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Small businesses are the backbone of the economy, but they face many challenges, including risk management. One of the best ways to mitigate these risks is through proper planning, including the use of life insurance. In this article, we'll explore how small business planning can be enhanced by utilizing life insurance.
Life insurance is a contract between an individual and an insurer, where the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium, upon the death of the insured. Life insurance can be used for personal or business purposes, and can provide a range of benefits, including financial protection, estate planning, and tax advantages.
Small business owners should consider life insurance as part of their overall risk management strategy. In addition to protecting their families and loved ones in the event of their untimely death, life insurance can also help small businesses with succession planning, key person insurance, and buy-sell agreements.
Succession Planning
Succession planning is the process of identifying and developing potential successors to key leadership positions in a company. For small business owners, this means identifying individuals who can step in and manage the business in the event of their death or disability. Life insurance can play a critical role in succession planning by providing funding to the business to help it continue operating during a transition period.
For example, if a small business owner dies unexpectedly, the business may be at risk of losing key customers, suppliers, and employees. Life insurance can provide the necessary funds to help the business weather the storm and continue operating until a suitable successor is identified.
Key Person Insurance
Key person insurance is a type of life insurance policy that is taken out on the life of a key employee or executive in a company. The purpose of key person insurance is to protect the business in the event that the key employee dies or becomes disabled. Key person insurance can provide the business with the funds necessary to find and train a replacement, cover lost revenue, and pay off outstanding debts.
Small businesses may not have the same resources as larger companies to cover the loss of a key employee. Key person insurance can help ensure that the business is protected and can continue to operate smoothly in the event of an unexpected loss.
Buy-Sell Agreements
Buy-sell agreements are agreements between business owners that govern the transfer of ownership in the event of one owner's death, disability, or retirement. Buy-sell agreements can help prevent disputes and ensure a smooth transition of ownership.
Life insurance can be used to fund a buy-sell agreement by providing the necessary funds to buy out the deceased owner's share of the business. This can help ensure that the business remains in the hands of the remaining owners, rather than being sold to a third party.
Choosing the Right Type of Life Insurance
Small business owners have several options when it comes to choosing the right type of life insurance. Term life insurance is the most affordable and straightforward option, providing coverage for a specific term, typically 10, 20, or 30 years. Term life insurance is ideal for small businesses that need coverage for a specific period of time, such as during the startup phase of a business.
Permanent life insurance, on the other hand, provides coverage for the life of the insured and includes a savings component that can grow over time. Permanent life insurance is more expensive than term life insurance, but it can provide additional benefits, such as tax-deferred savings and cash value that can be used to fund a buy-sell agreement.
Conclusion
Small business planning is essential for the long-term success and sustainability of a business. Utilizing life insurance as part of a comprehensive risk management strategy can help small business owners protect their families and loved ones, ensure business continuity, and plan for succession.
Whether you're just starting your business or have been in operation for years, it's never too late to start! At Southwest Senior Advisors we work with a great team of agents who have a vast range of experience and expertise to help you find solutions that will fit the goals of your business. Give us a call today and we can set up a no-obligation meeting to review your current plan and see if there are any solutions that would benefit you in your unique situation.
Index Universal Life Insurance (IUL) is a type of permanent life insurance that provides both a death benefit and an investment component. This means that the policyholder can accumulate cash value over time while also providing financial protection for their loved ones.
Here are some of the benefits of Index Universal Life Insurance:
Overall, Index Universal Life Insurance can be a valuable financial planning tool for individuals who want both financial protection for their loved ones and the potential for investment growth. However, it's important to carefully consider the costs, risks, and benefits of any life insurance policy before making a decision. Let our team of experienced agents help you navigate your options and find a policy that will work to be a solution to ALL of your needs. Always with No obligation to enroll.
We wanted to share some information about an additional product line that we are offering that you may be interested in. That is Long Term Care! Maybe you already have a policy in place that you purchased when you were younger and that is perfect! We likely wouldn’t recommend changing that at this point, although if you would like to review your coverage and compare it to other options we are happy to do that for you.
In this article from 2019 the author shares some good statistics about the number of people that will need LTC- 47% of men and 58% of women age 65 and older will likely need to utilize a nursing home at some point in their lives. So your chances of being able to utilize a traditional LTC policy are higher than you may like to think. And the cost for this care can get very costly… depending on your location and how much care you need nursing home care can range from $3,000-$7,000/month!
If you haven’t signed up for Long Term Care insurance because you don’t understand it, or you don’t want to pay for something you feel like you are likely to not ever need, that is why we are sending this email- there are lesser known options out there that will provide you with a benefit for Long Term Care should you need that, OR provide a death benefit to your beneficiaries after you pass away if you don’t ever wind up in a Nursing Home.
