Hi there and welcome to this week’s Protection Tip.

My last post discussed priorities of protection, using a mental image of a pyramid to help describe what’s at stake when your priorities of protection may not be as they should. This week, believe it or not, I’m going to let the famous philosopher and author, Aesop, help me get across the details a little better. The story you are about to read is over 2600 years old, but is every bit as relevant today as it was back then.


A stag came to a pool of water in the woods on a hot summer's day. As the animal bent down to drink, he saw his reflection and couldn't help noticing how large and magnificent his antlers were. “My antlers make me different from most other creatures in the forest,” the stag thought to himself. “Few animals are as handsomely adorned. I wish the rest of me was so well put together. These skinny legs and little hooves are no match for such a noble headpiece." As the stag stood admiring himself an arrow zipped by his head. Immediately the animal bounded away and found a safe haven in a dense thicket. Once out of harms way, though, the animal started craning his neck to get a better look at himself, until his antlers got tangled in the tree. The more he struggled, the more ensnared he got. Hearing the thrashing, the hunter found the stag and put an arrow into him. With his dying breath, the stag sighed, “I hated my legs that saved my life and loved my antlers that were my ruin.”

The moral of the story: few people appreciate the very things that are the most useful to them.

Okay, so you’re probably thinking that I’ve gone around the bend, but really this has a direct connection with protecting your assets. You see, it all relates back to the fact that many people have misplaced priorities when it comes to insurance and protecting the things that matter most. Maybe the term misplaced priorities is a little harsh – what it really amounts to is an overlooked asset – perhaps the most valuable asset you own – your ability to earn an income. We don’t think twice about insuring our cars or our homes, but most people neglect to insure their ability to earn an income.

There is approximately a one in three chance that a person of working age will become disabled and unable to work for 30 consecutive days or more before they reach age 65. That roughly 33% chance of unpaid time off before retirement is much higher than that of being in a car wreck or having your house burn down. Let’s say that you get sick or hurt and in addition to the high medical expenses, you can’t work and receive a paycheck for an extended period of time. Where is the money going to come from to replace your paycheck?  It won’t come from your health insurance and it won’t come from Workers Compensation either, unless your injury or illness was job related.

Studies have shown that the vast majority of American families are only 3 paychecks away from bankruptcy. So just what might you have to lose? For argument’s sake, let’s take a 40-year-old person earning $40,000 per year. He or she will earn $1,000,000 by the time they’re 65... if they stay healthy and employed. Most people in that income bracket need nearly every penny of their income just to meet normal expenses. People earning more than $40,000 simply have that much more to lose by becoming disabled.

You do the math; subtract your age from your intended retirement age and multiply that number by your annual income. This is the approximate amount of money you will earn from now until retirement (without taking into account salary increases, promotions, inflation, etc.). How much of your annual income does your family need to cover expenses? How long can you go without a paycheck before your loss of income becomes a real burden? Remember, the average family is only 3 paychecks away from bankruptcy. How far is yours? You need something that will sustain your income during the time when you can’t work because of sickness or injury. You need paycheck protection coverage, where for a small monthly premium, you can buy yourself future income if you get sick or hurt.

In the story above, the stag wished that he had appreciated his legs more than he did, as they could have saved him. Don’t fail to appreciate your most valuable asset – your ability to earn an income. Give us a call to find out how inexpensive you can protect that income. Call 1-800-482-6426 or locally at 482-6424.

Until next time,

Craig Hummel
Hummel Insurance Services

Hi there and welcome to this week’s Protection Tip.

When you’re trying to find something decent to watch on TV these days (a difficult task at best) it is pretty easy, while searching through the schedule, to find a program about the famous pyramids on the History Channel, Discovery Channel or National Geographic Channel. Just for kicks this morning, I Googled the word "pyramids" and came up with 7,950,000 hits. Now, I don’t know the reason for the popularity of this subject; it may be because there is a lot of mystery associated with how these structures – some of the oldest in the world. Unfortunately, mystery is also a word many people use to describe insurance.

