A 2016 Thanksgiving Message from President Heidi Petschauer

turkey-cartoon

This is the time of year when we all stop to give thanks for the many blessings in our lives. I would like to share my appreciations:

To our loyal clients: Thank you for all the trust that you have in our agency and staff. You are all very open to our knowledge and expertise as we protect you, your family and your business.  Every year we focus on ways to enhance your experiences so that you always feel safe.

To my amazing and knowledgeable staff: I am so blessed to have your commitment and dedication to our firm and our clients. Each one of you truly embraces our Petschauer Brand of honesty, integrity and trust. You also bring your team spirit and collaboration in your work with our clients, our projects and our Petschauer team.

To my family and friends (and my dogs Dobie & Gracie): Thank you for all your love and support. I truly feel so blessed to have you all in my life.

To my dad and our founder: Thank you for creating a Petschauer Insurance philosophy that has now become your legacy. Your wisdom continues to guide us every day.

May everyone have a wonderful and blessed Thanksgiving.

Understanding the Need to Prepare for Long Term Care

older-couple-ipadMuch like death or disability, thinking about a potential long term care event is difficult. It is critical to the financial, physical and emotional well-being of your family to put a financial plan in place prior before you require medical assistance. It may be difficult to anticipate what could happen in the future. Tending to long term care costs sooner than later ensures that you and those you love will not feel the financial burden if that time does come.

In the event that you are plagued with a physical impairment or chronic illness, you may need to rely on long term care. You may also require long term care if you experience a decline in intellect and require ongoing care, supervision, and assistance completing life’s daily tasks.

These are conditions that can be medicated, yet not cured. Ailments and diseases that fall under this category include the following:

  • Alzheimer’s
  • Parkinson’s
  • Multiple Sclerosis
  • Brain Tumors
  • Strokes
  • Spinal Cord Injuries

older-couple-drinks

Long term care provides the necessary attention for you while in need, at the same time lessening the burden on your family to step in and provide it instead.

Your children may feel obligated to take care of you, in turn allowing their own life goals to be placed on the back burner.  This sacrifice often takes a severe emotional and physical toll on a loved one to provide care while juggling all the other obligations they have. Having to reallocate your own funds (or those of your family) may also limit your ability to take care of other financial responsibilities.

When opting to purchase life insurance, you may do so in order to protect your family in the event of an unexpected death. Long term care insurance can be looked at with the same regard.

Long Term Care insurance can be purchased as a stand-alone policy that provides funds for extended care costs or as part of a Permanent Life policy. The death benefit here can be accessed for a qualified Long Term Care event prior to the insured’s death. If you become frail and require extended care services, the benefits from a Long Term Care policy can be accessed if the insured requires assistance in the six activities of daily living.

These are defined as:

          • Eating
          • Dressing
          • Bathing
          • Toileting
          • Continence
  • Transferring (getting in and out of bed, chair, etc.)

The benefits may also be accessed if you have a cognitive condition such as dementia or Alzheimer’s that requires supervision to prevent harming yourself or others. Long Term Care insurance provides funds when the family needs it the most.

We encourage you to review this information carefully so that you can make good choices now that will keep you and your family feeling safe and cared for later on in your life.  Contact us today to help you consider your best options.

Petschauer Insurance’s Guide To A Safe and Happy Halloween

family-pumpkins

Having spooky adventures is all part of the fun during Halloween. That said, the real scare would be not being careful on this frightful holiday. Allow us to walk you through some key safety tips to ensure a fun-filled holiday.

Halloween Parties: Gatherings can be exciting, and hosts will be worry free if they’ve reviewed their homeowners coverage before the fun begins. Taking up well known traditions can be done in a careful manner. When carving pumpkins, it’s important to keep carving tools away from young children. They can decorate with markers instead. You can supplement candles with energy efficient LED lights. The FDA recommends rinsing fruits and vegetables under cool running water before bobbing for apples. If you’re hosting a party and charge money for entry, Travelers notes that it could be considered a business opportunity and the proper insurance would come in handy.

halloween-costumes

Trick or treating: AllState recommends that children travel in groups, do so in brightly lit areas, and have a mutual place to gather should they end up getting separated. On the flip side, as a driver you’d be smart to keep an eye out for children running in the street, especially if it’s a darker area. As a parent, you can keep kids’ food allergies in mind and prepare them with a raised level of awareness around the risks of encountering strangers. On a day centered around snacks and sweets, Utica offers some healthier alternatives.

Decorations: The quickest and safest way to avoid injury for any visitors is to keep your front and back yards clean and to clear a path for trick-or-treaters. According to The Washington Post, Halloween is unfortunately a day with a higher risk/percentage of home burglaries and car vandalisms. Luckily, Nationwide offers a complete outline to keeping your home and car safe.

