financial planning – WisMed Assure

Lifetime Term Life Insurance. Does It Exist?

October 1, 2024October 2, 2024

By Tom Strangstalien, Insurance Advisor

Last month was life insurance awareness month, but we should be aware of the value of life insurance and the opportunities it offers all year round. A relatively new concept in life insurance is guaranteed no-lapse universal life. So, what exactly is this new form of life insurance, and does it potentially serve a purpose in your life?

Term insurance is the least expensive and most common form of life insurance. You choose a term period of one year (annual renewable term), ten years, twenty years, thirty years, or in rare instances even 40 years. If you pay your premiums on time, the coverage is guaranteed to be in place if needed. At the end of the term period, you are now older and while you can potentially renew the coverage for another term, because you are older, the cost will be substantially higher. Alternatively, you could pay the current premium for our attained age each year until it reaches the point where it simply isn’t affordable anymore. Lastly, depending on the product that you purchased, you may not have the option to renew the coverage, and the policy simply lapses, so the coverage goes away.

The major question with term insurance is, “What if I need the coverage after the end of the term period?” As outlined above, it can create a situation that is not ideal. Life happens and there are numerous scenarios where you might want life insurance coverage for a lifetime and not just a specified number of years. A no-lapse universal life insurance policy can address these concerns. With universal life insurance, you pay more into the policy than you would with term insurance. It has a cash value component where excess funds are deposited in the earlier years of the contract. Those funds then assist in paying premiums in later years when you are older and premiums are more expensive. You can “cash out” your account at anytime if the coverage is no longer needed. If funded properly, the premiums will not change, however it must be carefully reviewed each year if anticipated interest rates (or the performance of the cash account) do not perform to the expected standards. If it’s not earning sufficient interest, premiums and/or the amount of coverage may need to be adjusted, or the policy can be in jeopardy of lapsing in the future since it’s not properly funded. It simply can run out of money.

With guaranteed no-lapse universal life, you pay more at your attained age [EW1] than you would with term insurance. However, like traditional universal life, it does have a cash value account. Yet, as long as you pay the no-lapse premium, the coverage is guaranteed to be there for life! Unlike traditional universal life, the contract is never in jeopardy. The cash account may or may not perform as anticipated, however this has no bearing on the life insurance coverage. It will always be there! It’s essentially a pseudo lifetime term insurance program!

What will your future hold? How will your health be? Will you want to create a legacy, a charitable endeavor, or a scholarship fund? Will you want to create wealth for your future generations? As you consider term life insurance, what term limit will you choose? Or maybe you should explore coverage for your lifetime in the form of guaranteed no-lapse universal life.

The WisMed Assure team would be happy to provide you with quotes from several companies. Our allegiance is always to you, and as always thank you for all that you do!

For help with your insurance planning, contact Tom Strangstalien at 608.442.3730 or the WisMed Assure team at insurance@wismedassure.org, complete this quick online form or call 608.442.3810.

Note: This article is for informational purposes only and should not be considered as insurance advice related to your specific policy or situation. Please consult with a qualified insurance advisor or professional before making any policy decisions. Full disclaimer and contact information.

Investing in Private Equity: A Pre-IPO Opportunity

September 20, 2024October 2, 2024

By Mark Ziety, CFP®, AIF®, Financial Advisor, WisMed Financial

Private equity offers a unique opportunity to invest in promising companies before they go public. Unlike publicly traded stocks, which are bought and sold on stock exchanges, private equity investments are made in privately held companies.

How Does Private Equity Work?

Private equity firms raise capital from investors, including individuals, institutions, and pension funds. They use this capital to invest in privately held companies through strategies such as:

Acquiring existing businesses
Funding expansion
Restructuring underperforming companies

Why Invest in Private Equity Before an IPO?

