insurance

BE AWARE AND CHANGE LIVES

By Tom Strangstalien

Insurance Advisor with WisMed Assure

September is Life Insurance Awareness Month. All month long, as I sat sipping my morning coffee, I reflected on how many times I’ve experienced the life changing impact of life insurance.

Even though I’ve been a life insurance agent for more than two decades, there are times when even I take for granted this life changing tool within our financial tool box. There are dozens of stories I can tell about how life insurance has truly been a difference maker in the lives of so many. Four of these stories stand out in particular because they had a direct personal impact on me.

Rene’s Home

Rene designed a plan, utilizing universal life insurance to potentially pay off the mortgage on her home early. The policy insured the lives of her and her husband jointly, and we funded the policy in such a way to grow the cash value quickly, yet be friendly to the family budget. 

One day, John mentioned to Rene that he had a lump on the back of his tongue which was bothering him. Being a nurse, Rene advised John, that he probably should get it checked out by their Doctor.  John battled cancer for the next four months. The family took care of him at home, until the day came when John passed away in his sleep.

 I received a call from Rene months later. Choking back tears, she told me because of the plan that was intended to pay the mortgage off early, the life insurance allowed her to remain in the home with her two daughters. She went on to tell me that she was going back to college to advance her status to a Registered Nurse. After much expression of gratitude and profuse thanks, she ended by telling me I helped the family change their life. Speechless at first, I finally said, “Yes, life insurance is a game changer.” 

Rene is debt free, cherishing her career as a registered nurse, while her two daughters attend college in Eau Claire.

Don’s Hockey Legacy

My son is a hockey player. Our small-town hockey rink was actually a make shift park shelter. I cherish the times that we set up the chiller to make the ice for the season, construct the walls, bring in the bleachers, and keep the rink maintained throughout the winter season. Our rink was viewed as a joke, and with a little bit of disdain by our fellow competitors throughout the state. 

However, we were really good. In fact, we took home many tournament trophies, state youth championship titles, and as a high school advanced to the state tournament on multiple occasions. How amazing would it be if we had a real rink? In discussing ideas with the parent committee on how to pursue such an aggressive endeavor, I suggested we approach community benefactors. 

I proposed an idea to Don, a very successful businessman in the community, that we fund a $5 million life insurance policy to someday create a community hockey arena and event center, bearing his family’s name. After deliberation with his tax accountant, he learned the charitable pursuit would provide a large benefit to him “tax wise”. His family stands proud of their patriarch, as they regularly witness the use of the family named facility. Don made a difference, and his legacy lives on.

Life Can Go On

Wayne would do anything for me, and pretty much for everyone. 

He helped me put up my tree stands for deer hunting every season. He taught me the ropes to hunt for ginseng in the fall and morel mushrooms in the spring. When the Brewers would play during the summer, I would frequently see Wayne and Carla’s truck pulling into our driveway, with their daughter Carlie in tow, to have a cold one, watch the Brewers, and do our best to discover the meaning of life. 

As with all of my friends, I encouraged Wayne to purchase a term life insurance policy. Their budget was tight, but we were able to formulate a significant amount of coverage with an affordable price. 

On a really soggy rainy day in the spring of 2016, Wayne, Carla, and Carlie ventured out to Carla’s mother’s land, located in Iowa. They would frequently take these trips, and while Carla visited with her mother, Wayne would maintain the family farm.

Shortly after crossing the bridge into Minnesota, and initiating the trip south to the Iowa border, Carla saw a tree give way on the bluff above. There was no time to react. The tree landed on the roof of the truck, killing Wayne instantly, breaking Carla’s neck, and leaving Carlie with head trauma and face lacerations. 

Carla was now a single parent, in a neck brace for months. Carlie recovered, cherishing the moments with her father and hero. I stood silent at the funeral, as the military salute and folding of the flag took place. Doing their best to emulate Wayne, the family stood tall, confident, and proud. Life would go on, and they would be “ok”. 

My Friend Randy

Randy was my best friend. We went to high school together, were college roommates for four years, and his brother married my sister. I recruited Randy to join our team in the “insurance business”. After some hesitation, Randy joined the team, and we spent many nights together learning the business. His on the job training involved writing a policy on himself (encouraged by me). 

I’ll never forget the call I received from my mother one beautiful April spring morning. She uttered, “Are you sitting down?” As I sipped my morning coffee at my kitchen table, I replied an affirmative yes. “I have some news. Your friend Randy woke up yesterday, and was going to read the morning paper, but he couldn’t. He was diagnosed with an inoperable brain tumor, and has about 6 months to live.” The words shook me to my core.

