Life Insurance – WisMed Assure

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.

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.

Disability and Life Insurance Taxation

March 30, 2024April 2, 2024

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. Making sure these benefits are set up correctly, both by the insurance carriers and in your payroll service, is vital to tax-free benefits for employees.

Life insurance

Life insurance is the easier of the benefits to establish correctly. If an employer provides up to a $50,000 benefit to each employee, then this benefit and premiums paid for it can be excluded from an insured employee’s taxable wages. If you offer coverage to employees for a benefit over $50,000 and it is employer paid, you are required to tax premiums for the amount above $50,000.

Disability insurance

A bigger discussion happens regarding disability insurances (both Long-term and Short-term). When an employee or owner/partner is out of work due to a disability, they will receive only a fraction of their pre-disability earnings, the average benefit being 60% of pre-disability earnings. If an employer is paying 100% of the disability premiums, the employer can decide to offer these benefits as a “gross-up” to employees. A gross-up is structuring the premiums paid by the employer to be a taxable benefit on the employee payroll. The benefits received by the disabled employee (disability income) will then be tax deferred. The rule is direct, if employees are paying payroll taxes on the premiums that the employer is paying, the benefit will be tax free – however – it is very important that the payroll taxes begin prior to the benefits being received.

When premiums are split between the employer and employee, we need to make sure there are a few rules followed. If a benefit has a premium contribution of 50% paid by the employer and 50% paid by the employee, the setup will determine if the benefit is partially or fully taxable. If in this situation the employee pays their premiums pre-tax and there is no gross-up for the amount the employer pays, this full benefit will be taxable income. Another example is if the employer pays 50% of the benefit (not grossed-up) and the employee is paying for 50% of the benefit with post-tax dollars, then when the employee receives this disability income benefit, 50% of the benefit will be taxable. So, to make the full benefit tax deferred, you need to have the employer premiums paid be grossed-up and the employee portion needs to be paid with post-tax deductions.

This can get a bit confusing, and I would love to talk if you have any questions. Please email me at chris.noffke@wismedassure.org or call 608.442.3734.

Winter 2024 Issue

March 29, 2024April 3, 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

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

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.

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.

Making Part D of Medicare brighter

photo of an elderly man looking at medications with his physician

By Mary Krueger, Medicare Specialist

As many of you on Medicare know, October 15 to December 7 is the Annual Election Period for Medicare Part D and Medicare Part C (Medicare Advantage). This often coincides with a flurry of research needed and concerns expressed by client recipients and this year was no exception.

Peace of mind this holiday season

December 11, 2023December 11, 2023

By Martin Hurst, Insurance Service Representative

The agents here at WisMed Assure do not focus solely on revenue, our agents go that extra mile to address individual and specific concerns and provide coverage within each customer’s budgetary needs. By putting clients’ needs first, our agents demonstrate their commitment to providing excellent service and building trust with physicians. Their expertise and attention to detail enables them to guide physicians through the complex world of insurance, explaining terms, conditions and benefits clearly and transparently. Ultimately, our agents strive to empower physicians with the knowledge and coverage necessary to protect their health and peace of mind.

As I navigate my first year here at WisMed Assure, the agency has prioritized providing me with direct training with our agents. Tom Strangstalien is one of the agents I have had the opportunity to sit down with to discuss Life and Disability policies. Recently, Tom and I reviewed disability quotes for a physician. Tom carefully considered the physician’s lifestyle, occupational practice and potential risks to tailor the policy to their unique needs.

