Life Insurance Benefits That Kick in Prior to Death

Most prudent individuals with a family have life insurance in place, but what happens if you have a life-debilitating illness or injury that leaves you incapable of working and which renders you struggling to hang on to life?

The financial consequences of a terminal illness can be catastrophic. Developing cancer, suffering a heart attack or being seriously injured in an accident can leave you and your loved ones scrambling to make ends meet.

For people in that position, it makes sense for life insurance benefits to kick in so that they can be used while the covered individual is still alive.

The term for this type of insurance is “living benefits,” which typically comes in the form of a rider to a life insurance policy. A living benefits rider helps people to receive care and pay for chronic or terminal illness that precedes death.

The rider entitles the policyholder to an early and accelerated payout of policy death benefits, if the insured is diagnosed to have a life expectancy of 12 months or less.

The rider can help make the insured’s remaining time as comfortable and as dignified as possible, and also keep the family from financial ruin.

Often the majority of our health care expenses come during our end-of-life stage. And that leaves many terminally ill patients facing financial hardship during the worst possible time.

Unfortunately, a simple life insurance policy will not step in to pay benefits until the insured has passed. The living benefits rider breaks down that barrier.

The policyholder can access up to $250,000 or more of eligible policy proceeds, depending on the type of contract.

This payment, made to the policyholder rather than the beneficiary, reduces the cash value and death benefit, so it dilutes what the policyholder’s beneficiaries will receive upon his or her death.

Policyholders without this rider and in this situation have two options for accessing funds:

•          A policy loan

•          A policy surrender

 

In most cases, however, the rider may provide more funds than either of these options.

This is because policy loans or surrenders are usually based on cash value, while the amount available from the living benefits rider is generally based on the policy’s face value, paid-up additions, and (if applicable) an amount payable under a rider that provides a level amount of insurance.

The rider may be exercised only once and it will be terminated once the policyholder makes a claim for accelerated benefits.

At the policyholder’s request, this rider can be added to new or existing policies for a one-time charge, which is applied when the rider is exercised.

The policy owner merely has to elect living benefits coverage, and can choose to do so anytime.

Benefits are tapped when the policyholder presents the insurance company with proof that they have a terminal illness or have been given a certain time to live based on their circumstances.

If you have any questions about this voluntary benefit and why you should consider offering it to your employees, contact us today.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Had an Accident? Put Your Smart Phone to Use

AUTOMOBILE ACCIDENTS happen every minute of the day. But according to the National Association of Insurance Commissioners (NAIC), most people do not know what steps to take or what information to share – or not share – after an accident.  They may even put their identities and safety at risk by sharing too much personal information.

To combat identify theft and also help motorists in gathering all the info they need to properly file a claim, the NAIC recently introduced its Wreck Check mobile application for use on iPhones and Android devices.

A recent NAIC survey revealed consumers were unsure about auto accident best practices, such as when to call the police or what personal information to exchange with the other driver after an accident.

Consumers generally need only share their names and correct vehicle insurance information, which should include the phone numbers of insurance providers.

Sharing additional personal information, such as driver’s license numbers and home addresses, puts consumers, their property and their safety at risk.

The Wreck Check mobile application outlines what to do immediately following an accident and takes users through a step-by-step process to create their own accident report.

It also provides tips that make it easy to capture photos and document the necessary information to file an insurance claim. Additionally, the app lets users e-mail a completed accident report directly to themselves and their insurance agents.

Drivers can visit InsureUOnline.org for additional information about what to do following an auto accident.

Also on the site is a downloadable accident checklist, which can be found here:

http://www.insureuonline.org/auto_accident_checklist.pdf.

Capturing Crash Details – a Checklist

  • After a collision use your phone camera to thoroughly photograph the scene. Try to take pictures of:
  • Your car, and the damage it sustained
  • The other cars involved in the accident, and the damage they sustained
  • Any skid marks
  • Any vehicle parts, shattered glass or other debris that may have fallen onto the road
  • The accident site (i.e., the intersection, parking lot or other location), as well as the environment/weather conditions, and
  • Any visible bodily injuries to you, passengers and other parties (if feasible and consented to, of course).

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Protecting Your Important Data When Employees Leave

When is a business most susceptible to losing data, intellectual property and important records? No, not during a cyber attack or a break-in, but during lay-offs.

With employees maybe feeling disgruntled after being let go, it’s common for some of them to pocket important company data – usually client lists, old e-mails, vendor contacts and even intellectual property that is essential to the company’s competitive advantage.

