Millenials Are Not Carrying Enough Life Insurance

Forbes recently published an article reporting that only 10% of Millenials have enough life insurance in place to cover self-reported needs should they die. That is a scary statistic. Not carrying the proper life insurance puts your family members at financial risk, in the event of your death.

The article reports:

  1. Millenials report a 78% shortfall in life insurance coverage.

  2. By contrast, Gen Xers report a 48% coverage shortfall.

  3. Baby Boomers have a 37% shortfall.

In terms of purchasing life insurance, the article says, "Get enough insurance to replace the lost income of the deceased, so the surviving spouse can carry on with paying the mortgage and saving for retirement."

The American Institute of CPAs has a life insurance needs calculator (link here) to help you determine how much you really need.

Check out the full article here: https://www.forbes.com/sites/ashleaebeling/2018/11/13/the-big-millennial-life-insurance-gap/#65995fea6ac4

And, if you have questions about your life insurance policy, or getting a quote, call your agent.

Erie Insurance Accolades Speak To Company's Strength

For the sixth consecutive year, Erie Insurance received the highest ranking in the J.D. Power 2018 U.S. Insurance Shopping Study for "Customer Satisfaction with the Auto Insurance Purchase Experience." The study measures auto insurance shopping purchase behavior and purchase experience satisfaction among customers who recently bought insurance, and Erie received the highest numerical score: 877 out of 1,000. 

This is huge for Erie because J.D. Power surveys real customers and no other carrier ranks higher.

Also on the trophy shelf, Erie earned A.M. Best's rating of A+ (Superior). While Erie Family Life Insurance earned A.M. Best's rating of A (Excellent). These accolades speak to Erie's financial strength. Customers can be sure Erie is financially sound and will be there for its customers.

For more information on Erie's awards and rankings, visit its website: erieinsurance.com/awards

The Benefits Of Having An Insurance Agent

While purchasing insurance online can be convenient, there are true benefits to working with an agent, in-person for your insurance needs. Agents are required to have industry licenses and complete continuing education; meaning that when you need guidance and advice, they are equipped to give it. Their industry knowledge can help with everything from choosing the appropriate coverages, to navigating the claims process.

Technology is great, but sometimes having a real person to guide you is better.

Zombies Have Bad Days Too

Check out Erie's latest blockbuster...and it's perfect for the season. Have a wonderful Fall and a Happy Halloween from all of us here at Forbes Insurance.

With all the buzz around the new season of AMC's The Walking Dead, what if a literal zombie apocalypse happened tomorrow? While it's highly unlikely that zombies will really take over, it's good to know that insurance is there to protect you when things go wrong, like a telephone pole falling on your house or your TV getting fried by an electrical surge.

Why You Should Consider Life Insurance If You Own A Business

By: William Forbes

We have a quote printed on the wall of our office from financial guru, Suze Orman, which says, "If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance." This quote sums up pretty perfectly why you would need life insurance on a personal level. But, what about the people who depend on you in a business capacity?

Are you the owner of a business, or are you a partner in a business? If yes, then you have people who depend on you for the success of the business and their financial livelihood.

When a key member of a business passes, it can mean a few things for his/her family, as well as for the other employees: the sale of the business, the retention of the business, or liquidation of the business. The point here is to avoid liquidation, as it often results in a below market value.

There are several types of life insurance policies that can be beneficial for business use and to help prevent a company's liquidation upon the passing of an owner or key employee:

  1. Buy and Sell Policy. In a sole proprietorship, this policy is designed to allow competent associates of the deceased to purchase the business, using life insurance for funding. This means that if anything ever happened to you as the owner, your associates would have the proper funding needed to purchase the business and keep it running. Or, alternatively, your family would have the funds needed to keep the company running through a proper sale process.
     
  2. Cross Purchase Plan. In a partnership, each partner would purchase a buy and sell agreement on the others, naming himself as the beneficiary and the others as insureds. This would give each partner the proper funding to purchase a set share of the deceased partner's interest.
     
  3. Key Person. Most often used by corporations, here a business owner would take a life insurance policy out on a key employee (think CEO or other top executive). If the key employee ever died, the company would be the beneficiary of the policy, which would provide funding while a replacement was being trained.

These are just a few examples of using a life insurance policy to protect your business. For more information on these and other options, talk to our agency. Life insurance can provide needed security for more than just your immediate family members.

5 Times You Must Contact Your Insurance Agent

By: William Forbes

I'd like to use today's blog to remind my clients, and anyone who has insurance, that there are a handful of times when it's absolutely necessary you pick up the phone and contact your agent. If you have made any of the changes listed below, or have been involved in a claim, it's so important to get the details to your agent. Regarding the situations below, if you don't inform your agent, you may not be covered by your insurance policy.