Costume Safety: Putting together costumes for your kids can be done in a safe manner as well. Face paint can be less restricting on a child’s eyesight than a fully covering mask. Costumes that don’t run very long will give trick-or-treaters the flexibility to walk freely without risk of tripping. The toy weapons from your child’s favorite superhero should not be able to cause legitimate harm. AllState points out that flame-resistant fabric is always best, especially if there’s still an easily accessible spot for children to keep their cell phones, in case of an emergency.

To get into the spirit of the holiday, you can also check out one of our favorite Ask Sherri videos. Happy Halloween!

Understanding the ACA Obamacare Tax Penalty For the Uninsured

health-insuranceWhen filing your 2016 tax returns, you could face a sizeable fine if you and/or your family are without health insurance.

The Affordable Care Act mandates that anyone that has gone without health insurance for a span of three months or more is subject to paying a fine. The penalty this year has increased to equal the greater amount of $695.00 or 2.5% of an adult’s income. For every child under 18 without health insurance, the penalty is half that of an adult’s.

This penalty is deducted from any income tax refund you may be eligible for. It would be unfortunate to be burdened by such a penalty and have it get in the way of the potential tax refund you look forward to receiving every year.

There are, however, exceptions to the rule.

You may qualify for an exemption if you fall under any of the following categories:

  • Individuals and families who fall under the income-tax federal threshold would be exempt, or receive the necessary subsides to offset the costs of the health insurance.
  • If you are unemployed and are unable to find coverage costing less than 8% of your adjusted gross income, you would be exempt from penalties as well.
  • You may also qualify for a hardship if you are homeless or have been evicted in the last six months.

We encourage you to review this information carefully so that you can make good decisions for you and your family.

Please note, Open Enrollment for 2017 begins on November 1st  2016.  Feel free to contact us today to discuss the options that best fit the needs of you and your family, as the penalty will be the same for next year.

How is your car insurance rate determined?

carHave you ever wondered what determines the price of your car insurance? How and why do your rates change? Why are you paying more (or less) than you were at this time last year? These are all questions that go through a consumer’s mind when evaluating their respective rates.

Allow us to walk you through some crucial factors that help determine your insurance premium.

° Deductibles: The higher the deductible, the lower your premium will be, and vice versa.

° Coverages: Opting for more thorough liability coverage to better protect your assets and future earnings, as well as additional coverage (such as rental, reimbursement, full glass, and roadside assistance) will, understandably so, contribute to higher rates.

° Credit Based Rating: Many companies use a credit based insurance score to determine your car insurance rates. Higher scores correlate with responsible driving habits.

° Motor Vehicle Driving Record: If you’ve received a traffic violation or had an accident within the last 3 to 5 years, most insurance companies will take that into account. The rate could subsequently increase. On the flip side, if a driver has gone a longer period of time without a violation or accident, the rate could end up being lower.

° Age: Drivers between the ages of 25-65 typically pay lower rates.

° Make and model: Vehicles that perform better in crash safety tests usually have lower rates. Vehicles with higher sticker prices usually have higher comprehensive and collision rates.

° Residence: Living in heavily populated urban areas will make your premium more expensive than living in a suburban area. Urban areas have higher rates of vandalism, theft, and accidents, all making them more expensive than rural areas and small towns.

° Mileage and Usage: The more you drive and the further you drive, the more you pay. Your reason for usage (personal, business, etc.) is a factor in the rate as well.

With so many personal factors determining your auto insurance rates, it’s easy to understand why it often varies from one person to the next. Here are some ways to lower your rates:

° Increase your deductible

° Take a defensive driving course

°  If you’re the owner of multiple cars, there’s also the possibility of receiving a multi-car discount

° Driving fewer miles

° Some companies use vehicle tracking devices (like Progressive’s “Snapshot”) that monitor driving, which can offer additional discounts

° Bundle your home, auto & umbrella policies together with the same carrier, as they may offer multi-policy discounts.

There are many factors not in the control of an individual, so it’s important to take advantage of those that are. Contact us today if you are interested in getting the best coverage for you and your vehicle.

Water Is Not Always Your Friend

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What’s the difference between a flood and a sewer backup? With hurricane season in full swing, it’s important to understand the differences between the two so you are protected in the event either one happens to you.

A flood involves rising waters, such as those caused by rain, melting snow, or an overflow of a river.  We have witnessed the devastation that floods can cause. However, homeowners and commercial property policies do not always cover the subsequent flood damage.

The way to insure your home or commercial properties against flood damage is through the National Flood Insurance Program (NFIP).

Sewer and drain backup, on the other hand, involves water that causes damage to your property, resulting from a sewer or drain that backs up. When a buildup of water is prevented from continuing to flow in the normal direction, it must reverse its direction and go back up the other way. As a result, water backup occurs. A collapsed pipe and blockage are also known to cause water backup. Homes are most susceptible to the backup of drain lines during the wet months of spring and fall.