I think by putting these two subjects together so to speak, we can eliminate some of that confusion. Let me explain. . . Picture in your mind a pyramid. Now, as you’re looking at that pyramid, divide it into three levels – the base, the middle section and the triangle at the very top. Divide the base into three blocks, the middle section into two and of course the triangle at the top is just one block. Each of these boxes you just visualized represents a specific protection against some type of risk that you face in your daily life. It might be protecting your property, protecting your life, protecting yourself against lawsuits and so forth. If your protection is prioritized in the right way, your Pyramid of Protection will be very strong. However, if you’re placing too much emphasis on the wrong types of protection and not enough importance on others, your Personal Pyramid of Protection might be very shaky.

You see, your pyramid also represents financial stability. If you have the wrong type of coverage in that bottom row of the pyramid or perhaps have neglected to cover one of the critical risks at all, a portion of that foundation at the bottom of the pyramid is missing. Now picture your pyramid again but this time with one-third of the bottom row missing. Regardless of whether the missing block is in the middle or on one end or the other, this is a structure that is destined to collapse at some point. Without the proper protection and the proper alignment of your priorities, your Personal Pyramid of financial stability is in deep trouble. It may not collapse today or even tomorrow; however, it will collapse someday.

In other words, if your plan of protection is well balanced for your critical financial risks, your pyramid will be a strong safeguard against those risks. But if your premium dollars are not wisely allocated, your pyramid of protection might be upside down and look more like the Leaning Tower of Pisa. Picture both of these structures side by side in your mind. Would you rather be protected by a solid pyramid or one that is standing on its point? Call us; we can help you make your Pyramid of Protection rock-solid. Call 1-800-482-6426 to talk to us at Hummel Insurance Services, your Trusted Choice Agency, where your interests come first.

Until next time,

Craig C. Hummel

Greetings and Happy New Year!

For the last week or so, we’ve all been hearing about New Year’s Resolutions. Now, just a week into the New Year, many of these resolutions have already fallen by the wayside. A big part of making a resolution successful is proper planning. Too many people just pull something out of the air, such as “I want to lose 10 lbs” or “I want to stop smoking,” without having any idea how they were going to accomplish their goal. The key to success in so many things is planning.

Now, some of us are good planners, some of us are poor planners. It may well be that  the people who do a poor job of planning to protect their assets simply fail to realize (or maybe accept) that bad things can happen to them. Obviously no one plans for bad things to happen – they are just a part of life – a part of life for everyone – there are no exceptions.

Of course one of the ways to be prepared and plan ahead is by taking the necessary steps to make sure your assets are protected. Protected from damage by fire or by the weather; protected from attachment and forced liquidation brought because of lawsuits; protection from taxation and adverse distribution by the government. The first two types of protection mentioned above can generally be addressed by using some type of insurance. The last type – taxation and adverse asset distribution by the government is slightly different, but by no means less important.

One of the best ways to protect against your assets being distributed by the government after you die is to make certain that you have a properly drawn and up-to-date will. Here are some of the things that can happen if you die intestate (without a will):

• The Probate Judge will appoint anyone of his/her choosing to administer all of your property.

• All of your assets will be converted to cash, your debts paid, including taxes, probate fees, administrative fees, and attorney’s fee (including the administrator that you had no say in selecting).

• Your money will be distributed among your survivors if the Probate Court can locate any relatives (whether you liked them or not).
  

• If you have no remaining relatives (or none that can be found) all of your money will go to the state.

The point is, without proper planning, you have no say in how your property will be distributed. In fact it might be totally contrary to what you would prefer.

However, it isn’t enough just to have a will – you need a way to take care of expenses, retire debt and pay estate tax, if necessary. The best tool for handling this job is life insurance. Whenever people think about life insurance (which isn’t often) they always want to know how much they need and what kind should they get. Unfortunately, there is no one size fits all answer to those questions. You see, what an appropriate amount and type may be for one person may be the opposite of what another person needs.

Here are some questions to consider:

• Do you need to replace your income or simply pay for final expenses?
  

• Do you want your surviving spouse and/or family members maintain their current lifestyle and will your death affect that lifestyle?

• Do you have debt that will need to be retired, such as auto loans, mortgages, or operating loans?
  

• Do you have children or grandchildren who you would like to contribute to their college education fund?

• Are there any organizations, churches, or charitable causes that you would like to endow?
  