I took Randy shopping for his groceries one day. That was the last time I saw him. Six months from the date of the initial diagnosis, Randy was gone. He left behind two children, ages 5 and 7, and his wife Michelle who was a nurse. Michelle cried when she got the check for the life insurance. She was able to purchase a home for the family, continue her career in the medical field, and eventually put both boys through college.

Are You Aware?

Heaven forbid anything happens to you or your loved ones. But, wishing is not a plan. If you would like to explore and discover the very best possible options to fit your needs, I am always available. Please contact me with any questions or concerns you may have.

Tom Strangstalien

Insurance Advisor

WisMed Assure

Direct:  608-442-3730

Cell:  608-304-1579

tom.strangstalien@wismedassure.org

Financial Success Requires Offense and Defense

…and, defense may not be what you think it is

By Tom Strangstalien, Financial Protection Advisor

Offense, financially speaking, is focused on growth. Defense is focused on keeping what you have. Pretty simple concepts all-in-all. However, each has nuances that vary depending on your tolerance for risk, age, retirement goals, current and future lifestyle goals, and of course, income.

Income itself is one of your offensive tools. This includes the income you earn from working and passive income earned by investments. The other form of offense shows up in investment portfolio design and is generally about choosing assets or combinations of assets that have a high probability for growth… and generally, a greater degree of risk. And, of course, you can also play defense in your portfolio by choosing assets that are slower growing and less risky. The proportion of offense and defense in your portfolio is dependent on the variables mentioned above. This is where the advice of a professional investment advisor who understands your current situation, along with your goals and desires, is essential to your success.

As to other forms of defense, well that’s where I have spent my life helping people figure out. For example, during your earning years, your salary and other earned income is your most formidable offensive asset. But what happens to your plans if due to illness, injury or – God forbid – death, reduces or eliminates your income? How will you and your family maintain your standard of living? How will you be able to continue pursuing your retirement plans?

A substantial market for income replacement insurance has steadily developed for decades. (I include life insurance in this definition as it provides income for your family if you die.) There are as many options as there are individuals who need this type of defense, which means you have the opportunity to choose the type of insurance that exactly fits your current situation (including budget), and future goals.

A general feeling within the insurance industry, is that once a couple reaches the age of 55, there is substantial probability that one of them will need a form of long term care during their lifetime.   I have personally witnessed this within couples that I have worked with throughout my career.  That’s where another form of defense plays an exceptionally important role in protecting your immediate financial security and the integrity of your estate.

Now, like income protection insurance, there are many long-term care insurance options. To choose the option that’s right for you, you have to take into consideration how much tax you are paying and will pay. Again, the nuances can be quite subtle, but generally speaking, an experienced advisor will be able to show you all the ins and outs of the insurance products available.

One thing is for certain; the best time to do this type of planning and make your decisions is now. The sooner the better because, as you age, your options may become more limited, and for certain, the cost will increase.

If you would like a personalized tour of all the options that are right for where you are today and where you want to be in the future, contact me. I look forward to being your defensive coach.

Tom Strangstalien 

Direct:  608-442-3730

Cell:  608-304-1579

tom.strangstalien@wismedassure.org

Term Life Insurance

How much can I get for how little?”

This is the usual question from a potential buyer of “Term” Life insurance.

But for our Residents, Fellows, and young Physicians who want to protect their life and their family, it’s an incomplete question.

The better question is, “How can I inexpensively protect my family from bad consequences while we buy time for our assets to grow to a point where we won’t need Life Insurance anymore?”

Thinking through potential bad things that can happen is no fun, especially with the understanding that the probability of something catastrophic happening (other than death) is highly unlikely to happen to you.

And you’re right. It is not going to happen to you. That’s right … it is statistically NOT going to happen to you.

But it does happen to some … and when it does, the consequences are either tolerable or devastating, leaving one either emotionally comfortable or severely distressed.

Keeping in mind that insurance, by nature, is intended to cover “low probability/highly severe financial consequences”, there is a difference between “inexpensive” Life Insurance (the goal) and “cheap” Life Insurance (the mistake).

So, what makes term life insurance “cheap”?

After 24 years of working exclusively with Physicians, I’ve experienced a lot. The issues that follow are very real … (We’ll just leave it at that … but I can tell you that I am much more “mindful” of structuring Term Life Insurance now than I was 24 years ago …).

