Are you committed to enriching your life to create a ripple effect on others? Do you want to gain freedom and more control over what’s happening around you? Because of many uncertainties that could happen to anyone right now, you want assurance and stability. Join your host Chris Miles as he sits down for a conversation with Greg Nelson on the importance of disability insurance and long-term care. Greg is the owner of Strategic Benefit Coach, a full-service insurance agency.
In this episode, he dives deep into health insurance and income protection plans so you can plan for your future and not worry about losing money when something happens. You need to feel secure, which means you must also think about your loved ones. Tune in to learn how to start making your money work for you.
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Understanding The Benefits Of Disability Insurance And Long Term Care With Greg Nelson
This show is for you and about you. Those of you who work hard for your money and want your money to start working harder for you. You want that freedom and prosperity, not 30 or 40 years from now, but right now, so you can live that life that you love with those that you love. Most importantly, it’s not just about being rich. It’s about enriching the lives of others because as you are blessed financially, you have a greater ability as a rippler to create a ripple effect in the lives of others. Thank you so much for reading and sharing with other people on this show because this is the ripple effect we are here to create, and then I’m here to create specifically through your life so that your life is better.
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I want to go and shift into something important because as we are seeing what’s going on with the world, you need more certainty. Don’t you? We need more protection. We need to know that we can protect what we have because it’s not only about making the returns. The returns are awesome. We want to make lots of returns but most importantly, we’ve got to keep the money we have and then build upon that foundation versus gambling our lives away, which is what most people do.
It’s great to talk about offense, but what wins championships are defenses. We are going to talk about disability insurance and long-term care insurance. What’s the need for those? That’s a topic we don’t talk about a whole lot but it’s essential. I know many of you have been asking that question of me too. I wanted to be sure to bring on a special guest, the guy that I use for my insurance needs specifically in this area, especially around disability and long-term care, which is Greg Nelson.
Besides the fact that I’ve known him since 2006, he is a ChFC, Chartered Financial Consultant. He’s also a certified employee benefits specialist. He does a lot of things with group plans and things of that nature if you are an entrepreneur, also a disability insurance fellowship, and so forth. He’s only the recognized disability insurance, and he has that real disability insurance designation that comes with that.
Having his own experience with income protection that saved his own family, which is a cool story, he has been reviewing, and helping companies, business owners, and professionals get that income protection that they need for the last many years. The biggest thing is that we are not just talking about disability insurance but we are talking about that income protection plan. Greg, welcome to the show.
Thank you. It’s a pleasure to be here.
Give us a little bit more of your backstory. You mentioned that you had been a benefactor of your own training and teachings.
If we go back even before I knew you, Chris, I started in the early 1990s in the financial services industry. At that point, I was young and immoral. I had a mentor that said, “You can’t sell what you don’t own.” That was the only reason why I got disability insurance at that point in my life. I thought I never needed it but I trusted what my mentor said, so I got some. It was probably one of the biggest and best decisions that I’ve made in my life because it was about two years later that I ended up with something called Ménière’s disease.
It’s no known cause or cure. It’s not something that’s contagious but it affects the equilibrium in your inner ear. I would get these episodes of vertigo where everything starts spinning around and always would last anywhere from 30 seconds to 30 minutes at a time. I don’t know how you are when you have something spinning around like at an amusement park but in my case, if I get that, I’m useless for the rest of the day. I can’t do anything else because of that.
I would lose days at a time. With a young family, it was the thing that saved our financial thing but as important with the fact that I could concentrate on getting better rather than on how I put food on the table during that time. You will find that I’m a big advocate of it. Besides the fact that I had an employee, a close family member also used it.
We will start with disability insurance. We will go with long-term care in the latter section of this. One thing you taught me is it is income insurance, which is what we are all about here. We want that income protection, even for me, where I’m out of the rat race. I know that there are readers reading. It’s probably you right there, saying, “I’m getting the passive income to take care of all these needs, so I don’t need it.” I’m probably in a better position than you are financially and still have it. I’m still paying for it because it’s very cheap compared to what I get as a benefit. What would be your response to people that need disability insurance?
The first that I like to do is to dispel one of the misnomers of disability insurance. When we think about disability, probably the first thing that pops into most people’s heads is a picture of that person in the parking space that’s in the wheelchair, that blue and white thing that’s pasted on there. That’s what we think of as a disability. We think, “I’m never going to be that disabled.” I can also hear people saying, “As long as I can use my mind, I’m not going to be unable to work.”
