Focus on Risk: What is the concept of People Insurance and Insuring your Golden Eggs?

For those of you that are taking charge of your life and your financial well-being, are you working with teams that handle "People Insurance?"

Unsure about what this means? My guest today, Ann Baker Ronn, will break down what this means to her and her clients in this episode of #ThePathwaysofPeakPerformance.

As a Third Generation Advisor, she has created a fun but educational way to help people navigate and pinpoint the correct insurance products for their needs; finding products that match the risk management problems they may be facing.

She will talk about insuring your golden eggs!

What we know:

-We insure our homes, and our cars, and we even insure our jewelry.
-If something happened to your jewelry, it wouldn't impact your life. You might be sad. 
-If you lost a house or a car, you can always borrow/rent a car, or live somewhere temporarily. 
**But if you lose your ability to go to work and earn an income there is no other YOU.**

This season and into the New Year, can you think of ways to either protect your golden eggs or help someone else protect theirs?

An important time stamp is 9:23 where Ann tells a story about a client who wasn't earning money but still returned to check in with his clients after a disability. Just the act of showing up and making some phone calls turned off his group contract. Don't rely on just your group disability benefits. 

How to find Ann?
You can reach her via email at ann@afpgroup.com.

The AFP Group
602 Sawyer Street, Suite 120
Houston, Texas 77007
713.626.9820

Transcript

Amber 0:09
Hello, and welcome to the amber Stitt show. I am your host, Amber Stitt, and today I'm lucky enough to have my friend and colleague Ann Baker Ronn with me today. How are you doing? How are you?

Amber 0:22
I'm doing great. So today, I thought we'd dive into some disability insurance discussions because I know that you and I tend to, we can go off the rails a bit and talk for hours about insurance planning. But before we dive into disability insurance as our hot topic today, I thought that we would start by talking a little bit about your practice because I know that you call yourself an Insurance Advisor, but I think you do a lot more than that. So I thought we get a chance to talk about your practice and how you work even with your partners within your firm to really bring a lot of clients solutions to the individuals and families that you help solve, so let's let you take it from here. 

Ann 0:51
I am happy to share that with you. So I'm actually the third generation in this business. My grandfather was a life insurance agent and so was my dad but my dad started a financial planning firm in 1969. So we do be baseline which means we look holistically at people's entire financial situation. I have a partner who really specializes in the Financial Planning and Investment area. And my passion is what I call people insurance. So people kind of look at me quizzically when I say "People Insurance" and what does that mean? It's opposed to property and casualty which ensures that insurers are boats or cars, people insurance, and life insurance and that has been my passion for the last 15 years.

Amber 1:56
Yeah, and I know that we talked about disability insurance, we talk about some of our clients like our success stories. I know you've had unfortunate stories too and eventually, we'll talk about that in another episode. But I think that we know that it's not a fun topic, people tend to hide from it because it brings out some of those negative thoughts, and knowing that they say one in four people could go on the claim and file a claim, we know it's important to talk about that with our clients. And I know that you thought bringing more of a fun element. I don't know if disability insurance could actually be fun, but I know that you try so you shared a little bit with me about your strategy to kind of make it real for people. So I'll let me take it I won't even introduce the title of what you do, because I'm not even sure how you deliver it to clients. But you've told me a little bit about ..the "goose"
Ann 
Now I will I'll pretend that you're a client. Okay, so I'll just say my she's really cute. She has a little egg.....I say Amber...you are a goose! 

Amber 3:05
Ann, this is funny because you asked me about my daughter. Well, my daughter isn't buying disability insurance but my daughter I call her the "goosey girl" because like a silly goose with all these nicknames. So I remember when you talked about the goose I'm like, wait a minute.... This is really weird because most people say to like this all the time.