So, let’s look at an example of this low probability circumstance happening to someone like you…

A Physician, age 30, buys a $1,000,000, 20-year Level Term Life Insurance policy. She is delighted because, after a comprehensive search, she found the least expensive contract. She got the best rating class possible: only $25.73 a month. Such a deal!

Then, at age 42, with three young children, she is diagnosed with MS and is partially disabled and can practice only part time.

By age 45, she is totally disabled and not working at all.

So here’s the situation …

Typically, if one is disabled early in one’s career, one has not enough time to attain enough assets for retirement (and other objectives, such as a child’s college tuition).  This is because the monthly benefits being received from one’s disability insurance benefits leaves little to save. There simply is not enough money.

This was the reason for purchasing the Term Life Insurance 15 years ago.

Now the life insurance takes on greater value … It’s there to do what was intended … to make sure there are assets there for the family …

But does it?

Here is what her Life Insurance policy can and cannot do for her and her family …

This was the lowest premium … and it is, indeed, a cheap policy …

  1. She has 5 years left on her 20-year level term. Then you know what happens at the end of the level term? It becomes very expensive … onerously expensive … and increases in premium every year. So, with a tight budget, it quickly becomes unaffordable … at just the wrong time …
  2. She is now uninsurable and cannot get a new policy.
  3. Her policy could have been convertible to a longer term, but only during the first 10 years …

Talk about stress … At a time when one is emotionally vulnerable, now there is additional stress.

So, how could this have been avoided?

There could have been a longer “conversion” period put on the original policy. This would have allowed for the policy to be stretched to a longer term.

A conversion to a “permanent” policy is no bargain at this point; it has a much higher premium; it is around $1,000 per month; $12,000 per year … year after year. But, at least one would have had the option.

Please Note: longer conversion periods cost pennies more per month … but need to be applied for and put on the original policy at inception.

Could a better decision have been made back when the policy was originally purchased?

The answer is “yes”. There could have been a “Waiver Of Premium” Rider on the policy.

Waivers differ with each Insurer, but “strong” waivers waive premiums when one is totally disabled … and continue to waive them past the “level” term period … Many will waive it all the way until one passes … no matter how long one lives.

Disability waivers typically cost about $12 – $15 per million per month.

If this had been part of the policy, the contract would have stayed in force free of charge.

So, the result could have been less stress, knowing that one’s family would be getting that $1,000,000 no matter how long or how short one’s life would have been.

Could decisions have been made that would have been even better than this?

The answer is “Yes”. This could have been a contract with the ability to both “waive” the premium and then convert it to a permanent contract, which, if one is totally disabled, not only waives premiums, but it funds itself, that is, the Insurer pays the premium.

Now that same $1,000 per month is deposited into the contract by the Insurer and would have been building a cash reserve for the insured that could have been accessed later in life.  

At age 65, the cash would have probably been in excess of $500,000 … and, of course, there’s the Life Insurance …

Now, instead of stress, there is the emotional comfort of knowing that one’s family is financially sound no matter if one lives a long time or dies prematurely.

There’s a little bit more to this story …

A “20” year level term is, by far, the most common “term” chosen by young Physicians … and, with me having been around for 24 years, many of those 20-year terms are coming to an end.

As mentioned before, once the “level” term ends, these contracts get incredibly expensive … No one ever keeps them …

The thing is … Many, now at age fifty-something, still want some life Insurance. “The kids are still in college” … Not quite enough yet in the Retirement plan … Just want the extra million for another 10 – 15 years of so …” are commonly heard reasons.

Well, back at age 30, that 20-year term for $25 per month could have been a 30-year term for $44, but it was decided back then that was just a little too “pricey”.

Now, at age 50, if one is healthy, a new 10-year level term is $75 per month and a new 20 year term is $119 per month.

And again, that is assuming one is still in good health …

In closing, if you want the cheapest Life Insurance, anyone can shop for you.

But, as a young Physician, if you want “inexpensive” insurance with the appropriate protections for you and your loved ones, our promise is to watch out for you and provide the right kind of guidance.


Dave Serena

Dave Serena is in his 25th year as an Agent with the Wisconsin Medical Society’s Insurance Group: Wismed Assure. He has Physician clients in 36 states and continues to provide them with  life-long counsel and guidance. His position is that Physicians are free to practice high quality medicine and enjoy their families when they are confident about their personal financial security. He can be contacted at dave.serena@wismedassure.org  (414) 238-6105

It’s Time to Jump Start Your 2020 Employee Benefits Process

Open enrollment season is upon us. Here is a list you can use to ensure your employee benefit program for 2020 is implemented without a hitch.

