What is Life Insurance?

            As agents and advisors, our creed is to help society help itself.  We support the American public in the most personal and meaningful ways.  When everyone else is at the door with his or her hands out, we are there to give and aid those who need it most.  There is no doubt that the insurance industry is one of the solutions to America’s economic woes.  Let us not forget this as we go about our everyday business lives.

            Recently I delivered a death claim to a client.  This process was two parts: I met with my client in the comfort of her own home and was able to spend a few minutes with her discussing recent events, and I assured her not to worry, that I would process the claim in a timely manner.  Ten days passed and I received a check in the mail for the death benefit amount and interest.  I reconnected with my client and returned to her home the next day.  When I saw her she seemed to have shrunk, her face swollen with grief and sadness.  She had lost all of her normal happy glow.  She said that she loved her husband and never thought she would need to call me.  When I presented her with the check, all of her emotion came to a head.  I instantly hugged her and offered my sincerest apologies.  Her lips were barely able to move, but the words “thank you” came out.  Every situation in which I present a death claim, no matter if these are clients I have known for my entire career or for just a short time, lives with me every day.

            I am grateful to be able to offer my services to my clients.  An agent that I worked with many years ago told me that when an agent has a death claim, it is his or her “turn to shine”.  What I do is not just sell life insurance, but also provide a lifetime of security.

Thomas Newsad sells life insurance, annuities, long term care, and disability insurance and serves communities such as Middletown, Franklin, Monroe, Lebanon, Trenton, Hamilton, Oxford, Miamisburg, West Carrollton, Springboro, and more.  For more information, call Tom Newsad at 513-424-6871 or check out www.newsadinsurance.com

Executive Bonus Plans: Rewarding Employee Performance

Executive Bonus Plans: Rewarding Employee Performance

Rewarding employee performance strengthens the stability of a business and reduces employee turnover among the ranks of valuable employees.  Losing an important employee to a competitor can disrupt current and future business profitability.

Privately-held businesses entities have limited options when designing compensation packages for their employees.  Many small companies are unwilling to establish qualified retirement plans because of the high cost of the plans and because they have to include all eligible employees.

Nonqualified deferred compensation plans are an option but participation is restricted to certain highly paid management employees.  Having benefits in addition to normal compensation is a proven method for improving employee morale and job satisfaction and thereby reducing costly employee turnover.

An Executive Bonus Plan (also known as a Section 162 plan after the section of the Internal Revenue Code that permits an employee to deduct compensation paid to employees) offers the opportunity to reward any employee.  It could be a one-off bonus for exceptional work in any year or, more commonly, an on-going arrangement to provide additional compensation annually.  To enhance the future value to the employee and the employee’s family, the payment is usually paid as the premium for a cash value life insurance or annuity contract owned by the employee.

Attaching conditions, such as job performance or continued employment, to the right to continue receiving this additional compensation increases the attractiveness of such a plan to the employer and further increases the likelihood that the employee will remain with the company. 

The employee is responsible for payment of income tax on the bonus paid by the employer.  In some cases, the employer will pay an additional amount to cover the associated income tax liability in which case the plan is known as a “double bonus” plan.

As long as the bonus represents “reasonable compensation”, the business can deduct the bonus used to pay the life insurance policy premium.  The employee owns the life insurance policy and names his or her beneficiary.

An employer can place certain restrictions on the policy as an incentive to the insured employee to remain with the company.  One such restriction can be limiting access to policy cash values by the employee for a selected period of time, such as the employee’s expected date of retirement.

Additional Considerations

Employers should seek legal counsel regarding creating a formal agreement between the employer and the employee governing the Executive Bonus Plan.  Any corporate records notation or agreement should spell out who will participate in the executive bonus program, why such employee or employees were selected for participation, and the nature of the benefit these employees will receive.  Any restrictions on an employee’s rights to access insurance policy cash value, or any “golden handcuffs” arrangement, should be spelled out in the written agreement between employer and employee.

Actual restrictions on the policy itself, such as limiting the employee’s access to cash values, can be enforced using a policy endorsement filed with the insurance company. The endorsement should indicate the time period during which policy restrictions will remain in effect, and list the conditions for removal of any restrictions on the employee’s access to the policy.

