With all the hoopla about health insurance, lots of people ask me my opinion, which along with $1.85 with get you the best cup of coffee in Des Moines at Cup O' Kryptonite. My opinion: the current problems are only the tip of the iceberg.
The real crisis is about 10 to 20 years down the road. The Baby Boomers will be going to the nursing homes. Think about this. During the "Summer of Love" in 1968, the first Baby Boomers were 23 years old. If dementia and Alzheimer's are problems for our 70 and 80 year olds now, what do you think it will be like when the Boomers start seeing white rabbits again? Instead of streaking football games, they'll be streaking the hallways of long term care facilities. Instead of burning their draft cards and bras, they'll be burning down their kitchens because they forgot to turn off the frying pan. Instead of smoking pot they'll...never mind, they'll still be smoking pot. but they'll have long term memory loss in addition to the short term memory loss.
Where will their care come from? Who's going to pay for it? We don't have enough facilities or qualified workers to handle them all. And if science continues to reduce the mortality rate, more and more bodies with fried minds will live longer and longer. The "if it feels good, do it" generation hasn't saved their money like their parents did, and what they did save has been lost in the market downturns. They have fewer children, and most of their children have moved away.
The good news? Those of us with aging parents won't have to worry about being empty nesters. When the kids move out, the parents can move in. We won't be bored with no one to take care of.
Or maybe the Green Movement will become the Soylent Green Movement.
Tuesday, October 6, 2009
Friday, August 21, 2009
LIFE and health, No Longer HEALTH and life
It's taken longer than I've wanted and the journey has not been without frustration, but I've taken my agency from being a health insurance agency that also offers life insurance to being a life insurance agency that also offers health insurance.
Several things prompted the change. Most important was the realization that although I saved my customers hundreds and often thousands of dollars on health insurance, I had the potential to create and save tens or hundreds of thousands of dollars for them and their families with life insurance, annuities, and IRA's. That's thrilling to me and my clients.
The increasing regulation of the health insurance industry, especially with Medicare, has been a factor also. Because of all the hoops I have to jump through, extra documentation, and time spent on claims issues, I'm fairly sure I'm making less than minimum wage on health insurance sales. I haven't calculated it out. Better things to do with my time.
I'm focussing on life insurance because I believe in it. Nothing else has the power to protect families that life insurance does. And nothing's more important than family.
Several things prompted the change. Most important was the realization that although I saved my customers hundreds and often thousands of dollars on health insurance, I had the potential to create and save tens or hundreds of thousands of dollars for them and their families with life insurance, annuities, and IRA's. That's thrilling to me and my clients.
The increasing regulation of the health insurance industry, especially with Medicare, has been a factor also. Because of all the hoops I have to jump through, extra documentation, and time spent on claims issues, I'm fairly sure I'm making less than minimum wage on health insurance sales. I haven't calculated it out. Better things to do with my time.
I'm focussing on life insurance because I believe in it. Nothing else has the power to protect families that life insurance does. And nothing's more important than family.
Thursday, November 13, 2008
Generic Cosopt!
Cosopt (dorzolamide hydrochloride with timolol maleate) was approved on 11/6/08 by the FDA. Cosopt is used to reduce pressure in the eye (glaucoma).
Saturday, November 1, 2008
Who to Vote For?
The following is my response to a friend who says we should vote for Obama because then we'll have universal healthcare:
"You obviously don't work in the health care or insurance industry or haven't talked to anyone from Canada. Universal health care is extremely expensive and inferior to coverage available in the private sector. If you want to see the right way to do healthcare, take a look at Medicare part C & D. Letting the private companies compete has resulted in prescription coverage costing billions less than what was predicted. The best way to solve the health care problems is to reward healthy decisions and to make the consumer pay a large portion of the cost. The problem we have is that health care costs are rising because of overuse. Our generation runs to the doctor every time we have an ache or pain we brought on ourselves and expect it to be paid for. Quit smoking, exercise, maintain a healthy weight weight, eat your vegetables, drink water, sleep 8 hours a night, etc. If you still get sick with something major, then use your health insurance. If we all did that, half the hospitals and doctors wouldn't even be needed. The vast majority of health costs (95%???) comes from a small minority (5%???) of the population. Almost all of those costs can be traced to smoking and obesity. The biggest problem we have in this country is not letting people suffer the natural consequences of their actions. "
I'm still undecided and don't like any of my choices. All I know is that the choices I make in all the other areas of my life will have a much bigger impact on mine and my family's future than who is chosen as president.
