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The Different Types of Business Insurance

October 19, 2020 by Steve Gebhardt

Types of Business Insurance

Insurance is necessary for businesses, big and small. However, the types of insurance your business may need will depend on different factors such as the type of industry your company is in, risk of employee injury, federal, state and local laws, where your business operates and more.

Business insurance policies can protect your company, your employees and yourself in the event of injury, property damage, theft, fire and liability claims. While it’s an additional investment in your company, it’s one worth making.

What is Business Insurance?

Business insurance is intended for companies rather than individuals. Depending on the type of business insurance you purchase, it can even protect your company from lawsuits. Small businesses usually are more exposed to financial losses and even business closures. Business insurance can protect against this and help you keep your company up and running, even in the darkest of times.

Our agents can evaluate your risks and help you pick which types of business insurance you need while keeping your budget in mind. If you cannot cover out-of-pocket costs in the event of a disaster or lawsuit, talk to one of our agents today.

Types of Business Insurance

Commercial Property Insurance

Damage can happen to any business. Whether you sustain damage to your office, your company vehicles or any other type of company property, property insurance can cover the cost of repair or replacement. The damage may be caused by man or through natural events.

It’s important to note that damage due to flooding and earthquakes is usually not covered with this type of policy. Vandalism, lightning damage and fire are typical coverages with a commercial property policy.

Your physical assets may be included in this type of policy as well. Make sure you provide your insurance agent with an inventory of company assets. This may include computers, machinery, furniture and more.

Workers’ Compensation Insurance

Workers’ Compensation insurance (also known as workers’ comp) protects your employees that are injured on the job. It will cover their medical expenses pertaining to the injury and may also cover their lost wages while they recover.

Workers that fall ill due to occupational hazards may also be covered under this type of insurance. Most states require companies to carry workers’ compensation insurance by law.

Commercial Auto Insurance

Any company that has company cars or vehicles needs commercial auto insurance. Whether you use trucks for landscaping or allow employees to use company cars to take clients to lunch, every business owner needs the proper coverage in place.

Professional Liability Insurance

If your company is sued for negligence, having a professional liability policy in place can help. Also known as Errors and Omissions insurance, if a client thinks you made a mistake regarding your professional services and they were harmed in any way, they may sue you for damages.

Business Interruption Insurance

Businesses that are forced to close for short periods of time can have difficulty keeping the company afloat. This type of policy, also known as business income insurance, can cover your financial losses by replacing lost income and help you continue to pay for your office space, employee salaries, etc.

Data Breach Insurance

If your company stores any private personal data or financial data, data breach insurance is crucial for your protection. Unfortunately, hacking is common and if you are hacked, your company’s private data may be stolen as well as confidential client data. This type of insurance will cover the damages due to a data breach.

General Liability Insurance

As far as business insurance coverage goes, this one is part of the first line of defense. In the event of a lawsuit, general liability coverage can cover the cost of an attorney. It acts to protect your business in the event of liability claims due to bodily injury, personal injury and property damage caused by your business.

Home-based Business Insurance

If you run your business out of your home, this type of policy may protect you. Homeowners insurance policies do not cover businesses run out of your home. If your office equipment is stolen or damaged, a home-based business insurance policy can cover your items.

Directors and Officers Insurance

If your company has a director or officer and they act inappropriately towards customers or employees or conduct business unethically, a scandal may be on your hands as well as a lawsuit. This type of policy will pay for legal costs and pay for the financial aftermath.

Life Insurance

A business can purchase life insurance for any employee that is considered essential to the company’s operation. For small businesses or family owned companies, this can be crucial to have if the person in charge passes away.

Product Liability Insurance

Does your business sell a product? If so, product liability insurance may be an asset for your company. If your product or service injures a customer, this type of policy will cover legal and medical fees. Additionally, if your product is defective and a class action lawsuit occurs, it’s smart to have insurance so you will be protected financially. Otherwise, your business may collapse.

What Type Do I Need?

There are four main types of business insurance that almost every company needs: workers compensation, property, commercial auto and liability insurance. It all depends on your business size, location, potential risks and revenue.

If your company has company vehicles, it is an absolute must to have commercial auto insurance. This will give your company and vehicles protection in the event of an accident.

Unless your business is private and located in Texas or Oklahoma, you will be required to have workers’ compensation insurance. These requirements vary by state. To make the process simpler, work with an insurance agency to navigate these requirements correctly.

How We Can Help

At Gebhardt Insurance Group, we have extensive experience insuring businesses just like yours. Whether you need small business insurance or have a large company, we can help you assess your risks and get you covered so you’re prepared in case disaster strikes.

Our insurance company will work tirelessly to help protect your business. Need help determining what type of business insurance you need or interested in additional coverages? Give us a call at 520-836-3244.

Filed Under: Auto Insurance, Business Insurance, Home Insurance, Insurance, Liability Insurance, Life Insurance

8 Red Flags: Health Insurance Scams

July 24, 2020 by Steve Gebhardt

Health Insurance Scams

Many Americans receive health insurance through a government entity or platform. This is true for younger individuals who may be looking to healthcare.gov or older individuals that rely on Medicare programs for their health benefits.

Scammers know this. They use the information to form clever and even threatening scam tactics to try and steal the personal information of countless individuals. Unfortunately, many are quite successful. This leads to a cost of $68 billion lost to scams each year.

As such, it is important to know the signs of a scammer before you interact with one. Not only will this save you from identity theft, the information can help you educate countless others. Keep reading for 8 red flags of health insurance scams.

1. You Are Asked Upfront For Money

A common tactic involves scammers pretending to be insurance agents. Commonly, they will say that they can get you a better plan rate or higher discount, but you will have to pay them first to render this service.

Simply put, government entities and insurance companies alike do not function this way. Never give your financial information or personal information to individuals like this.

2. They are Trying to Sell a Specific Plan

Similar to the point above, insurance agents and government entities alike don’t work this way. Agents and government aids do not have a preference to sell you one plan over the other, rather, they want to find the best plan for your needs.

If you find an individual pushing a hard sell on one specific type of plan, it’s a red flag that the caller is illegitimate.