That’s right, you can choose to buy a traditional, “use it or lose it” type of Long Term Care Insurance which works great for many people. Or, there are 3 other options that we wanted to let you know about.
The first alternative that we have includes a hybrid life with long term care policy. These are great if your main objective is to secure LTC insurance for yourself and or your spouse, but you want to be able to get something back for your premium payments in the event that you don’t go to a nursing home.
We can also write a permanent life insurance policy that has a Long Term Care rider included that would allow you to advance a portion of the death benefit to use if you needed to be in a nursing home. This type of policy is ideal for someone who would like extra life insurance but also wants to protect against the high cost of a nursing home stay.
A fourth option if you are very limited in your budget, is a Short Term Care or rehab policy that we can offer. Even though it is called “short term” we can do terms that last up to 365 days and can be renewable one time. That could give you two years of coverage in a nursing home. This isn’t the most ideal option to protect against major long term care stays but it could definitely help if you are unable to afford the higher costs of the other products.
This is a lot of information, but hopefully you find it helpful. Please give us a call or email us if you would like to get some quotes on any of these options for yourself or for a loved one.
A deep dive into Medicare Advantage Plans
With all the rage on the TV these days it sounds like Medicare Advantage plans are the only thing anybody ever uses for their health coverage. What is all the hype? What are the “advantages” and are there any disadvantages to going with a “Part C” plan? This and more will be covered in this article!
Medicare Advantage, also known as Part C plans are network based plans that will become your primary insurance. What this means is that you will still have Medicare A and B, (this is a requirement to get onto an advantage plan), however Medicare will no longer be paying any claims for you. You will utilize your Advantage plan at your doctors office, the hospital and the pharmacy. Kind of an all in one option.
What are the “advantages” to advantage plans? The things that are appealing to people who sign up for an advantage plan are that they are typically a more affordable option in terms of premium as compared to having Medicare with a separate Medigap plan, which we will talk about in another article. You should know that you will usually have more copays and coinsurance with a medicare advantage plan vs medicare with a medicare supplement plan- if you have ever had an employer plan you will be used to this, Medicare Advantage works a lot like those plans.
Another thing people like about Medicare Advantage is that they offer benefits that aren’t offered through original Medicare. These could be things like Dental coverage, some vision exams and help paying toward eye glasses and contact lenses, some plans also offer gym memberships, as well as other benefits. Not every plan offers every benefit so you should shop around and find a plan that offers you the benefits that are important to you.
One note about these extra benefits: a lot of the time they are not comprehensive in what they cover- for instance; you might receive dental coverage but it will not cover major services, or maybe it only covers $750/year- this will get you a cleaning and exam and maybe some fillings but not a lot beyond that. Other plans offer a lot more for their dental, just be aware that they do vary in what they cover. At Southwest Senior Advisors we do our best to thoroughly go over all the benefits for a plan you are looking at and make sure you understand what is covered and what may not be covered. Unfortunately, not all agents you talk to on the phone or even in person will be this thorough, they should be and they are supposed to be, but we have come across too many people that got signed up on a plan with promises of lots of great extra benefits all to find out it wasn’t a good fit for them. If this has happened to you, give us a call and we would love to help you get things straightened out. If you are just trying to get an idea of what you want to sign up for, you can also give us a call! We would love to help you get things set up right from the start.
One thing we try to impress upon everyone we talk to about all kinds of insurance, whether that is Medicare Plans, regular health insurance or even life insurance- there is no perfect insurance! They all have their quirks and we have things we wish were better about our plan even if it is “the best” option for us. On that note, there are things that are less than favorable about Medicare Advantage plans as well. Some things that people don’t like about them is that they are network based. This means that you need to make sure your doctor is in network with the plan that you are looking at, otherwise you may not be able to continue seeing them, or you might have to pay a higher copay to see them. We have software that will allow us to check if your provider is in network with any of the plans that you are looking at. If you are local to us we also work closely with most of the providers in the area to know what plans they accept and make sure to keep you in their office after you sign up for Medicare.
Hopefully this helps you gain a greater understanding of Medicare Advantage. They are great plans, but it is so important to know and understand how they work. They aren’t for everybody and there are plenty of people that we have helped and we did not recommend going with a Medicare Advantage plan. Give us a call and we can help you know if it is a good fit for you. If you are on one now and want to compare it to other plans we can also help with that.
When we started out in the insurance industry we only did Medicare. We wanted to become experts in this field so that we could help those people getting onto Medicare to navigate their options and ultimately allow them peace of mind because they know how things work and they are confident that they have the best plan available for their situation. We still love to do this but now we are thrilled to be able to offer this same confidence and guidance for Life Insurance products as well. We work very closely with a great team of brokers at Brokers International and through that connection we have access to some of the best quoting software as well as the ability to look at various insurance companies to help you find the one that will be the best fit.