Additionally, he broke down the various policy options, highlighting the specific benefits and limitations of each. He focused on the importance of comprehensive coverage that would provide adequate support if the physician ever faced a disability, without worry of the financial burden. After reviewing the quotes for this physician, he noted that the physician was concerned the monthly premium was exceeding their budget. This was to be expected as their initial meeting was to create the “ideal policy” without worrying about the premium cost. With this concern in mind Tom navigated to the riders page with the cost for each listed next to the rider and asked what I would keep or remove from the policy to reduce the overall cost. We went back and forth on keeping or removing certain riders, we looked at 90- or 180-day elimination periods, possibly decreasing the time covered in relation to retirement age of 65 or 67, to see the impact this would have on premiums. At the end of our meeting, we were able to give this physician several options that had the potential of saving them $4,000 in monthly premiums. This is an example of what each agent does here daily and is the reason I am grateful to work alongside so many unique and caring individuals.

As you’ll see in this edition of the Antidote, the WisMed Assure and WisMed Financial team is focused on building and maintaining relationships with clients, and always keeping the best interest of the client at the center of all we do. These real client stories help illustrate the WisMed difference. Contact us at 608.442.3810 or insurance@wismedassure.org.

Fall 2023 Issue

December 6, 2023December 11, 2023

Peace of mind this holiday season

By Martin Hurst, Insurance Service Representative

Helping clients with strategies, not just quotes

photo of calculator and stethoscope on top of graphs

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

Managing the costs of employee benefits while still providing robust resources for your employees can be a challenge. If your insurance agent just gives you a few quotes to compare, you might not be getting the best plans for your team.

Consolidation leads to $600,000 student loan forgiveness – a case study

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

Good financial planners do much more than help with investments. They look at the entire financial picture, which includes debts too. Today’s case study shows how a unique rule, available until December 31, is facilitating more than $600,000 in student loan forgiveness.

Nightmare before Christmas success story: cyber hacker stopped

By Shawna Bertalot, CIC, ACI, WisMed Assure President

Message from IT Manager: “Unusual activity has been detected on your exchange and our files cannot be backed up.”

This is not how any clinic administrator or managing partner wants to start their Monday morning, but exactly what happened to a long-time WisMed Assure client last December. This highly experienced, professional administrator of a 15-physician independent clinic with over 50,000 patient records was facing a situation she had never experienced before.

Finding insurance and financial advisors I trust

By Tim Bartholow, MD

I have several connections to our Wisconsin Medical Society, and I’d like to share some good and bad experiences with on the street financial advising and insurance advising, and how WisMed Financial and WisMed Assure cut through market confusion.

Should I convert my term life insurance policy?

photo of a young family looking out the window at fresh snow

By Tom Strangstalien, Insurance Advisor

Protecting your most important asset can be a daunting task

By Lisa Koerner, Insurance Advisor

Making Part D of Medicare brighter

By Mary Krueger, Medicare Specialist

Protecting your most important asset can be a daunting task

December 6, 2023December 7, 2023

By Lisa Koerner, Insurance Advisor

What is your most important asset? It’s your ability to earn an income. When choosing disability programs to protect your income, there are a number of different companies and benefits. It’s often a task that takes time and research, along with several discussions with an insurance agent. Sometimes, the biggest challenge is finding an agent who is willing to work with you at the times that you’re available. Many of the people I work with are surprised when I respond to phone calls, emails and text messages after 5 p.m. and on the weekends. I know the schedules for students, residents and physicians can sometimes be challenging so I try my best to accommodate them.

A resident I recently worked with scheduled several meetings with me after 6 p.m. so we could discuss the different benefits available in the quotes I had shared, how they worked and the different costs. As we worked out the best benefits, the premium still came in a little high for his budget. The insurance provider I worked with offered an option to pay a lower premium in the beginning, then increase it over time with an option to level out the payments after he started his fellowship and increased his income. He was very thankful that we were able to get him the benefits that were important to him with payments that were affordable.

I once had a client tell me that I don’t act like an insurance agent because of the way I try to explain things. That was the best compliment I’ve ever gotten. I try to explain things in a way that I would want them explained to me.

Our goal is not just to sell you a policy, but to provide guidance in helping you find solutions for you for now and for the future. The greatest gift we have to offer is the gift of education.