3. They Can’t (or Won’t) Answer Simple Questions

When someone is hired as part of an insurance agency, they know all about the plans up for offer. This is how they help connect you with the plan that best fits your needs. When you are dealing with a caller who either can’t, or won’t, answer very simple questions about their policy offerings, the only policy they are offering is a scam.

4. They Say They Work With The Government

Whether it’s for healthcare or for your taxes, a federal government agency will never call you and never ask for your personal information such as your name, address, social security number, and bank information.

However, we understand that this particular scam makes many individuals nervous for risk of missing something important. In these cases, it’s best to hang up on the caller and contact the government body directly to verify the origin or purpose of the call.

5. They Claim You Need to Update Your Insurance Card

Healthcare reform is a big headliner anytime a new bill is circulating in congress. As such, when there is healthcare legislation happening, the uptick in scams starts happening fast. This is because a scammer will try to exploit your uncertainties by blaming reform on the need to collect your information.

Like in the point above, the government will never call and ask for your information. If you are worried however, you can always contact the government agency directly to verify the origins of the call.

6. The Offer is Too Good To Be True

Oftentimes scammers will offer you plans and discounts that are far too good to be true, especially when compared to the general average of plans from open enrollment. In cases like these, scammers may be offering you “insurance” that only amounts to a medical discount card at best, and an entirely fake plan at worst.

Depending on when you find out about the dupe, it may be too late to enroll in another plan.

7. You receive a Phishing Email

Phishing emails might be difficult to spot at first as they are made to look as legitimate as possible. However, even the best scammers can’t make a fake email look real.

Red flags to look out for include an email coming from an incorrect or unknown address, spontaneous requests for information, or links which direct you to financial forms. These warning signs usually indicate the email is a scam.

8. You are Being Threatened

Some scammers go the aggressive route and attempt to harass and threaten other individuals into divulging their credit card, banking, and personal information. Know that, like asking for personal information, you will never be threatened over the phone by a legitimate government entity.

Resources for Reporting

In the event that you suspect a scammer, there are several reporting agencies available to help keep yourself and others safe. The following is a list of agencies that allow you to report scams, fraud, and file formal complaints.

  • Medicare Fraud
  • State Insurance Fraud Bureau
  • National Health Care Anti-Fraud Association
  • ftc.gov/complaint

Working With Trusted Arizona Agents

One surefire way to avoid a scam isto work with an agency that boasts years of experience on the local and state-level.

A staple in Casa Grande Arizona, the Gebhardt Insurance Group offers a variety of coverage from a host of major insurance carriers with an experienced staff that can help you determine the right coverage for your business. Give us a call at 520-836-3244 to get a quote and make an appointment to take the final steps in insuring your business.

Filed Under: Insurance, Life Insurance

Who Needs Life Insurance?

July 9, 2020 by Steve Gebhardt

Who Needs Life Insurance

Any time family members depend on your livelihood and services for their daily needs, life insurance becomes an important part of your financial planning. In the event of your death, expected or otherwise, your policy coverage is the difference between your loved ones being financially protected or buried in grief and debt.

From this perspective, the decision to get life insurance seems rather simple. Unfortunately, many individuals delay getting coverage far longer than they should, creating an avoidable risk for those they love.

Below, we discuss the different types of life insurance you can purchase and the different life milestones that indicate it is time to enroll in a plan.

Types of Life Insurance

Life insurance is not a one-size-fits-all solution to financial security. Depending on your health and the stage you are at in life, some policies may hold more appeal than others.

Term Life Insurance

The simplest form of life insurance by far is a term policy. This is a bare-bones, no-strings-attached plan that offers a set term of coverage (30 years, for example) in exchange for a premium. If you pass away before this term is up, your spouse, family, or beneficiary will receive a death benefit— a sum of money paid on your passing to cover expenses, repay outstanding loans, and ensure the financial security of your loved ones.

Whole Life Insurance

Similar to term life insurance, “whole” policies also offer a death benefit in exchange for a premium. However, in comparison these premiums are far higher for the same amount in death benefit due to the different overall structure of these plans.

When purchasing whole life insurance, there is no term limit. So long as you pay your premium, you will have coverage for the remainder of your life.

Furthermore, “whole” policies have a cash value that earns a set interest rate over time. This is possible as part of your elevated premium cost goes to funding this value, essentially acting as a tax-deferred savings account that is attached to your policy.

Universal Life Insurance

Building on the policies above, we have Universal insurance. As the others, they function off the same premise but have slightly different policy structures.

For a universal policy, you have more control over your premium and death benefit by being allowed to alter these amounts at any time. Because your premium goes toward both the death benefit and the cash value of your plan, by lowering these thresholds you can readjust your premium to be far lower than before.

Here, the cash value also works a bit differently. Unlike whole plans which accrue interest at a fixed rate, Universal plans will accrue interest that fluctuates along with market pricing.

The above three policy types represent the most common life insurance options for most individuals, however, there are many more policies than what we have described here. With policies such as variable life insurance, variable universal insurance, simplified issue insurance, and even final expense insurance, individuals are recommended to speak with an insurance agent to pick the plan that meets their needs.

Knowing that such a variety of plans exists, it’s time to look at some of the major life events that should have you considering life insurance.

When Life Insurance is a Necessity

Discussed previously, life insurance is a way to give financial security to those who rely on you for their daily quality of life. This includes having a large enough death benefit to cover expenses, outstanding loans, and potential funeral costs.

As you will see, many of these events are those which happen earlier in adulthood. This serves to debunk the rather harmful myth that life insurance is reserved for the elderly. Not only can life’s unpredictability leave our loved ones in a challenging situation if we pass prematurely, it is universally cheaper to begin coverage when young and healthy.

Some telltale milestones are listed below:

1. You are married or own assets with a spouse 

For most individuals sharing a life with their spouse, financial security rests in the balance of both partners shouldering some of the burden. Should one spouse die unexpectedly, this would create financial hardship in maintaining assets, repaying loans, and a host of other expenses normally shared between two earning individuals.