"You obviously don't work in the health care or insurance industry or haven't talked to anyone from Canada. Universal health care is extremely expensive and inferior to coverage available in the private sector. If you want to see the right way to do healthcare, take a look at Medicare part C & D. Letting the private companies compete has resulted in prescription coverage costing billions less than what was predicted. The best way to solve the health care problems is to reward healthy decisions and to make the consumer pay a large portion of the cost. The problem we have is that health care costs are rising because of overuse. Our generation runs to the doctor every time we have an ache or pain we brought on ourselves and expect it to be paid for. Quit smoking, exercise, maintain a healthy weight weight, eat your vegetables, drink water, sleep 8 hours a night, etc. If you still get sick with something major, then use your health insurance. If we all did that, half the hospitals and doctors wouldn't even be needed. The vast majority of health costs (95%???) comes from a small minority (5%???) of the population. Almost all of those costs can be traced to smoking and obesity. The biggest problem we have in this country is not letting people suffer the natural consequences of their actions. "
I'm still undecided and don't like any of my choices. All I know is that the choices I make in all the other areas of my life will have a much bigger impact on mine and my family's future than who is chosen as president.
Thursday, October 30, 2008
Jumping Through Hoops!
Wow! I haven't posted forever (and probably won't again for awhile)! October is usually insane for me, but this year it's like insanity decided to smoke some PCP. It's been great for business, but not so much for my sleep schedule. Usually my main concern is getting through all the training and certification for the next year's new plans, but this year on top of that I've been dealing with everyone's concerns with the financial markets and insurance company difficulties. Then just as things seem to be settling down somewhat, CMS came out with a bunch new regulations, saying that I have to have written permission to talk to a prospect, that it has to be signed at least an hour before I talk to him or her, and I have to keep it on file for 10 years. Even if it's my own grandma. The good thing is that it at least gives me an excuse to go pheasant hunt for an hour after she signs it!
Wednesday, September 17, 2008
AIG and the Amusement Park
With AIG showing up on the news every night (or every minute on the internet), I've had a few questions come my way along the lines of, "What's going on with AIG? Do I need to switch companies?" The strongest statement I can make is, "I am making no changes to my AIG policy" (which happens to be the biggest policy I've sold for them, both in premium and coverage amount).
As both a policyholder and agent I've been following the situation closely. Every news story and press release has its own bias and angle, but they have a consistent theme. AIG is not broke. They have over a trillion dollars in assets. The problem is that it's not a trillion dollars in cash sitting in a vault. It's in long-term investments, real estate, etc., where they don't have instant access to it. The crisis is a short-term liquidity problem.
Billions and trillions of dollars are difficult for me to grasp, so here's how I'm thinking of it. Hopefully this will help you to. This situation is parallel to me going to an amusement park with my family and $100 cash in my pocket. I'm not planning to spend that much, but want to have it just in case. The first ride, my younger son tells me repeatedly he can't ride the merry-go-round because he'll throw up. I tell him, "That's ridiculous. Nobody get's sick on that little ride". I drag him onto it, and after about a minute he pukes up his breakfast. Then my wife smells his vomit and loses her breakfast too. Luckily my son's wearing an old t-shirt, so instead of trying to clean it up, we throw it away and spend $25 on a new Hawkeye t-shirt at the gift shop that's really only worth $10. Of course now the second son wants a Cyclone t-shirt to make it "fair". I don't want the day to be ruined already, so I avoid the fight and buy it. No problem, I've still got $50 and my ATM and credit cards.
However, an hour later my wife and son are both "starving" because they barfed breakfast. So we go to the hot dog stand. Hot dogs are $5 and pop is $4. Even though the price is ridiculous, I bite the bullet to keep the peace. I think that maybe I should use my credit card, but the cashier tells me it's a $50 minimum for credit card purchase. Do I spend $18 of my cash, or spend another $32 so I can use my card. Either way stinks. I figure I'm better off spending the cash and just not being extravagant the rest of the day. I've got $32 and 8 hours left in the park. I should be fine.
Six hours later, everything has been a blast. We've played a few games, had a few snacks, and my cash is gone. But I can get by another 2 hours. If they get hungry, I can stall a couple of hours by promising that I'll take them to McDonald's across the street on the way out. No big deal.
But an hour later we go by the ice cream stand and both kids start screaming for ice cream. They're hot and tired, and it sounds pretty good to me too. I tell them I'll go to the ATM and get some cash, even though I know the ATM has a $10 charge since it's not my bank. They get in line while I go to the ATM. But when I get there, the ATM is down. Out of cash. There's a couple grand in my checking account, but no way to get it. What do I do? Other than asking strangers for a handout (the ice cream stand doesn't take credit cards), my only other option is to pull them out of the ice cream line and head to the parking lot. I just keep my head down and avoid the stares of the people watching me drag the crying kids out trailed by my angry wife. I'm a really great guy, but I sure don't look like it to the other people in the park. It stinks, but we'll survive.