The purposes of a permanent cash value life insurance Executive Bonus Plan include growing funds on a tax-deferred basis to be made fully available to the employee for supplemental income in retirement.

From an employee’s perspective there are two concerns with this type of arrangement.  If this is not a “double bonus” plan, the employee may be concerned about having the funds to pay the income tax liability.  Also the employee may be concerned about the viability of the life insurance contract if the employer does not pay the bonus each year.  To address some of these concerns, the employer and the employee could agree to establish the plan for a limited period and make payments in an amount sufficient to sustain the policy after the payment period.

With a properly structured executive bonus plan, both the employer and the employee win.  The employer benefits from greater employee loyalty and lower staff turnover; the employee benefits from expanded compensation options.

Article written by Columbus Life appeared in Columbus Life Advanced Market Insights October 2011 edition.

Tom Newsad has been building relationships for over twenty years in his community.  Newsad Insurance Services offers life insurance, fixed index annuities, health insurance, and disability and long term care insurance.  For more info see www.newsadinsurance.com . Tom serves clients in the Butler, Hamilton, Montgomery, Warren, Miami, and Preble county areas and beyond.

Top Ten Most Expensive Health Conditions

Top 10 Most Expensive Health Conditions

Life insurance rates are determined by many factors including age, health, gender, and lifestyle. Life insurance underwriters put applicants in risk classes based on the likelihood of death before policy maturity. The higher the risk, the higher the rate class, and the more expensive a policy will be.

These are the top 10 health conditions that are most likely to affect your life insurance rate class:

1.)    Hypertension (High Blood Pressure)

·        High blood pressure that is not well controlled is a concern to underwriters because it can lead to vascular complications

·           T he industry takes individuals who have well-controlled and well-managed high blood pressure into consideration and often underwrites them very favorably 

2.)    Type 2 Diabetes (Adult Onset)

·        The potential complications that can result from diabetes affect risk class

·        Youth does not work in favor of the Type 2 applicant. The younger a person is when they are diagnosed, the higher the risk for a life insurance company as the person gets older

·        The important factor in getting affordable life insurance coverage with diabetes is good control and management

3.)    Sleep Apnea or Narcolepsy

·        Severe sleep apnea can be associated with high blood pressure and coronary artery disease

·        If sleep apnea is well controlled and well managed, applicants can still get a good underwriter rating

4.)    Heart Disease

·        Heart disease encompasses a wide range of diseases and conditions from atherosclerosis to a prolapsed mitral valve

·        Underwriters consider family history in heart disease assessments…they look at immediate family members- father, mother, brother, sister- who may have developed heart disease or had a stroke

5.)    Asthma

·        With asthma, underwriters are concerned about the severity of the condition and how well it is managed

·        An individual with well-controlled asthma should be able to be favorably underwritten

6.)    Cancer

·        The word “cancer” will flag any life insurance underwriter but its ultimate effect on an applicant's rate class can vary from negligible to substantial

·        Just as each cancer is individual, every insurance company will underwrite it differently

7.)    Obesity

·        Centers for Disease Control and Prevention statistics indicate that more than 1/3 of adult Americans are overweight and another 1/3 are clinically obese

·        Insurance companies calculate an applicant’s BMI when determining their risk class

·        Most carriers have build tables to determine which weights can qualify for each rating

8.)    Organ Transplants

·        Insurance companies treat organ transplants on a case-by-case basis

·        Kidney transplants are the most common and can be insurable but liver and heart transplants are rarely insurable

9.)    Depression

·        The rating for individuals with depression depends on the degree, the severity, and how well it is managed

10.)            High Cholesterol

·        Life Insurance companies are concerned with high cholesterol because it is a risk factor for the development of a lot of vascular conditions, including coronary artery disease, stroke and other atherosclerotic kinds of disease

·        Underwriters tend to treat high cholesterol like they treat high blood pressure…favorable ratings can exist if it is controlled and well-managed

-From Bankrate.com “Top 10 Health Hazards for Life Insurers”

Tom Newsad of Newsad Insurance Services has building relationships for over 20 years through insurance and financial services.  Newsad Insurance Services serves Middletown, Trenton, Hamilton, Franklin, Dayton, Centerville, Oxford, and surrounding areas.  For more click on www.newsadinsurance.com

Seven Wonders of Life Insurance

Seven Wonders of Life Insurance

Your clients can address their financial problems with these seven life insurance solutions.