Here, it is recommended that your policy death benefit covers any existing balances on loans and other major expenses. This is especially true for private student loans, most of which are not dischargeable after death. If your death benefit fails to cover your outstanding loan amount, your partner will be responsible for paying the balance.

2. You are the breadwinner of your household

In single-income households or households where the lifestyle of one partner is largely dependent on the increase in earning capacity of the other, you will similarly want to buy a life insurance policy. In the case of your unexpected death, your benefit should help cover your personal finances and any outstanding loans such as those for vehicles and education.

For individuals in this situation, Term life insurance is a highly recommended policy type, given that your policy term limit will cover your working years.

3. You have minor children

As an addition to the above, you want to ensure that if you have children, you also have life insurance. This allows for your remaining spouse or guardian to meet the financial obligations left behind while still providing adequate financial support to your children’s day-to-day life.

As with calculating the worth of a stay-at-home parent, you need to be honest and exact when calculating the costs of your children, potentially even adding expenses such as college tuition. This will help you arrive at a more accurate number for your ideal death benefit amount.

4. You are a stay at home parent

While the stigma of being a stay-at-home parent is lifting as the years go on, there is still some confusion as to how life insurance benefits as a spouse who does not earn an income in a traditional job.

The recommendation here is to compile the costs that would accumulate should you have to pay for the services this partner provides. This includes housekeeping, child care, meal preparation, school help, and more. According to Salary.com, the worth of a stay-at-home parent is upwards of 162,000 annually, giving more than enough reason to purchase insurance should something unexpected arise.

5. You Have disabled adult children or support aging parents

Similar to minor children, a disabled adult child or family elder often does not have the capacity to support themselves. As such, if you are a part of contributing to their daily expenses, getting insurance that can maintain that support in your absence is integral to their quality of life.

In these cases, life insurance can help cover their immediate needs, but it is also wise to speak with an estate planning attorney to ensure your family has secure, long-term care.

6. You own a business that employs other individuals

Similar to how a buy-sell agreement ensures a company has a plan of action should a business partner pass away, life insurance can provide an added benefit to the financial stability of the company when placed under the same circumstances.

Many small business owners fund their start-up process with a series of loans, some of which they use personal assets as collateral. Furthermore, their business is a reliable source of income for their employers. Because of these two factors, having a life insurance policy that can repay your loans and maintain employee payroll for a set period of time is integral to being a responsible business owner and planning ahead.

7. Your job is high risk

A high risk job means your chances of becoming fatally injured are far higher than normal. If you are in this category, life insurance is integral to the financial health of your family, even if your premiums reflect a higher price.

Shop Local: Insurance Agents in Casa Grande, AZ

The above instances are only a handful of examples where an individual may need life insurance. However, as a rule, if anyone depends on you financially, no matter your age, life insurance is heavily recommended. Even though it may be a challenging thought to engage with, it’s the responsible decision to make.

At Gebhardt Insurance Group, we understand the different policies of several life insurance companies. As experts in the field, we can help you understand the various benefits and offers made by different plan providers, all in a way that is concise and simple, helping cut down on time, misunderstanding, and potential mistakes in coverage.

Ready to speak with an insurance experiment about the plan that’s right for you? Give us at call at 520-836-3244.

Filed Under: Insurance, Life Insurance

Should I Get Short Term Health Insurance?

April 14, 2020 by Steve Gebhardt

Short Term Health Insurance

As we enter into another recession, US residents are searching for alternatives to employer-sponsored healthcare.

Why? With skyrocketing unemployment rates and an uncertain job market, short term plans (also known as “term health insurance plans”), may be the only affordable option to bridge the gap experienced in coverage.

Unfortunately, there is no easy way to find the short term plan that works for you. Each insurance provider has their own requirements, limitations regarding coverage, and plan details.

As such, the information below is a starting point to explain some of the most common routes insurance providers take when developing short term insurance plans, in addition to some of the unexpected consequences consumers face when failing to read the fine print.

What is Short Term Health Insurance?

Many major insurance companies offer plans that offer health insurance coverage. In the state of Arizona, these policies are offered up to 364 days at a time. This gives you the opportunity to re-enroll after your current plan has expired, or, simply end your coverage period and allow employer-sponsored benefits or Medicare to kick in.

As these plans are open for enrollment at any time (with some offering coverage as soon as the next day), they provide a flexible option to remain insured if you have missed the open enrollment period for the Affordable Care Act.

What Does Short Term Coverage Actually Cover?

Generally, these policies seek to provide coverage for individuals against major medical events such as unexpected illness or accidents. However, several policies also include provisions for prescription drugs, preventative care, and maternity care.

Pitfalls of Short-Term Plans

While these plans are flexible, inexpensive, and allow you to keep your current medical providers, they are riddled with unexpected problems.

They Are Often Not ACA Compliant

any short term health plans are not compliant with the Affordable Care Act (ACA) and therefore do not provide the “10 essential health benefits” designated by this program:

  1. Hospitalization 
  2. Ambulatory services
  3. Emergency services
  4. Lad services
  5. Mental Health and Substance Care
  6. Rehabilitation 
  7. Prescription medicine 
  8. Maternity and Newborn Care
  9. Pediatric services
  10. Preventative and wellness care

As such, you are never guaranteed minimum essential coverage by short-term plans and can, in the future, find out that your policy covered far less than you originally expected.

You Might Face Balance Billing

The flexibility of short-term plans comes from the fact that they don’t have a “network.” Without a network, there is no set or established list of health care providers who you know will accept your insurance policy. As such, you might visit a doctor only to find out later that they do not accept your insurance, thus resulting in a medical bill that must be paid for mostly out of pocket.

No Coverage for Pre-Existing Conditions

One of the largest differences between short and long-term insurance plans is how they cover pre-existing conditions. Short-term plans are meant as a backup for medical problems that have not yet happened, they are not made to cover a condition you are already aware of.

Here, some insurance providers will trust your portrayal of your previous health conditions until you file a claim while others will not. In either case, verifying your health status requires an underwriting process in which up to 5 years of your past medical records can be used to determine your status. If they find you do, in fact, suffer from pre-existing conditions, this is grounds to deny you coverage.