Answers to these questions will help determine not only how much you need, but also what type of life insurance is most appropriate.

There aren’t many things more important than having your funeral and the disposition of your property and the care of your loving survivors be properly planned. This isn’t something that you can simply put off until retirement age. Too many people never make it to retirement for one reason or another. We never know when our time will come, but by then it is way too late to make plans. Do it now while you’re thinking about it. Make sure your will is current. If you don’t have one, we can point you in the right direction. Discuss with your spouse or your children your wishes for a funeral and write them down. Call us for a review of your life insurance to make sure the people you love are taken care of.

Until next time,

Craig Hummel
Hummel Insurance Services

Hi there and welcome to this week’s Protect Tip. Wow… here we are just one week from Christmas. I keep thinking that there is something I should be doing. Oh yeah – shopping – that’s it! Yeah, but today is only the 18th. That leaves a good 6 days to get the shopping done, right?

Uh-oh… I’m starting to sound like folks who keep putting off important planning. Hopefully you aren’t someone who puts off critical things like making out a will, protecting your family with life insurance, protecting your assets with an umbrella liability policy and protecting your ability to earn an income with paycheck protection disability insurance. But heck, there’s always time to think about those issues later, right?

Not necessarily. Let me tell you about a few people who thought time was on their side. The first was a colleague of mine from Indiana. He was just a few years older than me and a couple of years ago everything was fine. His agency was growing and he had the world by the tail. And then he was diagnosed with cancer. Although he fought it hard, it was a very aggressive form of cancer and he lasted less than a year. He discovered that time really wasn’t on his side. I’m also reminded of a good friend of mine who was t-boned on a gravel road on his way home from camping on Labor Day Weekend several years ago; he hadn’t even turned 40 yet. I’m sure he also thought there was plenty of time to take care of things. One other example that comes to mind is a lady named Rose, whose husband owned a wrecker service. In her own words…

“Here’s my story… At 45 years old, Kenny Nunley was one of the best wrecker drivers in the country. I used to ride with him a lot, so I know.

Kenny and I had been together for 29 years. We got married right out of high school and I’ve never once considered cheating on him. He was the only man I ever loved. He was a good man and I know absolutely, positively that he loved me too.

I guess you could say we were old fashioned. Kenny took care of the bills and I took care of the house. I liked the arrangement. Kenny was a good provider. I am 45 and never once had to work outside the house.

Business had been pretty good the past couple of years. He bought us a new house in April of 1998 and we moved in on tax day… April 15. That December brought one of the best Christmases we ever had! Our kids loved it… Unfortunately, it’s the last Christmas we’ll ever have together!

In January of 1999 he started having headaches. They got real bad. He figured they were caused by a combination of the stress that comes with owning a wrecker service and listening to scanners and radios all day long in the truck. An of course, like most men, he wasn’t willing to pay $80 to let a doctor tell him what he already knew… So he never got checked out.

One night I was riding with him and he just suddenly pulled over to the shoulder. He strained forward holding his head with both hands and said, “Rose, I need you to drive for a while.” Since he never let me drive before, I was both shocked and scared! I wasn’t afraid of driving, I was afraid for him… I can only imagine how much he must have been suffering in order for him to pull over and ask me to drive.

The headaches continued for several weeks and kept getting worse. Eventually, the pain got so bad that I was able to convince him to go see a doctor.

Tumors! 15 of them in his head. Lung cancer too! They diagnosed him with 4 – 6 months to live and let me tell you…they knew what they were talking about!

After 6 or 7 radiation treatments he seemed to feel o.k. He’d lost quite a bit of hair and a whole bunch of weight, but the pain wasn’t so bad. Then 5 ½ months after the original diagnoses, he was gone…

In 5 ½ months, my Kenny changed from being a 45 year old, 250lb “bullet proof, invincible” man in the prime of his life… to a 150lb, balding, shell of a man. I had to spoon feed him during the last days. On the inside he was the same person I’d always loved. But on the outside I barely recognized him!

Fortunately, we had bought a burial plot when we were young so the funeral only cost $5,000. I had no idea the cheapest casket you can buy costs $2,000! That doesn’t include the $800 they charge you just to open and close the grave.