Here are some disturbing facts from LIMRA about U.S. life insurance ownership and the attitudes of consumers toward our products.

7 Life Insurance Facts

1. LIMRA’s 2010 Life Insurance Ownership Study found that 30% of U.S. households (35 million) have no life insurance protection.
2. In 2009, insurance companies issued 9.4 million individual life insurance policies in the U.S.—about one million fewer policies than they did in 2004.
3. About seven in ten middle-market households agree that life insurance is the best way to protect against the premature death of a primary wage earner.
4. The two top reasons Americans have life insurance are to cover burial and final expenses and to help replace the income of primary wage earners.
5. One in four households plans to buy life insurance for themselves or another household member in the next 12 months, but many are unlikely to follow through with their plans.
6. Twenty-four percent of households with children who are under the age of 18 want to speak with a financial professional about their life insurance needs, but they may not proactively initiate contact with an insurance producer or with a life insurance company.
7. About one in four middle-market households (those with yearly incomes of $35,000 to $99,999) admit they don’t know how to obtain or reach their financial goals. But only 18 percent of them want to speak with a financial professional about life insurance.

These are the problems that we face.  Here are the seven solutions:

1. Life insurance buys time: it allows loved ones to focus on their grief by helping to pay for the funeral and other costs.
2. It provides a fresh start: it lets loved ones start with a clean slate by helping to pay off credit card bills, outstanding loans, and even the mortgage.
3. It generates income: it helps replace lost income for years to come so that surviving family members can continue to pay for life’s necessities.
4. It offers flexibility: it gives a surviving spouse the chance to take time off from work or switch to a job that offers a more flexible work schedule.
5. It creates opportunities: it can provide funding to start a business, or pay for schooling so that surviving family members can train for new careers.
6. It funds the future: it offers a way to fund longer-range goals like a college education for the kids or a secure retirement for a surviving spouse.
7. It leaves a legacy: it gives parents the change to leave future generations with the legacy of long-term financial security.

Taking the first step

Problems and solutions go hand in hand, but if we want to use these solutions to help our clients and prospects, we must first start with digital marketing.  This means taking your digit and using it to push the buttons on the telephone, because everything starts with a call to a prospect.

September is Life Insurance Awareness Month.  Use the resources from the LIFE Foundation to reach out to your clients and prospects to educate and motivate them in their life insurance buying decisions.  Go to LIFE’s website at www.lifehappens.org to learn what is available to you and your clients.

-article by Marvin Feldman, CLU, ChFC, RFC

-article taken from NAIFA’s  Advisor Today July/August 2011 publication

Tom Newsad and Elaine Dominy of Newsad Insurance Services offer life, health, disability, and long term care insurance and equity indexed annuities to the Trenton, Oxford, Middletown, Monroe, Liberty, West Chester, Miamisburg, and Centerville areas and beyond

Insure Your Love

Insure Your Love

Many people work to create a legacy of love by protecting and providing for our families, businesses, or favorite charities.  People usually choose to buy life insurance because they “love” someone or want to protect someone that they love financially.  Other products that can be used in this spectrum of financial services are annuities, which are also sold by life insurance companies.  An annuity is a flexible retirement planning tool that allows your retirement savings to grow on an income tax-deferred basis option that best meets your needs for income when you retire.  Many people choose to purchase annuities because an annuity allows savings to grow without any current tax, since earnings on an annuity are not taxed until payout begins.  Many others say they like annuities because an annuity provides a steady stream of income they cannot outlive.

At Newsad Insurance Services, we believe in custom tailoring life insurance products around the needs of our clients.  Tom Newsad believes in “customer relationships built on knowledge, trust, service, and love”.  Not until one sits down with one’s clients and listens to their concerns can one help them fill their needs.  As Tom believes, “your clients look at you and see what they want to see…their hope!”

Tom Newsad has been selling financial services products including life insurance and equity indexed annuities for over 20 years.  Newsad Insurance Services provides service to the Dayton, Middletown, Franklin, Hamilton, and Oxford areas and beyond.