Navigating Insurance Providers

As you may have gathered, insurers have a great deal of autonomy when it comes to what they offer as part of their temporary plans. Because of this, it is often necessary to check in with individual insurance providers to get information on what they cover. In the state of Arizona, the following providers are offering temporary coverage:

  1. Blue Cross Blue Shield of Arizona (in partnership with IHC)
  2. Everest Prime
  3. Golden Rule (UnitedHealthcare)
  4. Independence American Insurance Company
  5. LifeShield
  6. Madison National
  7. National General
  8. Philadelphia American Life Insurance
  9. Standard Life
  10. Companion Life
  11. United Security Health and Casualty

While these are the current providers offering plans in Arizona, this information is subject to change. For the most up to date information, it’s best to check in with the insurance providers themselves to see whether they are still offering coverage.

Some Insurance is Better Than No Insurance

When it comes to your health, having sub-par insurance for a period of time is almost always better than having no insurance at all. However, it’s important to think in the long-term and start shopping for a plan that is sustainable enough to maintain on a regular basis.

At the Gebhardt Insurance Group, we offer a variety of coverage from a host of major insurance carriers with an experienced staff that can help you determine the coverage you need. We can help everyone from individuals looking for a basic health policy to families, persons with pre-existing conditions, and even those who are looking to purchase life insurance.

If you have any questions, give us a call at 520-836-3244 to get a quote and make an appointment to take the final steps in insuring your business.

Filed Under: Insurance, Life Insurance

Life Insurance as an Investment Tool

August 8, 2019 by Steve Gebhardt

Life Insurance as an Investment Tool

What is life insurance? It is an insurance contract that is established between the policyholder and the insurer that will pay a benefit upon death. There are various types of life insurance products on the market today. One type of life insurance is called permanent life insurance. Permanent life insurance pays a death benefit to the named beneficiaries and can be a great investment. 

Facts Regarding Life Insurance

According to a study by LIMRA titled “Life Insurance Ownership in Focus” more than 87 million Americans have a life insurance policy. The number of Americans that have life insurance is trending upward; however, the average amount of coverage has decreased. Approximately 70% of U.S. households have life insurance.

The Difference Between Term and Permanent Life Insurance

Term life insurance is much simpler than permanent or whole life insurance policies. The buyer agrees to make premium payments for a specific term or period. These policies are commonly purchased for terms of 10, 20, or 30 years. Term policies are fairly affordable and are most popular among households that have dependent children.

Term policies pay a specified death benefit if the insured party dies during the term of the policy. Buyers often choose a term based on when certain milestones are likely to occur. For example, parents may choose a term policy that extends to the estimated time their children will be graduating from college. A term policy can be very important so that dependent loved ones have financial support if you pass away.

A permanent life insurance policy also pays an amount to the beneficiary when the insured party dies. There is no other defined term or length for a permanent life policy. A whole life policy typically has a fixed premium amount. These types of policies often contain clauses preventing an insurer from revoking or otherwise terminating the policy unless premiums go unpaid.

Permanent life policies also have a savings component that builds cash value that the policyholder may borrow or withdraw from. As funds accumulate, they are invested in a tax-protected account. The investment portion of the policy may be subject to stock market fluctuations and the invested funds may generate dividends. Common types of permanent life policies include variable and universal life insurance.

Why Purchase Permanent Life Insurance?

Each consumer has a unique set of individual circumstances. Life insurance policies are fortunately not a “one size fits all” product. Many lower-income individuals immediately recognize that permanent policy premiums are beyond their financial means. These policies tend to be more expensive than term policies.

It is critical that consumers considering a whole life policy are prepared to maintain it. Those with a need for a life policy that exceeds 30 years often find it difficult to find a term policy. Those with a considerably younger spouse who want to ensure that they will have financial support should seek a permanent life policy. Children with permanent disabilities should also be considered when choosing a life insurance policy.

Variable Life Insurance

Variable life is a type of permanent life policy where the cash value and death benefit fluctuate based on the performance of invested funds. When the investments perform well, the earnings may be used to pay premiums or added to the death benefit amount. Variable policies may or may not have a guaranteed return rate. Keep in mind that the cash value may decline in years where investments perform poorly.

Universal Life Insurance

A universal life policy is a type of permanent policy that invests funds. The key aspect that differentiates universal policies is that they generally have a fixed rate of interest. The policies are quite flexible. The policyholder may choose to skip premium payments as long as the minimum required premium is paid during that year. Policyholder’s may have the option to tailor the amount of premium allocated toward the death benefit or cash value.

Indexed Universal Life Insurance

An indexed universal life policy allows the policyholder to maintain cash value in a “fixed account or equity index account.” The investment component is considered to be less risky than variable universal policies. The policyholder can typically pay a premium between a set minimum and maximum range. The cash value of the policy is usually accessible at any time without penalties.

Tax Benefits of Permanent Life Insurance

  • The cash value of a policy will increase tax-deferred as a retirement account would.
  • Withdraws from the cash value will usually be tax-free up to the amount you have already paid in premiums.
  • Life insurance policy beneficiaries can receive the death benefit without having to pay taxes.
  • Life insurance policy premiums are typically paid with “after-tax” dollars. 

Medical Examination Requirements

A life insurance company often will have applicants undergo a medical examination performed by a professional. You may be asked to complete a questionnaire. A full medical exam may include taking blood or urine samples and other various tests. This is part of the underwriting process that insurers complete when issuing policies.

There are “guaranteed acceptance” life policies available in the market as well. The premiums tend to be comparatively expensive and the death benefit may be restricted to a low amount. These policies are often viewed as being a poor overall value except for those with serious medical conditions.

Policy Waiting Periods

Some policies may have a waiting period. This is an amount of time that must elapse before the policyholder is eligible for the full benefits of coverage. These are commonly referred to as “elimination periods” or “qualification periods” during which you are paying premiums. For example, consider a policy with a two-year waiting period. If the policyholder dies during that time they may only be able to recover the amount already paid in premiums.

