Did you know that there were over 80 traffic fatalities in the city of Dallas alone, this is not including any of the neighboring cities.  If you look at the statistics of underinsured households in America, it’s a good probability that 50% of those who lost their life in the accidents either did not have any life insurance or were underinsured.

Far too often we assume that the accidents will happen to someone else, and not us.  I’m almost certain that the individuals who were in those accidents did not wake up the morning they lost their life thinking it was going to be their last day on earth.  The important fact about life insurance is that its there when we need it because when life is lost, usually its unexpected. 

Many people will have some level of life insurance through work, but lets face it how many people have changed jobs recently?  Many employers provide a base level of coverage that does not go far enough to protect a family.  Ask yourself how much money do you spend in a year, how much is the mortgage, how much is the school for children’s education?  If you start adding these numbers up you will soon realize that you have to have your own coverage to protect your family.

Protecting your family from financial disaster in the event someone loses their life is a very straight forward process.  We take the time to find out your specific financial needs and come up with the appropriate combination of coverage to protect you and your family so in the event that there is a loss of life, your family will be taken care of financially.   There is no better time than the present to start the year off right by protecting your family from financial injury with having a lack of life insurance, lets get started today in changing that!

The insurance industry is faced with fraud cases of all types.  Costs associated with paying fraudulent insurance claims ultimately affect insurance rates.  In order to combat fraud of all types, insurance companies employ highly trained investigators to examine possible cases of insurance fraud.

Recently,  a Texas family pleaded guity in a large supplemental insurance fraud scheme.  According to the U.S. Attorney’s Office and the Associated Press,  seven family members including one probation officer have been convicted as co-conspirators in a $3 Million insurance fraud scheme.

The Texas family was among a group of 27 defendants that attempted to defraud AFLAC by filing thousands of false claims under the company’s Accident-Only Supplemental Insurance Plan.

According to a news release from the U.S. attorney’s office for the Southern District of Texas, U.S. Attorney Kenneth Magidson, a former probation officer along with his mother, two aunts, and three cousins, pleaded guilty on november 14 in McAllen in the insurance and wire fraud scheme.

According to the Insurance Journal, “the six others who pleaded guilty were Mary Cedillo of Edinburgh, Martha Ortega, Yolanda Segovia, Candida Chavez, Lori Chavez and Anissa Chavez of McAllen, Texas.”

U.S. attorneys stated that the defendents used the same two Reynoso, Mexico doctors to prepare and file approximately 21,000 false injury claims with Aflac.

The investigation into this insurance fraud ring, was conducted by the FBI.  Assistance was given by Aflac’s special investigations unit in Georgia.

Ten people pleaded guilty in the case in early November and 20 others pleaded guilty in early August.

Source: U.S. Attorney’s Office, Associated Press, Insurance Journal

This news article was originally posted by The Insurance Journal online.

A former northeastern Pennsylvania insurance executive has been sentenced to 5 1/2 to 16 1/2 years in state prison in what prosecutors said was a pyramid scheme worth at least $7 million.

Brian Murray, 68, former head of Murray Insurance Agency Inc., was arrested in July, 2010 by agents from the state attorney general’s insurance fraud section. He pleaded no contest in June to felony counts of criminal conspiracy, theft by deception and theft by failure to make required disposition of funds. Murray was sentenced in Lackawanna County Court.

Prosecutors said he and others took premiums from new clients to conceal the thefts from others and never procured the insurance the customers thought they were paying for. Moses Taylor Hospital, Mount Airy Casino Resort and the University of Scranton were among the alleged victims of Murphy’s fraud.

Some of the fraud was uncovered after Pennsylvania Manufacturers Insurance and Travelers Insurance conducted audits of Murray’s accounts.

Join the conversation on this topic.

Mistake #1 – Trying to lose weight before you purchase life insurance

I labelled this one as #1 because it is the easiest one to tackle.  All insurance companies are different and have different guidelines.  Besides life insurance underwriting is more about looking at the  entire picture.  If you’re overweight and have hypertension combined with a recent heart attack, you’re a higher risk than someone who is just a large frame person. 

Takeaway:  Have your agent look all types of policies and companies to make sure you get the best rate for your relative health.  From there, replace the policy when lose weight.