Has your advisor: 

  1. Requested a census?
  2. Reviewed alternative carrier market options?
  3. Presented a plan level review of your benefits (i.e. deductibles)?
  4. Discussed Open Enrollment and your employee forms?
  5. Provided a Benefit Booklet for your employees?
  6. Updated your Summary Plan Description (SPD)?
  7. Reviewed the legally required group health plan notices for employees? *

If any item on this list causes you concern, or you have any questions about how to make your 2020 employee benefits plan the best ever, we can help.

Contact our director of group benefits, Chris Noffke, GBDS.

608.442.3734 direct

Chris.Noffke@wismedassure.org


History Repeats Itself: Medical Liability Insurance Premiums on the Rise

Part 1 of 3

Physicians in Wisconsin will soon be paying more for medical professional liability (MPL) insurance thanks to a cyclical “hardening” of the market.

Many younger physicians have never experienced a hard market because we have been in a “soft” market for an unprecedented length of time. The last time premiums increased was in 2001. And, prior to that, 1975 and 1986.

Here’s how it works. The insurance underwriting cycle is determined by the collective behavior of insurers. During a soft market, insurers are willing to provide coverage at or below cost, usually in an attempt to gain market share. But, at some point, insurers get nervous about low premiums failing to cover the payment of future claims.

Tom Baker, a University of Pennsylvania Law School professor, says understanding how insurers define cost is, “key to understanding the insurance under-writing cycle”. He goes on to say that when, “…insurers set their prices, most of the costs of the insurance coverage will be incurred only in the future. As a result, insurers constantly have to imagine the future to decide how to price their products today. This situation creates a remarkably high degree of uncertainty… This uncertainty about insurance costs is the fuel that drives the underwriting cycle.”

Insurers turn a profit by charging their clients premiums, investing those premiums and then paying out claims that are less than the income they make on premiums and investments.

Things are changing because 2018 was the third year in a row the industry’s combined ratio has exceed 100%. In other words, the industry would have been unprofitable each year since 2016 without investment income.

And, according to Don Tejeski, Senior Vice President at AmWINS Group Inc., no insurer is bucking the trend: “Underwriting overall has gotten more disciplined. No one is undercutting the market.”

Despite publishing an article earlier this year that forecast a continued soft market, Susan J. Forray, a principal and consulting actuary at Milliman (one of the world’s largest providers of actuarial and related products and services), when contacted directly cautiously advised, “The closest proxy to a nationwide market would be the market for reinsurance. Most companies would say the reinsurance market has hardened. This was the case when we wrote our article but I think the hardening has broadened across the reinsurance market since then. I think this will continue to contribute to a hardening market in states where the soft market has not yet ended.”

Wisconsin is an insurance haven

Nationally, adverse litigation trends, increased frequency of severe claims, and years of poor market results are driving insurers to look at raising premiums for the first time since 2001. Several states have already seen significant premium hikes and higher deductibles along with a reduction in coverage. It’s a classic hard market scenario; physicians and employers of physicians are paying more for less.

And it gets worse. Some insurers are exiting the market all together.

Because of a number of factors, Wisconsin physicians have been shielded from this trend. But, in the last three months, we have seen that shield start to give way.

Thanks to the efforts of the Wisconsin Medical Society and the medical community in general, Wisconsin has always been among the top states when it comes to affordable MPL insurance. One of the most significant factors was the creation in 1975 of the Injured Patients & Families Compensation Fund. Physicians and other health care providers pay into the fund, which covers malpractice awards of greater than $1 million. Physicians must purchase their own MPL insurance to cover claims less than $1 million. Bottom line: A physician’s personal assets are never at risk in Wisconsin thanks to this fund.

In addition to being instrumental in the creation of the fund, the Wisconsin Medical Society has consistently and effectively lobbied the state legislature resulting in the capping of non-economic damages and other legislation beneficial to physicians.

What can you do about it?

Inevitably, you will pay more for MPL insurance. But, to avoid an even worse-case scenario, where you can no longer find adequate coverage at all, there are several things you can do.

As the market hardens, underwriters will begin to clamp down on exceptions. This means that if your risk management practices and policies are irregular, you will pay a lot more and your options could be severally limited.