Avoiding Gaps in Life Insurance Coverage

Avoiding Gaps in Life Insurance Coverage

In a recent meeting with a client it was discussed that most people are not aware of what happens to their life insurance benefits when they retire. Most group term policies, which are generally low cost term life insurance protection, simply end when employment ends. In some cases you may “convert” your existing insurance into a permanent style policy. If this is not an option, the coverage ends leaving a gap in life insurance protection.

You should always consult with a life insurance agent for help reviewing the insurance jargon in your group policy. In some group policy cases term benefits decrease in face amount, declining vastly after age 70. Some larger companies have even eliminated coverage for spouses’ life insurance policies. For these reasons it is very important to review your life insurance and retirement plan with a financial advisor, especially when you decide to retire or separate from employment. Purchasing an individual life insurance policy can give you peace of mind and fill in gaps left by your group insurance policy.

At Newsad Insurance Services we believe in knowledge, trust, and service for each of my clients to ensure that each client is prepared for the present and the future.

Tom Newsad and Elaine Dominy of Newsad Insurance Services serve Middletown, Monroe, Franklin, Trenton, Oxford, Dayton, and surrounding areas.

Where to Turn for Help

Where to Turn for Help

About one in four middle-market households admit they do not know how to obtain or reach their financial goals, including buying life insurance.  One of the biggest obstacles is lack of information.  At Newsad Insurance Services, product education is vital to helping clients find the best product for their needs.  Almost eight in ten households do not have a personal life insurance agent or broker to turn to when making important financial decisions.  Most individual life insurance policies are sold by insurance agents, as sixty percent of baby boomers prefer to buy their policies from agents in a face-to-face meeting.  In newer trends, younger generations often gather information about life insurance from the internet and from their place of business.  Whether one buys from an agent, has coverage through an employer, or makes an online purchase, the most important thing is to make sure life insurance coverage is place to protect your needs and the needs of your loved ones.

-Article from 2010 LIMRA report

 http://www.limra.com/newscenter/newsarchive/archivedetails.aspx?prid=145

Newsad Insurance Services has over 20 years of life insurance experience.  Tom Newsad and Elaine Dominy serve Middletown, Franklin, Monroe, Hamilton, Trenton, South Dayton, and surrounding areas.

Save Money...Plan Ahead

Save Money…Plan Ahead

I was recently thinking about the amount of planning and preparation that people put into a vacation or a wedding or purchasing a car or a home in order to make sure that they are getting what they want at an affordable price. Yet, many people do not make any plans for one of the most expensive purchases that they will ever make…their funeral and final expenses. Unless you plan in advance and shop around you are most likely going to have to pay top dollar. The average funeral in the United States costs about $6,500 according to the National Funeral Directors Association. Although the cost of final expenses can vary from state to state, the total sum can easily reach $10,000 according to the AARP.

3 Major topics need to be discussed when considering funeral and final expense funding:

           

1.)    Plan ahead

Talk about your plans with your family members. Be sure to discuss your wishes and find out what is important to them as well

2.)    Know your rights

The Federal Trade Commission (FTC) Funeral Rule requires that mortuaries present a price list of services, like a shoppers’ guide, to consumers before their death

3.)    Shop around

Make sure that you are not spending too much money. It is a good idea to purchase life insurance to fund this important expense

While families should make decisions about funeral arrangements in advance, they should NOT pay for them in advance. Over time prices may go up and businesses may close or change ownership or a person could change their mind about their desired arrangements.

People who favor a traditional funeral and burial can save hundreds or even thousands of dollars by taking these simple steps. Many people say that they have found great meaning and peace in being able to carry out thoughtful funeral plans that honored their family members in an appropriate and affordable way. Purchasing life insurance is a great way to make sure that you will have the funds to cover your funeral and final expense plans. Be sure to meet with your financial representative to discuss this and all of your important financial needs.

-Tom Newsad

Tom Newsad and Elaine Dominy from Newsad Insurance Services can meet with you. Tom and Elaine serve Middletown, Franklin, Trenton, Monroe, Liberty Township, Hamilton, Dayton, and Oxford.

"Insure Your Love"

Many people work to create a legacy of love by protecting and providing for our families, businesses, or favorite charities. People usually choose to buy life insurance because they “love” someone or want to protect someone that they love financially. Other products that can be used in this spectrum of financial services are annuities, which are also sold by life insurance companies.

