Life Insurance Awareness Month

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My husband and I were just married in July. He has been my best friend, biggest supporter, and love of my life for more than seven years.  So this month, I ask the question: What does life insurance mean to me?

Life insurance means that if something happens to me, my husband won’t have to worry about the monetary things.

He won’t have to worry about missing half of our income.

He won’t have to worry about the expenses to lay me to rest.

He will be able to accomplish some of his dreams, like buying season tickets to the Cincinnati Reds or visiting the UK.

This is what life insurance means to me. It means lessening the burden of being gone.

September is life insurance awareness month. Take the time to review your life insurance and make sure that it’s active and that the face amount is enough to support your family in the event of your loss.  Take this opportunity to meet with our life insurance agents to discuss any concerns or questions that you might have about your policies.

Buyer Beware

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Today, I did an online quote through an anonymous insurance company just to see how people who don’t eat, sleep, and breathe insurance shop for their insurance online. To say I was not impressed was an understatement. Below are the results of today’s labors:

 

  • The company would not even let me carry the coverage I currently carry With Erie (250/500/100). The most that they would let me purchase was (50/100/50) because of my age.  I’m 24 years old. Keep in mind that this is 5 times less coverage than I currently carry!
  • The MAXIMUM coverage that this company offered was 100/300/100 which is the LOWEST bodily injury limits that Masters Insurance currently offers its customers.
  • The initial anonymous quote offered me only bodily injury for the low, low price of $94. They left out: med pay, uninsured/underinsured motorists liability, uninsured/underinsured motorists property damage, towing , and rental car.
  • The deductibles automatically chosen for me were $1000, which is what I currently carry. However, the industry standard auto deductible is $500.
  • When I completed my quote (with 5 times less coverage), the final premium was $153.46 I pay $85.30. Contrary to popular belief, I get no extra discounts for being an agent.
  • Currently, I carry the “New Auto Security” (similar to Liberty Mutual’s ‘new car replacement’) and the “Erie Auto Plus” (diminishing deductibles, extra days in a rental car, $10,000 death benefit, etc.) endorsements. I did not find any of these options with the online company.

So for any of you who have watched “The Middle” will recognize this life lesson I’m about to give you. Frankie gave her son Axl her dining room set when she found one online for $50. When her dining set finally arrived, it was for a dollhouse.  Beware of that good deal that you find online!

Masters Insurance NEVER quotes a policy without uninsured/underinsured motorists coverage or med pay. Here’s a refresher on what some of the terms we say and sometimes don’t explain to you mean:

o   Bodily Injury: coverage for persons injured by you. This covers medical bills, lost wages, pain and suffering, etc.

o   Property Damage: any damage to property of another done by you.

o   Uninsured/Underinsured Motorists Liability: covers bodily injury to you and anyone in your vehicle in the event that you are hit by an uninsured or underinsured driver.

o   Uninsured/Underinsured Motorists Property Damage: covers damage to your vehicle in the event that you are hit by an uninsured or underinsured driver.

o   Med Pay: covers the medical bills incurred by you or someone in your vehicle in the event of an accident up to the amount listed on the policy.

Agency vs. Online

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In today’s world, there are many different options for purchasing insurance. You can call a hotline, get quotes online, or walk into an agency. So the next question you might ask is: why should I take the time to walk into the Masters Insurance buildings when I can get quotes from the comfort of my home and my couch? (The good news is you can call us for quotes from the comfort of your couch as well!)

  • Because we want to know you – our agents aren’t just interested in making a sale and meeting quotas. We do our best to get to know you and your family in order to find policies that best suit your needs.
  • We carry multiple companies – if for some reason you don’t like one company or a premium becomes too high, there are many other companies that we can quote you with.
  • Customer service – you will always see our smiling faces behind our desks. You won’t have to speak to a different person every single time you call in.
    • The best part- real people answer the phone. You don’t have to press one for more options

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  • Location, location, location – get this: Masters Insurance has four different locations. We have an office in Fort Wayne, Columbia City, Dunkirk, and Anderson.
  • The Masters Insurance family is hands-on with claims. We do our best to be on-site for major claims in order to help our customers as much as possible.
    • We do our best from behind our desks to get you back to the way you were before your claim.
    • We can answer any questions you might have on your claim – and if we don’t know the answer, it’s our job to find the answer.

Umbrella

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Let’s talk about umbrellas, or as they are more formally known – Personal Catastrophe Liability policies.

An umbrella policy works just like the umbrellas you know – they protect you from the rain.  An umbrella policy can cover your home, auto, boat, and any other personal policies in the event that an accident or something unfortunate happens and you are found to be at fault. There is also such a thing as a Business Catastrophe Liability policy that covers your business.

A normal Personal Catastrophe Liability policy is basically an extra $1 million worth of protection in the event of a lawsuit or settlement.  We all know that lawsuits are becoming more prevalent and courts are awarding bigger and bigger sums with every passing day.  Lawsuits can come from injury or damage caused by, but not limited to: home or auto accidents, pets, children, boats, recreational vehicles, sports, non-profit activities, vacation activities, even social media activity, and the list goes on and on.  If any of these result in injuries, property damage, slander/libel, wrongful death, or legal expenses, you’re likely looking at a larger cost than initially expected.