Unlike flood insurance, the coverage for this type of loss can actually be purchased as part of your homeowners and commercial property polices.

It is also important to note that Flood polices do not cover losses caused by sewer or drain backup.

Don’t drown yourself in worry over a lack of coverage.  Contact us today to discuss your coverage options.

Key Man and Buy Sell Insurance Simplified

business-meetingWhile each and every employee has an opportunity to provide your business with value, it’s up to you to protect the business in the event of losing someone who proves so vital to your success.

If the success of your business is primarily dependent on one specific individual, what would happen if they were to die unexpectedly? How can your business maintain continuity, for the benefit of your employees and clients, in the interim?

One way to do this is choosing to take out Key Man Insurance on a specific employee.

Such protection can go a long way towards helping your business stay afloat, specifically in the event of the death of a key employee. This type of life insurance includes a death benefit that would cover certain losses. Additionally, this benefit is often used to recruit a key man’s replacement.

Choosing to protect someone who serves as a primary income producer and/or generator is a smart business decision, because their contributions will be difficult to duplicate. This can apply to non-revenue generating employees like office/operations managers as well, because they, too, can be critical to your business functioning smoothly. Their overall skill and/or knowledge may not be as seamlessly replaceable.

Now that you know the benefits of Key Man Insurance, what’s the difference between that and a Buy Sell agreement?

As mentioned, Key Man Insurance is purchased to help preserve the financial viability of your business, in the event that the key person passes away. Buy Sell Agreements are legal contracts that dictate how the firm’s equity is handled in the event a partner leaves the business, retires, dies or becomes disabled. However, a Buy Sell Agreement is incomplete without the mechanism to fund a transfer of ownership.

This insurance only covers the owners. In the event a business owner passes away, the death proceeds are either paid to the business, or to the surviving partners, who in turn use the proceeds to “buy out” the estate of the deceased owner.

The Buy Sell Agreement insurance benefits the deceased partner’s estate by liquidating the shares of the business and releasing their family from the burden of managing a business they are likely unqualified to run.  This insurance also benefits the surviving business owners by relieving them of the burden of being in business with someone they wish not to be, while also providing the means to buy them out.

What type of insurance is best for Key Man and Buy Sell? 

A permanent policy is an asset that grows in value and is often out of the reach of creditors. This makes sense for a key person with an ownership stake in the business. The cash value is accessible during the insured’s lifetime and can help fund the buy-out of a departing owner. Business owners also enjoy the tax advantages of permanent life insurance.

For non-owner key persons, term policies are generally recommended because they are inexpensive and easily cancelled if the employee leaves the firm.

To speak with a trusted insurance advisor who can design a policy that best fits the needs of your business, contact us today.

Who Is Covered Under Your Homeowners Policy?

keysOwning a home comes with many different freedoms and luxuries. In addition, you may have the flexibility to host others in your home.

Have you been faced with any of the following situations? *

  • Things are getting more serious with your significant other, and they find themselves staying over more often than not.
  • You have the opportunity to lend a helping hand and welcome a friend to stay at your place during troubling times.
  • You need assistance with paying the bills, and opt to get a roommate.

These examples, or any of similar circumstances, do not necessarily qualify an individual to be protected under your Homeowners Policy. Your Homeowners Policy only covers an “Insured.”

An “Insured” is defined in the policy as:

  • You (the person named on the policy)
  • Your Spouse (must be a resident of the same household)
  • Resident Relatives
  • Legal Domestic Partners
  • Any other person under the age of 21 who is under the custody of the person named on the policy

Clearly, your friends do not fit the definition of an Insured. Should you and your significant other get engaged, he/she would still not be covered. Therefore, their contents would not be covered under your policy. The definition of an Insured is also the same for condos, co-ops and renters policies.

Let’s look at this scenario for clarification: *

Hosting a gathering of mutual friends with your houseguest sounds like a fun idea. However, when one of your friends falls and gets injured in the home, they subsequently sue the both of you for their injuries.

Your policy will only defend you in this lawsuit and your houseguest will be left to hire an attorney at their own expense. Once again, they do not meet the definition of an Insured, so property coverage as well as liability coverage will not apply. This would turn into an unfortunate source of newfound stress.

The best way to ensure that everyone in your household has contents and liability coverage is seeing to it that additional residents purchase their own Renters policy. As always, please contact your broker for more information on all the possibilities. Every company has different guidelines for these situations.

* The examples in this post are intended to educate the reader generally about the benefits of insurance, through the use of hypothetical “details” including coverages, cash values and premium costs. These are approximations based on the author’s experience, but are not facts that would necessarily apply to the reader’s own situation or to that of any other person. Reliable information regarding such items as coverages, cash values and premium costs may only be obtained through formal communications with your broker.

