Insurance Tips and trik auto insurance, auto insurance quotes, auto insurance companies, auto insurance florida, auto insurance quotes online, auto insurance america

Some years ago, we blogged on a rather interesting (and illegal) sideline in which a Pine Tree State insurance agent was engaged:

"57-year-old Mark Strong Sr., pleaded not guilty to 59 counts of promotion of prostitution and violation of privacy."

Mr Strong being, of course, the proprietor of the "Strong (Insurance) Agency" of Thomaston, Maine.

We wondered at the time about whether or not his Errors and Omissions policy would provide much cover.

Fast forward a half-dozen years or so, and co-blogger Bob V tips us to this life-imitates-the-news stiry out of Portsmouth, Ohio:

"Regulators are trying to remove the license of an insurance salesman allegedly involved in a sex trafficking ring ... saying he committed insurance fraud on at least two separate instances."

Wait, is he in Dutch because of the sex thing, or the fraud thing?

Well, seems to be both, plus the odd HIPAA violation (one wonders how he missed out on the jaywalking).

Turns out, he's accused of trying to fool an insurance company into paying a fraudulent disability claim [ed: and look at that - it's still Disability Insurance Awarenes Month! Go us!], so that covers the insurance part.

Aside from that, two women claim to have slept with him for money (wait, did he get that from the DI carrier?).

The article also mentions that he's "a long-time financial adviser;" given that at least two insurance carriers have fired him, and the DOI is apparently looking to suspend his license, seems like the SEC folks will soon be taking their bite, as well.

I lead such a sheltered life.

Original content copyright © InsureBlog

from InsureBlog http://bit.ly/2YVJzrt
via

Insurance Tips and trik auto insurance, auto insurance quotes, auto insurance companies, auto insurance florida, auto insurance quotes online, auto insurance america

Recently, a friend of mine attended a post-retirement financial planning seminar, at which was touted a way to use one's life insurance as a "living benefit" (no, not that kind of living benefit).

The idea goes something like this (all numbers in this example are for illustrative purposes only):

One buys a single pay Whole Life (WL) insurance plan, depositing $100,000, which purchases s $200,000 death benefit. One then waits a few years for the surrender period to end, and then "withdraws" [ed: we'll circle back to this] $75,000, leaving $25,000 of the original premium in the plan. This reduces the death benefit to $125,000. When one's time comes to exit this mortal coil, one's beneficiary still gets $125,000 ($200,000 - $75,000). Nice return: $125,000 benefit check for $25,000 net deposit (5:1).

My friend wanted to understand why a carrier would agree to this, and I agreed to look into it, as a result of which I have some some concerns.

Here’s what I think would actually happen:

As a single pay plan, it's automatically considered a Modified Endowment Contract (MEC).

And what the heck is that, you ask?

Well, a "modified endowment contract (commonly referred to as a MEC) is a tax qualification of a life insurance policy which has been funded with more money than allowed under federal tax laws ... Essentially a life insurance contract which becomes a MEC is treated like a non qualified annuity by the IRS for taxation purposes prior to the insured persons passing."

In other words, the money coming out of such a plan would be on a LIFO (last in, first out) basis, so when one pulls out that $75,000 at least some of that is taxable as income (and depending on age, may be subject to a 10% penalty). Also, that $75,00 is not a "withdrawal," it is a loan, and most companies charge 7% or 8% interest on outstanding loan balances (and that’s on the whole $75,000).

Ouch.

But what does that mean "in real life?"

I ran a Single Pay WL quote with our primary carrier (figuring it would be pretty industry average) as a baseline. 

The surrender charges went away by year 5, at which point cash value was $103,000, so about $3,000 growth, so maybe a $300 penalty. Not really hateful.

But: the whole $75,000 is a loan, and the interest on that is 8% (I presume that's fairly common). So the interest charged is $6,000.

Per year.

Every year.

Here's where it gets "fun:"

If one is smart, one is paying that $6,000 every year so that the loan doesn't snowball. In about 12 years (maybe less), one has just paid the carrier back the $75,000 (in $6,000 per year increments), and still has to keep paying. We call that "in the hole."

Or, perhaps one decides not to pay it, and the carrier deducts the $6,000 from the remaining cash value (remember: that's about $25,000). That's gonna go away pretty fast, no? And then one has nothing.

No, wait: one still has the $75,000 one took out (and paid some taxes on) . After giving the carrier $100,000 of one's own money.

#Winning!

Now, why wouldn’t the carrier love this?

To be fair, we've seen (and debunked) this general idea before:

"Life insurance policies are rarely good "investments," however, and should never be confused with such. While the cash value builds on a tax-deferred basis, and can be accessed on a tax-advantaged one, they're really not cost effective as ATM's."

But this particular iteration has some novel twists, and I'm not so sure it's completely off the charts. A friend who's familiar with it suggested that I reach out to Lafayette Life, which apparently markets a plan that could (does?) serve as a platform. I have yet to hear back from them, but will update this post when (if) I do.

Meantime, I would very much appreciate any thoughts our readers might have on this.

