July 2012 - Susman
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Bad News for Insurance Agents

The recent ruling of the Supreme Court concerning the clarification of "Obamacare" has sounded the death knell for many agents who sell health insurance. With the mandate stating that every United States citizen must assume some type of health and medical insurance coverage over the next two years is eliminating any way for insurance agents to make a living.

Large insurance companies like Aetna and Well Point, are now having to create insurance plans to meet the needs of every American citizen. Some packages are going to be so limited in scope that an agent will be unable to make any type of commission for its sale. What does this mean for agents? It means a wave of mass firings while, their companies convert to a type of wholesale/retail business that offers products at a discounted rate. A good comparison is the electronics industry which took a huge hit when retail stores like Best Buy had a hard time competing with online retail giant, Amazon.com.

It was hoped that the Supreme Court ruling would go in favor of the insurance agents, but it was not to be. Now thousands of agents are scrambling, trying to salvage something from what for some has been an entire career.

Housing Market Rebounding

Housing market analysts from the National Association of Realtors are reporting some good news. Last month more prospective buyers signed agreements to buy new homes. The association cited statistics that report agreements are up by 5.9% from April, and 13.3 % from the same time last year. This surprised analysts, who expected a much smaller rise. This is good news for home owners and realtors, and is accompanied by a report from economist Lawernce Yun, who predicts further increases this year, as much as 10%. Yun also reported that the average price of homes is on the rise, and predicted further increases. He predicted existing homes will increase 3 % this year and 5.7% next year, with new homes rising 26% this year and 50% next year.

Other analysts also report that the housing industry is recovering, however they report more modest numbers. They say that while these numbers are good, and the housing industry is definitely improving, there are still obstacles to overcome. These include low inventory, underwater homeowners, and tight credit. Some of the analysts point out that the Association is biased, but all agree that this is good news for the housing industry.

The Business Implications of Disability Insurance

[youtube]http://youtu.be/rWhiTbpqTGc[/youtube]Dr. Szatkowski was a prosperous, successful member of a Tarzana dental practice until he was diagnosed with amyotrophic lateral sclerosis (ALS) and was forced to retire in 2002. His story is related by his wife of 35 years, his practice partners and his insurance agent as Frank is now in a wheelchair and requires a ventilator to breath. An overhead disability practice purchased by the practice paid Frank’s third of the office expense. A disability buyout contract delivered a lump sum payment to the corporation, allowing his partners to purchase Frank’s share of the practice without personal or corporate financial stress. A personal disability insurance contract helps the family to maintain their standard of living while caring for Frank at home with the assistance of around-the-clock care.

Barbara Farone’s Background Helped Prepare Her

[youtube]http://youtu.be/wnVvIKw5R24[/youtube]Barbara met and married her husband, Vance, 1965. She worked in, and retired from, the nursing home industry and so was familiar with aging and different individual needs. Because of this background, it was important for her to purchase long-term care insurance policies for herself and Vance in the event that one or both of them became ill. Shortly after she purchased these policies, she experienced a heart attack and was then diagnosed with brain cancer. They both assumed that Vance — in excellent health — would be Barbara’s caretaker. Vance was diagnosed with progressive dementia in 2001 and required around-the-clock care at his home in Atwater Village by 2005. As expressed by Barbara, this policy gives a patient and a family “choices” and the ability to remain at home, if desired.

Barbara Fosberg: Rising to Challenges

[youtube]http://youtu.be/Ds3KeoKRrOw[/youtube]Barbara Fosberg is an attractive, elderly practicing attorney who chose to attend law school late in life after her husband, a former State Department attaché retired. After a melanoma scare, Barbara sought out long-term care insurance for the two of them in the event that the condition recurred. As life would have it, her deeply intelligent, multilingual developed Alzheimer’s disease. The situation soon progressed beyond what Barbara could handle at home even with provided nursing assistant. After touring Sherman Oak’s nursing homes, she finally discovered a small group home limited to eight patients. Because of their coverage, she was able to keep her home instead of “spending down” to Medicaid-level poverty to provide for his nursing home care.