Ann 3:28
I had another client who had geese on her front porch. So for some reason, it has a familiarity with people. So I say you're a goose, and I'm a goose, and seeing how people are reacting... So instead of thinking, Oh, how depressing disability insurance, I'm going to be in a wheelchair. They see the goose and they get a smile on their face and I think that they become more open-minded. So then I say to them, you know, we all insure our golden eggs. So we insure our homes, our cars, we insure even our jewelry, and like really, if something happened to your jewelry, it wouldn't impact your life. You might be sad. So think about a friend of yours one of my friend's house burned down and she founds her parents for like, you know, eight months when they 
lose your car. You can always borrow a car and get a rental car. But if you lose your ability to go to work and earn an income there is no other hand. There's no one else in common. And the other thing that's different about that is that as a human you're still spending money. You're not earning anymore, right your expenses may go up because you also have medical expenses. So I think that you know, the idea of the goose is just something that makes a really somber topic into something kind of cute. People are just really into my goose, see look at her little fluffy tail.

You can make a topic that isn't fun, a topic that some people don't want to think about, ok to talk about. It makes them understand, wow, yes, I do need to insure my golden eggs. So I should insure myself as the breadwinner that provides all 

Amber 5:15
Right, In The Pathways of Peak Performance, the curriculum or the framework is 5 steps, focusing on risk management, even the word risk management sounds very corporate and it could be also just what does that mean? And I don't believe that, but part of us even speaking today is to help people see if we can do the steps in advance to be 'proactive and not reactive, and we know that things are gonna happen. We saw things happen the last few years of others still getting sick and running families, and businesses, dealing with all the things combined. 

What if you have all the steps in place prior to a major event and it will be a major event? To what level we don't know if you'd be different for different people, but from even like the mindset like the ability to have resilience with some of these things that we face and if we can iron it out in advance with potentially disability insurance or something like that, It'll help us recover or be able to survive and then you know, not have such an awful time going through the process and then we're not even talking about money yet. 

I think a lot of people also forget that there are benefits needed to also fund retirement so if you're on claim early, you have to pay your bills, but what about retirement funding? 

Ann 6:29
Right? How do you save for your future when you can barely pay your bills? And it's interesting that you just brought something up to me that reminded me about that a friend of mine, so he actually was in a water skiing accident. And this was many many years ago, but he was in a water skiing accident and he became a paraplegic. He now runs the Chicago Marathon every year. And the reason why was his disability policy at a rehabilitation center. So he had someone come to his house three times a week to do rehab now look, this didn't happen overnight. It took him seven years to get the use of 70% of his body. The reason I tell the story is that the contract once he came back to the office, he was a financial adviser like you and me. Once he came back to the office, they said, Oh, we're not paying you anymore. You're back at work. He wasn't earning an income. He was just picking up the phone and saying, Hey, client, we're still here. We're here to take care of you. He was just kind of reaching out so that people didn't think he was gone permanently. So his group contract has he says read him the "Dear John" letter. His name is actually John and said we're not saying individual contracts, not only paid from an income or incurred at work, but it also paid for rehab. And so look again, it took seven years to get to be back to himself. But I think that that's something that's really amazing that someone could come in to not only being at the top of his business but running the Chicago Marathon every year like it's almost the miracle of disability insurance.

Amber 8:18
So let's step back at her a couple of things. He had a group plan and he also had a  private plan too. Okay, so for the audience there there are podcast links in the Physician Edition. We talked about modified, modified own occupation. That's more of specialty-specific. There's also private insurance that does a few things differently depending on how you structure it but you choose to apply. Hopefully, work with an independent broker that can help you see all the pieces that you have access to the group plan. That's where if you look at some of our previous episodes, we have modified Own Occupation. It's very similar where there are restrictions within so even some of my clients will come in and come to me for a conversation about private disability insurance and then we'll find out there is a group contract. Contracts typically pay a percentage of your salary. And if it's free. 'll get into taxes because I'm not a tax advisor, but a lot of people are surprised that plan is really not going to pay. You're talking about the "Dear John" is coming from the workplace, your employer 

Ann 9:23
and he was shocked and said he couldn't believe that happened to me. And look, I'm not I'm not working. I'm not earning an income. I'm just back in my office to try to communicate with people to let them know that I'm still here. So if I look to you, I would think being an advisor his group contract would continue to pay him, but the minute he went back to work the group contracts. **even though he wasn't working and getting paid, the group plan still shut off*** 

Amber 9:49
So if he wasn't showing up that any occupation any job if they know that you're capable of doing anything, even if he's not showing a paystub yet...