[Hat Tip: FoIB Chris v B]

Original content copyright © InsureBlog

from InsureBlog http://bit.ly/2JMPXhf
via

Insurance Tips and trik auto insurance, auto insurance quotes, auto insurance companies, auto insurance florida, auto insurance quotes online, auto insurance america

You may have seen the news that the Centennial State has become the first in the union to impose price controls on insulin:

"The state is capping co-payments for diabetics with private insurance at $100 per month"

The Tiffany Network also says that the average diabetic currently spends upwards of $500 a  month on insulin (although they offer no insight as to how they arrived at this figure, other than it was reported to them by the Health Care Cost Institute). They also don't say how much the average diabetic actually pays for the med (this is an important, and generally unremarked upon, distinction).

[ed: the Institute itself is apparently funded by 4 major carriers. FWIW]

While one's first reaction is likely applause, it should actually give one pause. As a longtime correspondent in Colorado notes in email:

"Recently our governor in Colorado signed a bill restricting copays on insulin to $100 monthly. Comments about this universally demagogue President Trump, blaming high prices on him. And a tv reporter did a completely uncritical segment on it. I wrote to him and told him that price controls create shortages, etc. But this won't work the usual way, because it is with an insurance company, not a retailer. I told the reporter that the insurance company may just raise premiums for everyone to make up the difference. Or they could pull out of the Colorado market."

I would quibble only with the "may" raise premiums: count on it.

It's also worth remembering that, while Colorado may be the first state to cap co-pays on insulin, they're far from the first to dabble in rx cost controls. From almost 4 years ago:

"Drug companies are facing a new campaign to contain treatment costs, this time with proposed rules in Massachusetts that would include a first-in-the-nation cap on some prices."

[ed: Which bill, by the way, "failed to emerge from a legislative committee." C'est la vie] 

Our correspondent also ponders:

"Why did Governor Polis choose diabetes as his target to reduce to costs? There are plenty of other chronic diseases out there that have attached meds to manage the disease. So why do diabetics get a break, but others don't? Does he want to buy the votes of diabetics?

Perhaps insulin is just a trial balloon to see how this flies and then move on to all meds." 

This is an excellent point.

And it gets even better (for certain values of "better"):

"Let's play a game. What would happen if he capped the co-pay on all meds? And what if that co-pay was $1.00? It is easy to see that this would be so expensive, insurance companies would have to make it up in premiums. When premiums go up, the governor will have to create a new program to help subsidize them. So then he gets to buy the votes of those he is subsidizing, while calling the insurance companies evil."Pitch. Perfect.

I responded that this echoes the minimum wage "debate:" why $15 an hour? Why not $25? Or $50? Or $1,000? Each is equally defensible, no?

In any event, will be interesting to see how the co-pay cap works out in Colorado.

Original content copyright © InsureBlog

from InsureBlog http://bit.ly/2MbYn3A
via

Insurance Tips and trik auto insurance, auto insurance quotes, auto insurance companies, auto insurance florida, auto insurance quotes online, auto insurance america

As I'm sure most have heard, our little corner of paradise was slammed with multiple tornadoes last night. Miraculously, there don't appear to have been any fatalities, but there is significant property damage (as one would expect).

We've been asked to pass along the following urgent suggestion from out primary carrier:

"Tell insured's not to sign any contracts with door to door contractors.  If you need to get in contact with [your adjuster] you can call her on her cell phone."

This is likely good advice no matter who your insurance is with....

Original content copyright © InsureBlog

from InsureBlog http://bit.ly/2HGI3U7
via

Insurance Tips and trik auto insurance, auto insurance quotes, auto insurance companies, auto insurance florida, auto insurance quotes online, auto insurance america

Courtesy FoIB Dr Rob:

Original content copyright © InsureBlog

from InsureBlog http://bit.ly/2wqTVmI
via

Insurance Tips and trik auto insurance, auto insurance quotes, auto insurance companies, auto insurance florida, auto insurance quotes online, auto insurance america

Life expectancy is a very poor measure of the healthcare system. Other factors have much more influence. https://t.co/jsRXWQ6EfO

— Gayle Brekke (@blahblahKC) May 24, 2019

Yup.

But: #NarrativeUberAlles

Original content copyright © InsureBlog

from InsureBlog http://bit.ly/2YGbono
via

Insurance Tips and trik auto insurance, auto insurance quotes, auto insurance companies, auto insurance florida, auto insurance quotes online, auto insurance america

Courtesy FoB Holly R:

"Some fans attending Sunday's Indianapolis 500 can get measles vaccines at the track's infield medical center."

This comes as the CDC has issued a warning about the increasing incidence of the once-eradicate disease:

"From January 1 to April 26, 2019, 704 individual cases of measles have been confirmed in 22 states including Indiana. This is an increase of 78 cases from the previous week."

At least one fan's not worried though. Local Indy aficionado Mike Dean's theory is "I think if you drink enough beer, it kind of inhibits the measles virus, so that’s been my defense."

Heh.

Original content copyright © InsureBlog

from InsureBlog http://bit.ly/2VMlbXp
via