Potential for Higher Returns: Private equity firms often target high-growth companies. If these companies succeed, their value can increase significantly before an IPO, potentially yielding substantial returns for early investors.
Reduced Market Volatility: Unlike publicly traded stocks, private equity investments are not subject to daily market fluctuations, providing a more stable investment environment.
Exclusive Investment Opportunities: Private equity firms often have access to investment opportunities that are not available to the general public.

How to Invest in Private Equity

Direct Investment: Some private equity firms accept direct investments from individuals. However, this typically requires a substantial minimum investment and may not be accessible to all investors.
Private Equity Funds: Many investment firms offer private equity funds that pool capital from multiple investors. These funds provide diversification and are managed by professionals, making them a more accessible option for many investors.
Venture Capital Funds: Venture capital funds are a subset of private equity that focuses on investing in early-stage companies. While they often involve higher risk, they can also offer significant growth potential.

Important Considerations

Liquidity: Private equity investments can be illiquid, meaning it may be difficult to sell your investment before the company goes public or has another liquidity event.
Risk: Private equity investments carry higher risk compared to publicly traded stocks. There is no guarantee of success, and the potential for loss is greater.
Fees: Private equity firms typically charge management fees and performance fees, which can impact your overall returns. It’s important to understand these fees before investing.
Tax Implications: Consult with a tax advisor to understand the potential tax implications of private equity investments.

Investing in private equity before an IPO can offer significant rewards, but it’s essential to be aware of the associated risks and benefits. Conduct thorough due diligence on private equity firms and their investment strategies. Consider diversifying your portfolio by investing in multiple funds. And always consult with a qualified financial advisor to make informed decisions. Want more investing tips? See the 7 ways to improve investment performance.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

Note: This article is for informational purposes only and should not be considered as financial or tax advice. Please consult with a qualified financial advisor or tax professional before making any financial decisions. Full disclosures.

2024 Volume 3

September 19, 2024October 2, 2024

Worker’s Compensation Rates Drop

By Brian Fowler, WisMed Assure Account Director

Workers compensation program word concepts banner. Protection employer legal right. Infographics with linear icons on dark green background.

Starting October 1, 2024, for the ninth consecutive year, Worker’s Compensation rates in Wisconsin will drop. Work Comp rates in Wisconsin are set by the state and are the same for every insurance carrier.

Residual Disability Rider Provides Financial Protection

By Martin Hurst, Insurance Service Representative

The Residual Disability Rider is an essential addition to a physician’s disability insurance policy. It provides financial protection in the event of a disability that limits your ability to work at full capacity.

Investing in Private Equity: A Pre-IPO Opportunity

Businessperson working on laptop with PRIVATE EQUITY inscription

By Mark Ziety, CFP®, AIF®, Senior Advisor, WisMed Financial

Open Enrollment

By Chris Noffke, GBDS, CSFS, Vice President of Employee Benefits

Now is a good time to start thinking about your open enrollment. Many companies fail to properly do an open enrollment, or maybe it’s your first time. We had our HR OnDemand professional create this checklist to help you make sure you don’t miss anything.

Lifetime Term Life Insurance. Does It Exist?

By Tom Strangstalien, Insurance Advisor

New Rules Regarding Overtime Pay

Overtime law book and calculator in an office.

By Fine Point Consulting HR Professional

The Department of Labor announced a final overtime rule, Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees, on April 23, 2024. The rule revised the regulations issued under the Fair Labor Standards Act (FLSA) that implement the exemptions from minimum wage and overtime pay requirements.

An Invaluable Secret for Residents and Fellows

June 28, 2024July 9, 2024

By Tom Strangstalien, Insurance Advisor

I recently spoke with a physician regarding an eye condition that he has developed. He doesn’t know his prognosis, but there’s a strong possibility that it could be debilitating and threaten his ability to practice medicine in his specialty. He inquired if there’s any way to increase his disability insurance coverage as his current limits are significantly below his income.

Upon investigation, we discovered that the relatively small amount of monthly benefit protection included in the contract he purchased as a resident included a Future Increase Option. This allowed us to increase his disability protection with no medical underwriting! The uncertainty of his eye condition was of no consequence, and we were able to increase his monthly benefit amount to a level much more suitable to his current income.