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.

Should I convert my term life insurance policy?

December 6, 2023March 13, 2024

By Tom Strangstalien, Insurance Advisor

As we celebrate the holiday season, we’re especially thankful for our loved ones. It’s the most popular time of year to reflect on our life insurance needs to determine whether we have the right coverage and enough coverage to protect our loved ones. The most common form of life insurance protection is term life, and a planning tool that often gets overlooked is the potential to convert your term life insurance coverage to some form of permanent life insurance, without any medical underwriting requirement. Unlike term insurance which either disappears or substantially increases in cost at the end of each term, permanent life insurance provides you with the peace of mind of knowing that it will be there for as long as you pay the premiums.

As with so many of our clients, I am the trusted insurance advisor for Katie, John and their family (names changed to protect confidentiality). One day I received a call from Katie because John’s mother, Anna, had suffered a severe and debilitating stroke. Anna and her husband had purchased a $1,000,000 term life policy from an agent several years ago to provide protection for their family. Katie indicated that in doing research into Anna’s finances she discovered that the term policy was about to expire. She asked if I could look into the coverage to make sure it could be in place for Anna’s lifetime as she was now completely uninsurable. Upon doing so, I unfortunately discovered that the conversion option had expired a few years ago. Furthermore, the policy was not guaranteed renewable and was about to expire within a year. Anna passed away a couple of years later and rather than receiving the intended $1,000,000 income-tax-free benefit, they received nothing. Had the policy been converted to a permanent plan during the allowed timeframe, the insurance benefit would have been available as desired for the family.

This is just one example of why you should at least explore your term life conversion options. You can consider whole life, universal life or even index universal life coverage if offered by the insurance company. These policies will be more expensive but have a cash component that can be utilized if the need for protection diminishes in the future. So why else would you consider converting your policy?

Do you want to provide a legacy for your family and loved ones in the form of an income-tax-free benefit? Perhaps your estate planning needs include a life insurance policy or some charitable planning by leaving a legacy to a treasured institution, scholarship fund or community entity? This type of planning has the potential of also providing a significant tax benefit. No matter what your future holds, if your policy contains a current conversion privilege, you can make the change, regardless of our current health or health history.

Early in his career as a physician, Brad (pseudonym for privacy) had purchased an inexpensive term life policy in the amount of $5,000,000. Brad experienced a significant change in health and contacted me to determine what options may exist for life insurance protection, since leaving an income-tax-free gift to his family was extremely important to him. He was now uninsurable, however his term life insurance policy did contain a conversion option. We did extensive planning, and though we did reduce the life insurance amount somewhat, we were able to provide a whole life policy that would be paid up requiring no further premium payments at retirement. Brad is so thankful that the coverage will be guaranteed for his family as he had originally planned!

Now is the perfect time to research your life insurance coverage and your options. This is exactly what my team at WisMed Assure does! We are dedicated experts with our allegiance solely to you and your loved ones. Please reach out to us with no expectations or obligations and take care of your life insurance planning, especially to determine if converting your current term life policies makes sense in your life.

Contact the WisMed Assure team at insurance@wismedassure.org, complete this quick online form or call 608.442.3810.

Summer 2023 Issue

August 14, 2023August 15, 2023

When and why to schedule a life and disability insurance policy review with your agent

By Lisa Koerner, Insurance Advisor

Many people think that once they have a life insurance or disability policy in place, they can file it away and forget about it. However, as your life changes, your needs often change as well. The policies that you took out when you were young, single and starting your career may not still cover your needs after you get married, buy a house, have children and start your dream job. As your life changes, it’s a good idea to review your policies.

The power of planning: a physician’s journey to financial wellness

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

With uncertainties and change a constant, financial planning stands as a beacon of security and peace of mind. Today, we bring you a remarkable story that sheds light on how a dedicated physician and her family reaped the rewards of a well-structured financial plan, proving that even the busiest of physicians can find stability and fulfillment through proper financial planning.

