The Insurance You Actually Need

Maleeah, CJ, and SHawn talk about what insurance you actually need as you grow older.

Episode Transcript

(00:00):
This is money in Motion with ClassFinancial, a fun and informative show designed
to help you get answers to allyour retirement questions in one place. That
means also our phone lines are openfor you right now at six o eight
three two one thirteen ten. That'sthree two one thirteen ten. Love to
get you on the air this morningwith our retirement planning professionals from Class Financial,

(00:22):
CJ. Class and Malia Quavis.I got a telephone ober to join
the program. Get on the airsix o eight three two one thirteen ten.
That's three two one thirteen ten.You can learn more about Class Financial
on the website Class financial dot com. That's klaas financial dot com. Great
website to learn more about Class Financialtheir separate divisions. Also an opportunity to
listen back to this and previous showspodcasts and subscribe RT online and and another

(00:47):
opportunity on the website Class financi dotcom. Sign up for the weekly Market
Pulse newsletter. It's a fantastic weeklysnapshot email that you received of what's been
going on the markets. Also alink to the most recent podcast. Again
that all available to you at classfinancial dot com. Speaking if things available
to you that first appointment at ClassFinancial. It is available to you at
no charge, complimentary all I gottagive a call six o eight four four

(01:08):
two five six three seven at sixeight four four two five six three seven
and joining this morning as mentioned ourour retirement planning professional CJ Class and Malia
Quavis CJ. How are you doingtoday? Doing great? How are you
searing? I'm doing really well.Great to chat with you, and this
week we're going to be talking aboutsome insurance strategies for retirement planning, and
insurance can be nice. Sometimes they'vegot nice features, like things like roadside

(01:30):
assistance. Malia speaking up, howare you this morning? How is your
day? Yeah? So I justgot a flat tire on the freeway and
ironically, I just had told myadult children yesterday. You know, I'm
gonna let them start paying for theirown triple A and they will decide if
it's valuable or not, because ifyou're not paying for something, you don't

(01:52):
equate the value. Well guess what, it's valuable, folks. Now,
that's why they should keep paying fortheir own. It's great, it's great
to have you both. Long andYeah, we talk about the of course
as mention we're gonna talk about someinsurance strategies for retirement planning, and of
course I talk about things that aregreat value and great opportunities in weighing those

(02:13):
things. As always, if youever have questions about the program, right
think about retirement planning. Of course, we've got a retirement planning professionals,
Malia and CJ with us this week, and they'd love to chat with you
and answer your question at six oreight three two one thirteen ten. That's
three two one thirteen ten. Mentionedall the great resources available to you.
Haven't mentioned yet the Class Quiz questiona week. It's a great opportunity for
you to win a fantastic prize,and our friends at Class Financial have provided

(02:35):
another one this week at twenty fivedollars gift card to target. I'll tell
you a little bit later on theprogram how you can win that gift card
with the Class Quiz Question the week. Little tip though, if you listen
closely to the show, both thequestion and answer come up oftentimes during the
program and before we are rolling onthis week's conversation, Malia, let's take
a look back at last week's ClassQuiz Question the Week and get the question
and the answer there as well.Yeah, So last week we had a

(02:55):
conversation about how you can do somemid year tax planning our favorite word,
taxes, and so the question ofthe week was what does the IRS do
date for twenty twenty three income taxesto be filed in twenty twenty four,
So shout out to Jeremy of Middleton. He correctly answered April fifteenth, twenty
twenty four. It's not always thefifteenth, so next year it actually is,

(03:20):
So congratulations to him. Listen carefullyto today's question and as always a
very informative and very enjoyable program.You can always listen back at class Financial
dot com. That's Klaas Financial dotcom and as Maleah mentioned, listen closely.
We'll do another one this week.So this week's conversation is about insurance
strategies for retirement planning. Are therespecific insurance coverages or changes that we need

(03:42):
to be considering before we retire?CJ. Yeah. I mean, while
retirement planning looks at the risk ofyour investments, and certainly it should,
it's equally important to review what youhave previously put into place to address other
risks through insurance. And part ofthe reason we say this because your needs
have likely changed, as have yourpremiums for that coverage over time. So