 

How Does a “Buy Sell Agreement” Help Your Business?

signing-contractYour business is likely to be your most important asset. Many business owners are relying on this asset for retirement as well as planning to pass the business onto their children. However, this plan can be quickly derailed in the blink of eye.

What would happen to the business if you or your business partner were to die unexpectedly, contract a chronic illness or have a permanent injury?

This is not something you want to think about with so much riding on your ability to go to work. Without a succession plan, a business partner can find themselves sharing ownership and operations with the deceased partner’s spouse or children. How do they find the liquidity to buy them out?

How does one replace the owner to keep the business viable and ensure future success of the business?

If the spouse relies on the business for their retirement income, where does this leave the spouse financially?

All too often, families discover too late that their businesses were built on a house of cards.

According to the Conway Center for Family Business, 80 to 90 percent of U.S. businesses are family owned, yet less than a third of these companies succeed into the second generation. Less than a tenth make it to the third generation. According to a Price Waterhouse Coopers report, a whopping 47 percent of companies have no succession plan in place.

Given the volatility of the economy and local industry, it comes as no surprise that small business owners focus their energy on the survival and future growth of their enterprises.

Having a succession plan is essential to maximizing the value of your business for your family.

A Buy Sell agreement is a key component in this plan. This is an arrangement that outlines what happens to the business in the event that an owner retires, sells their shares, passes away, or becomes disabled.

However, the Buy Sell agreement is not complete without a means to fund the transfer of ownership. In the case of a death or disability, the most cost efficient way is often to fund the transfer through a Life and Disability insurance policy.  For example, if a partner were to die, the insurance policy would pay the surviving partner(s) the death proceeds to “buy out” the estate of the deceased owner.  In doing so, the decedent’s family is compensated for their stake in the business, while the surviving partners absorb full equity of the business with little to no financial burden, if funded correctly.

Once established, a Buy Sell agreement and the insurance policies to fund the agreement need to be updated to account for the changes in business valuation and ownership. Contact us today to discuss the scenario for your business.

* The examples in this post are intended to educate the reader generally about the benefits of life insurance, through the use of hypothetical “details” including coverages, cash values and premium costs. These are approximations based on the author’s experience, but are not facts that would necessarily apply to the reader’s own situation or to that of any other person. Reliable information regarding such items as coverages, cash values and premium costs may only be obtained through formal communications with your broker.

Sports Stars See Value Of Investing In Life Insurance

football-life-insuranceLast month, the University of Michigan agreed to an amendment with head football coach Jim Harbaugh on his existing contract. After a successful first season, the school rewarded Harbaugh with increased compensation in the form of a life insurance loan, according to ESPN.

In addition to his base salary, Michigan will loan Harbaugh $4 million in 2016 and an additional $2 million in each of the five years that follow to support the premium on a life insurance policy. Harbaugh will not be obligated to repay the loan until his passing. When that occurs, the university will be allowed to recoup its original investment. The rest of the payout will go to Harbaugh’s beneficiaries. According to the terms of the contract, they will receive no less than 150% of the policy that has been paid out at the time. Harbaugh himself is also allowed to borrow from the policy while living, though he must keep 150% of the value untouched, in order to protect the school’s investment.

While such a contract provision is unique in the sports world, there’s no denying that Coach Harbaugh sees the importance of valuing (and subsequently benefitting from) a life insurance policy.

Another notable sports figure, former NFL player and current commentator Boomer Esiason, also understands the value of life insurance. After his mother passed away, Esiason watched at a young age as his family struggled. They had not invested in life insurance.

“We were very lucky we had neighbors who could help out and make sure I was being looked after while my dad was at work,” he shared as part of his partnership with Life Happens. “I learned at 7 that no one is guaranteed a tomorrow, so I’d probably look them in the eye and say, ‘Just imagine if something happened to you and you hadn’t done the planning. The people you leave behind will feel the brunt of your mistakes.'”

This year’s spokesperson, professional race car driver Danica Patrick, concurs. “I’ve been fortunate to have a successful career from the beginning, and I want my family to be looked after if something were to happen to me, especially since my parents sacrificed so much for me to get where I am. But going a bit deeper, both my parents lost their dads when they were teenagers, and neither had any life insurance. My mom was one of five kids, and remembers that her mom had to sell most of the farm off as a result. When my sister and I came along, my parents got life insurance,” she said.

Traditionally, the biggest names in sports serve as role models because of their talent on the field/track. As demonstrated here, the choice to raise awareness for life insurance gives fans another reason to look up to them.

We would be happy to discuss your life insurance needs with you. Contact us today!