We understand that as residents and fellows your income and budget are limited. You are far from the income you’ll receive as an attending physician in your intended specialty. You need disability protection and the earlier you purchase this protection, the less expensive it will be throughout your career. However, with your current budget, you may think you just can’t afford it at this point. This is not necessarily true. But how do you get affordable disability insurance?

As referenced above, the key here is the Future Increase Option. Insurance companies vary their name and definition of the benefit. It may be referred to as a “Future Purchase Option,” a “Maximize Your Benefit” option, or other terms. The purpose of the option remains the same; it allows you to increase your disability monthly benefits in the future without the worry of medical underwriting! But what about your budget concerns?

I’ve worked with several physicians this week whose budget was a concern, so we applied for a relatively small amount of disability monthly benefits coverage. For example, $2,000 or $3,000 per month, well short of what you will need as an attending physician. However, we included the Future Increase Option in the contract to allow you to adjust it once you’re earning more. In each case, our client is paying less than a $100 per month for this essential coverage! My advice for every resident and fellow is to put at least a base amount of coverage in place with the future increase option included. As your income increases and your budget allows, we can easily increase your coverage.

You help your patients manage their health conditions every single day. Will you ever experience any of these conditions? Your ability to earn an income is your most valuable financial asset, so protect it now. At WisMed Assure, our allegiance is to you and to serving your financial needs. We are here to provide you with quotes for this protection at any time, at your convenience, with absolutely no obligation. As always, thanks for all that you do!

For help with your insurance planning, contact Tom Strangstalien at 608.442.3730 or the WisMed Assure team at insurance@wismedassure.org, complete this quick online form or call 608.442.3810.

Essential Estate Planning Documents in Wisconsin

June 28, 2024July 9, 2024

By Mark Ziety, CFP®, AIF®, Financial Advisor, WisMed Financial

Planning your estate isn’t just about paperwork; it’s about giving your loved ones peace of mind. Here’s a breakdown of key documents in a Wisconsin estate plan:

Last Will and Testament: This document directs how your assets are distributed and names guardians for minor children. It goes through probate court, so consider a trust to keep your affairs private and for faster distribution.
Revocable Living Trust: A trust offers flexibility and privacy, allowing assets to avoid probate and pass smoothly to beneficiaries. It can also include legal protections for your assets. While you’ll still need a will, it can simply state that assets transfer to the trust.
Powers of Attorney: Grant someone you trust the authority to make decisions on your behalf. There are separate powers of attorney for finances and health care. Consider a “springing” power of attorney that takes effect only when you’re incapacitated.
Advance Directive (Living Will): This document outlines your preferences for medical care if you can’t communicate them. It guides your health care providers and loved ones, especially regarding end-of-life decisions.
Beneficiary Designations and Titling: Assets like life insurance and retirement accounts typically go directly to designated beneficiaries, bypassing your will or trust. Ensure your beneficiaries are up to date and follow the language your attorney provides such as naming your trust as beneficiary rather than a person. Your attorney may also recommend changing the title of some assets to your trust.
Guardianship Designations: Choose a guardian for your minor children in your will. Discuss this responsibility with them beforehand to ensure they’re willing and able.
Community Property Agreement (if married): Wisconsin law treats certain marital assets as “community property.” This agreement clarifies which assets fall under this category and allows for potential tax benefits and easier transfers to trust.
Letter of Instruction (Optional): While not legally binding, this letter provides guidance to your executor or trustee regarding your wishes, funeral arrangements, and other important details. Including a list of assets and liabilities can further streamline the process.

Remember: Estate planning, like taxes, retirement savings, investments, and insurance, is one of the important components in a proper financial plan. Find additional estate planning resources here.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

2024 Volume 2

June 28, 2024July 9, 2024

Med Mal 101 Refresher for All Physicians

By Shawna Bertalot, CIC, ACI, WisMed Assure President

Graphic explaining Claims-Made and Occurrence Med Mal

The WisMed Assure team spends a lot of time the first half of the year doing Medical Student and Resident education on topics especially important to those who are completing their education and heading off to their first jobs. Part of that education is Medical Professional Liability (Med Mal) 101.