(04:05):
unite might need more or less ordifferent types of coverages than you did when
you had a young family, orwere working, or say had a mortgage,
and so it's important to just kindof slow down as your nearing retirement
or entering retirement to look at theseNow, we're going to give you some
categories that we would suggest you evaluateas you get close to retirement. Those

(04:26):
categories or types of insurance would behealth insurance, life insurance, long term
care insurance, and property and casualtyinsurance. A lot of people go,
what's what's property and casualty? Justthank your homeowners and auto insurance and umbrella
policies things like that. So youknow, let's we'll kind of cover each
one of these areas of a reviewin order. So beginning with health insurance,

(04:50):
you know, a big part ofretirement planning actually is around health insurance.
Most people have insurance through their employeras they're working, by the way,
not all, but most, andthen as they're getting closer to retirement,
they start hearing about this thing calledMedicare. And if you haven't heard
of Medicare, Just wait till youget close to sixty five, because your

(05:12):
mailbox will become filled with all thepamphlets on Medicare. But as a reminder,
Medicare is a federal government's health insuranceprogram for people age sixty five and
older. You can sign up duringa seven month window which starts three months
before your sixty fifth birthday. Youcan learn about the difference parts of the
program at medicare dot com dot gov, and then you can stay on top

(05:35):
of the enrollment period by going tothat website. You'll usually pay a higher
price for Medicare if you enroll late. So as you're getting close to sixty
five, regardless of where you're gettinghealth insurance from, you're gonna want to
jump on a Medicare dot gov andmake sure that you let them know what
you're doing regarding your health insurance.Now, if you're not yet turning sixty

(05:58):
five, you'll want to look atother options for health insurance. Say you're
retiring at sixty, so perhaps youremployer offers something called COBRA, which is
an eighteen to thirty six months extensionof your workplace health insurance, or perhaps
you're retiring at sixty, but yourspouse is still working and you can jump
onto their group health coverage. Ormaybe you're like some of our clients who

(06:21):
say, no, I just wantto get a part time job. I
just wanted to be out of myfull time job, and that part time
job will offer me health insurance untilI turn age sixty five. But here's
the key. As you get closeto retirement, you're going to want to
have a really firm grasp on whatit is and when it is that you're
going to do it. Regarding healthinsurance, it is by far the number

(06:43):
one barrier to an early retirement isnot having an awareness around what you're going
to do for health insurance. Andfinal thing in this category of health insurance
review would be to sign up fora Medicare supplement or a Medicare advantage plan
or a prescription plan which is knownas an RX or Part D prescription plan
as you get to Medicare eligibility age. Now, again this is assuming you're

(07:05):
not on a spouse's plan. Thisis assuming you're not still working on and
on a group plan. But thekey is going to be as you get
close to that retirement age and getclose to sixty five, you're going to
want to become aware and probably wewould suggest hire a medicare insurance specialists to
help you make some of those decisions. Really important things to think about as
we talk this week about some strategieswhen it comes to planning for retirement,

(07:29):
insurance strategy specifically, and some ofthe things you want to be reviewing and
stay on top of before you enterinto retirement, and of course getting yourself
ready. One of the great thingswe do each and every week on this
program is prepare you for different phases, and last week we talk in depth
about taxes, and of course thecool thing about that is if you miss
any of the program today or lastweek or the week before, you could
always listen back at class financial dotcom. That's klaas financial dot com,

(07:51):
a great website and great resource notonly to listen back to the podcast,
but also get to know the folksat class Financial. Speaking of getting it
in all the cloaks, folks atClass Financial, they're telephone number six O
eight four four two five six threeseven. No charge for the initial gets
to know you appointment tech Loss Financial. It will be complimentary to you again
they're telephone number six O eight fourfour two five six three seven. Also
an opportunity this morning if you've gota question for CJ and Malia, we

(08:13):
would love to get you on theair with our retirement planning professionals are going
to do is give us call hereat station six O eight three two one
thirteen ten. That's six O eightthree two one thirteen ten. We'll get
you right on the air. We'retalking about life insurance and some other types
of insurance to be considering and thinkingabout when it comes to reviewing and part
of your retirement planning strategy. Willdo that and take your call next as