During lay-offs or termination, you need to take steps to protect your data and intellectual property, but there are legal implications as well for how far you can go. Consider the following:

Non solicitation agreements – These protect from a departing employee taking with them proprietary, confidential information like client and vendor lists. A non-solicitation agreement bars an ex-employee from going to a competitor and contacting your clients for business.

These are not legal in all states, so check your state laws and consult with your attorneys. In California, for example, non-solicitation agreements are not enforceable.

 

Non-disclosure agreements – These are different than the above and no states bar them. They focus instead on company data that a competitor can use to harm the business.
These agreements spell out the employee’s fiduciary obligations under the law by identifying protected company proprietary and confidential information. The agreement requires that the employee keep such information secret for a certain period of time.

Before huddling with your lawyer, your management team should identify all of your company’s protected data that you feel is worth protecting.

 

Return and inventory all company property – Before your employee leaves the premises, make sure they have returned all of your property that may contain company information. That would include:

  • Laptops.
  • Originals and copies of company documents the employee has made.
  • Data on the worker’s personal phone or home computing devices (this may be difficult to enforce, but you should make them aware that they are required to delete it).

 

Passwords and access – On their last day, remember to delete from your database and systems their user names and passwords and access codes. This could include:

  • E-mail passwords
  • Voicemail passwords
  • Teleconference and intranet passwords
  • VPN access and passwords
  • Building or office coded lock-access codes.

 

Make sure to also collect any company ID cards. If you have concerns they may try to contact your current customers or vendors for any reason that could be detrimental to your firm, you can consider notifying them that the employee is no longer with you.

 

Conduct an exit interview – During this interview, you should go over boilerplate information like why they were let go and the importance of not taking with them any physical or intellectual property.
Ask questions to determine what, if any, company data they may have been privy to or had access to. Also, if you have non-disclosure or non-compete agreements in place, use this time to reiterate the consequences for violating those agreements.

 

What to look for

It’s more difficult to avoid data misappropriation by an employee that is planning on quitting, as they can make preparatory moves unbeknownst to you.

When employees are planning to take corporate data or are in the process of doing so, there are often one or more signs, which can be monitored with the right systems in place:

  • A spike in an employee copying information to the cloud, USB drives, personal devices, e-mail accounts, and more. An increase in such activity could mean that an employee is planning to leave or has gotten wind of an impending dismissal and wants to copy useful information before they go.
  • A surge in documents being deleted from an employee’s laptop or desktop computer. Files may also be deleted from corporate file shares.
  • Sudden spikes or drops in e-mail activity.
  • An employee accessing your customer relationship management system or financial accounts during late nights or very early mornings. This could mean they are scraping your files.
  • The employee is sending and/or receiving e-mails from a competitor.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Don’t Rely on Employer Life Insurance Coverage Alone

Fewer employers are offering life insurance to workers as an employee benefit.

Only 48% of employers offered life insurance as an employee perk, as of 2016. This reflects a steady decline of 23% compared to 2006 levels, according to the Life Insurance Marketing and Research Association (LIMRA).

The decline is curious, given that some six in 10 employees rank employer-paid life insurance as an “important” or “very important” part of an employer’s benefits package.

Americans are underinsured

Americans are dangerously under-protected when it comes to life insurance. Three in four American households without life insurance report they would have immediate or near-immediate trouble paying for basic living expenses in the event of the death of a primary wage earner.

But relying solely on group life insurance coverage from your employer may not be sufficient. Tax laws limit the deductibility of employer-paid life insurance premiums to those required to provide a death benefit of $50,000, when many American working families need several times that amount of protection.

Even among those who have group life insurance from their employers, half still report they would have immediate or near-immediate hardship in the event of a breadwinner’s unexpected death, according to LIMRA figures.

Own your own coverage

Even if employers weren’t cutting back on life insurance as an employee benefit, there are many good reasons to contact an insurance agent and take out your own life insurance policy. Here are five of them:

  1. It goes where you go. If you leave the firm, you may lose your coverage. If you have a history of health issues, it may       be difficult or impossible to get life insurance at that time. If you own your own policy, you don’t have to worry about             losing your life insurance when you leave the company.

    2.  More coverage. While employers often limit what they’ll pay for to a death benefit of $50,000, or one to two times your      salary, this may not be nearly enough. Experts often recommend owning at least 10-20 years’ worth of your current         income in life insurance protection – particularly for younger families early in their careers.