Mistake #2 – Thinking life insurance is too expensive

I like this one because just about everyone  that can read this blog can afford a life insurance policy.  It is true that life insurance gets more expensive as you get older.  On the other hand, term insurance policies have decreased consistently over the past 20 years.  Thanks to advancements in modern medicine, we are living longer lives as a whole.  In that case, the cost of life insurance comes down to 4 things: age, policy type, amount, and health.  Remember , term insurance is the most affordable form of life insurance.  A policy option is available for all budgets.

Takeaway:  Term insurance provides pure life insurance protection at a lower cost.  Also, rates increase as you get older.

Mistake #3 – I’m still young, I can get life insurance later

If you are currently uninsured, you’re leaving your family at risk of severe financial loss in case of your untimely death.  According to the national funeral directors association, the average cost of an adult funeral in 1960 was $708.  As of 2009, that number has inflated to a whopping $6560.  Imagine adding this cost to your family’s budget.  If married, this could be catastrophic to a surviving spouse.  Not to mention, your early passing has also removed money from the family budget as well.  Purchasing term insurance can be done very easily with new technology.  In fact, some insurance companies will issue policies online wthin 24 hours.

Takeaway:  Accidents happen.  Term insurance can be purchased and issued within 24 hours with some companies.

Mistake #4 – I won’t qualify for life insurance due to a pre-existing health condition

Thinking that you will not qualify because your neighbor or friend told you that they had problem is irrational.  Generally when an insurance company rejects a person’s life insurance application, it is due to additional information found  from the health background or medical exam.  I you think you will have difficulty getting approved for a life insurance policy, discuss this with your agent.  By carefully explaining a case to the insurance company, many times agents can get the most difficult cases closed.  In fact, I’ve personally had policy issed for people who have had cancer, heart attacks, and even kidney dialysis.

Takeaway:  If you have a medical condition and you need life insurance, explain all the facts to your agent.  That way, the insurance agent can call his or her underwriting contact and pre-screen your case

As you can see, life insurance can be easier to obtain.  If you need more information, feel free to contact us at 214-717-4326.

As a new parent, you want to see you child grow up and realize all their dreams and hopes.  As a new parent, you want to do everything possible to help them along in life, but what if you or your spouse were suddenly out of the picture?  What if you, your spouse, or both of you were to die prematurely?  Would your child have enough money for day care, high school sports, college tuition and everything else?

Your children are your greatest gifts and your greatest responsibility.  Protect yourself and your children with life insurance.  Life insurance ensures that they grow up in a financially secure and stable environment if some were  to happen to you or your spouse.

Since the future cannot be predicted, it’s better to get it insured. There are different insurance policies, which you can choose according to your needs and urgency.

Types of insurance policies

All insurance policies are important since they are for the things you possess and don’t want to lose. So you should get them insured. Some of the most important insurance policies are cited below:

1. Life insurance

This policy ensures the family members of a sole bread earner financial security after his death. When you are the only person who has all the responsibility of your family, it’s always important to go for life insurance policy. This way, part of your premium is put into savings account so that money is not a problem in the future

2. Health insurance

This is also an important insurance policy that pays for all the treatments and medications if you are seriously injured. Suppose you are involved in an accident and don’t have health insurance, you will have to pay for the treatment from the money you have saved. If you don’t have the money required, you may fall in medical debt and the hospital may stop your treatment. It’s better to have a health insurance to ensure you a secured and healthy life.

3. Property insurance

This insurance policy ensures the property you own. This is also very important as you spend a good amount of money on the things you possess and so it’s only natural that you should have property insurance. This policy provides coverage against fire, earthquake, vandalism, etc. This insurance policy protects your assets which can be business or your personal property. Usually homeowners policy covers for most of the personal property.

4. Auto insurance

If you own a car or a vehicle, it’s important that you have auto insurance. This policy covers the cost of the damage caused to the vehicle and you in an accident. It also pays for the damage the other party incurs in an accident. This insurance policy also covers your vehicle from the damage caused by natural calamities and robbery, vandalism, etc.

The above list gives you an insight of the most important insurance policies you should go for.

In most cases, if you have no dependents and have enough money to pay your final expenses, you don’t need any life insurance.

If you want to create an inheritance or make a charitable contribution, buy enough life insurance to achieve those goals.