I am telling you my story because someone needs to tell the wives and families of other “bullet proof, invincible” men that they’re not as invincible as they would like you to think! And, if the Good Lord decides it’s “their turn to go” they have absolutely no idea of the burdens you’re left with.

Besides the huge void in your heart – imagine rolling over to an empty pillow knowing that he’s never going to come back! – you also have to deal with all of the bills he’s left behind… bills you never used to have to mess with because he took care of it all.

If you think you’ve got money problems now – while he’s alive and earning some – just try paying $10,000 to bury him, $1,500 in medical bill deductibles (assuming you have medical insurance) and running your trucks yourself.

To save money, Kenny always did a lot of the truck repairs himself. I can’t… If something breaks, I’ve got to pay someone to fix it!

And so here I am… 45 years old, never worked for anybody else and though I think I am pretty smart, I don’t even know how to use a computer! Have you tried looking for a job lately? There are 19 years olds out there with more job skills than me!

I’m a survivor, I’ve got friends and I know that it’ll all work out in the end. But I am telling you straight… I don’t care how slow business is this month or how many other bills you haven’t paid yet… if your husband really loves you he’ll stop pretending that he’ll live forever and actually make a plan for the “what if” scenarios.

Last week I talked about some of the most dangerous occupations in the United States with some surprising results. One of the main points I was trying to illustrate is the danger of making assumptions, especially when it comes to protecting your family. For example, a natural assumption would be that most people recognize the need for taking out life insurance on themselves to protect their families, but often times, that isn’t the case.

It’s also important to make sure you have the right kind of insurance, whether it be term or some permanent form. And within each of these two main categories of life insurance, there are quite a few variations and it is just as important to have the right variation. Unfortunately many people tend to view insurance, whether it is life insurance or car insurance, as a commodity; as if the only thing that mattered is getting the cheapest price. However, not all insurance is created equally, and not even all term insurance is created equally. In fact, one of the more revolutionary types of insurance in recent years has really kind of broken the mold on traditional term life insurance.

One of the things that bothers many people about life insurance is the fact that if you don’t die during the term of the policy, all the money you’ve paid in premiums is down the drain. But with return of premium term insurance, that money isn’t lost forever.

Let me give you an example. Say for instance that you have a 10-year loan for $100,000. You want to protect your family in case you die before the loan is paid off. That way, they won’t have to worry where the money will come from to pay that monthly mortgage payment. Now, the bank is probably more than willing to sell you credit life insurance and they’ll make it convenient, too, just adding it to your monthly payment. However, when you get your loan paid off, your insurance disappears. Now, this might be okay if you have other insurance in force to protect your family. However, if this is all you have and you get sick, it may be difficult, if not impossible to get coverage after your loan is paid off.

On top of that, credit life is among the most expensive you can get. It would cost approximately an extra $53 per month, added to your loan payment, to cover that $100,000. And after the 10 years is up, your coverage is gone. With EMC National Life’s Ultra Value Return of Premium Term, a 40-year old male non-tobacco user in good health would only pay $33 a month. But here’s the kicker. Instead of it lasting for 10 years and running out like the credit life you’d get from a financial institution, the EMC National Life policy runs for 20 years at that guaranteed premium of $33 per month and if you are still alive at the end of that 20-year term, the company will send you a check for just under $8,000.

You might think that when they send you that check, you would have to reinvest it in another policy or some type of investment with that company, but that isn’t the case at all. The money is yours to spend however you choose. Use it for a down payment on a new car, stick it in the bank, invest in stocks, spend foolishly, whatever you want to do with it is your business – no strings attached.

To summarize, then, it is very important to remember the reason you need the insurance and buy the right kind of policy. For long term needs, it’s usually best to buy permanent insurance, such as whole life or universal life. For a temporary need, term insurance is normally the best. There are many different kinds of each of those two major types of life insurance, though, so do your homework and find a trusted advisor. Don’t rely on price alone, because unfortunately, sometimes you really do get what you pay for.

Call 1-800-482-6426 to find out more about this great new opportunity to be more in control of your protection dollars. I was skeptical, too, when this new type of policy came out, but not anymore. Call Hummel Insurance Services, your Trusted Choice Agency to find out how Return of Premium Term can benefit you and your family.