Small Business Owners – Concerned about the cost of Healthcare?

If you have a healthy group of 5 or more employees there is a compliant alternative to the Affordable Care Act plans. It can be made very easy for you to fund your group’s health insurance claims with a plan that is owned and funded by you. You select features, options, deductibles and you may set up employees to have some cost sharing requirements such as deductibles or coinsurance. When we mention the term, “self funding” many employers believe they would be burdened with the entire cost of their employees claims. Self funded plans, however, typically include a stop-loss where an insurance company steps in to cover claims that exceed a pre-determined amount. After underwriting of a group is completed and projected total dollar amount of claims for the year is determined, a monthly premium is assigned that funds the expected losses, stop-loss insurance and covers the cost of plan administration.  If the group’s claims exceed the aggregate deductible, the stop loss insurance steps in to cover the difference. You always know your maximum out of pocket potential for the year. On the other hand, if premiums paid for the year exceed losses, you, the employer receive a refund of the excess premium. One company that administers self-funded plans says 60% of their employer groups receive a refund. If you have a small group plan in place now or if you are considering implementing a group health plan, this is an option definitely worth considering.

End of Life Planning – there is a lot more to it than buying life insurance


Having recently experienced the loss of a close family member, my own end of life planning has been front and center in my mind lately.   Taking time to plan for the inevitable makes good sense for many reasons, not the least of which is relieving surviving loved ones of the difficult decisions and financial burdens that come when someone passes.  Cremation?  Burial? Final Dispostion?   Does everyone close to me know my wishes?   How about the funeral service?  Do I want special pictures displayed, certain music played?  There are many decisions to be made and some involve potentially costly outcomes.  It really is important to plan all the details and make sure funding is set aside for those final expenses either through designated accounts or with Life Insurance.   One of our Life Insurance Companies works with a site called “Dignity Planning dot com” which offers a number of planning services but most importantly, it has a free tool where you can do a mock (or real) funeral plan using services and pricing from a funeral home you select in your area.  If you try the tool, be sure to use the “custom” selection rather than picking one of the packages.   You can make a much less expensive plan that way and by searching through the various options you will gain a lot of insight into what must be done and the associated costs of various services that are available.  Check it out:

Life Insurance—How Much Is Enough?


You are probably aware of the importance of having enough life insurance coverage to handle the financial contingencies that may affect your family in the event of your death. Determining the necessary amount of life insurance can be complicated. One general rule of thumb is that you should have enough coverage to equal five to ten times your annual salary. However, you should determine the “right” amount of life insurance coverage for you and your family with a careful “needs analysis” rather than using an arbitrary formula.

The needs analysis approach incorporates an evaluation of your family’s most important financial obligations and goals. This leads to planning insurance coverage to help address mortgage debt, college expenses, and future family income, as well as to provide liquidity for meeting future estate tax liabilities.

Mortgage Debt
The first point worthy of consideration is whether your life insurance proceeds will be sufficient to help pay the remaining mortgage on your home. If you are carrying a large mortgage, you may need a sizable amount. If you own a second home, that mortgage should also be factored into the formula.

College Expenses
Many people want life insurance proceeds large enough to help cover their children’s college, and possibly graduate school, expenses. The amount needed can be roughly calculated by matching the ages of your children against projected college costs adjusted for inflation. This calculation should be revised periodically as your children get closer to college age, and it may be a good idea to be as conservative as possible when estimating long-term financial goals.

Continuing Income for Your Family
The amount of income you will need to help provide for your surviving spouse and dependents will vary greatly according to your age, health, retirement plan benefits, Social Security benefits, other assets, and your spouse’s earning power. Many surviving spouses may already be employed or will find employment, but your spouse’s income alone may not be sufficient enough to cover the monthly expenses of your family’s current lifestyle. Providing a supplemental income fund can help your family maintain its standard of living.

Estate Taxes
Life insurance has long been recognized as an effective method for establishing liquidity at death to pay estate taxes and maximize asset transfers to future generations. However, this use of life insurance requires qualified legal expertise to help ensure the proper results.