(08:35):
Money in Motion with Class Financial continuesright here on thirteen ten WIBA. This
is Money in Motion with Class Financial, a fun and informative show designed to
help you get answers to all yourretirement questions in one place. S talking
this morning with our retirement planning professionalsfrom Class Financial, CJ, Class and

(08:56):
Malia Quavis. The website for ClassFinancial and check it out if you haven't
been there yet. This morning clausFinancial dot com that's Klaas financial dot com.
Learn more about the team at ClausFinancial. Their separate divisions. Also
sign up for the weekly Market Pulsenewsletter. While you are at the site.
Claus Financial dot com. Telephone numbersix O eight four four two five
six three seven. No charge forfinancial get to know your appointment at Class

(09:18):
Financial. It will be complimentary toyou again the telephone number six O eight
four four two five six three seven. Speaking of telephone numbers, great opportunity
to give us call. Get youon the other this morning with CJ Claus
and Malia Quavis of Claus Financial.I got it. It's called six O
eight three two one thirteen ten.At six O eight three two one thirteen
ten, we'll get you on theair with your question. Talking this week
about insurance strategies for retirement planning andcertain things to be considering before you retire

(09:43):
and things to think about before youretire. I talked a little bit about
health insurance, which is, asCJ pointed out, a biggie. What
about life insurance? Is this somethingthat I need? Is I get into
retirement? Malia, Yeah, that'sa really good question. We should call
Sean's wife and find out if pos. But a quick disclaimer, while we
are insurance licensed, we don't personallyoffer any of these insurances, but we

(10:09):
can definitely put you in touch withsome professionals within our partner network that could
assist you. So just I wantedto mention that. So with regards to
life insurance, it's it is preferableto investigate this a few years prior to
your retirement. If your kids aregrown up, your house is paid off,
and you have enough retirement savings tosupport you and perhaps your spouse,

(10:31):
your needs to have it in placemay have changed. So that's key here
may have changed. So the worstthing. I don't want people to walk
away and go, Okay, I'mjust my debt's paid off and there's no
need for it, and I canceledit, because that's sometimes what I hear
from people. And they show upand they go, I canceled the life
insurance. I'm like, did youconsult with someone to make sure in your
situation it makes sense? So youreally want to have that evaluated before you

(10:56):
sign them the data line to cancelsomething with life insurance, what we want
you to do as a as abeginning point is look at what you currently
have in place. Is there cashvalue on the policies, what amount of
death benefit is actually sitting there.Is it a term policy, is it
going to actually stop at a certainpoint, you know, a ten year,

(11:20):
twenty year, twenty year term.We want to take a look at
what your yearly premium is. Isit even worth keeping in place or is
it a paid up policy. Sothat's where you might see some cash value
on that. A big thing wetell people's look at look to see who
the beneficiaries are on the policies.I recently just had a client lose their

(11:43):
husband and they found an old lifepolicy. I'm not kidding you. This
was from like the nineteen forties andthere was a five hundred dollars death benefit,
so it doesn't sound like a lot, but she she researched it and
found out the beneficiaries were his parents, so not a surprise, and she
had to work pretty hard to getthat five hundred dollars renamed to her as

(12:05):
a beneficiary. So point being,you know, things got out of whack
as soon as you get married,or you may you get divorced, or
you have kids. You want tomake sure that those beneficiaries read as you
want them to read. So wewould say retaining some life insurance sometimes makes
sense to cover your funeral, otherfinal expenses. So that's that's typically what

(12:26):
we see people retain small policies forjust a note, average cost of a
funeral today runs between eight and tenthousand dollars. Certainly can cost more,
so that might be a reason youwant to hang onto some life insurance if
you feel like your own assets won'tprovide for that. So you're gonna want

(12:46):
to look at as your approaching retirementwhat financial obligations you still might have.
So those could be you've got dependencestill or maybe your kids just recently moved
out from your out from your home. You might have some mortgages, you
might have some businesses you're helping stillsupport. And the real key here is
an unexpected death could become a hugeburden for your spouse, So you want