An annuity is a flexible retirement planning tool that allows your retirement savings to grow on an income tax-deferred basis option that best meets your needs for income when you retire. Many people choose to purchase annuities because an annuity allows savings to grow without any current tax, since earnings on an annuity are not taxed until payout begins. Many others say they like annuities because an annuity provides a steady stream of income they cannot outlive.

At Newsad Insurance Services we believe in custom tailoring life insurance products around the needs of our clients. Tom Newsad of Newsad Insurance believes in “customer relationships built on knowledge, trust, service, and love.” Not until you sit down with your clients and hear their concerns can you help them fill their needs. “Your clients look at you and see what they want to see…their hope!”

Tom Newsad has been selling life insurance for 19 years in Dayton, Middletown, Franklin, Hamilton, Oxford, and the surrounding areas.

Where to Turn For Help

About one in four middle-market households admit they do not know how to obtain or reach their financial goals, including buying life insurance. One of the biggest obstacles is lack of information. At Newsad Insurance Services product education is vital to helping clients find the best product for their needs. Almost eight in ten households do not have a personal life insurance agent or broker to turn to when making important financial decisions. Most individual life insurance policies are sold by insurance agents, as 60% of baby boomers prefer to buy their policies from individual agents in a face-to-face meeting. In newer trends, younger generations often gather information about life insurance online and at their place of work. Whether you buy from an agent, have coverage through an employer, or make an online purchase, the most important thing is to make sure that you have life insurance coverage to protect your needs and the needs of your loved ones.

- Article from August 2010 LIMRA Report
http://www.limra.com/newscenter/newsarchive/archivedetails.aspx?prid=145

Newsad Insurance has over 17 years of life insurance experience. Tom Newsad serves Middletown, Franklin, Monroe, Hamilton, Trenton, and South Dayton.

Save Money...Plan Ahead

I was recently thinking about the amount of planning and preparation that people put into a vacation or a wedding or purchasing a car or a home in order to make sure that they are getting what they want at an affordable price. Yet, many people do not make any plans for one of the most expensive purchases that they will ever make…their funeral and final expenses. Unless you plan in advance and shop around you are most likely going to have to pay top dollar. The average funeral in the United States costs about $6,500 according to the National Funeral Directors Association. Although the cost of final expenses can vary from state to state, the total sum can easily reach $10,000 according to the AARP.

3 Major topics need to be discussed when considering funeral and final expense funding:

1.) Plan ahead

Talk about your plans with your family members. Be sure to discuss your wishes and find out what is important to them as well

2.) Know your rights

The Federal Trade Commission (FTC) Funeral Rule requires that mortuaries present a price list of services, like a shoppers’ guide, to consumers before their death

3.) Shop around

Make sure that you are not spending too much money. It is a good idea to purchase life insurance to fund this important expense

While families should make decisions about funeral arrangements in advance, they should NOT pay for them in advance. Over time prices may go up and businesses may close or change ownership or a person could change their mind about their desired arrangements.

People who favor a traditional funeral and burial can save hundreds or even thousands of dollars by taking these simple steps. Many people say that they have found great meaning and peace in being able to carry out thoughtful funeral plans that honored their family members in an appropriate and affordable way. Purchasing life insurance is a great way to make sure that you will have the funds to cover your funeral and final expense plans. Be sure to meet with your financial representative to discuss this and all of your important financial needs.



-Tom Newsad


Tom Newsad from Newsad Insurance Services can meet with you. Tom serves Middletown, Franklin, Trenton, Monroe, Liberty Township, Hamilton, Dayton, and Oxford.

What Is The Purpose Of Life Insurance?

Financial advisors as well as some insurance advisors tell clients that insurance should generally be used for 2 purposes:

• The first purpose is to cover all final expenses including debts and funeral and burial costs
• The second purpose is to ensure that your family will be able to continue to maintain their lifestyle once you are gone

These are 2 primary reasons to purchase life insurance and should be talked through with a financial advisor or life insurance agent if you have questions about or are considering purchasing life insurance.

Life insurance can be a simple low cost alternative to providing for the future of our loved ones if we do not accumulate enough wealth to do so during our lifetime. Purchasing a life insurance policy can be a key element in estate planning and a legacy for surviving beneficiaries such as spouses and children.