    3.  More features. While most workplace life insurance policies are one-size-fits-all, buying your coverage from an agent in      the open market means you can customize your insurance policy. For example, you can choose whole life or universal life      insurance for permanent life insurance that accumulates cash value.
    You can also get coverage to cover your spouse or domestic partner, whether or not they are working. Or you can choose      to layer affordable term insurance with permanent coverage and convert your term insurance to more valuable permanent      coverage over time, as your income increases.

    4.  Broader protection. As you go through your insurance needs analysis, you may uncover the need for other forms of        insurance protection not provided by your employer. Since 2006, employers have become less likely to offer important      insurance benefits like long-term care insurance, critical illness or cancer insurance and long-term disability coverage.

    5.  You control the policy. If you get all your life insurance from your employer, they could shut their doors, lay you off, go     bankrupt, or simply cancel the benefit tomorrow. Again, if you’ve had medical problems, it could be difficult or impossible     for you to line up replacement coverage.   By owning your own policy and not relying on your employer, you guarantee     that no one can terminate the policy except you.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

How to Protect Your Home from Medicaid Seizure

The high cost of nursing home coverage has forced thousands of families to exhaust their savings trying to pay for long-term care.

When the money is gone, you may however be able to qualify for Medicaid benefits to keep you or your loved one from becoming homeless. The catch: Medicaid officials may move to seize your home after your death to pay the tab.

The Medicaid estate recovery program allows state officials to place liens on the assets of Medicaid benefit recipients to repay the taxpayers for the benefits provided on their behalf. If you are a homeowner and you go on Medicaid, this means that the state Medicaid program will put a lien on your home.

When you and your spouse both pass away, your heirs will have to repay the money owed to satisfy the lien before they can take possession of an inherited property. They could also sell the home, and Medicaid would be repaid with any available proceeds from the sale of the home before heirs can receive it.

Example
You own a home worth $300,000 outright. You develop Alzheimer’s, resulting in the need for several years’ care in an assisted living or nursing facility. The cost forces you to deplete your savings below the poverty level in your state (typically around $1,700 to $2,000 in total, excluding home equity and a few other exempt assets), allowing you to qualify for Medicaid.

Medicaid pays $200,000 on your behalf in nursing home and other medical benefits before you die, and places a lien on your home.

Your heirs will need to pay off the $200,000 lien before inheriting the property outright, or sell and collect the remaining $100,000.

 

The Long-Term Care Partnership Program

There are some strategies you can use to protect your home from Medicare estate recovery officials. One option: Purchase a qualified long-term care insurance policy.
This program enables you to protect your personal assets up to an amount covered by your long-term care insurance policy and still allows you to qualify for Medicaid benefits if and when your insurance coverage runs out.

Long term care generally comes with a maximum daily benefit for a period of years. If you own a qualified long-term care insurance policy, you can shield your home for up to the total benefit amount of your policy, under a federal initiative called the Long Term Care Partnership Program.

To qualify, your long-term care insurance policy must offer an inflation protection rider or include it in the base policy. It must also offer some non-forfeiture options that enable you to recover premiums paid if you have to cancel the policy before it pays benefits on your behalf.

 

Trusts

Alternatively, you may put your home in an irrevocable trust. This has the effect of getting it out of your estate.

But, the law allows Medicaid recovery officials to “look back” up to five years and claw back assets that have been transferred out of your name, or trigger a Medicaid ineligibility period of up to five years.  So speak with a qualified elder law attorney before relying on any strategies involving an irrevocable trust.

For more information about protecting your home and other personal assets from possible estate recovery seizure, call us today, and we can go over your specific situation.

Have a Prized Collection? It May Not Be Properly Insured

If you’re like most collectors, you’ve put time, money and effort into your endeavor, be that stamps, baseball cards, jewelry, fine art, wine or other collectibles. Your collection is probably valuable to you financially, and some pieces may also hold a sentimental value.

However, if the collection is destroyed or damaged, there is a strong likelihood that your homeowner’s insurance policy won’t cover the loss. Consider the following ways a collection can be damaged or lost:

  • Breakage – Damage caused by dropping an item.
  • Mechanical breakdown – Spoilage (like wine) due to climate-control system failure.
  • Break-up of drain or sewer – A collection may be destroyed if you have a drain or sewer failure, and especially if you keep your collection in the basement or cellar.
  • Natural disaster – A collection is fully or partially destroyed in an earthquake, flood or other weather-related event.
  • Diminished value – Due to cosmetic or water damage to the item.

Obviously, you don’t want to put your hard-earned collection at risk. Consider a collections policy to protect your valuables properly. This is a specially designed insurance policy for people who want to protect their valued collectibles.

