By Glenn J. Downing, MBA, CFP®
At CameronDowning our primary business is investment management and financial planning. Nonetheless we are happy to represent our clients to the insurance markets where we’re licensed to help them obtain necessary coverage. We broker life insurance, disability income insurance, and long-term care insurance. In obtaining Insurance coverage for our clients, We shop the market for the most suitable product at the best price.
Can I get auto or homeowners through you?
No – that requires another license which we do not hold. As part of a complete financial planning engagement, we will evaluate the client’s risk exposure in these areas, and recommend coverage changes as appropriate. We are glad to refer you to insurance agents who can assist you with these policies. BTW we neither pay nor accept referral fees from other professionals, nor do we accept any liability for their actions.
Is life insurance part of a financial plan?
A crucial part. A life insurance death benefit can complete the overall plan in the event of an untimely death.
Life Insurance
Should I buy term or permanent insurance?
Usually term. It is generally pretty cheap for large amounts of coverage. The insurance need is that someone else is depending upon you for a living. For a young family, 30 year term coverage should do it. By the time it ends the children are likely grown and on their own, and substantial assets would have been accumulated.
In our view, permanent polices have more specific than broad applications, e.g. in estate planning. Permanent policies are also much more expensive than term.
Can I get an income from my insurance policy?
Perhaps. The strategy is to purchase a permanent policy in such a way that maximizes the cash paid in relative to the policy death benefit. In other words, you want to keep the death benefit low and the cash value high. With compound interest over time, one can generate a substantial tax-free income by borrowing against the cash value. If a life policy does not become a modified endowment contract, monies are loaned out tax-free to the policy owner.
Do life policies provide long-term care benefits?
Yes – some life policies offer full long-term care riders.
Are my assets protected in a life insurance or annuity contract if I am sued?
There is a significant degree of asset protection in Florida for funds in life and annuity policies. Florida courts have long held that such assets are judgment proof, meaning that should you lose a civil suit, these funds are not available for attachment by the plaintiff. There are lots of ins and outs to this, and you should consult an attorney to be sure.
How do I get life Insurance?
You must be able to medically qualify for it and afford to pay the premium. If you just had a cancer diagnosis last week, you’re not going to get life insurance. Unfortunately, most people want to purchase it when they have a health scare. Insurance companies call this adverse selection, and therefore medically underwrite each life policy. If not for underwriting, no one would purchase life insurance until he became sick.
Can I buy a life policy if I live outside the US?
Possibly, yes. You’d need to have demonstrable US ties (i.e. business interests here; real estate here), a US tax-payer ID, and premiums must be paid in US dollars. The application and medical exam must be done here in Florida.
What does medical underwriting involve?
You submit an application in which you’re questioned extensively on your health history: doctors visits, procedures, Rx, etc. An examiner will come to your home and complete another medical questionnaire with you and do a brief physical. The examiner will draw blood, and you provide a urine sample. Depending upon the amount of insurance, there may be an EKG. The company will most likely also order your medical records from your physician.
Disability Income Insurance
Do I need disability insurance?
Generally, yes. That is, unless you have substantial assets such that you can live off of them. The purpose of DI, as we call it, is to insure your future stream of income. It is most often purchased by professional people who have invested substantial time and money into their professional educations. Typically one can insure anywhere from 50% to perhaps 60% of one’s income up to a cap. The benefits received on an individual policy are tax-free if they have not been deducted somewhere else. There are lots of moving parts to DI – from policy definitions to benefits & pricing.
Is disability insurance expensive?
There are many factors that go into the pricing of a DI policy. These include your age, the amount of income to be insured, the elimination period (sort of an initial deductible, during which no benefits are paid), the benefit period (for example, 3 years, or to age 65), and the inflation adjustment if any. Ballpark estimate for a Florida professional: expect to pay between 3 – 5% of your insured income.
How do I sign up for disability insurance?
There is not only medical but financial underwriting. The medical underwriting can actually be a little more stringent than for life insurance. What may not kill you may lay you up in bed, causing a claim. For the financial underwriting, you’ll have to submit tax returns to demonstrate the income that you want to insure.
Long-Term Care Insurance
Do I need long-term care insurance?
Long Term Care insurance (LTC) is designed to pay for the necessary care for a long-lasting debilitating illness, such as Alzheimer’s, thereby preserving the retirement nest egg for the surviving spouse. Most all our clients tell us that outliving their money is their primary retirement concern. At, say, $10,000/month for nursing home care (a ballpark number for Miami), a nice nest egg can get depleted pretty fast.
What happens if I never use the LTC Policy?
What happens if you go 6 months without crashing your car? You paid for coverage, and you’re glad you didn’t crash your car. Still, a commonly cited statistic is that by age 65, 70% of us will need some type of long-term care.
This is a big objection to buying a policy – and we understand. You’ve spent all that money on premiums, and never gotten anything out of it. But – there are life policies that have long-term care riders. These advance the death benefit in the event of certain triggers. Often this is a more cost-effective solution. If you never use the LTC feature, the death benefit still pays out, so your premium dollars are ultimately recouped. Some annuities also have a LTC feature.
If my spouse is in early Alzheimer’s, can I still buy LTC?
No. There is medical underwriting involved, and part of that underwriting will be cognitive tests. For example, you may be asked to come up with a list of 10 items. A little later on the examiner may ask you to recall those 10 or use some of them in a sentence. In ways like this cognitive impairment is discerned. Also use of a cane or walker is an automatic disqualifier.
What is the best age for buying LTC?
Probably early/mid 50’s. The premiums go much higher in the 60’s and are prohibitive in the 70’s – even if you medically qualify.
How Can We Work Together?
Are Saturday appointments available? Evenings?
Yes – some Saturdays. You are most welcome to see our calendar and book an appointment here.
Can we communicate by text?
Yes. Our office and text number are the same: 305.564.3794.
Are you willing to work with my other advisors?
Yes of course, with your written instruction. Our work frequently involves related professionals – typically the accountant or the attorney. We’re glad to work with those whom you already know. If you do not already have a relationship with an attorney or accountant, we will be glad to make recommendations. You should know that as a matter of business policy and ethics we neither pay nor accept referral fees from other professionals, nor do we accept any liability for their actions.
Where is your office?
Downtown Miami, at the Overtown Metrorail Station. We’re in the Buro Office Building at 101 NW 8th St.
What’s parking like?
Usually easy, as guests find ample street parking. The parking building’s parking lot is not accessible, but there are parking garages within a few blocks.
Do you speak Spanish?
¡Claro que si! All but Glenn are fluent. We have many client meetings in Spanish.
Can we do a virtual meeting?
Yes – in fact, most of our meetings are now over Zoom.