Two School Teachers’ Struggles

[youtube]http://youtu.be/qRGSEERnYSQ[/youtube]Lynda and Alan Striepe were both schoolteachers. She was known for her musical ability as a pianist. Alan had a reputation as a bright, fun and quick-witted individual. Through Lynda’s employer, North Hills school district, she had the opportunity to enroll herself and Alan in long-term care insurance policies and did so. At age 54, Alan developed what his doctor’s termed “galloping Alzheimer’s disease” due to the rapidity of symptom onset. He was aware enough of his diminishing facilities to become easily frustrated and angry, a situation that Lynda was unable to handle at home even with a full-time caretaker. He was admitted to a nursing home where he died shortly thereafter. Because of his policy, his home and facility care was paid for from Day 1. Lynda was able to retire early and devote herself to their family and her other interests.

If You Don’t Have It, You Need to Get It

[youtube]http://youtu.be/KEdNieA6PzM[/youtube]Margaret Sweborg’s story is told by her step-granddaughter, Rindy Main, and her insurance agent because of her current condition caused by Alzheimer’s Disease. She married Rindy’s grandfather, Wayne, and into his extended family in 1966. In his job selling business supplies, Wayne met the man later to become his insurance agent. Margaret was known for being very, organized, meticulous and active in the local community. After Wayne’s death, she purchased a long-term care insurance policy as a supplement to her coverage. Her extended family, including Rindy, continued to visit often from her home in Melrose Hill, LA. Margaret lived alone in her own home until she was discovered by a neighbor to have fallen five days earlier and broken her hip. She was taken to a nearby hospital where she was not expected to live. Despite the odds, Margaret survived but required nursing home care due to her hip and a diagnosis of Alzheimer’s disease. Rindy was able to place her in very reputable facility due to the coverage from the long-term care facility — an option that would not have been available without the policy.

Jeanne Rizzotto’s Education

[youtube]http://youtu.be/C0q-JJPnk90[/youtube]Jeanne Rizzotta and her friend Linda were business partners in a real estate company. They were successful as they attracted different clients and successfully so. One might sell a customer a doublewide trailer while the other would manage the cash sale of a home worthy of Angelino Heights. Even as the business expanded, Jeanne tried to avoid details of the company and insurance options. However, two persevering insurance agents worked with the two and sold them personal life insurance policies and a buy sell life insurance policy that would allow the business to continue in the event of the death of the other. Linda died unexpected in a car accident and the business insurance allowed her family access to Linda’s share of the business assets while providing the purchase cost to Jeanne to continue the company.

The House’s Solid Business

[youtube]http://youtu.be/E2MIJe1BAWM[/youtube]Jim House, 49-years old, was the owner of a thriving car dealership, grown with loving care from the tiny one first founded by his grandfather. The Reymore dealership could sit on any corner in North Hills. He and his wife Nancy, parents of two grown children, were active and travelled often in apparent excellent health. Jim collapsed upon arriving at work on morning and died despite a medically induced coma. He had earlier purchased both personal and business insurance and Nancy was quick to meet with dealership employees to explain the protections Jim had put in place for them all, including a Key Man Life Insurance Policy to get them through their grieving process and reorganization. This reassurance helped employees continue to perform their jobs knowing that their futures had not been jeopardized by the owner’s untimely death. Judy also commented at length on the personal life insurance policy protection Jim had gifted to her and the family. “I didn’t have to worry about losing my home. We could keep our standard of living. I think that was important to him.”


Dan Claus: Both Parents Now

[youtube]http://youtu.be/0zACYa-BdX4[/youtube]Dan and his insurance agent tell the story of Peggy Claus, a woman “fun” to be with, a businesswoman specializing in computers, the mother of two sons, and a woman of determination who happened to love an old Victorian house worthy of Atwater Village too. In 2000, when Peggy asked their agent about more life insurance for Dan, he made the point that she was the primary breadwinner in the household. Her life insurance amount was doubled to take the couples’ income contributions into account. Two year later, Peggy was diagnosed with breast cancer and treated. After a short remission, the disease returned and she died in early 2005. Her life insurance sustains her legacy and what she loved: her sons and their plans for college, her husband’s welfare and the home she was so determined to renovate.