And then the straw that breaks the camel's back. We get the truck and head to the gate. Parking is $8 ($1 per hour--didn't think it was that expensive at 9:00 this morning). Cash only, no checks or plastic. The attendant thinks he's a U.S. Marshall and won't let me out without paying. I scrounge the floor, ashtray, bottom of my wife's purse and come up with $4.72 in change. Not good enough for Johnny Law. The 20 cars behind me are honking, kids are screaming, mosquitos are biting, and now I have to pee. I'm on the verge of a meltdown because I can't come up with $3.28 at that moment. The only thing that's going to save me is if someone behind me comes up and gives or loans me a few dollars to get me the heck out of the parking lot.
That's where AIG is at, on a global scale. The $85 billion loan should get them through the short term problem and back on the right track. In retrospect, there are plenty of ways they could have avoided this problem, just as I could have started out with more cash, not forced my son onto the merry-go-round, rinsed his old shirt out instead of buying new ones, drank from the water fountain instead of buying pop, and so on. I learned a lot of lessons and won't make those mistakes again. I just need a little help to get out of the parking lot and back on the road home. I'm having an acute financial crisis right now, but I'm confident I can pay my mortgage and light bill, just as I'm confident AIG can pay anything it needs to on my policy.
As both a policyholder and agent I've been following the situation closely. Every news story and press release has its own bias and angle, but they have a consistent theme. AIG is not broke. They have over a trillion dollars in assets. The problem is that it's not a trillion dollars in cash sitting in a vault. It's in long-term investments, real estate, etc., where they don't have instant access to it. The crisis is a short-term liquidity problem.
Billions and trillions of dollars are difficult for me to grasp, so here's how I'm thinking of it. Hopefully this will help you to. This situation is parallel to me going to an amusement park with my family and $100 cash in my pocket. I'm not planning to spend that much, but want to have it just in case. The first ride, my younger son tells me repeatedly he can't ride the merry-go-round because he'll throw up. I tell him, "That's ridiculous. Nobody get's sick on that little ride". I drag him onto it, and after about a minute he pukes up his breakfast. Then my wife smells his vomit and loses her breakfast too. Luckily my son's wearing an old t-shirt, so instead of trying to clean it up, we throw it away and spend $25 on a new Hawkeye t-shirt at the gift shop that's really only worth $10. Of course now the second son wants a Cyclone t-shirt to make it "fair". I don't want the day to be ruined already, so I avoid the fight and buy it. No problem, I've still got $50 and my ATM and credit cards.
However, an hour later my wife and son are both "starving" because they barfed breakfast. So we go to the hot dog stand. Hot dogs are $5 and pop is $4. Even though the price is ridiculous, I bite the bullet to keep the peace. I think that maybe I should use my credit card, but the cashier tells me it's a $50 minimum for credit card purchase. Do I spend $18 of my cash, or spend another $32 so I can use my card. Either way stinks. I figure I'm better off spending the cash and just not being extravagant the rest of the day. I've got $32 and 8 hours left in the park. I should be fine.
Six hours later, everything has been a blast. We've played a few games, had a few snacks, and my cash is gone. But I can get by another 2 hours. If they get hungry, I can stall a couple of hours by promising that I'll take them to McDonald's across the street on the way out. No big deal.
But an hour later we go by the ice cream stand and both kids start screaming for ice cream. They're hot and tired, and it sounds pretty good to me too. I tell them I'll go to the ATM and get some cash, even though I know the ATM has a $10 charge since it's not my bank. They get in line while I go to the ATM. But when I get there, the ATM is down. Out of cash. There's a couple grand in my checking account, but no way to get it. What do I do? Other than asking strangers for a handout (the ice cream stand doesn't take credit cards), my only other option is to pull them out of the ice cream line and head to the parking lot. I just keep my head down and avoid the stares of the people watching me drag the crying kids out trailed by my angry wife. I'm a really great guy, but I sure don't look like it to the other people in the park. It stinks, but we'll survive.