Erie Insurance has a couple of good cases for us to look at:

  • A jury awarded $900,000 to the estate of a 43-year-old father who died after an automobile accident. The award was based in part on the father’s future earning potential.
  • While helping a friend paint his home, a 40-year-old man fell and broke his heel. Although the homeowner was found only partially responsible, the fall cost him $1.2 million.

In the cases above, these would lie far outside the limits of liability on a normal home and auto policy. Generally speaking, Masters Insurance has been trying to increase limits to $250,000/$500,000 on auto policies. This means if you are in an at-fault accident, insurance will cover up to $250,000 per person and $500,000 per accident. This covers medical bills, lost wages, pain & suffering, etc.  In the first case, insurance would have covered up to the $250,000, you would be responsible for the extra $650,000 that is still owed to the family.

I don’t know about you, but I don’t have an extra million lying around in the event that I am sued. I’m 23 years old and I have an umbrella policy. Mike Masters also carries a Personal Catastrophe Liability policy as well as a Business Catastrophe Liability policy.

Bobbie Sage, a Personal Insurance Expert, believes that every policyholder needs and umbrella. Check out her article below.

http://personalinsure.about.com/cs/umbrella/a/aa110503a.htm

Life Insurance and Albert Ihnat

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Meet Albert Ihnat. Mike Mayberry and Mike Masters have been working closely with Mr. Ihnat and he wanted to share a little about his life experiences.

 

“I have been fortunate to have good people around me in my life. My first wife passed away in 2004 after 41 years of marriage. On September 16, I will have been married to Tammy, my second wife for 9 years. That is now 50 combined years of marriage to my two lovely wives who are certainly good people.

I have also been fortunate to have been around so many good people while teaching in Anderson schools where I coached wrestling for 45 years. I was fortunate to be inducted to the Indiana Wrestling Hall of Fame in February 2014.

I have also been blessed to meet Mike Mayberry and Mike Masters. They have helped me with my life insurance and saved me thousands of dollars a year. I want to thank them and the others there. They are such good people.

Once again, I have been fortunate to be around so many good people in my life. It has been a blessing.”

Do You Need Life Insurance When You Retire?

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Once you hit 65 and retire, you don’t need life insurance, right? Not so fast!

The traditional thinking about life insurance is that you only need it when you have an income to protect, when you have a mortgage or when you have kids to support.

And while it’s true that having life insurance after 65 isn’t right for everyone, there are some good reasons you might want to consider it.

1. Supplement your retirement income. If you have an existing permanent life insurance policy, for example, you may be able to tap into accumulated cash value as a form of retirement income. You can incorporate the funds inside your permanent life insurance policy to complement other forms of retirement income such as Social Security, 401(k) plans and IRAs.

Drawing on the cash value of a permanent life insurance policy enables people to use other resources to guarantee lifetime income.

There also comes a point when people become concerned about outliving their retirement savings. Drawing on the cash value of a permanent life insurance policy enables people to use other resources to guarantee lifetime income, such as a longevity annuity or a guaranteed living benefit.

2. Transfer wealth. Life insurance can be an effective vehicle for transferring wealth to your heirs while avoiding inheritance taxes. While the federal exemption for estate taxes have been raised to $5.43 million for 2015, there are still state inheritance taxes to consider. There are several states where you wouldn’t want to be caught dead, from an estate-planning perspective.

Of course, such policies have to be set up correctly. Life insurance payouts are generally free of income tax, but they are still subject to inheritance taxes if they are owned by the insured. That is, if you own a policy on yourself, then it is considered part of your estate.

Here are three examples of how permanent life insurance can be used for wealth transfer:

  • Set up an irrevocable life insurance trust. You would then gift premiums to the trust—as long as the gifts are under the annual gift tax exemption, you wouldn’t have to worry about paying gift tax. The beneficiary of the policy would be the trust rather than your estate, so the policy wouldn’t be included in your estate for estate-tax purposes. The proceeds of the trust would then be distributed to your children or grandchildren, however you set it up. The downside of this approach is that, because the owner of the policy is an irrevocable trust, you have no access to that policy. You give up any access to it in exchange for the tax benefits.
  • Use a survivorship policy. If you might need access to the cash value of the policy, you can use a survivorship policy, one that covers multiple people and doesn’t pay out until the last person passes away. Initially, the policy would be owned by one of the insured, but when the first insured passes, the policy would then move into a trust. The trust becomes the beneficiary, avoiding estate tax because the survivorship policy pays the death benefit on the last death, not the first death.
  • Insure the children for the benefit of the grandchildren. This can be a very cost-effective way for people in their 60s or 70s to use life insurance for wealth transfer in a “skip generation” strategy. Generation 1 owns the policy, so they can have access to the cash if they want, but then when they die, the policy goes into a trust for the benefit of generation 3.

These are complex matters, so you will want to discuss these items with your financial and legal advisors to determine what post-retirement life insurance strategies make sense for you.

(This information should not be construed as tax or legal advice applicable to each individual. Please consult a qualified advisor regarding your individual circumstances. All guarantees are based upon the claim-paying ability of the issuer. Accessing cash values may result in surrender fees and charges, may require additional premium payments to maintain coverage, and will reduce the death benefit and policy values.)