For additional information, contact Tom Newsad at tnewsad@cinci.rr.com or http://www.newsadinsurance.com. Tom is a Grange Life Pacesetter agent serving Trenton, Middletown, Oxford, Franklin, Liberty Township and surrounding areas in Ohio, Kentucky, and Indiana.

Explaining Life Insurance Policies

A good agent can go a long way toward explaining your life insurance policies to you, and it’s highly recommended that every family or business person work with an experienced agent who will take the time to explain what policies they offer. Here are some important things that you want to know from your agent.

• How much money your loved ones will receive when you die
• How long your policies will be in force
• How much money you are paying
• If and when your policy eventually ends
• Whether or not you are building any cash values on your policies

The answers to these questions determine what kind of policies that you have.
While you hope that money would never replace you in your loved ones hearts, a large death benefit (Term Life Insurance) amount can go a long way toward keeping groceries on the table, making sure that you don’t lose your house or that dream of a college education for your children.

Term Life Insurance is setup to provide insurance for a set period of time; 1 year term, 10 year term, 15 year term, 20 year term, and 30 year term. The advantage of Term Life Insurance is that it offers the most protection for the least amount of money, especially for younger people.

Although permanent life insurance can be more expensive, it does have its place as it provides life long guarantees, especially for seniors and older Americans. The insurance companies know that when you purchase these policies they will eventually have to pay on those claims.

The main thing to think about when purchasing life insurance is how the insurance money will meet your family’s needs, especially if you were to die before paying off all of your bills. That is why working with an agent can be beneficial. Agents will help determine your true needs with their experience and product knowledge.

Contact Newsad Insurance Services for all of your life insurance needs.

-Tom Newsad

Smokers vs. Non-Smokers

Remember, life insurance companies base their issuing of life insurance on age, sex, and health status. Smoking has been proven to increase your health risk as you age and to make it more expensive to purchase life insurance. For these reasons, finding an independent agent to sell you life insurance is even more important for smokers. Some companies do specialize in writing life insurance for smokers at lower rates, so be sure to always shop around for the lowest rates when buying life insurance on smokers and non-smokers. When agents are captive to their carriers they may not always find the best rates for their clients. For this reason, independent agents offer the best avenue for “shopping."

- Tom Newsad

Life Insurance Isn't Really That Scary

Most people don’t really want to talk about life insurance. Words like death and mortality, and the costs associated with funerals and final expenses aren’t topics anyone likes to talk about. While it’s definitely not an issue at the top of anyone’s list, there are some steps you can take that can make the process a little less overwhelming.

First, get the scoop from a qualified source. Think of that first meeting as more of an educational experience than an “answer everything” session. I like to ease into things with a little fact finding process, painless to you, called the DIME process, (Debt, Income, Mortality, and Education) or if you prefer the official phrase, Life Insurance Needs Estimator. I know, it sounds daunting, but really it’s just a matter of sitting down with your advisor and answering a few questions. And don’t worry, the questions are easy…they’re all about you after all.


After you ace this quick Q&A, your advisor will have the tools to start working towards a more customized plan for you, one that includes all those unique, individual circumstances.


For example, while making sure that funeral and final expenses will be paid for is important to older Americans, younger families need to also plan out how they will pay for their children’s education, especially while the parents are in their earning years. Your insurance agent should answer those important questions like protecting income and providing future education for all family members. Here’s a good starting point: Be sure to provide 2 years of annual salary for loved ones to readjust after the passing of a family member.


Next, your life insurance and financial advisor will help you with those finer details such as taking mortgages, credit card debt, and student loans into consideration. Consulting with your estate planning attorney or tax advisor will round out the remaining points of a sound financial plan.


Oh, and keep in mind that at your death, your investments do not pass through probate. Probate is a legal process that takes place after someone dies. Probate usually involves a lot of paperwork and court appearances and includes proving in court that the person's will is valid, identifying and inventorying the deceased person's property, property appraisal, paying debts and taxes, and distributing the remaining property according to the will. Only life insurance products provide a tax free distribution of death benefits.


I hope you found this helpful in taking those first steps towards securing your future. For all of your life insurance needs, contact Newsad Insurance Services.


- Tom Newsad