Comparing Life Insurance to Other Types of Investments

A permanent life policy is not the best option to choose exclusively for investment purposes. Although there are clear tax advantages, life insurance does not offer an employer match like a 401(k) or other retirement accounts. Those who qualify for Roth IRA’s may find these to be a superior option for investment purposes. It is recommended that you always consult a financial advisor or other professional.

Advantages to Purchasing Insurance Through an Independent Agency

If you have shopped around for insurance recently you have likely encountered an overwhelming number of options. Trying to compare policy options can be time-consuming. Unlike a captive insurance agent, an independent agent can offer policies from various insurance companies. These professionals are positioned to efficiently evaluate and identify the best options for your unique set of circumstances and goals.

Independent Agency Provides Life Insurance in Casa Grande

The Gebhardt Insurance Group is a well-established provider of insurance solutions and is locally based. We can help you save money on insuring your home, vehicles, business, and much more. Contact our team of professionals today at (520) 836-3244.

Filed Under: Insurance, Life Insurance

Life Insurance for Seniors Over 65

March 21, 2019 by Steve Gebhardt

Life Insurance for Seniors

It should come as no surprise that the costs of life insurance typically increase with age. Seniors should expect fewer coverage options and higher monthly premium prices. Life insurance companies view those ages 60 and over as a much greater risk. What are the best life insurance plans for people age 65 and over? The answer varies according to your individual circumstances and what benefits you are seeking.

What is Life Insurance?

A life insurance policy is a contractual agreement between the holder of the policy and an insurer. The insured makes premium payments in exchange for some lump sum death benefit payable to the beneficiary named by the deceased. There are dozens of types of life insurance policies. Term and permanent are the two primary types of life coverage.

Life Insurance Considerations

There are a host of considerations that seniors may factor into their policy selection as follows:

  • Whether there is a living spouse or not
  • Other assets that the individual has such as a home, retirement account(s), etc.
  • Any current debt and the amount(s) owed
  • If any children are still dependent financially
  • Any estate taxes that would apply upon death
  • Whether elderly parents or adult children who are disabled are relying on support financially       

Term Life vs Whole (Permanent) Life Insurance

A term life policy lasts for a specified time period of up to 30 years. Compared to whole life insurance, it may be seen as a temporary policy. Term policies are generally more affordable. The insurer may not ultimately have to pay a death benefit if the insured outlives the policy term.

A whole (permanent) life insurance policy remains in effect as long as the premium is paid and usually builds cash value. The insured party may use this cash according to the terms of the contract. These are typically much more costly than term policies.

Annual Premium for$500,000, 10-YearTerm Policy(Healthy/Non-Smoker)
Age 40Age 50Age 60Age 70
Male
$242$547
$1,476$4,523
Fe,ale$211$449$986$2,807

The above chart shows the large disparity in prices based on gender. Premiums for females ranged from roughly 13% to 38% less costly.

Age Limitations on Life Insurance Products

As you advance in age, there are fewer options available for term policies. These age-related limitations vary by company. Generally, the maximum term available for those 70 years of age is 20 years. At ages 75 and 80, the maximum terms decline to 15 and 10 years. Whole life policies for this age range are quite costly and are rarely offered beyond age 75. Seniors are also likely to encounter a requirement that they submit to a medical examination.

Concerns Regarding Medical Conditions

Seniors in their early 60s who are in good health may qualify for a term policy with a monthly premium of roughly $100. Being in good health allows access to better rates. This is partly due to the chance that the policyholder will live beyond the term of the policy. These healthy individuals may find that submitting to a medical exam lowers their rates.

MetLife typically requires applicants over the age of 50 to submit to an electrocardiogram and both blood and urine tests. New York Life often requires those over the age of 70 to undergo cognitive and physical testing. Prudential Insurance may reference a database showing any prescription drugs applicants take.

Avoid Buying Cash Value Policies Over Age 65

Universal life insurance policies are a form of whole life policies that accumulate cash. Policyholders can obtain a loan from their policy while still alive. These types of policies are generally not recommended for seniors. The premium tends to be high due to the cash value feature of these policies. In addition, they tend to have administrative or management fees that can approach 3%. The policies are often best for those focused on longer-term goals.

Burial or Final Expense Policies

Those well into their 70s will likely have few options. Those over 80 years of age may only be eligible for a burial policy. Burial insurance is a form of whole life coverage that exclusively pays “final” expenses. The death benefit in the policy is unlikely to exceed $40,000, with many in the $10,000 to $15,000 range. Typically they do not require a thorough medical exam. These policies are useful for seniors with health concerns who want ensure their family does not have to pay for funeral expenses.

Evaluating the Insurance Carrier

You may recall seeing advertisements, such as those with celebrity spokesmen, discussing life insurance policies with “guaranteed” acceptance. They commonly promote that no medical exam is required. The insurer knows that these policies are particularly appealing to those with health concerns. As a result, the policy premium is typically inflated and death benefits are generally limited.

You should feel comfortable that a life insurance company is stable and legitimate before purchasing a policy. It is often advisable to check their Standard and Poor rating or AM Best standing. Avoid purchasing policies that have extremely confusing terms and conditions. You should have a firm understanding of what the agreement entails.

The Advantage of Purchasing Through an Independent Agent

There are many types of life insurance products on the market from many carriers. A smart way to consider your options is by consulting with an independent agent. These insurance professionals are able to identify your needs and find policies that are suitable. An independent agent is not “captive”, meaning that they may offer policies from more than one carrier. This allows seniors more life insurance options and will help with finding an affordable solution.

Life Insurance Agency in Casa Grande

Our team of insurance professionals at the Gebhardt Insurance Group has provided life insurance to those of all ages for years. We also assist those locally with auto, homeowners, business insurance and much more. We encourage you to contact us today at (520) 836-5244.