(13:11):
to make sure that you you lookat the whole picture. Using a life
insurance policy perhaps to replace a pension, could make sense in certain situations.
Maybe when you did your your choicesfor what pension you were going to take
from your retirement, maybe in factyou took the highest amount for a single
and maybe you want to have somelife insurance there to create a future pension,

(13:35):
so to speak. If in factyou'd chosen the larger amount. So
those are considerations. Sometimes we seepeople use life insurance in the situations where
they have second marriages children from anearlier marriage. Um, they're they're using
it for a state planning, sothat they're kind of taking care of the

(13:58):
bulk of who should in what.Remember with estate planning, if your state
will be subject to taxes estate taxes, if your estate's going to be over
twelve point nine two million dollars,that might be another reason I have life
insurance in place to help pay estatetaxes. Your errors can use life insurance
proceeds to pay both state and incometaxes on Maybe I raise that they inherit,

(14:24):
so just because they're inheriting something,it depends what they inherit as far
as what kind of taxes they mayor may not have to pay on it.
So the one thing most people knowabout life insurances it does come to
you tax free. So if youinherit life insurance, you will not have
to pay income tax on that,which is pretty favorable in most people's minds.

(14:46):
Talking this morning with CJ. ClausEmily Equivis our retirement planning professionals from
Class Financial. Go forget. We'vegot full mines open if you've got questions
formerly on CJ. Love to haveyou joined us this morning six or eight
three two one thirteen ten. That'sthree two one thirteen ten. Don't forget.
If you miss partner today's program,or you want to listen back to
the previous shows, you can alwaysget caught up with the podcast right at
class Financial dot com. That's klaasFinancial dot com. The telephone number six

(15:11):
O eight four four two five sixthree seven, No charge for that initial
gets no employment deck Class Financial.It will be complementary to you again.
The telephone number six O eight fourfour two five six three seven to get
on the air six O eight threetwo one thirteen ten. That's six O
three two one thirteen ten. Talkabout things like home insurance umbrella policies,
all the types that car insurance.Also get into long term care insurance policies.

(15:35):
We'll get those details and take yourcall next as Money in Motion with
Class Financial continues right here in thirteenten wi BA. This is Money in
Motion with Class Financial, a funand informative show designed to help you get
answers to all your retirement questions inone place, talking with our retirement planning

(15:56):
professionals Malia Quavis c J. Class. Of course they come to us from
Class Financial to website Class financial dotcom. That's klaas Financial dot Com.
Great website Class Financial dot Com.Are telephone number six O eight four four
two five six three seven. Nocharge for financial kits. Know you appointment
at Claus Financial. It will becomplementary to you again the telephone number six
O eight four four two five sixthree seven. Talking insurance this week,

(16:18):
specifically when it comes to insurance,retirement planning and of course when it comes
to things think about before you retirein the insurance realm. And we talked
earlier about health insurance and the bigcosts there that that can add up for
folks in retirement and the effect thatcan have on when you retire. What
about things like long term care insurancepolicies CJ. Yeah, this is an

(16:41):
area that again we don't tend tothink about when we're when we're younger,
and becomes really critical as we getcloser to retirements. So again at a
high level you mentioned at SEAN,but we're covering kind of insurances you should
be reviewing as you get closer toretirement. We mentioned four category. Those
four categories are health insurance slash medicareas you get to sixty five, Malia

(17:03):
just went over life insurance, thethird categories long term care, and the
final categories property and casualty. I'mtalking about third component now of long term
care. But if you think ofthose four three of the four year dealing
with basically your entire life, healthinsurance, life insurance, property and casualty,
pretty much all of your adult life. You're having to deal with these.

(17:26):
Long term care. Insurance, onthe other hand, not so much.
Often people don't think about this orhaven't heard much about it until they
get older and then and then it'susually, yeah, my aunt Betty or
my parents ran out of money becausethey ended up in a nursing home.
And so here's the point. Asyou're younger, the risk is not the

(17:48):
major risk, I should say,is your premature death right, because you've
got liabilities and dependence. But asyou get older, your major risk is
not death. I mean, thissounds morbid, but if you die,
your family will probably be fine becauseyou're seventy five and you've paid off all
your debts and you've got assets,right, So death is not the problem
when you get older. It isactually not dying but having poor health.