There are lots of things to consider when looking at life insurance policies and you have multiple plan types as well as insurance carriers to choose from. There is Term Life, Guaranteed Universal Life, Indexed Universal Life, Whole Life, and Final Expense insurance to name a few. To keep this article not too wordy we will discuss Final Expense today and share information on the other products in the coming weeks.
Final Expense Insurance is what it sounds like: Insurance to cover your final needs and arrangements after you pass away. This is not something people like to think about or start planning for too early, however it might be wise to start looking into it today!
Our research has shown that the average cost of burials today is around $12,000. If you choose to be cremated it can be more affordable but costs for a full service with a cremation can start around $3,000 in a lot of areas. If something tragic were to happen to you, a Final Expense Policy would allow your loved ones to afford to pay for your funeral or memorial service without worrying about the cost. Many policies will pay the death benefit within a couple of days vs other life insurance policies that require a death certificate which can take weeks to obtain. Final Expense Life Insurance is an affordable option that can be used to cover any "final expenses'' ranging from funeral/burial costs, family travel costs, replace lost income, or pay off outstanding debt that the deceased may have had. The policies can be made to fit your budget or what we calculate your final expenses to be. We have seen policies as low as $27/month! Let us know if you have any questions or if you want to look into any of these options for yourself or somebody you know.
Term life insurance- What is it and should I have it??
What is Term Life Insurance?
Term life insurance is the more straightforward of your life insurance options. It is a death benefit payable upon your passing to a beneficiary of your choosing for a set timeframe. For example, you can choose a death benefit amount of 1 million dollars to be paid to your spouse if you were to pass away, the term of the policy could be anywhere from 10, 15, 20 or 30 years typically. When this “term” is up, the policy owner has a few options which can also be dependent on which company is providing the insurance… they can renew the term, typically this will end up being at a higher rate, but can potentially be without underwriting. They can sometimes convert the term policy into a permanent life insurance policy that we will cover another day. Or they can simply let the policy lapse.
Should I have a term life insurance Policy?
Term policies are generally more affordable in terms of premium as compared to other, permanent life insurance options. These policies allow younger people to purchase a large amount of coverage for a minimal monthly cost. If you have children at home a term policy may be a good idea to protect them and your spouse in the event that you pass and are no longer able to provide for them financially. These can also be great policies for more middle-aged couples who are still paying off a mortgage or student loan debt. It gives your spouse peace of mind knowing that in the event of your passing, they will not have to carry the burden of these debts on their own. There are many other situations where term life would be suitable, but these are some great examples to start.
Example:
Jose is a healthy 30 year old who wants to provide protection for his family in case he is to pass away. He calls us and we are able to obtain a term life insurance policy for him. He now has a policy that will provide $1,000,000 to his spouse if he passes away within the next 20 years and it only costs him $35/month! This particular policy can also be easily converted to a permanent life insurance product in the future if he chooses.
Medicare Enrollment: 3 Things You Need to Know
You’re about to turn 65 and you know the time is coming – Medicare. But you also know all the troubles you’ve heard that arise from trying to sign up for Medicare. There are so many plans to choose from, between Medicare supplement plans and Medicare Advantage plans, and then there’s knowing what prescriptions are covered and whether your doctors are within the network for the plan you choose.
Whew.
It honestly just sounds like a lot of headache and stress.
But it doesn’t have to be!
At Southwest Senior Advisors we’re here to help you every step of the way. We have made this business our passion and that passion is fueled by your successes. Taking the complicated mess of Medicare, and turning it into something plain, simple, and easy for you to understand, well, that’s a success for us.
So here’s 3 things you need to know about Medicare in order to make your enrollment a success.
So here’s the bad news first. Missing Medicare enrolment windows will result in penalties. The open enrollment window is 3 months before turning 65 and runs until 3 months after your 65th birthday. Not getting signed up within this window can potentially give you penalties that are applied to your premium. Those who don’t make it within this timeframe could potentially end up paying double the amount on their premium depending on how long they wait to sign up. And what’s more, these penalties never go away!
Don’t let this be you! These penalties are easy to avoid if you just remember the enrollment window and start preparing yourself before the time is up. Whether you do your own Medicare research, or let us do it for you, doing this research before your window closes is the first step to success.
So now you know when you need to enroll, but how do you go about doing it? There are 3 simple ways to start the Medicare process
Here’s where Southwest Senior Advisors comes in to make this process a breeze. While you could do all the research on your own, you would miss out on valuable insight and experience we’ve gained over the years as we’ve helped other clients. Our passion is to sit down with you and work through your needs in order to find a plan that fits your needs best. We sift through budget, medical expenses, prescription drugs, doctors and networks – all in order to optimize your coverage. You can leave our office feeling relieved, knowledgeable, and with the perfect Medicare plan for you.