Filed Under: Insurance, Life Insurance

Types of Life Insurance

February 14, 2019 by Steve Gebhardt

Types of Life Insurance

Those who buy a life insurance policy generally do so as a means of financial protection for their families. The beneficiary of the deceased will receive a lump sum benefit if the death occurs while the policy is active. Funds are commonly used for funeral and burial costs, debts such as a home mortgage, and future educational expenses of children. Life insurance coverage is broadly categorized as either term life or whole life (permanent life) insurance. Whole life policies make up approximately 60% of those sold within the market.

Overview of Types of Life Insurance Policies [1]
Term LifeWhole Life (Permanent)
Level TermTraditional
Decreasing TermUniversal
RenewableVariable
Non-RenewableVariable Universal

Term Life Insurance

These policies offer financial security for the beneficiary of the policyholder for a defined “term” or time period. In comparison to a whole life policy, they are considered a temporary option. It is the most simplistic and least costly option that may extend up to a 30-year-period. Those with minor children may maintain these policies until their kids have grown and no longer depend on them. Term insurance products are typically purchased exclusively for death benefit coverage. Unlike other forms of life insurance, they generally do not have a cash value component that may accumulate funds.

Renewable vs Non-Renewable

Most term policies extend over a multi-year period. A term of 20 years is quite common, after the time period has passed, the policy may be renewable. Establishing a long-term policy generally provides you with a stable premium cost that will not increase over time. Another advantage is if the insured party begins experiencing health concerns they already have existing coverage in place. Older adults and those will health issues are viewed as a greater risk and will have difficulty obtaining a new policy. Non-renewable policies end after the term and buyers will then have to shop for a new policy. When a term policy is renewed, the new premium is likely to be higher. This increase is likely because the insured party is now older. Renewals also may account for inflation and the rising cost of living.

Level vs Decreasing Term

Another distinction between types of policies involves whether they are level or decreasing. Most term policies have a level premium, but policies may or may not have a level death benefit. A level death benefit amount is clearly established when the policy is purchased and will remain unchanged throughout. Over 90% of term life policies issued are level. A policy with a decreasing level has a death benefit amount that is reduced at some interval over the policy term.

We will consider a scenario of a decreasing term policy that has an initial $250,000 death benefit with a 20-year term. This example has a 2% annual (yearly) decrease. We will track it at five-year intervals thus realizing a 10% decrease every five years.

YearsLevel Death BenefitDecreasing Death Benefit
0$250,000$250,000
5$250,000$225,000
10$250,000$202,500
15$250,000$182,250
20$250,000$164,025

Why Would Someone Select a Decreasing Term Policy?

Policyholders may consider a decreasing term policy if their primary concern is paying off a long-term loan upon death. One example is a home mortgage that is being paid off and the balance is steadily falling. The insured may have teenage children entering college soon and progressing into the workforce; therefore, their financial dependency is also diminishing. A decreasing policy is likely a more affordable option in most cases.

Whole (Permanent) Life Insurance

A whole or permanent life insurance policy also provides a death benefit as long as the premium is paid. It will also allow you to accumulate cash value depending on the type of permanent policy. A certain portion of the premium payments is invested. These funds may be invested in the stock market and potentially diversified similar to a mutual fund. If the investments perform well, the life insurance company may then pay you dividends based on earnings. These cash value arrangements often have great tax advantages. Many types of permanent life policies allow you access to the funds for purposes such as:

  • To make your premium payments
  • To extend yourself a loan at a lower interest rate than you could obtain in the market
  • As funding for other investment opportunities
  • For use as supplemental income in retirement

Whole Life vs Universal Life

Whole and universal life fall under the category of cash value policies. The distinction is primarily related to how premiums are paid and how cash accumulates. Whole life policies make the schedule of premium payments more simplified by using a set schedule. Whole life policies also generate a fixed return that “guarantees” you some cash value.

With universal life, the policyholder has some degree of flexibility in making their premium payments. The cash value component of the policy is more volatile and is dictated by short-term interest rates. Although a universal life policy may also have some “guaranteed” cash value, it is subject to changes in the investment markets. A possible disadvantage is that death benefits could decrease and policy premiums may increase in response to market conditions.

Variable vs Non-Variable

Variable life policies are highly volatile because premium funds are heavily invested in stocks, bonds, and other market funds. If these investments perform poorly the death benefit and cash value will decline. When investment performance is good there is a significant upside with strong increases in cash value. Policies deemed as non-variable are more conservative and not subject to the sizable extremes found in variable policies. They typically guarantee a minimum interest or cash value; however, lack the potential for large cash value gains from investment performance.

Variable universal life insurance coverage is a hybrid product. These policies use a variable cash value approach that has the investment-based risks and rewards. They also offer policyholders flexibility in their premium payments and death benefits that are typically associated with universal models.

Employer Plans

Larger employers often provide basic group life insurance policies to all employees. Many are paid entirely by the employer or have a small amount of employee contribution. These are generally small policies that rarely have a death benefit greater than $100,000. Usually medical exams and health inquiries are not required. Most of these policies are not sufficient for individuals with dependents. Many do offer the employee the option to add supplemental life coverage that is sometimes available at a good value. We will take a look at a couple standard plans offered by large Arizona employers.

  • The City of Mesa: Their standard program provides full-time employees with life coverage equal to their annual salary at zero cost.
  • The University of Arizona: Offers an Employer-Paid Life Insurance benefit with automatic enrollment for those eligible for benefits. It contains a $15,000 term policy that includes an additional $15,000 “seat belt incentive”. Also included is a $15,000 policy for Accidental Death and Dismemberment.
  • Hexcel Corporation: They have an office in Casa Grande that employs roughly 500 people. They provide a group life policy to employees at zero cost that has a $50,000 maximum benefit.

Buyer Considerations & Premium Allocation

Those considering life insurance obviously have many options to consider. You should consult with an experienced insurance agent who will help you find an appropriate plan that reflects your specific goals. Those looking to accumulate cash within the policy may choose a minimum level death benefit plan.

Enrollment Details & Tips

Depending on the policy that you are applying for, you may be subjected to a medical examination. This is more likely if your policy will provide significant benefits. All types of life policies will have a named person that is the beneficiary. You will need this individual’s social security number or other tax identification information. If the beneficiary is a minor child, you may establish a trust account for benefit distribution. Your policy premium should be an amount that is fairly affordable. This is particularly important if you choose a policy that may have rising premiums.