That’s the way I felt but I can tell you from personal experience that it doesn’t always work that way. Those disabilities happen but those are the exceptions rather than the rule. In most cases, it’s something where I can still work but I can’t work as long or as effectively as I could before. Therefore, my income drops. When I’m in a position where I’m trying to build those assets with a great plan, “I’m going to be able to get out of the rat race. I’m going to be able to live on passive income,” I hope that everybody is able to get to that point. Until I get to that point, and even beyond that point, it’s always a good idea to make sure that you have the income to be able to continue to meet those goals that you have for the future.You think that you won’t need disability insurance but you’ll realize that it’s the biggest and best decision in your life. Click To Tweet
I would also like to share one other analogy that I find interesting. I’m going to say that I offered you two different jobs, whatever you label, job A and job B. Job A pays you $100,000 a year but if you are too sick or hurt to work, it pays you exactly zero. On the other hand, Job B pays you $98,000 a year. If you are too sick or hurt to work, it’s going to pay you tax-free about $60,000 a year.
The question is, “Which 1 of the 2 would you take?” I have yet everybody that said they want job A even though job A pays a $2,000 mark. I suggested that disability income protection is the foundation of any good financial plan and is very cost-effective for the benefits that you could receive in millions for where you are working.
That’s the big key. A lot of people think this must be expensive. Granted, if you are 60 years old, it might be depending on your health. Being in my mid-40s, I pay $400 a month, and my benefit is almost $15,000 a year. To me, that’s a small trade-off in comparison to the benefit because I don’t have a crystal ball. I can’t tell you what’s going to happen in my future as great condition as I’m in physically. I’m running marathons. You never know. It could even be your mind, which for me, that’s my most important asset. I could be in a wheelchair and do a lot of the things I’m doing but some of it affects my brain and moods. If there’s depression or other mental illnesses, I could be toast.
Maybe I can clarify two things along those lines. The first one is that you mentioned $15,000. That’s what your monthly benefit is. If you took that monthly benefit, let’s say, it’s $15,000 hypothetically, and your times it by twelve, that’s $180,000 a year. If you times that even over 10 or 20 years, plus there’s the cost of living adjustments that can be added to that, you can be close to $500,000. One instance can more than make up what you paid for the premium, besides the fact that you have that peace of mind that if something happens, you have a way to be able to focus on getting better rather than how you put food on the table.
Any other pieces of advice when it comes to what to look for when they are looking for a good policy? Let’s say they maybe even have a disability insurance policy. What should they look for to see if they have the right policy for them?
I would say two things. The first one is one of the questions that I ask people when they say, “I got my own policy. I got something for work or whatever that way,” “When is the last time that you reviewed that coverage to make sure that it’s working for you for your specific situation?” In other words, there is maybe something that you got 5 or 10 years ago. You haven’t even looked at it. You may have had a change in your income or job occupation. You may have even started a new career. That policy may not be doing the right job for what you need. Even if it’s a group policy, I ask employers a lot of times, “When was the last time you reviewed it?”
They don’t seem to understand other than, “Here’s what my premium is. Here’s with the company.” “That’s great but do you have the right amount of benefit? Do you have the right definitions?” For example, one of the definitions that you look at is, “What does it take to get a benefit?” That’s probably the most important question. That’s based on not only what your occupation is but what your definition of disability is. You’ve got two different definitions there.
You’ve got one for total disability. Is that an own occupation definition? This means that if you can’t do the substantial neutral duties of your specific occupation at the time of disability, do you get the benefit, even if you decided to do something else and are making twice as much? Is it based on any occupation that you could do because of education, training or experience?
I’ve seen a lot of people that when they got to a disability situation, they weren’t able to get much benefit because the insurance company determines, “It’s because of your education or experience, you could do this like a doctor. You may not be able to be a doctor but you could teach at the university.” That’s probably going to be a huge pay cut for that doctor but they determined you could do that. Therefore, you are no longer disabled. The other definition that you want to look at is, “If I can still do my job but not as long or as effectively, how am I going to get a benefit, and how is that going to work?” There are a lot of different definitions that you should check to make sure that you have the right policies in place.
