days of gray nursing homes filled with our grandparents are becoming an image of the past, I’ve learned – more than 70 percent of LTC claims are being used for home health care.* People are staying in their homes as long as they possibly can. Knowing that statistic, can you tell me why we are still selling LTC policies to cover nursing homes?
You might argue that you want to sell your clients an LTC policy that puts them in the Ritz-Carlton of nursing homes, but unless your client is a millionaire, that's going to be hard. The days of 5 percent compound cost-of-living adjustments and lifetime-care benefits are gone; a close comparison to those policies can cost a client more than $10,000 a year in premium. If they can afford that God bless them, but I know my family can't.
There is a market for traditional LTC insurance. The difference in the market of late ’90s and early 2000s is that we're not covering nursing homes – now we're covering home care.
Let's look at an LTC benefit of $4,500 a month for three years. That's a total bucket of $162,000, which is enough to cover home health care costs in most of the country today.* Add a cost-of-living adjustment to keep up with the rising costs of care, and by age 80, that client is looking at a healthy policy – one that can give them peace of mind as they age. It can keep them in their home when they are sick. It can keep their family from fighting over care. It can even allow them pass their hard-earned assets to their loved ones.
Oh, and did I mention if we talk to them early enough, and they are healthy enough, that same peace of mind could cost your client less than $3,500 a year? That's literally less than the cost my Verizon wireless family plan each year ...
Put It In Practice: Do yourself a favor and stop making the association of "LTC = nursing home." There's a whole new, positive, innovative LTC market out there waiting for you and your clients. They'll thank you for thinking differently.
Every year, we review more than 1,000 existing life insurance policies with our Life Insurance Portfolio Analysis. Most of our time is spent understanding the “what” of life insurance, and rightfully so. Families, businesses and charities depend on the “what” of these policies. People need to understand how their policy works, how long it lasts, how much to pay and when, etc.
So the “what” is critical, but it’s not the whole story. In fact, our entire analysis means very little without the “why.” Life insurance is an incredible tool that can solve a multitude of issues, but if you don’t know why you have such an asset, it has little perceived value.
When we review policies, we need to better understand why the original policy was purchased, what purpose it served at that time and what purpose it can serve today. Reviewing a policy means very little without considering what is important to the family it is intended to serve. A needs analysis can be done, but you have to ask how it fits with your clients’ hopes, plans for the future and desires for the most important people in their lives.
Really, the “why” can be summed up with one question: “Who’s counting on you?"
Put it in practice: Think of a few clients who have existing life insurance coverage and ask if they would be willing to review the coverage. Then ask the question, “Who’s counting on you?”
When it comes to buying ice cream, the options we have today are astounding. No longer is it just plain vanilla … there’s rocky road, chocolate chocolate chip, cookie dough, strawberry … you name it, and it’s probably out there. Sometimes all you really want is a bowl of plain vanilla, but it’s nice knowing you have multiple options to choose from.
The same is true when it comes to long-term care (LTC) planning. For a long time, all we had was plain vanilla, offered by more than 100 different carriers. However, as the market began to expand, there became a demand for some different “flavors” and things got exciting.
Today, the options are many, depending on the flavor that appeals to you and your client’s situation. We have single-premium, asset-based solutions that leverage a death benefit while still maintaining some cash value. There are solutions that allow clients to exchange their existing non-qualified annuities and leverage that account value TAX-FREE if care is ever needed. We also have the option of adding LTC or chronic illness riders to life insurance policies; these riders allow clients to accelerate the death benefit if they ever need care.
But, lest all these options overwhelm you, let’s not forget about the plain vanilla of traditional long-term care insurance. Yes, it may not be for everyone, but sometimes, plain vanilla is just what’s needed.
Put it in Practice: Now is a great time to reflect on the wide variety of flavors you can offer your clients. Ash Brokerage will not only help you understand all of the flavors available, but we’ll also help you determine which one will best suit your client’s tastes.
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