Independent Life Insurance Agency in Casa Grande

Would your family be faced with severe financial difficulties in the event of your death? Life insurance is a critical means of protection. At Gebhardt Insurance Group, we can help you secure a policy based on your current and long-term needs and goals. We represent many of the best life insurance carriers in the market and understand potential concerns about affordability. If you have an existing life insurance policy that has not been reviewed recently, we encourage you to contact us as well. It is very important to do so if you have had life changes involving dependents, marital status, income, or employee benefits. We can be reached at our office by calling (520) 836-3244.

Filed Under: Insurance, Life Insurance

Life Insurance Cost Calculator

November 16, 2018 by Steve Gebhardt

Many Americans overlook the importance of maintaining adequate life insurance coverage. It is common that people believe their premium amounts are much higher than they actually are. This is shown in a 2018 study by Insurance Barometer involving consumers in the United States.

Responders estimated that a term life policy for a 30-year-old valued at $250,000 was three times higher than the true cost. Data shows that Arizona residents are now recognizing the importance of life insurance with currently $520 billion in coverage statewide. The decision to purchase life insurance is an important choice, particularly among those who are financially responsible for loved ones.

Life Insurance Cost

According to the 2015 Insurance Barometer study by Life Happens and LIMRA, one of the most common misconceptions regarding life insurance is that it is too expensive to afford. In fact, despite the majority of the participants stating that they had a good understanding of life insurance, 80% overestimated the cost, with 1 in 4 believing the cost of life insurance to be upwards of a $1,000 per year or more.

The reality is, the peace of mind and financial stability that life insurance provides in a time of need is priceless. The best part is that it is totally affordable too!

For example, if you are a healthy 35 year old, your 20-year term life insurance plan worth $250,000 is only going to cost you approximately $23.90 per month. If you do the math, that means the amount you would put in over 20 years is $5,736. This is only 4% of the amount available in case the unthinkable happens! If that is not a good investment I do not know what is.

What’s even better is that there are a wide variety of life insurance plans available to choose from. This means that if need be, you can find an even more moderate plan for as low $13 per month. Who cares if it’s “not as nice”, any life insurance plan is still countless times better than no plan.

If you still don’t think you can afford life insurance or if you are unsure what the right plan is for you,  an our experienced life insurance agent can help you find the best option possible.

What is Life Insurance?

The Arizona Department of Insurance provides oversight within the life insurance market. The state statute defines life insurance as “insurance on human lives.” It involves the provision of benefits in the case of death, dismemberment or disability of an insured party. This form of insurance is part of a broader group of financial products and services called annuities. The insured pays regular premiums to the insurance company in exchange for a predefined death benefit if the insured dies.

Assessing the Need

Some questions that you should ask yourself to assess your need for life insurance include the following:

  • Would others experience financial hardship if I were to die suddenly?
  • Do I have a home mortgage or other large debt?
  • Are there concerns about paying for my child’s education?
  • What percentage of the family income do I provide?
  • Does my family have the money available to pay for my funeral and burial expenses?

Types of Life Insurance Policies

Term vs. Cash Value

A term life insurance policy offers coverage for a certain period of time. They tend to cost less and most do not build up future cash value. A term policy only pays a death benefit if death occurs during the term. Cash value policies typically span a lifetime and may increase in value tax-deferred. A permanent (cash value) policy may be “cashed in” for income while you are alive.

Renewable vs. Non-Renewable

Generally, term policies are “renewed” after the duration of the specified time period. The new policy may have a higher premium as you age. Non-renewable policies require the buyer to apply for a new policy after expiration.

Whole vs. Universal Life

Whole life and universal life insurance are both classified as cash value policies. Whole life policy premiums usually have a predetermined set payment schedule. Universal life policies have greater flexibility in the frequency of premium payments. Buyers must pay the minimum requirements to maintain either type of policy.

Variable Life vs. Non-Variable Life

Variable life policies invest premium funds in stocks and bonds and may accrue or lose cash value accordingly. Non-variable policies reduce the risks associated with market fluctuations by guaranteeing minimums. Non-variable policies typically do not benefit from rises in the investment market to increase value.

Employer-Based Plans

According to the National Business Group on Health, approximately 90% of large company employers offer some variety of accidental death coverage. Many employers simply provide a set amount of life insurance to all employees at no cost. A standard employer-provided life policy is likely to pay a death benefit that is insufficient in most cases. These policies generally do not require medical underwriting or exams and will typically terminate if you are no longer employed at that company.

Calculating Coverage Amounts

How much life insurance coverage is needed? This is a common question and the answer is dependent on the buyer’s unique circumstances. Craig Simms is a senior vice president with Vantis Life Insurance. He recommends that those with children obtain sufficient coverage to pay off their mortgage and children’s college education. There truly are many potential considerations such as current debt level, spousal income and medical costs. One common expense to consider following an individual’s death is the cost of a funeral. The National Funeral Directors Association recently provided costs associated with this:

Median Costs (U.S.)[1] 2014 2017
Funeral with Viewing & Cremation $6,078 $6,260
Funeral with Viewing & Burial $7,181 $7,360

Buying a Policy

Purchasing life insurance through an experienced agent is recommended. Some policies require the buyer to complete a questionnaire of medical questions or in some cases, have a medical examination. You will need to name a beneficiary when beginning a policy and will need their Social Security or tax identification number. As your circumstances in life change, you should reevaluate your policy with an insurance professional.

Life Insurance Agency in Casa Grande

No one wants to dwell on the idea of dying prematurely. Purchasing life insurance is a process that may be critical to secure the financial future of your family. The insurance professionals at the Gebhardt Insurance Group can assist you in choosing a policy that offers sufficient coverage and affordability. Contact our office today at (520) 836-3244 to receive a life insurance quote.

Filed Under: Life Insurance

Guest Post: Seniors Can Keep Their Health and Finances Robust

October 29, 2018 by Steve Gebhardt

Health and Finances Robust

As seniors approach and begin retirement, it’s a great time to take stock of your financial situation. Managing your money in retirement can differ from when you are employed full-time, so it makes sense to reassess your situation. Here are a few tips to get you started.