You don’t want to be able to get that little curve ball thrown at you, saying, “You still get a cheap minimum wage job. Congratulations. You don’t get anything.” That would be a horrible situation to be in, especially if it’s a big cut in your income. It’s a good point.
I heard a good analogy that when you are up in the airplane and going to do some parachuting out, would you like to know how the parachute works before or after you jump out of the plane?
That’s when you want to look at your policy. Make sure that it’s working right for you when your situation and upgrade it or review it regularly.
Before we moved to long-term care, because I know people want to be able to review their policies, whether it’s disability insurance or long-term care, I know you can do health insurance as well. What would be the best way for them to contact you?When you have disability insurance, you have that peace of mind that if something happens, you have a way to be able to focus on getting better rather than worrying how you can afford food. Click To Tweet
They could do 1 of 2 things. They could phone or email me directly at (801) 860-6552. If they mentioned that they work with you, then there’s no cost or obligation for a review. I’m happy to do that for your readers. You can also email me with that at Greg@SBCoach.net.
Let’s move on to long-term care because this one is becoming a lot more of a concern for a lot of people. I’m having more people saying, “I’m wondering if I should put a long-term care rider on my life insurance policy because I want to be able to make sure that this goes beyond age 65. This is something that can take care of me whether I’m staying at home, being taken off a home or if I have to be put into a home. I want to make sure that these costs are covered.” They are getting very expensive regardless of inflation. They are spendy to be able to take care of you. Tell us more about long-term care and the need for that.
Essentially, the idea behind long-term care is to be able to enjoy your retirement or whatever you would want. You are building up your passive income to be able to enjoy life in general. To be able to enjoy those assets, they have permission to use those assets so that you don’t need to use them for long-term chronic care needed such as long-term care. I suggest that long-term care also has a stigma similar to disability. We think that the person is in a wheelchair. If we think about long-term care, we usually think about that nursing home that we know down the street where grandma might be or somebody that we don’t even know.
We look at their condition there and say, “I’m never going to be in a situation like that. I’m going to do my care at home or in assisted living.” The question becomes, “Do you want to pay for that? Do you have the resources to do so on your own where it won’t affect your retirement or your lifestyle for not only you but for your spouse or other significant people? Do you want to be able to pass those on to your children or other beneficiaries, or do you want it just to be spent on 85% of Americans’ faces at some type of level sometimes in their future?”
This is one for risk-wise, other than maybe auto insurance. It seems like this one is probably the next afterlife insurance and auto insurance being used because people are living longer. I’m seeing this with my family. I have an aging parent who would live life however he wanted. He had smoked since the Vietnam War. He is eating fast food and candy. You think this would have killed him off because he had strokes in his 40s and heart attacks in his 50s.
However, thanks to modern medicine, he’s still alive. As a result, the guy is very diabetic. He’s crippled and can’t do hardly anything. He is the perfect person that should have done this decades ago to pay for this because now he’s eating up all of his assets, trying to pay for basic care while modern medicine keeps him alive barely.
I would like to think of long-term care to be an extension of disability. During our working lifetime, statistically speaking, there’s about a 1 out of 4 chance that I’m going to use it in some manner, and it doesn’t mean I’m going to be totally disabled but partially is the more likely scenario. In the case of long-term care, once I’m no longer needing to work for a living, now I’ve got my assets. In some cases, even before then, I’ve got the assets that I want to be able to enjoy and do whatever I want, not having to use those assets for something like long-term care. It doesn’t mean that you are going to end up in a nursing home. It could be at-home care, assisted living or seniors’ living.
I like to use the example of my wife’s mother. I saw this person firsthand. In this case, it was her grandmother. Her grandmother was being cared for at home by her mother. Her mother, at that time, was getting up in age but she wanted to take care of her mom so she didn’t end up in the nursing home. Part of the problem is that it not only affects you, it probably affects somebody else who’s trying to take care of you, whether it’s your spouse, one of your children or somebody that needs to take care of you. It ultimately got to the point where she couldn’t take care of her any longer. She ended up needing to be put in a nursing home because she couldn’t lift her, stay there or do a lot of things that needed to be done for her.