Unfortunately, to protect their profits, insurers may reduce claims and risk management personnel and services. Which makes it even more important for physicians to make sure they have their act together when it comes to risk prevention.

This means you’re going to have to be more self-reliant when it comes to risk management because every claim will have an increasingly significant adverse effect on your premiums and even your ability to be insured at all. If you make risk management a top priority, you are much more likely to be been seen as a preferred customer by your insurer.

We will dig a little deeper into what you can do to better manage your risk and the help that you can expect from a dedicated and experienced insurance brokers in the third part of this article.

For now, assuming your house is in order, you will want to look for stability and security by renewing your coverage with a financially strong insurer; a long-term player committed to the MPL insurance marketplace. Here again, an experienced broker can play a key role in helping you understand the quality of the insurers willing to do business with you.

It is essential now more than ever to seek the help and advice of an experienced, committed adviser who can help you improve your underwriting profile if need be and navigate your options.


Shawna Bertalot, CIC, ACI, President WisMed Assure

shawna.bertalot@wismedassure.org

608.442.3738

Want more value from your 2020 medical benefit spend? Think ahead. Act soon.

Do you ever notice how the days seem to slip by faster and faster with each passing year?

Here we are approaching the final couple months of 2019 and it’s a shock to realize we’ll be entering a new decade. I can’t seem to adjust to typing 2020 on the applications. Before the rest of the year slips away completely, it is time to do some serious thinking about your medical benefit policies for next year.

Quoting and Timing

We see it every year— there is always a time crunch when quoting medical benefits mostly because the insurance companies do not make rates available to groups and agents until they absolutely need to. I believe insurance companies offer limited information on rates because it makes it difficult for clients to switch providers.

If you take action early… perhaps even right away, together we can put the pressure on the insurance companies. Additionally, we can reduce the time crunch by taking care of ancillary benefits like Dental, Disability, Life and Vision sooner because all quoting can be done months in advance of renewal. This will allow for more time to be spent toward working on medical benefits when the rates are available.

As a side note, I think it is unfortunate these benefits are called ancillary. Even though they might be seen as a luxury when rising premiums force people to make hard choices, they can be just as important as medical benefits… just ask the employee who needs dental work or has vision problems.

Notices and Enrollment Periods

Other important, time-sensitive things to think about now are your notices and enrollment periods. Open enrollment is the annual period of time when employees are able to make changes to their benefit selections. The only other time they can make changes is when they experience a Qualifying Life Event (QLE). Typically, groups need to provide a special notice to their employees to establish the time period for the upcoming open enrollment.

I am often asked to clarify which employees are eligible for open enrollment. The answer is simple for groups where all employees are working full time – 30 hours or more per week. However, for groups with employees who are working a variety of hours per week, it is a little more difficult. If you are concerned about getting it right, call me, I can help.

If you want to protect yourself, I recommend you consider setting up what is known as a Look Back Period. A Look Back Period helps you and your insurance advisor verify which employees qualify to have been part of the open enrollment process.

WisMed Assure Exclusive Programs – AHP, Delta Dental, MGIS

Most agencies only quote and spreadsheet for their clients which is why they are happy to work with any type of group or company. We’re the opposite. We are focused solely on health care companies which has helped us develop innovate and exclusive products that only WisMed Assure can offer. Some examples are the Association Health Plan, Delta Dental and income protection solutions from MGIS. If you shop for these elsewhere, you won’t get the discounts we offer.

A Little Faith Means Less Frustration

If, as the end of the year comes closer, you find yourself scratching your head with insurance questions, and feel frustrated due to not having access to the systems and services you need, think of us… have faith in us.  We are here to help you move the health care of Wisconsin forward and to be your financial partner for life.


Chris Noffke, GBDS

chris.noffke@wismedassure.org

608-442-3734

Medical Liability Insurance Premiums on the Rise: Part 1 of 3 Available in September

For the first time since 2001, the insurance market is hardening. This means Wisconsin physicians will be paying more for their medical professional liability (MPL) policies. It also means you will face stricter conditions, less favorable terms, and have fewer options and insurance companies to choose from.

At WisMed Assure, we know this is a serious matter for our clients. Our president, Shawna Bertalot, has written a three-part series examining what to expect as the market changes and MPL premiums increase. Part one of the series will be released in September with the debut of our bi-monthly newsletter. Be sure to subscribe to stay up-to-date on the financial and insurance matters of utmost importance to you and all of the Wisconsin health care community.

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