Innovation and improvements

Employee benefits manual with stethoscope on it

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

June marked my eighteenth year in the insurance industry; my entire career has been focused on employee benefits and helping clients save money and improve employee confidence in benefits. When I was asked to join the WisMed Assure team, I was given the chance to be innovative and truly build something the way I felt it should be and that’s exactly what my team and I are doing!

Workers Compensation rate decreases

By Brian Fowler, WisMed Assure Account Director

Starting October 1, 2023, for the eighth consecutive year, Workers’ Compensation rates in Wisconsin will drop. Work Comp rates in Wisconsin are set by the state and are the same for every insurance carrier. Overall, we’re seeing a decrease of 8.4% across all employee classifications. Physician rates remain low and competitive, with no change to the rates this year. Rates have decreased for physicians within hospital systems and hospital employees other than professional employees.

You bet your life

Cropped shot of young woman hugging her grandmother & helping her with her finances on a laptop

By Mary Krueger, Medicare Specialist

Most of us don’t spend our time concerned about our life insurance because it’s “set up” already through our employer, parents, bank or other sources. Have you really investigated how life insurance works? Is term insurance the best purchase or should you look at long term cost averaging?

You bet your life

August 14, 2023August 21, 2023

By Mary Krueger, Medicare Specialist

Most of us don’t spend our time concerned about our life insurance because it’s “set up” already through our employer, parents, bank or other sources. Have you really investigated how life insurance works? Is term insurance the best purchase or should you look at long term cost averaging?

Over the years, I have watched clients who are over 60 years old try to figure out what to do now that their term insurance is coming to an end and want to “just extend it.” When the option of paying dramatically increasing premiums doesn’t look very good for the budget, what to do is a significant concern.

So, what are the options other than term insurance at a young age? Consider a universal life or whole life policy. The costs are averaged over your lifetime instead of just a specified number of years. This idea takes the surprises out of trying to find coverage at an older age or at a time when your health has changed and you’re not eligible for coverage any longer. Ideally, doing a combination of both a term and universal/whole life makes sense if you’re looking to save more money in the long run.

To discuss your options, contact Mary Krueger at 715.760.1350 or mary.krueger@wismedassure.org.

When and why to schedule a life and disability insurance policy review with your agent

August 14, 2023August 18, 2023

By Lisa Koerner, Insurance Advisor

One of the biggest changes that people often overlook throughout the years is updating the beneficiaries on their life insurance policies. When people are single, they often choose a parent or sibling as their beneficiary. It’s good to change your beneficiaries when you get married, get divorced or if your beneficiary passes away.

It’s also important to alert your insurance agent of contact information changes. If you move to a new home, city or state and don’t update your address you might miss important updates from your insurance company. I recently attempted to contact a client whose term life policy was coming to an end. The phone numbers we had on file were all unavailable, the email address was undeliverable and the letter I mailed to the address came back undeliverable.

The other thing to keep in mind is whether your Disability Policy is keeping up with your income. When you have a significant increase in income, it’s important to review your benefits to make sure you’re covered in the event of a serious injury or illness. If you only have enough disability insurance to cover half of your income, would you still be able to keep up with your bills and expenses if you’re not able to work for a long period of time?

Most people think that the only reason an insurance agent wants to talk to them is to sell them something, so they avoid scheduling a policy review. A good insurance agent will review with you where you are in your life and what your current needs are. When you’re younger, you may need to add coverage as you build your family and career. Meanwhile, you may need to reduce your insurance coverage as you move into retirement or change from term policies to permanent policies. As you approach retirement, it’s also a good time to start researching Medicare, long-term care and wealth transfer ideas. That’s what our Income Defense team at WisMed Assure is here to help you out with.

You may not feel that you need an insurance review every year, but don’t forget to review your policies when you have a significant change in your life.

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.