If you have dependents, buy enough life insurance so that, when combined with other sources of income, it will replace the income you now generate for them, plus enough to offset any additional expenses they will incur to replace services you provide (for a simple example, if you do your own taxes, the survivors might have to hire a professional tax preparer). Also, your family might need extra money to make some changes after you die. For example, they may want to relocate, or your spouse may need to go back to school to be in a better position to help support the family.

You should also plan to replace “hidden income” that would be lost at death. Hidden income is income that you receive through your employment but that isn’t part of your gross wages. It includes things like your employer’s subsidy of your health insurance premium, the matching contribution to your 401(k) plan, and many other “perks,” large and small. This is an often-overlooked insurance need: the cost of replacing just your health insurance and retirement contributions could be the equivalent of $2,000 per month or more.

Of course, you should also plan for expenses that arise at death. These include the funeral costs, taxes and administrative costs associated with “winding up” an estate and passing property to heirs. At a minimum, plan for $15,000.

Other sources of income

Most families have some sources of post-death income besides life insurance. The most common source is Social Security survivors’ benefits.

Social Security survivors’ benefits can be substantial. For example, for a 35-year-old person who was earning a $36,000 salary at death, maximum Social Security survivors’ monthly income benefits for a spouse and two children under age 18 could be about $2,400 per month, and this amount would increase each year to match inflation. (It drops slightly when the survivors are a spouse and one child under 18, and stops completely when there are no children under 18. Also, the surviving spouse’s benefit would be reduced if he or she earns income over a certain limit.)

Many also have life insurance through an employer plan, and some from another affiliation, such as through an association they belong to or a credit card. If you have a vested pension benefit, it might have a death component. Although these sources might provide a lot of income, they rarely provide enough. And it probably isn’t wise to count on death benefits that are connected with a particular job, since you might die after switching to a different job, or while you are unemployed.

A multiple of salary?

Many pundits recommend buying life insurance equal to a multiple of your salary. For example, one financial advice columnist recommends buying insurance equal to 20 times your salary before taxes. She chose 20 because, if the benefit is invested in bonds that pay 5 percent interest, it would produce an amount equal to your salary at death, so the survivors could live off the interest and wouldn’t have to “invade” the principal.

However, this simplistic formula implicitly assumes no inflation and assumes that one could assemble a bond portfolio that, after expenses, would provide a 5 percent interest stream every year. But assuming inflation is 3 percent per year, the purchasing power of a gross income of $50,000 would drop to about $38,300 in the 10th year. To avoid this income drop-off, the survivors would have to “invade” the principal each year. And if they did, they would run out of money in the 16th year.

The “multiple of salary” approach also ignores other sources of income, such as those mentioned previously.

A simple example

Suppose a surviving spouse didn’t work and had two children, ages 4 and 1, in her care. Suppose her deceased husband earned $36,000 at death and was covered by Social Security but had no other death benefits or life insurance. Assume the surviving spouse is 36.

Assume that the deceased spent $6,000 from income on his own living expenses and the cost of working. Assume, for simplicity, that the deceased performed services for the family (such as property maintenance, income tax and other financial management, and occasional child care) for which the survivors will need to pay $6,000 per year. Assume that the survivors will have to buy health insurance to replace the coverage the deceased had at work, and that this will cost $12,000 per year.

Taken together, the survivors will need to replace the equivalent of $48,000 of income, adjusted each year for an assumed 4 percent inflation.

Thanks to Social Security, the survivors would need life insurance to replace only about $1,700 per month of lost wage income (adjusted for inflation) for 14 years until the older child reaches 18; Social Security would provide the rest. The survivors would need life insurance to replace about $2,100 per month (adjusted for inflation) for three more years when the non-working surviving spouse has only one child under 18 in her care.

The life insurance amount needed today to provide the $1,700 and $2,100 monthly amounts is roughly $360,000. Adding $15,000 for funeral and other final expenses brings the minimum life insurance needed for the example to $375,000.

What’s left out?

The example leaves out some potentially significant unmet financial needs, such as

• The surviving spouse will have no income from Social Security from age 53 until 60 unless the deceased buys additional life insurance to cover this period. It could be assumed that the surviving spouse will obtain a job at or before this time, but she could also become disabled or otherwise unable to work. If life insurance were bought for this period, the additional amount of insurance needed would be about $335,000.