Existing Resources
If your current assets and retirement plan death benefits are sufficient to cover your financial needs and obligations, you may not need additional life insurance for these purposes. However, if they are inadequate, the difference between your total assets and your total needs may be funded with life insurance.

There are many factors to consider when completing a needs analysis. In addition to the areas already mentioned, some other questions you might want to address include the following:

1. How much will Social Security provide and for how long?

2. How do you “inflation-proof” your family income, so the real purchasing power of those dollars does not decrease?

3. What is the earning potential of your surviving spouse?

4. How often should you review your needs analysis?

5. How can you use life insurance to help provide supplemental retirement income?1

6. How do you structure your estate to reduce the impact of estate taxes?

7. Which assets are liquid and which would not be reduced by a forced sale?

8. Which assets would you want your family to retain because of sentiment or future growth possibilities?

9. If your spouse remarried, how would that impact any college savings plan currently in place for your children?

As you develop an insurance strategy, remember to analyze your existing policies. Calculate the additional coverage you may need based on your family’s financial obligations and any other resources, such as retirement benefits and savings. Remember, having the proper life insurance coverage can play a major role in any family’s financial protection.

1 Access to cash values through borrowing or partial surrenders will reduce the policy’s cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. INLJ2UU-04

The information provided is not written or intended as specific tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company, Enfield, CT 06082.

What Happens When You Die?

Depends on who you ask…. Your own spiritual or religious beliefs may provide answers regarding the journey of your soul but what about the on-going earthly matters? What happens when you die? Medical personnel, hospice workers, mortuary personnel, cemetery workers, lawyers, local, state and possibly federal tax authorities, bankers and insurance agents can each offer different answers from their various professional perspectives because each has a specific and often important role when someone dies.
One thing nearly all of us will have in common when we pass away is that there will be bills to be paid. There may be medical bills, long term care and hospice bills to be paid. Funeral expenses can vary widely and can often cause financial strain on the grieving family. The family may need to hire movers to help relocate or dispose of personal items. They may need to rent storage space for personal property until it is decided what to do with various items. There may be legal bills, estate taxes… the list of details goes on.
More importantly, when someone passes away unexpectedly while supporting a family, the loss of income can be devastating to the surviving spouse and children. Is there a mortgage to be paid? Auto loans and credit card debt? Are there children in school? Will the children be able to go to college? Depending upon the age of any children, there may be daycare expenses. If the children are young, the surviving spouse may want to be at home with the children and only work part-time or not at all. We all hope to be able to raise our families and live to a ripe old age but, it is important to prepare for the unexpected.
An experienced life insurance professional can help determine your survivors’ financial needs and design a plan to protect your assets and your family. We all know that Life Insurance can be purchased directly through various sites on the internet however there is a lot more to buying this protection than finding the lowest price. There are many basic types of policies including term insurance, whole life, variable and universal life policies. Each of these policies can have dozens more features, benefits and provisions that may or may not fit your specific needs. Nobody wakes up in the morning thinking, “gee, I’d like to spend an hour talking with a life insurance agent tonight,” but there is a reason agents must be licensed and take continuing education classes for their profession. They know the” in’s and out’s” of life insurance policies and have been trained to help clients determine their specific needs. Additionally, when someone dies, a good agent can assist with filing the claim and help survivors determine the best way to receive their death benefit.
Educate yourself as much as possible but enlist the help of a licensed life insurance agent or financial planner before you buy. Chances are that the policy won’t cost you any more than that internet policy (assuming you buy the right one) and you’ll have the peace of mind knowing that if the worst happens, your loved ones will have the financial resources they need to carry on.