 

Value of having a collections policy

Unfortunately, most people don’t realize their homeowner’s insurance does not offer adequate protection to their collectibles, For example, did you know that the standard homeowner’s policy will cover only up to $500 worth of jewelry? Remember, your deductible is probably more than that also.

Instead, you can get a collections policy, which can be tailored to a few items in your collection or for blanket coverage of an entire collection.

 

Features of a collections policy

  • No deductible
  • 50% more coverage is available at the time of a loss, if the item is worth more than the value scheduled
  • Mysterious disappearances are covered
  • Worldwide coverage is included
  • Coverage during shipping
  • Covers theft both inside and outside your home.

 

Depending on the insurance company, you have the option to include the following:

  • Blanket coverage of a collection up to $10,000 per item, with the option to raise it to $100,000 in some instances.
  • Insuring the true value of items within your collection.
  • Inflation protection at the time of loss if the value of an item has increased over time.
  • Coverage for new purchases and for items on loan for up to 90 days.
  • Discounts for collectibles kept in a safety deposit box, safe or other secure place.

 

One of the keys to ensuring prompt and full payment should you suffer damage, loss or theft is to document your investments. Do this by:

  • Keeping all original documents, including purchase receipts, auction catalog or private seller information.
  • Keeping photos and detailed descriptions of items, including those with unique marks and vintage or production year.
  • Maintaining an updated inventory list, including descriptions, counts and storage locations.
  • Getting routine, professional appraisals of your collection and keeping a running record of appraised values.

 

The takeaway

By not properly insuring your collectibles, you’re unnecessarily exposing yourself if any of those valuable items are damaged or destroyed. You can call us to discuss options for how to best cover your collection.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.

Don’t Fall Victim to the Business E-mail Compromise Scam

West African organized-crime rings have been targeting U.S. business with “business e-mail compromise” scams that are costing firms millions of dollars every year.

Losses to businesses that are targeted by these scams hit an all-time high in the first quarter of 2018, with $685 million in losses reported by 4,081 victims. That’s more than the amount lost for all of 2017 in such scams: $675 million.

The gangs send fake messages to businesses’ finance departments purporting to be a vendor for the company with an invoice requiring payment.

These criminals do research before targeting companies, meaning they go to company websites and look for the right people to send e-mails to. They may even pull annual reports and find what companies they do business with, and then spoof those accounts (meaning they impersonate other firms in the e-mails).

Some criminals will fake a CEO’s e-mail account and e-mail that company’s finance office ordering payment to a certain account. In one case cited by Dow Jones Newswires, a real estate attorney received an e-mail from the purported sellers of a local property and asking the lawyer to wire the proceeds of the sale to the criminals’ bank account. The lawyer wired $246,218.83 to the scammers.

 

The main scams

Money request via compromised account of company exec

  1. A criminal compromises or spoofs the e-mail account of an executive, such as the CEO.
  2. The criminal sends a request for a wire transfer from the compromised account to an employee who is responsible for processing these requests and is subordinate to the executive, such as the controller.
  3. The controller submits a wire payment request, as per instructions from his or her “boss.”

 

Invoice from supplier via spoofed e-mail address

A fraudster compromises the e-mail of a business user employed by their target company; for example, someone in accounts payable. This is how it’s done:

  1. The criminal monitors e-mail of the business user, looking for vendor invoices.
  2. The criminal finds a legitimate invoice and modifies the beneficiary information, such as changing the routing number and account number to which payment is to be sent.
  3. The scammer then spoofs the vendor’s e-mail to submit the modified invoice.
  4. Accounts payable, recognizing the vendor name and services provided, processes the invoice and submits a wire request for payment.

 

How to avoid getting burned

  • Confirm an e-mailed monetary request purportedly from a company executive by creating a new e-mail and entering their known e-mail address; don’t reply to the suspicious e-mail as it will likely go to the criminal.
  • The e-mails typically have a similar tone, urging secrecy and expedience. Set up your e-mail gateway to flag key words such as “payment,” “urgent,” “sensitive” or “secret.”
  • Look for odd uses of the English language. Many of the scammers are foreigners abroad.
  • Although the late-stage e-mails used in these scams may not contain malware, malicious code is often used as part of an overall scheme to initially compromise an employee’s e-mail account. So, make sure you have an effective malware detection solution in place.
  • Register all domains that are slightly different from the actual company domain.
  • Scrutinize all e-mail requests for transfer of funds to determine if the requests are out of the ordinary.
  • Ask your accounts payable staff to get to know the habits of your customers, including the details of, reasons behind, and amount of payments.

If you have any questions or would like to speak to a professional advisor, please contact ACBI Insurance at 203-259-7580.