(18:12):
So I hope everybody understands the framingI'm giving there. The framing is,
as we get older, the riskis not death. The risk is not
dying, but having poor health andneeding significant care. This is where long
term care insurance can come into play. So let's dig into that a little
bit. Long term care includes arange of services that help with daily tasks

(18:34):
as people get older, such aseating and bathing if you can't do them
for yourself. How people pay forlong term care, whether it be delivered
at home or in a hospital,assisted living facility, or nursing home,
it depends on their financial situation andthe kinds of services they use. Obviously,
if you don't have a long termcare policy, often you are just

(18:56):
paying for these services out of yourpocket, which can be quite expenses expensive.
Some people believe that their current healthor disability insurance plan or even like
VA benefits will pay for their longterm care needs, and in most circumstances
the answers know it won't or it'svery limited. Long term care benefits are

(19:17):
separate from your health insurance or Medicarebenefits. Often people must rely on a
variety of payment sources, including personalfunds, government programs, or private financing
options to cover these costs. Accordingto the US Administration on Aging in twenty
twenty two, seventy percent of sixtyfive year old will use long term care

(19:40):
eventually. Let me repeat that.According to US Administration on Aging in twenty
twenty two, seventy percent of sixtyfive year old will use long term care
eventually, and the realities that Medicarewill pay very little towards this. However,
Medicaide, which is the government healthinsurance pro for low income people,

(20:02):
will pay for nursing home care,but only after you've spent down most of
your personal assets. And by theway, once you get on kind of
the side of the curtain that we'reon and you understand how all these programs
fit together, it actually makes perfectsense. Okay. So the idea being,
hey, we as a functioning society, if somebody runs out of money

(20:26):
and has no way to care forthemselves and they're eighty five years old in
super poor health, we should havea program that takes care of them.
And by the way, we do, however, that program, which is
taxpayer funded, should not care formillionaires who just decide to give all their
money away to their kids and youknow, have taxpayers pay for their care.

(20:47):
So there's rules around all of thesethings that apply, So planning is
critical. You can do things likesave money for long term care. You
can buy a long term care ensurepolicy which might have some tax benefits,
or you can rely on life insurancethat includes long term care benefits through something

(21:07):
called a long term care writer.But here's the key. The first place
to start is to recognize the riskand determine if there is a need.
We suggest that you begin with yourfinancial planner and actually not your insurance agent.
Now. I know there's some insuranceagents listening right now, and you
may not like what I'm saying,so forgive me what. We suggest you

(21:30):
start with your financial planner on thistopic and not your insurance agent, because
your planner is going to help youassess the risk and other income sources to
offset that risk, to determine howmuch long term care insurance you may need.
Then when you go to the insuranceagent, now you're armed with good
information so that the insurance agent canactually help you purchase an appropriate policy.

(21:53):
If you don't do that, oftenthe insurance agent is like, Wow,
I don't know your other sources ofincome, so I guess we'll just get
a comprehensive policy. But here's thekey. Long term care is one of
the greatest risks to seniors running outof money. It's not death, it's
not death, it's actually not dyingand ending up in poor health. Important

(22:14):
perspective this morning, that is forsure, talking this morning with c J.
Class and Malia Quavis, our retirementplanning professionals from Class Financial. As
we talk insurance this week, don'tforget as we've talked a lot of great
information. Gots more to come aswell about this. You miss any part
of the show, you can alwayslisten back at class Financial dot com.
That's Klaas Financial dot Com. Thetelephone number six to eight four four two

(22:36):
five, six three seven. Whatabout homeowners coverages? You know that?
How the home insurance and we've gotthe umbrella policy, car insurance, all
that stuff, Malia, where dowe what do we think on that?
What do we need to think aboutin those areas well? Again, the
whole point of the show today isaddressing risks so you want to make sure
you look at in your own situationwhat was right perhaps for you before retirement,

(23:02):
what needs to be adjusted. Sowe really would recommend you you review
your deck page declarations page every singleyear and make sure that you know what
we're seeing as a huge rise inpremiums um. I know mine just went
up exponentially, so I already puta call into my agent. But most