I can't stress enough how important it is to tell your agent about:

  1. A Change of Address - Without the proper address on file, your insurance company may be sending critical communication to the wrong location. Even if you do not receive these communications, you are still responsible for the information detailed inside. Additionally, if you have homeowners or renters insurance, you want to be sure your policy is set up to protect the correct property. Finally, counties and cities have different insurance ratings, meaning if you move and don't inform your agent, you could be missing out on savings. It's your responsibility to inform your agent of a change of address.

  2. Additional or Replacement Vehicles - When you replace one vehicle on your policy with a new one, or if you plan to add another vehicle, it is crucial that you inform your agent. Generally, in Pennsylvania, it is your responsibility to inform your agent of an additional vehicle within 14 days. While you get a bit longer to report a replacement vehicle. I tell my insureds to report either as soon as possible, to avoid issues with coverage.

    One thing to note here - many people think when they purchase a new vehicle the dealer will contact their insurance company. This does happen in some cases; but, it is the insured's responsibility alone to report new and replacement vehicles to insurance. Don't rely on your car dealer to add a vehicle to your policy.

  3. Adding or Excluding Drivers - If you have someone who is regularly driving your car, or if there is someone prohibited from driving it (called an exclusion), you need to inform your insurance agent. In the event of an accident, without the proper drivers listed on the policy, coverage may be denied.

  4. Structural Changes to a House - Putting an addition on your home? Installing a pool? Any structural changes to your home need to be detailed in your insurance policy. These changes can affect the value of your home, and can mean it's time for new or additional insurance coverage to protect your family.

  5. A Claim - If you've had a home or auto claim, involve your agent. Your agent is your insurance advisor and can help you through the process. Including your agent is about more than just getting your claim reported. An agent can guide you through the claims process, and can act as your advocate with the insurance company.

Insurance Concept of the Week: Merit Rates

Each week we will post and define an industry term or concept for our readers.

To continue our discussion on rates, a merit rate considers the characteristics of a particular risk, and depending on those characteristics a premium can be increased or decreased. Merit rates take into consideration a person's loss history, as well as steps he/she has taken to prevent loss, such as installing a smoke detector in a home.

Check out our previous posts on: (1) what is a rate (link here), and (2) manual/class rates (link here).

Insurance Concept of the Week: Manual or Class Rates

Each week we will post and define an industry term or concept for our readers.

Continued from last week's discussion on rates (link here), manual or class rates group insureds into classes based on similar characteristics. These classes receive the same rate. Manual rates are often used as the starting point for developing merit rates, which we will look at next week.

Don't Ignore Insurance in your Financial Planning

By: William Forbes

October is National Financial Planning Month – a time to be sure your family finances are organized and you have a plan in place to meet your financial goals. Although it is probably not the first thing that comes to mind, insurance is an important part of your financial plan. The very reason for insurance is to transfer your risk of financial liability to an insurer. To put it more plainly, insurance protects you and your family from a financial loss due to the loss of life or property.

Just as you might sit down with a financial advisor annually, or outline your family budget and savings, you should evaluate your insurance policy each year as part of your financial planning (Click to Tweet!). Below are some items to bear in mind when it comes to considering whether your insurance policy is still an accurate reflection of your needs.

1.       Have you moved or made any significant changes to your home?

Beyond just meeting the minimum requirement of notifying your insurance agent of a change of address, it’s important to discuss with your agent what a new home could mean for your overall financial picture. Are you taking a step up in terms of the mortgage and/or size of the home? Are you the primary earner for your household? Are the coverage amounts still appropriate for the new home, or for your current home after a structural change has been made? In looking at your finances, are the deductibles still appropriate?

The answers to these questions can dictate important financial decisions for you and your family. They also help to bring into focus your full financial picture, and can lead to other important financial decisions. Take, for example, the first two questions: (1) Are you taking a step up in terms of the mortgage? (2) Are you the primary earner for your household? If you’ve answered yes to both of these, then it may be important for you to look at your life-insurance coverages, in addition to your homeowner’s policy.

It’s not just about reporting new purchases and changes in your living arrangements to your agent to be sure they are covered (though that's certainly part of it); it’s also critical to understand what these changes mean to you and your family’s overall financial health.

2.       Have you had a major life event – marriage, a new child, health changes?

If you’ve recently had a major life event, it’s probably a good time to see if you have the right insurance policies in place for those who depend on you (Click to Tweet!). There are many different life-insurance products on the market, which address a variety of financial needs and time horizons.

Maybe just as important as life insurance, is disability insurance. While most Americans depend on company-sponsored disability programs for issues that keep someone from working, often these programs do not sufficiently cover income loss. Particularly in a one-income family, replacing the breadwinner’s earnings is crucial to the family’s financial well being.