In that case, it was interesting to note that when she started, she was self-pay. Meaning she was using her resources to pay for it. She had a private room and very good care. When she got to the point that she no longer had the resources, that’s where potentially Medicaid can kick in. Once she went to Medicaid, she moved to another wing of the facility, where she was in a semi-private room. I don’t know if you have been to some of the facilities that have Medicaid people in there.
They are doing the best they can with the resources that they have but don’t have the same amount of resources, so you can see people out in the hall where they are saying things like, “Help me.” It’s impossible for them to be able to help everybody with the resources that they get from Medicaid or places even available when you need them.
They put on a waiting list or something in the meantime. I get a lot of people that will say, “Some insurance agent told me I should put this onto my life insurance policy.” My own opinion is I don’t want you to take that away because that’s eating into your cash to do that. Plus, when you do use that long-term care benefit, it’s mostly eating into your cash anyways. I don’t know if you have to keep that cash in the policy separate working for you while also having a long-term care policy separate. Is that what you’ve seen as well?
There are a few other ways that you can do it, depending on the person’s situation. I always suggest, “You don’t have to have your long-term care policy cover all of your expenses,” the idea behind insurance, even with health insurance, we usually have a deductible of some type, and the higher the deductible, obviously the lower, the premium. Why not take a similar attack on long-term care insurance?
There’s a certain amount that if I needed it, I would be able to pay for X amount of it. The rest, I want to ensure that so that I don’t have to pay on this other. You can do it all or some. They are very customizable to where you can say, “These are the benefits that I need, time that I need it for, and even what my budget is.” We can help put together the best policy that meets your specific needs.
Here’s the big picture I see with what you do. You are that defensive coordinator on a sports team. You allow us to be able to use a better offense because if you don’t have a good defense or are always worried about the what-if question, you tend to play a little bit more scared on the offensive play too. For example, you might say, “If this event happens in my life, I got to keep more liquid cash.”If you’re thinking of getting insurance, there are a lot of different definitions that you should check on to make sure that you have the right policies in place. Click To Tweet
As many people read me say here, “Every bit of $100,000 that you have that you could be using to invest like if you generate at least $10,000 a year of passive income, plus,” that’s now being taken up because it’s over here. If you can get more of that at play, make sure you put the insurance companies at risk so that you free up all your cash and resources to focus on the offense. It’s a way better scenario. It’s a great investment if you think about it from that standpoint.
You are protecting and giving yourself permission to be able to use your other assets in ways that you want to, rather than having to store a certain amount and make sure that it’s there if something happens.
I know if even investments we’ve talked about on this show, you want to keep it more liquid. It means it’s going to get you a lower return, which costs you money. It’s an opportunity cost. The real question I have to ask is, “If a matter of a few hundred bucks a month, would that allow you to be able to create thousands more on that money elsewhere?” That’s that give and take, that opportunity costs you don’t want to give up. I see this as a huge necessity. Once again, Greg, go ahead and give us your phone number and your email address if they want to reach out with questions.
Thank you. It’s Greg@SBCoach.net. You can use Greg@StrategicBenefitCoach.com, but I want to make it a little easier. They both go to a safe place. The other one that you can either call or text is my personal number of (801) 860-6552. I’m happy to talk to you, answer questions, review what you have and make sure that it’s doing the right job for your specific situation because this isn’t all or nothing. It isn’t a cookie-cutter approach that you should take in these types of situations.
The thing I love is I know you are licensed all across the US. Anybody who’s in the United States can reach out to you, ask us questions and be able to get these things reviewed. If you already have policies and want to know if it could be done better, cheaper or whatever it might be, Greg can give you that. I appreciate your generosity and am able to offer that to the readers because that’s very generous of you.
Thank you. I’m happy to help in any way I can.
Everybody, here it is. If you want a great offense, you must have a great defense to go with your plan. You’ve got to make sure this works as efficiently as possible. You can read the show all day but if you don’t do anything about it, it won’t change your life. We want you to change your life and create that ripple effect so that as you prosper, you can be a blessing in the lives of others too, not just in your community but also for your own family and generations beyond you.
It’s not just about creating wealth for yourself. It’s generational wealth and creating a real, lasting legacy that you are here to create. Make sure you go take action and reach out to Greg if you feel like you need to have that reviewed or even need to get something in place because this is a big hole in your plan. Be sure to have that done, and make it a wonderful and prosperous week. We will see you later.