(23:23):
people really have experienced home insurance rateincreases of hundreds or even thousands of dollars
in the last couple of years.Inflated construction costs certainly have something to do
with that, but more than that, we see the changing climate you know
from hurricanes, wildfires, etc.That that home insurance is really being expanded

(23:45):
across the country as far as anincrease in premiums, whether you had had
had any type of charge to itor not. So you need to take
that into account. And I alwaystell people, look at what would the
replacement cost of your house actually be, you know your area, and all
policies have an automatic inflation factor onthem, and sometimes they're totally in line

(24:11):
with what's going on, and sometimesthey're really not. So you know,
if it's only going to cost fivehundred thousand to rebuild your home, and
it's telling you it's going to bea million dollars they're providing coverage for.
You might want to question that.And then also evaluating your deductibles. Maybe
before you're retired, you were comfortablewith a thousand dollars deductible or more.
But now that you're going into retirementtrying to watch your expenses, maybe you

(24:34):
want to bring the deductible down.How will that affect a premium? So
you just want to understand what youhave and maybe what you actually need.
We also tell people be aware ofthe discounts available. Honestly, sometimes they
don't ask you. You have toask them. You know I have an
alarm system, perhaps I put ona new roof, etc. Etc.

(24:57):
So make sure that you are upto date with what you could actually get
savings for. Then we tell youlook at your umbrella insurance coverage. You
know, if you're raising if youraise teenagers, maybe you guys were into
boating, you need to have umbrellainsurance coverage to cover over and above what
your liability policies cover for your homeowners. Well, maybe the kids have grown

(25:22):
up, they've gone Hopefully you're gettingready to retire, that might be some
coverage you might want to dismantle.And then finally, car insurance. Now
again, no matter how old ofa car you have, you have to
look at that. You often willgenerally have both comp and collision. Well
usually if your car is more thanten years old, you may want to

(25:42):
look at dropping that comprehensive coverage becauseyou're not going to get much to replace
your car, so look at thatas a way to reduce. Also,
look at perhaps some opportunities to savemoney by taking a defensive driving course through
AARP or triple A. They offerthose courses. You might save some money

(26:03):
there. And then finally, onelittle thing is if you're no longer driving
to work every day, you maybe able to change your driving habits on
your insurance coverage to suggests for pleasureversus work and you might see some savings
there. So just take a reallyclose look at things. Shop at you
know, every couple of years,make sure you're getting the best rates for

(26:26):
your important coverages. Great tips thismorning from la Quavis and c J Class
our retirement planning professionals from Class Financialto website class financial dot com. That's
Klaas Financial dot com telephone number sixO eight four four two five six three
seven. No charge for that initialget to know your appointment dot class Financial.
It is complimentary to you again thenumber six O eight four four two

(26:48):
five six three seven. Want tohold on to that telephone number as well,
because it's time now for the ClassQuiz question of the week. It
works like this. In just amoment, I'll ask you the class quis
question weak. You'll then have thirtyminutes from the end of today's program to
call the Class Financial office right herein Madison at six O eight four four
two five six three seven. Andif you are the first call correct answer,
you win this week's prize, whichis a twenty five dollars gift card
to target. The Class Quiz questionweek. Is this what percentage of sixty

(27:12):
five year olds today will likely needsome long term care in the future?
Is it twenty five percent or seventypercent? Telephone number six O eight four
four two five six three seven.First called correct nancer win the twenty five
dollar gift card to target and don'tforget as well. That's Class Financial's office
right here in Madison six O eightfour four two, five, six,

(27:34):
three seven CJ Malia. It's alwaysgreat chatting with you. You guys enjoy
this beautiful day. Thanks. TheGreater Madison Golf Show teas off tomorrow.
We'll get the details next here onthirteen ten WIBA. This is Money in
Motion with Class Financial Asset Advisors LLC, a registered investment advisor registered with the

(27:59):
SEC. The content of this showis for informational purposes only and should not
be considered individual investment advice. ClassFinancial does not offer tax or legal advice.
Any opinion offered during the course ofthis show is the opinion of that
particular investment advisor representative, and notnecessarily the opinion of Class Financial