Your agent can walk you through the different products out there and which would be most affordable and beneficial for your family.

3.       Are you planning any large purchases in the coming year – a car, boat, art?

This question is similar in nature to item number one. First, it’s important to discuss these types of purchases to be sure you have the correct insurance products and coverages in place. But, it’s also important to understand how large purchases affect your entire financial picture. As your lifestyle changes, it’s essential to have the proper insurance in place to protect you and your family, and to be sure your loved ones can maintain the lifestyle in the unfortunate event that something happens to you.

4.       Have you had any business changes?

Are you changing your job or company? Are you planning to be self-employed? Are you nearing retirement? These types of business-related changes not only affect your finances, but also affect the types of insurance you should carry. Whether you are getting insurance through a company, or are purchasing a policy individually, you should understand the policy’s coverages and limits. There are so many things to consider in terms of insurance, when it comes to a change of employment. I couldn’t possibly cover everything here. However, I wanted to include this item as a reminder that if you will be making career changes, set a meeting with your agent to discuss your plans and how to address your insurance needs smartly. (Click to Tweet!)

5.       Do you need to consider long-term health care for yourself or a loved one?

Long-term health care policies pay daily benefits to help offset the cost of nursing and home care for certain illnesses not normally covered by health insurance and Medicare.  It’s hard to think about, but for my insureds over the age of 50 (or those with an elderly relative), I recommend understanding what this type of policy can offer you and your family. A long-term health policy could provide money to help pay for skilled care of a loved one, including: (1) respite care, (2) home care, and (3) adult day care. Keeping up with the costs of nursing care can be financially crippling, but there are insurance products that can help.

6.       Are you planning to travel more?

If you are planning on jet setting, whether you have dependents or not, talk to your agent about what insurance products could be helpful in your travels. From travel health insurance to cover injuries or illness while you are on the road, to rental car coverage, to property insurance to cover your valuables, there are lots of options your agent can offer you. All of these options can impact your finances, should you experience a loss while traveling. 

Insurance Concept of the Week: Rate

Each week we will post and define an industry term or concept for our readers.

There has been a lot of coverage in the news recently about insurance rates. So, we are going to use the next few "Concept of the Week" posts to look more closely at insurance rates and how insurance companies arrive at them.

A rate is a price per unit, and it is used to determine the total premium of an insurance policy. Rates establish a price structure to cover claims and other insurer expenses, as well as provide profit for the insurer.

Next week we will start looking at some of the different types of rates used by insurers.

The Honest Talk About Life Insurance

By: William Forbes

If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance.
— Suze Orman

September is Life Insurance Awareness Month, and in my opinion it is an important topic. There are so many articles out there that give guidance on the best products and how you know if you need them. I'd like to cut through the confusion and noise by taking a firm stance in today's post. Simply put, if you have any dependents at all, you need life insurance. And, it's best to purchase a policy when you are younger to lock in a rate.

I'm speaking to readers of this blog who are between the ages of 30 and 50. During that age period, people usually have the most dependents - younger children, a spouse, a partner, etc. This is the sweet spot for life insurance, because this is the time your loved ones would be most affected by your death. It's not easy to think about, but children, spouses, and partners can be significantly affected by the costs and budgetary changes that come with losing a caregiver. Life insurance isn't about protecting yourself, it's about protecting your family. A good policy will help your family to maintain their lifestyle if you are no longer with them.

There are many things to discuss with your insurance agent when it comes to purchasing the right plan for your family. But, I suggest purchasing a policy as early as you can, and locking in a manageable rate on that policy. For example, a term policy is probably a good place to start if you've never looked at life products before. With a term policy you can set the time period for which you want coverage, usually 20 - 30 years, and these products are relatively inexpensive. A term policy will give you the comfort of knowing that your family is taken care of during the most crucial years - when children are youngest and your family is still likely paying off larger purchases, such as a house, car, or student loans.

Life insurance is truly an important purchase for the people you love. If you have any questions about life insurance, give us a call and talk it through with an agent.

Insurance Concept of the Week: Term Insurance

Each week we will post and define an industry term or concept for our readers.

Because September is Life Insurance Awareness Month, we thought we'd participate with a related Concept-of-the-Week post.

Term insurance provides life insurance protection for a designated number of years - anywhere from one to thirty. It accumulates no cash values and expires with no value at the end of the term; however, it is less costly than permanent forms of insurance. As a benefit, term insurance can be written as renewable or convertible - meaning the policy can be renewed or converted (to permanent insurance) without proof of insurability.

Please let us know how we may help with your life-insurance questions.