Thoughts on Winter Driving

We are all used to hearing people tell us how to drive in the snow and on the ice. “Steer into a skid, accelerate and decelerate gently,” etc. Good advice but the truth is, in a panic situation you do what you train for and chances are good that unless you’ve practiced, that good advice won’t be a lot of help when you suddenly find yourself skidding out of control across three lanes of traffic. Slippery weather driving skills can ony be mastered in slippery weather and preferably in a controlled environment with no other traffic and enough space to safely practice turning, braking and accelerating without any danger to persons or property. Of course, it’s probably not a good idea for your insurance guy (me) to send you out looking for someplace to skid and do donuts with your car. It’s always best to just stay home when the roads are bad. Remember, having an accident in bad driving conditions has the same awful consequences for your insurance rates (and driving record) as crashing on dry pavement. For now let’s just look at another winter driving safety factor …. the possiblity of getting stuck or breaking down in extreme weather. Most of us know that when the engine stops, the heat stops. If you’re out in the boonies, out of cell phone coverage or with snow blocking a rescue, this is a potentially deadly situation. Gentlemen, this is especially important to think about for your wives and daughters: You don’t want them to be forced into the situation of having to get in a vehicle with a stranger or approach a stranger’s home for help, especially at night. In the winter your car should not leave the driveway without some basic cold weather survival gear. A good heavy quilt or blanket should stay in the trunk. This can also come in handy if you encounter an accident where someone needs to be kept warm until help arrives. If you’re not already wearing them, snow boots, gloves and a heavy coat should always be in automobile along with a good flashlight. We all carry cell phones these days but it’s no good if the battery dies while you’re trying to get help. Make sure a car charger for your phone stays in the car. Of course the best survival plan is to avoid getting into a deadly situation. Make sure your car is well-maintained, especially the battery, cooling system and tires. Most auto shops can do a capacity check of your battery. This is not just checking the voltage. If you get a blank stare when you ask for a capacity check of the battery, go somplace else for the work. Modern car batteries last a long time and they are very reliable but they sometimes give almost no warning before failing. A capacity check can let you know a battery needs replaced before you find yourself standing alone in a dark, cold, snow covered parking lot with a car that won’t start and a fast cooling pizza on the back seat. Be prepared. Be safe.

Obamacare – Keep your plan? We was just kiddin’

Yes Virginia, there is a Santa Claus and by the way… if you like your health care plan, you can keep it…. Sort of…. Or at least a photocopy of it in your desk drawer. However if you purchased a plan after March 23rd of 2010 you are most likely going to have to swap it out for one of the new and improved “metal plans” that are now mandated to be offered to all Americans. Once again partisan media obscure the realities and make understanding what’s happening more difficult. The truth is that yes, many people are getting letters telling them that as of January 1st, 2014 their current plan of insurance will no longer exist. But wait, there’s more the news knobs aren’t mentioning…. Along with that letter comes instructions and documents outlining the new plans for which one may apply and that have no pre-existing conditions limitations. Ok… so at least that’s not as bad as just being told “sorry, you don’t have insurance anymore.” All you have to do is sign up for one of the new plans and everything is wonderful, right? Not exactly…. Yes you can get any of the metal plans your little heart desires IF you can afford the premiums. Oh, but don’t worry, if it costs too much the government has already decided what you can afford based upon your income and their idea of how much of that income you get to keep for food and shelter. Nice the way they look after us isn’t it? So if you’re unable to afford the now roughly 30% higher premium for your individual policy, you can go to the exchange and IF you happen to make the attempt when the website is working, you may apply for a subsidy. Nice, so now your premium is less and all you have to do is figure out how you’re going to come up with that huge deductible in your new plan… yes… that deductible that you never had before.

“Obamacare” – Two things everyone should know now.

First, ACA (Obamacare) is a law; it is not an insurance plan. Health insurance is still provided by private insurance companies however the ACA mandates that insurance companies offer certain minimum benefits and that a set of standardized plans be offered, now called the “metal plans,” Bronze, Silver, Gold, Platinum, to make it easier for consumers to understand what is being offered.
Second, The health exchange debacle continues with clogged websites, hung apps and hacked servers. Most people don’t know that THERE IS NO REASON TO PURCHASE THROUGH THE EXCHANGE UNLESS YOU MAY QUALIFY FOR A SUBSIDY! You may purchase any of the ACA compliant “metal” plans from any carriers that offer them through a licensed health insurance broker (like me ) or directly from the insurance company. The price is the same regardless of whether you purchase through a broker, direct from the company or via the exchange. Again, there is no reason to use the health exchange website unless you may qualify for a subsidy. The broker websites (like mine ) and insurance company websites are generally performing normally with no waiting.