Choosing a plan doesn’t have to be stressful! Come chat with us today and let our experience help you find the plan that fits you best.
So you’ve enrolled, picked a plan, and now you’re good right? Well, not quite. Believe it or not, Medicare isn’t going to cover all your health costs from here on out. That’s where Southwest Senior Advisors wants to make sure you’re covered! While Medicare will eventually pay at an 80/20 ratio, there’s no cap on that 20%. So what does that mean? It means if you have a really difficult year that results in a lot of medical expenses, you’re left footing the bill at 20%...until it’s fully paid! Where most insurance plans have a “cap” or a stopping point for patient payment, Medicare doesn’t have a limit on how much you’ll pay. And if you’re paying a rather large bill, that 20% can get expensive fast!
But we know how to help. With Medicare supplement plans, or gap coverage added to your Medicare plan, you will eventually hit a max out of pocket payment and then you can rest easy knowing the rest of the bill is taken care of.
Not all advertised plans are inclusive in terms of doctors and networks. A plan may look fantastic online and seem to fit your budget and needs perfectly. But what happens if your doctor doesn’t accept it? Then you’re left having to choose to either pay out of pocket for the doctor you like, or find a new provider in your network.
With Southwest Senior Advisory we have those local connections and relationships already established with providers in the area. We can quickly let you know which doctor accepts Medicare and what would be the best plan and coverage for you.
So Now You Know
Now that you’re aware of Medicare’s enrollment window, the penalties and gap coverage, you can have a better sense of what to do when that time arises. Our motto is that “we take the stress out of Medicare” and we want to do that for you today! Our goal is to help you feel prepared, informed, and confident that you’re getting the coverage you deserve at the cost that’s right for you.
Come visit us today and let us help you get started on your successful Medicare journey!
Medicare Parts A – D: What’s the Difference?
Medicare can sometimes seem like a confusing system full of labeled subsections that, quite frankly, can be wearisome to sift through. So why does it matter to know all the different aspects of each part of Medicare? Well knowing what is and is not covered can save you time and money down the road as you look for things like preventative care, doctors, and treatments. When you know what’s covered under each part of your plan, you can feel confident knowing what to expect and to how to find the best care available for you.
So lets jump in and figure out just what is the difference between all these Medicare Parts.
Part A – Hospital Insurance
As the name implies, this section of Medicare helps cover your inpatient care within a hospital. With Medicare being accepted in over 7,000 hospitals, it’s a safe bet that whatever hospital you need will take Medicare Part A. But it’s not just your normal hospital visits that are partially covered, but also, Critical access hospitals, Skilled nursing facilities, Hospice and Home Health Care. For some of these you do need to meet certain conditions in order to receive these benefits, but knowing the potential coverage is there is comforting. And as we all know how expensive hospital stays can become, knowing you have coverage for your hospital visits can ease your mind as you start on your Medicare journey.
Part B – Medical Insurance
When it comes to Part B, think preventative and medically necessary. Where Part A focuses on hospital, Part B covers things like doctors’ visits, outpatient care, and screenings that help early identification or the need for early treatment. Things like, Flu vaccine, Pneumonia vaccine, Hepatitis B vaccine, Pap tests, Screening mammograms and Ambulance Services. With prevention in mind, you can go forward knowing Medicare approves and encourages these routine immunizations and exams. You don’t have to worry about stacking up bills in order to get routine and recommended screenings. With Part B, you can gain access to all the preventative care you need in order to stay at your healthiest.
*Some of these items may require a copay and or coinsurance depending on your level of coverage.
Medicare Part D – Prescription Drug Coverage
Want the good news? Everyone with Medicare is available to Medicare prescription drug coverage! How does it work? You get to choose the Medicare drug plan that works best for you and then pay a monthly premium. Plans vary based on cost, specific drugs covered, etc. so taking the time to do the research pays off in the end. Here at Southwest Senior Advisors, we have the software available to take your current medications and plug them into our system and let you know what would be the most cost-effective plan for you. We can help take the headache out of planning and sifting through details, and ensure you get great coverage.
And there’s something to keep in mind about Part D. If you choose to skip getting get Part D, and don’t have other creditable drug coverage, you’ll likely pay an enrollment penalty if you choose to enroll later. And this penalty could stick around for life. So don’t let yourself be caught off guard, and let us help you find that perfect plan today!
Knowing Matters
Knowing the ins and outs of Medicare can be challenging. But knowing the basics is a good place to start so you can have the confidence and assurance that you’re getting the services and coverage you need. At Southwest Senior Advisors, we love helping others walk through this Medicare experience, ensuring that you walk out our doors with relief, confidence, and assurance that you’ve got the best possible care.
Let us take the stress out of Medicare and come see us today!