Budget Carefully

Your income in retirement will likely be much lower than it was in your biggest earning years, so you’ll need to plan for that. You and your spouse should develop a written budget (if you don’t already have one), so you know exactly where your money is going. This will help control your spending and identify areas where you can save even more money. You should also make sure to plan and communicate with your partner. You might have different visions and goals for your retirement years, so it will help to take the time to get on the same page.

Your Home

One asset that might give you a chance to better your financial situation as a senior is your home. It’s always a good idea to be aware of home price trends in your area and how your home matches up to the trends. Homes in Tucson, Arizona, for example, have sold for an average price of $210,000 in the last month.

If your home value has increased significantly, and you can get a good price for it, this may be a good chance to sell your house and pad your bank account a bit. This could give you some room to breathe, especially if your budget is tight and your home seems to be putting a strain on your finances. Downsizing will give you a smaller space to manage and create some room in your budget.

Beware Friendly Strangers

Seniors are often thought of as easy marks to get their money taken away from them, so it’s vital that you and your family keep a close eye on your financial affairs. The first warning sign to watch out for is confusing double talk filled with complex ideas that neither you nor even your younger friends can understand.

You should also be on the alert for excessive friendliness (calling repeatedly, for instance) and pressure to sign a document immediately, without taking the time for an appropriate review. If you don’t receive statements in the mail or unfamiliar details start surfacing, you should also check into things further. You should also put fraud safeguards in place on your accounts such as an alert for large withdrawals.

Get Help From Your Kids

As you get older, you may start to notice signs of cognitive or mental decline. If this begins to happen, you should ask your adult children to step in and help manage your finances. This will help your bills to be paid on time and will help ensure your kids know how best to help you, especially if something unexpected were to happen.

Get a Life Insurance

Life insurance is critical for all senior citizens. Having a life insurance policy can help you protect your legacy and your loved ones. It can protect your family from ongoing and immediate financial needs, funeral expenses, medical bills, and other debts, such as mortgage. Whether you’re preparing for retirement or are already retired, it’s never too late to consider purchasing a life insurance policy or expanding your existing coverage.

Your senior years are a fantastic time to enjoy life and the fruits of your labors for so many years. Following the tips above to manage your money will help you to make the most of what you have. Enjoying retirement doesn’t have to be just a dream; it can be a reality for you.

Photo from Pixabay

Filed Under: Life Insurance

Speed Kills – One of The Top Contributor of Road Accidents

February 16, 2018 by Steve Gebhardt

Penalties for Driving Without Insurance

For many years, speeding has been proven to be a leading factor in traffic deaths throughout the world. According to statistics from the department of transportation, one-third of all traffic deaths in the United States have been affected by speeding. The effects of traffic deaths also go beyond the loss of life and grieving by the family. Studies have shown that countries can lose 3-5 percent of their GDP due to car accident deaths through insurance claims, loss of work, and other financial factors. Speeding is a cause of death that can be easily solved without any new technology or cure, yet it still happens on a regular basis.

So why is speeding such a major factor in accidents and deaths on the road, compared to any number of other factors? Speeding while driving provides a higher risk of causing an accident for a wide variety of reasons. Drivers who speed have less time to react to changing conditions, such as changes in road quality, weather, or other driver’s movements on the road. Speeding makes for worse accidents when they happen due to the faster velocity of the impact. Its effects can also be multiplied by distracted driving or tired driving.

Fortunately for drivers, steps have been taken by many countries around the world to curb the danger created by speeding drivers. Most nations have implemented reduced speed zones in areas near schools and on narrow roadways. Speed bumps and speed tables have been added to areas where speeding has been known to be an issue. Higher fines have been put in place for speeding in sensitive areas such as construction zones and school zones to keep pedestrians safe. All of these factors further incentivize drivers to drive slower and drive more carefully.

In a world where others are speeding, what can someone due to keeping themselves safe from the danger? There are many actions a common driver can take in order to protect themselves on the road. The obvious first step is to not speed yourself. While others may choose to speed on the road, you do not have to speed with them. When you drive the speed limit, you bring a bit more safety to everyone on the road.

Driving defensively and having the right auto insurance is the best way to go. Avoid common distractions such as using your cell phone or constantly changing the radio settings while driving. Be mindful of other drivers, where they are around you, and their speed in relation to your own. Practice the 3-4 second rule, which states that you should stay at least 3 to 4 seconds behind the vehicle in front of you, and no closer than that. There are many aspects to defensive driving that can keep you much safer on the road, no matter how anyone else drives around you.

Also be sure to take care of your vehicle in terms of maintenance. While this may not seem to relate directly to speeding drivers, it is good practice to regularly maintain your car so nothing goes wrong with it while you drive. If you ignore issues like weak brakes or a bad engine, you could find yourself causing a hazard on the road, making it all that much more likely that you can cause an accident. Combine this with speeding drivers trying to avoid you as your car breaks down, and your chances of an accident are multiplied greatly. Always be sure you take care of your vehicle maintenance.

Despite all of these facts on the dangers of speeding, things are improving. In 2003, the United States saw approximately 13,000 deaths related to speeding. By 2012, that number had reduced to approximately 10,000. Awareness of speeding as a cause of death is growing, as more Driver’s Education classes emphasize the dangers, as well as the driving tests. Car manufacturers also have upgraded the quality and number of airbags in their newest vehicles, and are now building vehicle frames and windows with stronger materials.

The best way to keep yourself safer on the road is to simply not speed yourself. Plan to leave earlier for your destination so you don’t need to hurry. Anticipate the traffic you will be in and drive accordingly. Every step you take to change your own driving habits keeps you just a bit safer no matter what the other drivers may be doing. If these aren’t good enough reasons, save yourself the cost of the accident, the loss of fuel economy, and the price of a speeding ticket, too.

Filed Under: Auto Insurance, Life Insurance, Motorcycle Insurance Tagged With: Driving Tips, Speed Driving

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