An Invaluable Secret for Residents and Fellows

By Tom Strangstalien, Insurance Advisor

WisMed Assure clients benefit from access to Zywave solutions

Vector illustration of an abstract scheme, which contains people icons.

By Martin Hurst, Insurance Service Representative

At WisMed Assure, we are committed to providing more than just insurance solutions; we are dedicated to fostering the success and prosperity of our valued customers. That’s why we proudly provide our customers access to Zywave free of charge, as a testament to our unwavering commitment to your organization’s success. Zywave provides HR solutions that assist with employee benefits management, compliance tracking, and HR administration.

Essential Estate Planning Documents in Wisconsin

Information about Estate planning and old glasses.

By Mark Ziety, CFP®, AIF®, Senior Advisor, WisMed Financial

Planning your estate isn’t just about paperwork; it’s about giving your loved ones peace of mind. Here’s a breakdown of key documents in a Wisconsin estate plan.

Practice managers: join us for virtual discussions!

Virtual meeting with laptop and notebook on table.

By Chris Noffke, GBDS, CSFS, Vice President of Employee Benefits

In the constantly changing field of health care management, it is crucial to collaborate and share insights to achieve success. With this in mind, we are pleased to announce that we will be hosting virtual discussions for practice managers.

Artificial Intelligence (AI)-Generated Healthcare Content; Understanding the Limitations

by Kaelin O’Reilly, ProAssurance communications specialist

Artificial intelligence (AI), including chatbot tools like the popular ChatGPT, has made possible many useful applications in the healthcare sphere. ChatGPT’s ability to generate human-like responses to natural language inputs has made it an attractive tool for professional and student writers. The application can help develop quality and informative content in the form of articles, reports, blogs, tweets, and emails.

Life, Death and Taxes

March 30, 2024April 1, 2024

By Lisa Koerner, Insurance Advisor

If you are looking for some creative ways to avoid paying taxes, don’t overlook the benefits of life insurance. There are several different types of life insurance policies that serve different objectives, the greatest is a tax-free death benefit for your beneficiaries. Also, the death benefit does not go through probate, so only your beneficiaries can receive the money. There are a few things to look for when searching for the right life insurance.

When choosing life insurance programs, term life policies are typically the most popular. Term policies offer a larger death benefit for a smaller premium, however, the rates are only locked in for a certain number of years and don’t provide any cash return if you outlive the term or cancel the policy.

The advantage of a permanent policy is that it can build cash value in the policy that you can access tax-free while you are living and still provide a tax-free death benefit for your beneficiaries.

Universal life plans offer more flexibility but are also driven by interest rates. When setting up this policy, it is very important to work with your agent to make sure it is properly funded in the beginning to avoid the need to put more money into it later on.

Whole life policies can also be a good option for cash value growth, but there are things to look for here as well. If you choose a policy that has dividend options, you can set up the policy to allow you to access the dividends tax-free in the future without worrying about having a loan on the policy that could affect how the policy pays out. The biggest thing to be aware of with cash value policies is that if you take out more money than what you put in, the gains would be considered taxable income.

To learn more, reach out to Lisa Koerner or the WisMed Assure team at insurance@wismedassure.org, complete this quick online form or call 608.442.3810 for help with your insurance needs.

Tax Treatment of Long-term Care Insurance a Game Changer

March 30, 2024April 1, 2024

By Tom Strangstalien, Insurance Advisor

We put my dad into a nursing home on Monday. My mom had been his caretaker since he was diagnosed with a somewhat rare neurological disorder. My mom has been superwoman, a real- life example of a family member caring for a loved one. However, even superwoman has a kryptonite, hers being a diagnosis of breast cancer with an impending dual mastectomy this Friday. In need of her own care, our family had no choice but to concede to the fact that dad needed continuous care from qualified professionals. The cost? $8,000 per month, and that does not include costs for prescription medications and other needed skilled medical treatments. My parents are faced with a common long-term care phenomenon, which asset do we liquidate first?