Amber 10:06
Okay, so the rehabilitation is interesting because I feel like a lot of people assume the rehab is to get them back to work insurance companies will offer this but they don't have to offer its case by case but in this circumstance, he worked hard to rehab himself and they credit so it wasn't like the private plan was just trying to get him off disability they actually gave him coverage for a bit of a period of time. 

Ann 10:28
How was he pay that out of pocket when he wasn't even earning an income?

Amber 10:42
Yeah, well, that's wonderful because I didn't even think about that piece of it because typically it's people trying to get off disability as you know, it's hard to get off the claim. But that's very extreme and then there's a pretty neat I mean, unfortunate but a neat outcome that came from not only him just having sound like the right mindset but also the financial means. That could have helped him really work hard to say I got things covered. Now you can really focus your energy on getting better, 

Ann 11:04
which is what he wanted to do. His parents immediately said, Oh, John, you're gonna have to move back in with us and we're gonna have to take care of you. And he said, No, no, no. He said, You know, I'm in my 30s He said, I'm not planning to move in with you. I'm going to use my disability policy. I'm going to rehab and I'm going to get better. And so you know, it was really almost a miracle and disability insurance. It's an incredible story. 

Amber
And I feel like there are also a few other little statements you say, I know that you talked about: 1) The Goose, 2) You Talk about People Insurance, are there any other things that you want the audience to know when they're just starting to think about disability insurance? What other because I know that you've been in practice for over 30 years, right? So you've seen a lot of things but you've also worked with a lot of people. Is there anything else that is almost like a takeaway before we wrap up today that you think people should know? 

Ann 11:55
And they're really, you know, I think I'll just tell you a quick story. One of my clients became disabled. He actually carried a camera around and his boss can change even when he couldn't come to work. And so I often ask people when we're having this conversation, do you think your boss would continue to pay you if you couldn't perform a service anymore?

Amber 12:22
I know they ask that on the claims paperwork, looking for me to check the box? You have? No there's never I've never heard everyone says,

Ann 12:26
of course, my boss wouldn't continue to pay me so I feel like he just happened to be really lucky that he had that relationship with his employer. But you know, that's the reality is you can't count on anyone else to take care of you. So you have to say you know, what can I do to protect my family, if something should happen to me if I think I'm too sick or if I become too hurt, to continue working?

Amber 13:04
That's another thing. We have spouses that work. both spouses are working, so sometimes, the higher earner ensures their income that they say, oh, no, we don't need the other person to be insured because they don't make as much money. But I think people forget that. If you have this loved, loved one that's going on claiming needs to be driven to and from appointments and just some of these things. They might need to bring in health care. Or people that help you with your home as you're trying to spend time with that person because they need that support, in addition, to medical care that you can't go to work full time. And so a lot of times we have that.
It's always good to have dual incomes so that maybe we can build a bigger cash cushion, but I think people also forget the impact it could have on the only one. 

Ann 13:45
So I'm really happy that you brought that up. We have some clients in Tulsa, who when the man became disabled. His wife had also quit work because she became his full-time caregiver. So they went from earning two very nice salaries to earning nothing. And so I think that that's just a point that people don't think about, oh, we're just going to ensure the bigger income but they don't think about the impact on the other spouse. That you're right. She had to take him to chemo once a week. She had to take in policy appointments. She had to, you know, when he got sick at the end, I mean, there were a lot of things she had to do as a caregiver that didn't really allow her to continue working. So I think that that's something you know, people should consider.

Amber 14:40
So I mean, really the first step you can take, it's really getting organized within the house. Really look at the whole picture. What kind of benefits do you have at work, learning more, doing the under review, sitting down with your spouse or just as an individual, going through everything at least once a year to see what you have, and then learning? There's, you know, there are products out there that you can customize and build and not everybody buys the same products for me, I don't give everyone the same thing. And I know you don't either. So if anything, just do some research and really kind of think about the whole picture. And hopefully, that'll help you take those proactive steps and so I appreciate you sharing about disability insurance, I know it's not always the best topic to bring up but I know you and I enjoy it, and the fact that we see how it can help people and it's so important so and for the audience, I'm gonna link and bio below in the description box in the show notes so you can find her if you do need to ask her any questions or reach out to any of us. We are happy to help. So thank you for being here, and we'll see you next time!