And then the straw that breaks the camel's back. We get the truck and head to the gate. Parking is $8 ($1 per hour--didn't think it was that expensive at 9:00 this morning). Cash only, no checks or plastic. The attendant thinks he's a U.S. Marshall and won't let me out without paying. I scrounge the floor, ashtray, bottom of my wife's purse and come up with $4.72 in change. Not good enough for Johnny Law. The 20 cars behind me are honking, kids are screaming, mosquitos are biting, and now I have to pee. I'm on the verge of a meltdown because I can't come up with $3.28 at that moment. The only thing that's going to save me is if someone behind me comes up and gives or loans me a few dollars to get me the heck out of the parking lot.
That's where AIG is at, on a global scale. The $85 billion loan should get them through the short term problem and back on the right track. In retrospect, there are plenty of ways they could have avoided this problem, just as I could have started out with more cash, not forced my son onto the merry-go-round, rinsed his old shirt out instead of buying new ones, drank from the water fountain instead of buying pop, and so on. I learned a lot of lessons and won't make those mistakes again. I just need a little help to get out of the parking lot and back on the road home. I'm having an acute financial crisis right now, but I'm confident I can pay my mortgage and light bill, just as I'm confident AIG can pay anything it needs to on my policy.
Tuesday, August 12, 2008
Who Helps You Spend?
Who helps you spend? Everyone? Nobody?
There's never a shortage of people wanting to sell us something to get our money (or kids, spouses and grandkids wanting us to buy them something). No shortage of people wanting you to save or invest with them either. But there is little or no guidance on how to access and use the money you've saved and invested, especially retirement money.
Why? Because the companies and their representatives we invest and save with have much to lose and little to gain by you withdrawing money. Also, if money is in a 401k, you are rarely still working for the company when it's time to start using the money, so you don't have access to human resources professionals.
What's the result of the lack of help? In my practice, I usually see one of two extremes. Either a person pulls out more than he or she should, often paying much more in taxes and penalties than necessary, until the nest egg is either gone or drastically reduced to the point that the standard of living falls. I see the other extreme much more often. In those cases, fear of the money running out prevents it being used at all. Those people don't live any better than those who have spent their nest egg. The money sits earning a small amount of interest with nothing taken out until age 70 1/2. Then only the RMD's (Required Minimum Distributions) are taken. Then 20 years or so later at death, the descendents (usually adult children) receive the money and have to pay taxes on it. This often puts them into a higher tax bracket where they end up with a fraction of what their parent intended for them to get. Most of the children would much rather have had their parents spend more money on themselves instead of passing it on.
There's great news regarding a solution to this problem. There isn't one! There are many. You need a professional to sort it out. The best piece of advice I can give is is to actually formulate a plan instead of just "thinking about it" and maintaining the status quo. Equally important is to run, not walk away, from someone who talks to you about a product without delving into your wants and needs. The new generation of annuities, life insurance and other products have better performance and guarantees than products of just a few years ago. However, small, somewhat hidden differences between products can make one a perfect fit for your neighbor but cause huge problems for you. The wrong "help" can be worse than no help at all.
There's never a shortage of people wanting to sell us something to get our money (or kids, spouses and grandkids wanting us to buy them something). No shortage of people wanting you to save or invest with them either. But there is little or no guidance on how to access and use the money you've saved and invested, especially retirement money.
Why? Because the companies and their representatives we invest and save with have much to lose and little to gain by you withdrawing money. Also, if money is in a 401k, you are rarely still working for the company when it's time to start using the money, so you don't have access to human resources professionals.
What's the result of the lack of help? In my practice, I usually see one of two extremes. Either a person pulls out more than he or she should, often paying much more in taxes and penalties than necessary, until the nest egg is either gone or drastically reduced to the point that the standard of living falls. I see the other extreme much more often. In those cases, fear of the money running out prevents it being used at all. Those people don't live any better than those who have spent their nest egg. The money sits earning a small amount of interest with nothing taken out until age 70 1/2. Then only the RMD's (Required Minimum Distributions) are taken. Then 20 years or so later at death, the descendents (usually adult children) receive the money and have to pay taxes on it. This often puts them into a higher tax bracket where they end up with a fraction of what their parent intended for them to get. Most of the children would much rather have had their parents spend more money on themselves instead of passing it on.
There's great news regarding a solution to this problem. There isn't one! There are many. You need a professional to sort it out. The best piece of advice I can give is is to actually formulate a plan instead of just "thinking about it" and maintaining the status quo. Equally important is to run, not walk away, from someone who talks to you about a product without delving into your wants and needs. The new generation of annuities, life insurance and other products have better performance and guarantees than products of just a few years ago. However, small, somewhat hidden differences between products can make one a perfect fit for your neighbor but cause huge problems for you. The wrong "help" can be worse than no help at all.
Subscribe to:
Posts (Atom)