As part of our financial planning, we should all anticipate being faced with this conundrum. Which asset should we set aside to be liquidated first in the event of the need for exorbitant long-term care expenses? In considering the tax treatment of “qualified” long-term care insurance products, we may be able to make this decision much easier.

Qualified long-term care insurance premium deduction

First, the IRS allows a tax deduction for qualified long-term care insurance premiums. These premiums could be in the form of a traditional long-term care policy or for the prevalent “hybrid” life insurance with long-term care benefits available today. In essence our premiums can be combined with our unreimbursed medical expenses to the extent that they do not exceed 7.5% of our adjusted gross income. The maximum we can deduct is subject to age limits, but this by itself can be significant, especially if we combine the sum-total over a respective number of years. If we do not claim the deduction on our Federal return, we can claim the expense of our premiums on the State of Wisconsin income tax return. All states vary with how these premiums are treated, so you need to check with your individual state.

The 2024 federal IRS deduction limits are:

Age 40 and below $470

Age 41-50 $880

Age 51-60 $1,760

Age 61-70 $4,710

Age 71 and over $5,880

How are long-term care insurance payments for care treated by the IRS for tax purposes?

When determining which asset to liquidate first, this can be the determining game changer! If the policy is “qualified” per IRS guidelines, typically the payments for any level of care including home health care, assisted living or skilled nursing home care are not taxed. For my parents that would mean an estimated $96,000 in annual benefits received that would not be taxed. If assets were set aside and allocated to a taxable investment for future long-term care, it likely would need to achieve a significant rate of return to compete and almost certainly involve volatility and risk. I would say most of the time it makes much more sense to purchase “tax qualified” long-term care protection. My grandmother was in a home with cognitive impairment for 12 years. In her case at an average nursing home cost of $100,000 per year, she would have received $1,200,000 in tax-free benefits. Can a savings account or investment compete with that? And how will inflation and supply and demand affect future costs?

Using a Health Savings Account for long-term care insurance premiums

Another tax consideration worth mentioning is that qualified long-term care insurance premiums can be funded with Health Savings Account (HSA) assets. As we know, our health savings accounts accumulate on a tax-free basis, are deductible for individual contributions and can be funded with employer contributions. This fact can further enhance the benefits of purchasing long-term care protection.

I work with insurance planning for our physicians every day. Yet, the value of proper planning still resonates with an abrupt wake-up call when faced in real life. How much expense will accrue with my dad’s nursing home stay? Only the future holds the answer. One fact is undisputable, knowing which asset we will liquidate first should be planned well in advance. That asset may very well be and should be a tax qualified long-term care insurance policy.

For help with your insurance planning, contact Tom Strangstalien at 608.442.3730 or the WisMed Assure team at insurance@wismedassure.org, complete this quick online form or call 608.442.3810.

Don’t Let Taxes Take a Bite Out of Your Finances: Common Errors to Avoid

March 30, 2024April 1, 2024

By Mark Ziety, CFP®, AIF®, Financial Advisor, WisMed Financial

Investing is a smart way to grow your wealth, and keeping more of it from taxes is even smarter. Let’s explore some common tax mistakes investors make and how to avoid them:

Right Investment, Wrong Account: Investment growth, dividends and interest can be taxed as ordinary income, short or long-term capital gains or tax-free. Similarly, investment accounts are treated as tax deferred, taxable or tax-free. Holding tax efficient and inefficient investments in the right accounts can improve net returns.
Short-Term Gains Trap: Selling an investment held less than a year triggers short-term capital gains taxes, typically at your ordinary income tax rate. This can be much higher than the long-term capital gains tax for assets held over a year. Consider waiting to sell until you hit that long-term mark.
Neglecting Tax-Advantaged Accounts: Contributing to IRAs, 401(k)s and other tax-advantaged accounts, like a health savings account, allows your investments to grow tax-deferred or tax-free until withdrawal. This can significantly boost your returns in the long run.
Letting Losses Linger: Selling investments at a loss can offset capital gains and reduce your tax bill. This is called tax-loss harvesting. Don’t miss opportunities to claim these deductions! However, be mindful of the wash-sale rule, which limits claiming losses if you repurchase a similar investment within 30 days before or after selling.
Forgetting IRA Contributions: Investment companies typically don’t send the supporting tax document 5498 until May each year (because investors have until April 15 to make their IRA contribution for the prior year). This leads many investors to forget to record their IRA contribution on their tax return.

Wisconsin Specifics:

Missing Long-Term Care Premiums: Wisconsin allows a deduction for qualified long-term care insurance premiums on the state income tax return, even if you don’t claim an itemized deduction on the federal return. Plus, you won’t necessarily get a supporting tax document from your insurance company, so this is easy to miss.
Missing Edvest Contributions: Wisconsin residents contributing to an Edvest college savings plan may qualify for a state tax deduction on contributions. This is another one that’s easy to miss; there’s no supporting tax document sent out by Edvest.

Please note, this is not professional tax advice. For specific guidance on your situation, consult a tax professional. By being aware of these common pitfalls, you can keep more of your hard-earned investment returns come tax time, especially when considering Wisconsin’s unique tax landscape.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

2024 Volume 1

March 29, 2024June 28, 2024

Don’t Let Taxes Take a Bite Out of Your Finances: Common Errors to Avoid

By Mark Ziety, CFP®, AIF®, Senior Advisor, WisMed Financial

Crumpled tax form with money, calculator and notepad on the table.

Investing is a smart way to grow your wealth, and keeping more of it from taxes is even smarter. Let’s explore some common tax mistakes investors make and how to avoid them.

Change Healthcare™ Attack Highlights Often Overlooked Cyber Insurance Coverage

illustration of umbrella protecting computer screen from an attack

By Shawna Bertalot, CIC, ACI, WisMed Assure President

Many health care practices rely on a third party for access to their EMR and for billing. This creates a “contingent” or “dependent” risk. The February 21 cyberattack on Change Healthcare changed the world for many patients and health care providers.

Disability and Life Insurance Taxation

Tax payment concept. State Government taxation, calculation of tax return. Blank tax form, calendar, magnifier, money, notebook, calculator, coins, glasses, watches, documents, computer.

By Chris Noffke, GBDS, CSFS, Vice President of Employee Benefits

Taxation of benefits is a unique and important topic. Many groups I work with want to make sure their employees are not taxed for an employer paid life insurance benefit and other clients want to ensure that if an employee becomes disabled, they do not have to pay taxes on their already reduced income.

Tornadoes Can Strike in Seconds. Are You Ready?

By The Hartford

Tornado season is upon us and could bring more storms in the months ahead. In fact, the U.S. experiences the most tornadoes of anywhere in the world.

Tax Treatment of Long-term Care Insurance a Game Changer

Nurses, doctor and caregivers in nursing home take care of old men and women. Volunteers help aged people at home and hospital.

By Tom Strangstalien, Insurance Advisor

Your Medicare Update

By Mary Krueger, Medicare Specialist

It’s early 2024 and its already time to explore Medicare options for 2025. Many Medicare enrollees want to look at what is suitable for their needs in the Medicare market. If you have started looking for yourself or someone else, there are many different ways to procure coverage.

Life, Death and Taxes

Photo of a grandfather and his granddaughter loving autumn. Throwing leaves in the air.

By Lisa Koerner, Insurance Advisor

If you are looking for some creative ways to avoid paying taxes, don’t overlook the benefits of Life Insurance. There are several different types of life insurance policies to serve several different objectives, the greatest being a tax-free death benefit for your beneficiaries.