• Some people like to plan to use life insurance to pay off the home mortgage at the primary income earner’s death, so that the survivors are less likely to face the threat of losing their home. If life insurance were bought for this goal, the additional amount of insurance needed is the amount of the unpaid balance on the mortgage.

• Some people like to provide money to pay to send their children to college out of their life insurance. We may assume that each child will attend a public college for four years and will need $15,000 per year. However, college costs have been rising faster than inflation for many decades, and this trend is unlikely to slow down. If life insurance were bought for this goal, the additional amount of insurance needed would be about $200,000.

• In the example, no money is planned for the surviving spouse’s retirement, except for what the spouse would be entitled to receive from Social Security (about $1,200 per month). It could be assumed that the surviving spouse will obtain a job and will either participate in an employer’s retirement plan or save with an IRA, but she could also become disabled or otherwise unable to work. If life insurance were bought to provide the equivalent of $4000 per month starting at age 60 until 65 and $3,000 per month from 65 on (because at 65 Medicare will make carrying private health insurance unnecessary), the additional amount of insurance needed would be about $465,000.

You should review all of your insurance needs at least once a year. If you have a major life change, you should contact your insurance agent or company representative. The change in your life may have a significant impact on your insurance needs. Life changes may include:

• Marriage or divorce
• A child or grandchild who is born or adopted
• Significant changes in your health or that of your spouse/domestic partner
• Taking on the financial responsibility of an aging parent
• Purchasing a new home
• A loved one who requires long-term care
• Refinancing your home
• Coming into an inheritance

The last thing you want to happen after you die is for your beneficiaries to be unable to locate and submit a claim on your life insurance. To prevent this, you should have copies of your life insurance records in at least two places. This is to make it less likely that you’ll lose them (to fire, flood, accidental discarding, etc.) and more likely that, after your death, your beneficiaries will find them.

What information should I keep?

For each individual life insurance policy on your life, you should record the following information:

• The full name of the life insurance company that issued the policy
• The city and state of the home office of the company that issued the policy
• The name and U.S. headquarters of the group, if the issuing company belongs to a group of companies
• The policy number
• The date the policy was issued
• The amount of the death benefit
• The name and address of the agent/broker who sold you the policy
• The type of policy (e.g., term, whole life, etc.)
• The location of the original life insurance policy

You might have life insurance automatically from your employer. Your employer also might offer you the chance to buy additional life insurance under a group policy. And you might be eligible to buy life insurance under a group policy from your union or trade association or other group you belong to (such as a college alumni association or an automobile club). For each of these life insurance benefits, you should record the following information:

• The name of the employer or group that sponsors the insurance
• The office or person to contact when it’s time to file a claim
• The certificate number (comparable to the policy number under an individual policy)
• The date the insurance was started
• The amount of the death benefit

Sometimes financial programs that are mainly designed for income or other purposes have death benefits as additional features. This might include pensions, annuities, workers compensation programs, disability insurance, travel accident insurance, etc. For each such program, you should record the following information:

• The type of policy that has a death benefit as part of its features
• The full name of the life insurance company that issued the policy
• The city and state of the home office of the company that issued the policy
• The policy number
• The date the policy was issued
• The amount of the death benefit
• The name and address of the agent/broker who sold you the policy
• The location of the original insurance policy

Credit cards and lending institutions may offer life insurance to pay off your outstanding loans in the event of your death. For each life insurance benefit on your life dedicated to paying off a loan, you should record

• The full name of the lending institution through which you obtained the life insurance
• The loan number and issue date of the loan
• The name of the person or office to contact when it’s time to file a claim
• The policy number of the life insurance policy that pays off the loan

Where should I keep the information?

Keep one set of these records in your home, in a place where others who need this information are likely to find it (and after you put the information there, tell the people who’ll need it where it is). This might be with your other financial records (such as income tax, checking account, investment records), with your other legal papers (such as a copy of your will, living will, health care proxy, etc.), or anywhere your survivors are likely to look for them.

Keep another set of these records “off site”—that is, outside of your home, perhaps in a safe deposit box, or with a professional or a relative who can be counted on to produce them when they’re needed.

On each page, record the date on which the information was last updated. That way, if the copy in your home differs from the one in the safe deposit box, it’s easy to tell which is the more current.